MIT Sues to Shut Down GeneChip Technology — Again

533138_law_and_orderLast week, MIT and E8 Pharmaceuticals, a spinoff co-founded by professors at MIT and Harvard Medical School, filed a second patent infringement suit against Affymetrix‘s GeneChip genetic testing products and services. Last year, MIT sued Affymetrix itself. This time the defendant is Navigenics, a California-based direct-to-consumer genetic testing company. In February of this year, Navigenics acquired Affymetrix’s California CLIA-approved facility, including its microarray-based testing business. It’s possible that the acquisition was part of steps that Navigenics took to address potential compliance issues raised by the state of California with respect to its direct-to-consumer genetic testing services.

In a remarkably succinct (by the standards of patent lawyers) complaint, MIT claims that the GeneChip testing infringes what it calls a “pioneering” 2004 patent on a method of “accurate, reproducible and cost-effective genetic analysis, using minute amounts of sample DNA and a small number of reactants to generate results that were previously impossible.” MIT claims that the infringement is willful and knowing, as evidenced by references to the patent in the Navigenics-Affymetrix asset purchase agreement. Proof of willful infringement exposes the defendant to triple damages. MIT and E8 ask for unspecified damages, to be tripled, as well as attorneys’ fees and an injunction against further use of the patented technology, if Navigenics refuses to take a license. The complaint also references, as evidence of Navigenics’s willful infringement, “its insistence on certain contractual provisions regarding the ‘228 patent and this litigation,” which suggests that the parties have tried and failed to negotiate an agreement.

Pioneer patents — those that control basic technologies — are potential roadblocks to scientific development. Progress depends on efficient licensing on reasonable terms so that second-generation researchers can advance the initial discoveries. Where there are multiple pioneer patents held by different parties, the owners often avoid mutually-assured destruction by creating patent pools, cross-licensing their patents to each other and then licensing them to outsiders. The two MIT suits may indicate a troubling breakdown in the usual system, with these parties apparently unable to agree on what’s reasonable. It’s too early to pass judgment on who’s right in this case. More importantly, it’s also too early to tell if this is an isolated incident or the start of a pattern that could threaten the dramatic decreases in the cost of genetic testing. Because the MIT patent covers a method of sequencing, rather than a specific product, anyone who uses the same method is at risk. But on the other hand, some observers think that Affymetrix and its successor, Navigenics, were targeted because of the sheer magnitude of their alleged infringement. We shall have to wait and see.