The lawsuit, brought by Enzo Biochem and Yale University on June 8, 2004 to the United States District Court for the District of Connecticut alleges that Applied Biosystems is infringing six of their patents.
Four of the patents in question are assigned to Yale and licensed exclusively to Enzo Biochem and relate to ABI's sale of sequencing reagent kits, TaqMan genotyping and gene expression assays and the gene expression microarrays used with Applied Biosystems' Expression Array System.
These products play an important part of Applied Biosystems business, with its Taqman Real-Time PCR (polymerase chain reaction) lines accounting for a third ($704.6m) of the company's $2.093bn revenues in 2007 .
According to Applied Biosystems, the District Court granted its motion for summary judgment and dismissed all of Enzo's remaining claims.
In response, Enzo has filed an appeal with the Federal Circuit seeking to reverse the decision.
"Enzo has filed an appeal with the Federal Circuit seeking to reverse this ruling and intends to vigorously pursue its claims against defendants. We have every belief that the Federal Circuit will overturn this decision, and that Enzo will ultimately prevail," said Scott Robertson of Goodwin Procter LLP, Enzo's lead counsel in the action.
According to Enzo, the patents at issue are based on the work of Dr David Ward of Yale University that have been recognised by the scientific and biotechnology communities for more than 20 years as groundbreaking achievements in the field of nucleic acid labelling and detection.
In a separate case, on November 8, 2006, a patent interference proceeding was declared by the US Patent and Trademark Office between Enzo diagnostics and the California Institute of Technology (Caltech) concerning application owned by Enzo and US Patent No. 5,821,058 which is owned by Caltech and exclusively licensed to ABI.
The '058 patent claims methods for DNA sequencing, another large part of Applied Biosystems' business, which accounted for 27 per cent of the company's total revenues ($557.6m).
While Applied Biosystems is not party to the proceeding, as exclusive licensee they are involved in the prosecution, and are funding a substantial portion of the cost of prosecution in cooperation with Caltech.
According to Applied Biosystems' recent 10-K Securities and Exchange Commision (SEC) filing: "if Enzo prevails in the interference [case], the Patent Office could revoke the claims of the '058 patent from Caltech and award substantially similar claims to Enzo, which Enzo might then assert against our DNA sequencing products and possibly other products."
The '058Caltech patent was issued in 1998 and expires in 2015 and has withstood challenges in the past.
However, this latest challenge comes from an application that Enzo says was filed in June 1982, however it has remained hidden until now due to rejections, delays and amendments in the patent office.
US law was changed in the early 90's to prevent such hidden patents from surfacing after a company has developed products on their own without knowing about a patent hidden in the system.
However, due to its age the patent falls under the old rules and the challenge remains to be fought.