7 January 2014Americas

Enzo sees Applera damages rise to $61 million

Enzo Biochem, a US biotechnology company, has received another $12.4 million from a patent ruling against Applera Corp, bringing the total damages sum to around $61 million.

The pre-judgement interest, issued on January 3, is part of Applera’s punishment for infringing one of Enzo’s patents. The patent covers technologies directed to compounds used in DNA sequencing systems to read genetic code.

A jury at the US District Court for the District of Connecticut issued Applera, now owned by Life Technologies, with a $48.6 million fine in November 2012. Applera’s reagent products had infringed Enzo’s patent, but the company was cleared of infringing five other patents.

The patents cover compositions and methods for detecting and reading genetic materials. According to Enzo, the inventions range from detecting pathogens and human diseases, such as cancer, to decoding and analysing the human genome.

The 2012 jury ruling came eight years after Enzo filed suit, targeting Applera and its subsidiary Tropix Inc.

Since the decision, Enzo has been pushing for pre-judgement interest, which is meant to match the licensing fee that an infringer would have paid its victim. Applera argued that the court should deny Enzo this award because the company filed suit more than seven years after becoming aware of its potential claims.

But in court, Judge Janet Bond Arterton said an unreasonable delay in suing did not mean she should deny Enzo pre-judgment interest.

This delay did count against Enzo by restricting the level of pre-judgement interest it could claim, however.

Arterton said: “The rate advocated for by Enzo, ABI’s after-tax debt rate, attempts to put Enzo into the position it would have been in had it entered into a royalty agreement with ABI in 1998 and then agreed to provide financing to ABI in the form of delayed royalty payments up until the date of judgment.”

In contrast, she noted, the Treasury Bill, an alternative rate, seeks to compensate Enzo for the “lost opportunity to obtain a return on the investment of royalty payments that it should have been receiving from ABI since 1998”.

Opting to use the Treasury Bill rate, Arterton explained that she was seeking to prevent Enzo’s delay in suing from allowing the company to receive “excessive” compensation.

“While ABI may not have suffered prejudice as a result of this delay, it does not necessarily follow that Enzo should now be financially rewarded for it, and as the Supreme Court has recognised, such delay is grounds for limiting prejudgment interest.

“Accordingly, prejudgment interest will be awarded using the same interest rate set by 28 U.S.C. § 1961 for post-judgment interest: the one-year Treasury Bill rates for the relevant time period, compounded annually, resulting in interest of $12,428,728,” the judge said.

Enzo provided no comment when contacted by LSIPR. Life Technologies did not respond to a request for comment.