involved in the work underlying the ‘228 patent but, as an inventor himself who now has extensive knowledge of patent litigation through his business experience, he says he understood the incredible resources that have to be mustered to mount a challenge like this. His role, he says, was to help round up those resources, which are hard even for an institution like MIT to commit.
And MIT might have other reasons for not acting on its own before now—it has ties to Affymetrix via the Broad Institute, whose mission is to use genomic science to transform medicine. Since September of 2004, Affymetrix and the Broad have had a supply and research collaboration which gives “preferential terms to the Broad Institute for applications development in return for the option to make commercial products available from the resulting research,” according to an Affymetrix annual report. One of the main focuses of the alliance is whole-genome SNP analysis.
Indeed, two of Affymetrix’s newest SNP-analysis chips, launched commercially in December 2006 and May 2007, are products of the Broad collaboration. And SNP products are a substantial and growing source of Affymetrix’s revenue, which totaled $371.3 million in 2007. The product released in May 2007, for example, generated about $15 million in sales in the first quarter of this year out of about $80 million total, and it has “clearly been the biggest growth driver for Affymetrix’s genotyping franchise,” said Shaun Rodriguez, an analyst with Cowen & Company in Boston, in an e-mail. Genotyping product sales as a whole grew 25 percent in 2007, and Cowen forecasts it will grow another 16 percent this year, largely because of the newest SNP device, according to Rodriguez.
Given the history with the interference proceeding that went MIT’s way, E8 and MIT appear to have a strong case against the company, Rodriguez says. If Affymetrix loses, it could end up having to pay royalties on product sales that stretch out “for many years,” he adds.
The Broad Institute, for its part, relies on Affymetrix’s products for a portion of its experiments. Our request to MIT and the Broad for more information on the collaboration with Affymetrix was not answered by the time of this writing, though an MIT spokeswoman said it was unlikely they would comment. Similarly, MIT Technology Licensing Office Director Lita Nelsen said in an e-mail that she could not comment on a case in litigation.
An Affymetrix spokesman also declined to comment. Affymetrix did file a form with the SEC on July 3 acknowledging the lawsuit. “We believe that the plaintiffs’ claims are without merit and will vigorously defend against the claims advanced in the complaint,” the company said in the filing.
According to court filings, a summons was served on Affymetrix last week, giving the California company 20 days to answer the complaint. In the meantime, you can read the whole text of the E8-MIT complaint here.
