Stratagene Provides Update on Invitrogen Lawsuit; Competent Cells Patent At Issue
July 26 2006 - 6:30AM
Business Wire
Stratagene Corporation (NASDAQ:STGN), a developer, manufacturer and
marketer of specialized life science research and diagnostic
products, announced today that it was informed in the matter of
Invitrogen Corporation vs. Stratagene which was heard in the United
States District Court for the Western District of Texas, that the
jury determined that Invitrogen's 4,981,797 patent is valid and
that Stratagene infringed that patent by making and selling its
competent E. coli cell products. The jury decided to award
Invitrogen a 15% royalty rate on sales between the years 1997 and
2004 (for a total of $7.8 million in damages) and found Stratagene
to have willfully infringed the patent only between the years 1997
and 2001. The jury found that Invitrogen was not entitled to lost
profits because Stratagene has had a non-infringing manufacturing
process for competent cells. Invitrogen had been seeking $32
million in damages based on a lost profits argument. Stratagene has
the option to appeal yesterday's verdict. Other details concerning
the final judgment to be rendered by the court, including the
appropriateness of the damages determined by the jury and the
potential for enhanced damages, are being considered by the judge
presiding over the case. The timing of a final judgment has not yet
been determined. Stratagene had previously modified its process for
manufacturing competent E. coli cell products and, as a result,
Invitrogen has agreed that Stratagene products sold in recent years
and currently offered for sale will not be affected by the jury
verdict. The action by Invitrogen was initiated in March 2001. In
November 2001, the district court granted Stratagene's motion for
summary judgment finding that Invitrogen's aforementioned patent
was not infringed by Stratagene. Upon Invitrogen's appeal, the
United States Federal Circuit Court of Appeals reversed the lower
court's decision in part and remanded the case back to the lower
court. In January 2004, the district court granted partial summary
judgment to Invitrogen based on the determination that Stratagene's
then-existing manufacturing process infringed Invitrogen's patent,
however the court also determined that Invitrogen's patent was
invalid. Stratagene then changed its manufacturing process for
competent cell products to a non-infringing method. Invitrogen
appealed the decision again and in October 2005 the Federal Circuit
Court reversed the district court's findings in part. The case was
remanded back to district court, resulting in the jury's
determination handed down on July 25, 2006. About Stratagene
Corporation Stratagene is a developer, manufacturer and marketer of
specialized life science research and diagnostic products. The
Company's life science research unit supports advances in science
by inventing, manufacturing and distributing products that
simplify, accelerate and improve research. These products are used
throughout the academic, industrial and government research sectors
in fields spanning molecular biology, genomics, proteomics, drug
discovery and toxicology. The Company's diagnostic unit develops
and manufactures products for urinalysis, and high quality
automated instrument and reagent systems that use blood samples to
test for more than 1,000 different allergies and autoimmune
disorders. In addition, by combining its expertise in diagnostics
and molecular biology, as well as its experience with FDA
regulatory procedures, the Company is pursuing opportunities to
expand its product portfolio to include molecular diagnostic kits
and instrumentation. More information is available at
www.stratagene.com. Safe Harbor Statement Certain statements in
this news release that are not historical fact constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Stockholders and other
readers are cautioned not to place undue reliance on these
forward-looking statements. Stratagene generally identifies
forward-looking statements by using words like "believe," "intend,"
"target," "expect," "estimate," "may," "should," "plan," "project,"
"contemplate," "anticipate," "predict" or similar expressions. You
can also identify forward-looking statements by discussions of
strategies, plans or intentions. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors,
which may cause the actual results of Stratagene to be materially
different from historical results or from any results expressed or
implied by such forward-looking statements. Among the important
factors that could cause actual results to differ materially from
those contained in or implied by the forward-looking statements are
risks associated with the company's inability to sufficiently
anticipate market needs and develop products and product
enhancements that achieve market acceptance, the company's ability
to compete effectively in the diagnostics and life sciences
research markets, variability of the company's quarterly revenues
and operating results, the failure of the company to retain key
employees, the company's ability to obtain additional debt or
equity financing, the possibility of declining sales due in part to
a reduction in research and development budgets or government
funding, the company's ongoing ability to protect its own
intellectual property rights and to avoid violating the
intellectual property rights of third parties, extended
manufacturing difficulties and currency fluctuations. For more
information about these and other factors that could cause actual
results to differ materially from those contained in or implied by
the forward-looking statements please see "Factors that May Affect
Future Results" included in Stratagene's Annual Report on Form 10-K
for the year ended December 31, 2005 and in other reports filed by
Stratagene from time to time with the Securities and Exchange
Commission, including Quarterly Reports on Form 10-Q.
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