Stratagene Responds to Damages Awarded in Invitrogen Lawsuit
November 01 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 the federal judge overseeing
Invitrogen Corporation vs. Stratagene in the United States District
Court for the Western District of Texas has awarded Invitrogen
$16.2 million in damages plus pre-judgment interest and ruled that
Stratagene must pay Invitrogen�s attorney�s fees, in an amount to
be determined by the court. On July 25, 2006, 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 $7.9
million in damages) and found Stratagene to have willfully
infringed the patent only between the years 1997 and 2001.
Stratagene believes that the jury�s verdict and the damages awarded
were not supported by the facts of the case or the law and as a
result, the Company intends to appeal the decision. In appealing
the jury�s verdict and the court�s subsequent post trial rulings,
Stratagene will be challenging the finding of validity of the
patent, the appropriateness of the damages determined by the jury,
the trebling of a portion of the amount by the court and the award
of attorney�s fees. 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 jury found that Invitrogen was not entitled to lost
profits because Stratagene has had a non-infringing manufacturing
process for competent cells. 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 followed by the court order issued on October 31, 2006.
The Company currently has approximately $16.6 million in
unrestricted cash and a $9.0 million revolving line of credit in
place which has a zero balance currently outstanding. The Company�s
operations remain cash flow positive. The total amount of long-term
debt is approximately $3.8 million and final payments on such
long-term debt are not due until 2022. 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.
Stratagene Corporation (NASDAQ:STGN), a developer, manufacturer and
marketer of specialized life science research and diagnostic
products, announced today that the federal judge overseeing
Invitrogen Corporation vs. Stratagene in the United States District
Court for the Western District of Texas has awarded Invitrogen
$16.2 million in damages plus pre-judgment interest and ruled that
Stratagene must pay Invitrogen's attorney's fees, in an amount to
be determined by the court. On July 25, 2006, 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 $7.9
million in damages) and found Stratagene to have willfully
infringed the patent only between the years 1997 and 2001.
Stratagene believes that the jury's verdict and the damages awarded
were not supported by the facts of the case or the law and as a
result, the Company intends to appeal the decision. In appealing
the jury's verdict and the court's subsequent post trial rulings,
Stratagene will be challenging the finding of validity of the
patent, the appropriateness of the damages determined by the jury,
the trebling of a portion of the amount by the court and the award
of attorney's fees. 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 jury found that Invitrogen was not entitled to lost
profits because Stratagene has had a non-infringing manufacturing
process for competent cells. 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 followed by the court order issued on October 31, 2006.
The Company currently has approximately $16.6 million in
unrestricted cash and a $9.0 million revolving line of credit in
place which has a zero balance currently outstanding. The Company's
operations remain cash flow positive. The total amount of long-term
debt is approximately $3.8 million and final payments on such
long-term debt are not due until 2022. 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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