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La Jolla biotech proactively protects itself from patent infringement suits

La Jolla-based Diazyme Laboratories, a division of General Atomics, recently won a declaration from a federal judge in San Francisco that its enzymatic homocysteine assay does not infringe patents held by Axis-Shield of Norway. The ruling was the culmination of legal challenges that Diazyme initiated to prove Axis-Shield's threats of infringement were unfounded.

Diazyme was founded in 2000 to develop enzyme-based tests to run on automated chemistry analyzers. One of its products is an automated test for measuring homocysteine in the bloodstream, which is an indicator of potential heart disease.

It was not long, however, before Axis-Shield -- one of the giants in the homocysteine test industry -- sued Diazyme for alleged patent infringement. That case settled. Diazyme, meanwhile, continued to develop improved versions of its homocysteine test, eventually getting its own patents on its technology. Axis-Shield claimed the new test infringed the company's patents, and it threatened to sue. Rather than live under the threat of a lawsuit, in October 2005, Diazyme took the initiative to clear up the threat by filing its own lawsuit seeking a declaration from the court that its assay does not infringe any of Axis-Shield's patents.

Steven Comer

Represented by Morrison & Foerster LLP, Diazyme filed the case in federal court in San Francisco, which has extensive experience with patent cases. The case was assigned to Judge Susan Illston, who recently presided over such cases as Carnegie Mellon University v. Hoffman-La Roche (involving enzyme amplification and purification) and Boston Scientific v. Johnson & Johnson (involving angioplasty catheters). Diazyme filed a motion asking the court to rule that Diazyme's new enzymatic homocysteine assay does not infringe any of Axis-Shield's patents.

On July 19, 2006, the court issued a ruling agreeing with Diazyme. Axis-Shield asked for permission, however, to change its infringement arguments, which the court allowed. After extensive discovery and depositions, Diazyme filed a second motion, asking the court to rule that even under Axis-Shield's new theory, Diazyme's assay does not infringe. On April 11, Judge Illston issued an order again agreeing with Diazyme that its test does not infringe, even under Axis-Shield's new theory. Diazyme had also asked for a ruling that the older version of its test did not infringe, but the judge declined to rule on that test without a trial.

Diazyme managing director Dr. Chong Yuan said he was very pleased to see how well the court understood the patents and the technology, and was able to reach a decisive ruling that removes the cloud of infringement. He also credits Diazyme's legal team from Morrison & Foerster for presenting the law and the technology clearly and accurately. The team includes partners David Doyle, Steven Comer, Peng Chen, Jason Crotty and associates Anders Aannestad, Dr. Jae Lee and Brian Kramer. Aannestad is Norwegian, which helped make depositions go smoothly, since many of the witnesses were from Norway.

Diazyme initiated this case to prove that its enzymatic homocysteine assay does not infringe Axis-Shield's patents, and the court's rulings confirm that Diazyme is right. Axis-Shield said it will appeal.

Diazyme was also successful in Europe. It filed its opposition against Axis-Shield's European patent on homocysteine assaid in January 2004. After briefing and a hearing, on Oct. 5, 2006, the Opposition Division of the European Patent Office ruled that the broader claims of Axis-Shield's patent are invalid. The remaining patent claims require the use of certain specific enzymes that Diazyme does not use. The Opposition Division issued its written decision Feb. 21. Diazyme was represented in the EPO by Chen from Morrison & Foerster in San Diego, and Hajo Otten and Gabriele Laufer from Witte, Weller & Partner in Stuttgart, Germany.

Comer is a partner with Morrison & Foerster LLP.

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