An English Court of Appeals decision in November held that Affymetrix (Santa Clara, CA) has a valid license to critical DNA microarray technology developed by Oxford Gene Technology (OGT; Oxford, UK). If upheld in the house of Lords, the UK's highest court, the decision effectively prohibits OGT from blocking Affymetrix from manufacturing and commercializing high-density GeneChips it develops using OGT technology. The news, which pushed share price of Affymetrix up 24.4% to $79.4, forces OGT to compete in the high-density microarray business with Affymetrix, which already holds 90% of a market estimated to be $527 million. However, although the decision could cost OGT millions in lost royalties, analysts say the decision will have no real impact on the chip industry as a whole, as newcomers move to alternative microarray systems.
The focal point of this transatlantic battle is a family of key US and European patents referred to as the “Southern patents” after their inventor, Edwin Southern, founder and majority owner of OGT, an Oxford University spinoff. Southern's patents, including US patents 5,700,637 (′637) and the newly issued 6,054,270 (′270)—not involved in this litigation—and their European counterparts, claim basic methods for creating and using arrays of oligonucleotides that are attached to solid supports such as a glass slide. The two patents cover methods of creating two types of microarrays: those formed by in situ synthesis of the probe oligonucleotides on the chip itself (′636)—a technology focused on in the Affymetrix litigation—and those created by deposition of oligonucleotides previously synthesized offline (′270). The two types of microarrays are widely used in the $2 billion genomics market to produce customized tools used in genotyping and diagnostic applications.
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