A Diagnostics & Imaging Week

Innogenetics (Gent, Belgium) reported last week that the U.S. Court of Appeals for the Federal Circuit made its first substantive ruling in Abbott’s appeal of a trial court’s judgment and injunction in favor of Innogenetics. Innogenetics said the court denied a motion by Abbott Laboratories (Abbott Park, Illinois) for a stay of injunction pending appeal.

Following a Jan. 10 ruling by the U.S. District Court for the Western District of Wisconsin which permanently enjoined Abbott from any further sales, use or export of products, including components, that infringe on Innogenetics’ U.S. Patent No. 5,846,704, Abbott filed an emergency motion to stay the injunction pending its appeal. On Jan. 19, the Federal Circuit temporarily stayed the injunction while it considered Abbott’s motion. Last week’s ruling lifted the temporary stay, ordering that the injunction be reinstated. The U.S. Court of Appeals for the Federal Circuit handles all patent appeals.

Frank Morich, CEO of Innogenetics, said the decision “marks a positive first step in the appeal process and reinforces our belief that we will prevail in the court of appeals, just as we did at trial,” said Frank Morich, CEO of Innogenetics.

In September 2005, Innogenetics sued Abbott alleging that it was infringing the patent, which covers a method of genotyping the Hepatitis C Virus. The court found the patent was infringed as a matter of law. On Sept. 1, 2006, a jury returned a unanimous verdict for Innogenetics that the patent was valid in all respects. On Sept. 8, 2006, the same jury unanimously found that Abbott’s actions had been willful, and directed Abbott to pay Innogenetics $7 million in damages related to the infringement up to the time of the trial.

On Jan. 4, the judge in this case dismissed Abbott’s requests for a new trial, affirmed the jury’s finding that the patent was valid in all respects and approved the award of $7 million in damages. The judge overturned the jury’s unanimous finding that Abbott’s infringement had been willful. On Jan. 10 the judge granted Innogenetics’ request for a permanent injunction against Abbott, enjoining Abbott from any further sales, use or export of products, including components, that infringe on Innogenetics’ patented genotyping technology. Innogenetics later filed an appeal to reinstate the jury’s willfulness finding, and Abbott likewise appealed and moved to stay the permanent injunction pending appeal.

Innogenetics is an international biopharmaceutical company building parallel businesses in the areas of specialty diagnostics and therapeutic vaccines.

In other legalities:

PolyMedica (Wakefield, Massachusetts) reported that the Federal District Court in Fort Pierce, Florida, has determined that its subsidiary, Liberty Medical Supply (Port St. Lucie, Florida), violated the Fair Labor Standards Act with respect to its former overtime compensation and lunch break deduction policies.

The court ruled that upon final resolution of the remaining legal issues in the case, it would enter a judgment against the company. A former employee filed the lawsuit against the company in 2005.

“We respectfully disagree with the court’s ruling and plan to appeal the decision to the 11th Circuit Court of Appeals once a final judgment has been entered,” said Patrick Ryan, president/CEO of the company. “We anticipate a final judgment could be entered in late April 2007 and that the appeals process could take as long as 24 months. We believe that our former policy regarding lunch break deductions is supported by both law and industry practice.”

The company stated that, based on the recent rulings in this matter, it plans to record a reserve of roughly $1.4 million to reflect the potential amount of the judgment, the company’s legal fees and associated costs, and the legal fees of the plaintiffs that the company may be required to pay. “Recording such a reserve should not be misinterpreted. Although fiscal responsibility requires us to do so, we are optimistic that the Court of Appeals will reverse the District Court’s ruling,” Ryan said.

PolyMedica provides blood glucose testing supplies and related services to people with diabetes.