In an ongoing battle between Igen International (Gaithersburg, Maryland) and Roche Diagnostics GmbH, the diagnostic unit of F. Hoffmann-La Roche (Basel, Switzerland), a key milestone was reached last month, but probably not the final one sought by either company. An 11-person jury ruled that Roche must pay Igen $505 million in damages; Roche has promised an appeal, a promise that could continue the dispute into late this year or beyond.
George Migausky, chief financial officer for Igen, expressed great satisfaction with the decision. "The litigation began in September of 1997, so [it's been] almost four-and-a-half years of litigation. In fact, the disputes arose prior to that, so if you went back to when the disputes were arising, prelitigation, it's been even longer. But [we've had] four and-a-half-years alone just of litigation time, and finally we've got to the end of that process," he told The BBI Newsletter, while noting that a Roche appeal would be no surprise.
Following presentation of arguments in the 10-week trial before the U.S. District Court for the District of Maryland, the jury unanimously found Roche to have broken the license agreement between the companies, that Roche violated its duty to Igen of good faith and fair dealing and engaged in unfair competition. The monetary award broke down to $105 million in compensatory damages and $400 million in punitive damages. Igen was ordered to pay $500,000 as a result of one of Roche's counterclaims, however.
"That was a tremendous monetary damage, and that's only part of the story," Migausky said. Igen had sought $709 million in compensatory damages, in addition to punitive damages.
The very first claims were brought by Igen against Boehringer Mannheim GmbH (Mannheim, Germany) in 1997 in dispute of a 1992 agreement in which Igen licensed to Boehringer its electrochemiluminescence technology. Roche acquired Boehringer in 1998.
The ruling struck the Swiss company with a number of other blows. It said that Igen must be given rights to Roche's Elecsys diagnostics product line, which Roche developed using Igen's Origen biological detection technology. In addition, the jury's findings permit Igen to terminate its license agreement with Roche that allows Roche to use Origen technology in its diagnostics products. "That's what we were seeking through this litigation," Migausky said. "I think, at the end of the appeals process, we would look to exercise our right."
The appeals process will continue the drain on Igen's finances, which have been characterized by heavy red ink — loss figures driven by large legal costs in recent quarters to pursue the case against the much larger firm.
Igen's rights to Elecsys include the 1010, 2010 and E170 lines of clinical diagnostic immunoassay analyzers and the tests developed for use on those systems, including tests for thyroid and reproductive hormones and markers for cancer, cardiac disease and osteoporosis. The jury said Igen also is entitled to certain other technologies owned or developed by Roche, including polymerase chain reaction, PCR rapidly becoming a gold standard nucleic acid amplification technology.
"A big part of the story really relates to the fact that we're also given the right to terminate this contract and also the ability to access all of the improvements that have been made, which is basically the Roche product line," Migausky said.
"Now that we've seen what the jury has come up with, we'd look to put into place some additional business plans that would be able to take advantage of the opportunities that present themselves there. We already had the right under the contract, although we had to litigate to get it enforced, to have access to the improvements. Now it really opens up the doors for us to be able to execute on that, whether we do it alone or in combination with some other business partners.
"I guess it's a lesson that you have to be very careful when you're licensing your own intellectual property," Migausky said. "You have to be very careful about who you're dealing with and how you structure any arrangements. You certainly need to be careful — you always know that, but this just re-emphasizes it."
1st pacemaker recipient honored
St. Jude Medical (St. Paul, Minnesota) last month paid tribute to Arne H. W. Larsson, who died Dec. 28 at the age of 86 and was the first person to receive an implantable cardiac pacemaker more than 40 years ago. Larsson was implanted with the pacing device on Oct. 8, 1958, after being diagnosed with a heart block condition known as Stokes-Adams syndrome. The device was developed and manufactured by a Swedish company that now is part of St. Jude.
At the urging of Larsson's wife, Else-Marie, cardiac surgeon Dr. Ake Senning and medical device engineer Dr. Rune Elmqvist completed the first implantable pacemaker, and Larsson subsequently received 25 more pacemakers. He became a sort of ambassador for the pacing industry, appearing at many clinical meetings.
That initial device, using just two transistors and about the size of a hockey puck, was very crude compared to the devices now prescribed for implant in more than 500,000 patients every year. Current devices incorporating aerospace and computer technology feature advanced circuitry and sensor capabilities. While containing up to 500,000 transistors, they can be as small as a half-dollar.
Commenting on Larsson's passing, St. Jude Medical CEO Terry Shepherd, said, "While we mourn the death of Arne Larsson, we also remember the 43 years of extended life Arne received from medical technology. The story of the first implantable pacemaker is one of courage, creativity and persistence by Drs. Elmqvist and Senning and Arne and Else-Marie Larsson." He noted that the implantation involved great risks, "but Arne's life was saved, and an industry that now provides life-enhancing technology to millions of people around the world began on that day."
While pacemakers and their implantation are now commonplace, Shepherd noted that Larsson pursued use of the technology "at a time when the outcome was uncertain and the procedure was completely original."
He added: "In 1957, St. Jude Medical's former medical director, the late Dr. C. WaltonLillehei, 'the father of open heart surgery,' collaborated with the co-founder of Medtronic, EarlBakken, on the first wearable, transistorized pacemaker which was successfully used to treat heart block after some of the earliest open heart surgery cases at the University of Minnesota. These collaborations in Minnesota and Sweden of engineers and physicians were early building blocks of the global medical technology industry."
Shepherd noted that the result has been to help build three medical technology companies — Medtronic (Minneapolis, Minnesota), St. Jude and Guidant (Indianapolis, Indiana) — either with headquarters or pacing operations in Minnesota, and that those companies today supply more than 95% of the world's pacemakers. St. Jude also maintains a pacemaker research and manufacturing operation in Stockholm, Sweden.