An 11-person jury left little to doubt in awarding IGEN International Inc. $505 million in damages in its case against Roche Diagnostics GmbH, a division of F. Hoffmann-La Roche Ltd.

“Our reaction was more than overwhelmingly positive,” said George Migausky, IGEN’s chief financial officer. “Everybody was very, very happy. But [we’ve had] four and a half years alone just of litigation time, and finally we’ve gotten to the end of that process.”

As the 10-week trial before the U.S. District Court for the District of Maryland closed, the jury unanimously found that Roche broke the companies’ license agreement, violated its duty to IGEN of good faith and fair dealing, and engaged in unfair competition. The monetary award breaks down to $105 million in compensatory damages and $400 million in punitive damages.

“That was a tremendous monetary damage, and that’s only part of the story,” Migausky said.

In the trial that began in October, IGEN sought $709 million in compensatory damages, in addition to punitive damages.

Roche said it would appeal the decision. Migausky said he expected the appeal and added that the appellate process could take an additional 18 months.

IGEN originally brought claims against Boehringer Mannheim GmbH in 1997 in dispute of a 1992 agreement in which IGEN licensed to Boehringer its electrochemiluminescence technology. Roche acquired Mannheim, Germany-based Boehringer in 1998, after the litigation began. (See BioWorld Today, May 28, 1997.)

The decision gives Gaithersburg, Md.-based IGEN rights to Roche’s Elecsys diagnostics product line, developed by Roche using IGEN’s Origen biological detection technology. In addition, the jury’s findings permit IGEN to terminate its license agreement with Roche, which allows Roche to use Origen 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.”

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. IGEN also is entitled to certain other technologies owned or developed by Roche, including PCR, a 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.

But Roche retains the license until the case reaches final resolution. Until then, Roche plans to continue development of assays for the Elecsys systems, including cardiac markers such as proBNP. Also, the company said it will continue to market instruments and assays covered by the original agreement.

The ruling found Roche negligent in a number of areas.

First, that by improperly calculating royalties; by failing to provide full, accurate and comprehensible sales reports; and/or by underpaying royalties; Roche failed to keep full and accurate records necessary to calculate royalties due to IGEN.

Second, Roche sold IGEN technology-based products to customers other than the hospitals, clinical reference laboratories and blood banks permitted by the agreement.

Third, Roche did not ensure full compliance with the agreement by its affiliate sublicensees, and the company failed to return to IGEN the rights to DNA probe assays for Origen-based systems.

Lastly, Roche did not provide IGEN with improvements such as instruments and assays, also obligated by the agreement.

“There were a large number of breaches,” Migausky said. “Our legal complaint had, I believe, 14 different counts. Twelve of them were breach of contract, two of them were tort claims, which were for unfair competition.”

The court previously found in IGEN’s favor on four additional breach-of-contract claims, namely that Roche took unsubstantiated “rental surcharge” deductions against reported sales of royalty-bearing products; it settled a patent infringement suit with a third party without IGEN’s consent; it improved certain products after launching the Elecsys 2010 system; and Roche failed to inform IGEN of patent filings and/or to provide copies of patent applications in a timely manner.

IGEN, however, was ordered to pay $500,000 as a result of one of Roche’s counterclaims.

“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 always know that, but this just re-emphasizes it.”

IGEN’s stock (NASDAQ:IGEN) gained $4.06 Friday, or 10.7 percent, to close at $42.15.