By Kim Coghill

Washington Editor

Caliper Technologies Corp. will receive a $12 million cash settlement from a patent attorney and law firm named in a breach of fiduciary duty and trade secret misappropriation lawsuit.

The agreement was reached with the firm of Flehr, Hohbach, Albritton, Test, and Herbert, of Palo Alto, Calif., and Bertram Rowland, a patent attorney with Mountain View, Calif.-based Aclara BioSciences. Rowland and Flehr, Hohbach formerly represented Caliper.

Both Rowland and the law firm continue to deny any liability to Caliper, and the settlement is not an admission of liability, according to a prepared statement by Caliper.

The settlement has no impact on a separate lawsuit against Aclara in which Caliper alleges trade secret misappropriation. Aclara has also filed suit against Caliper, alleging patent infringement. Both companies specialize in laboratory miniaturization.

"Whatever disagreements existed between Caliper and Flehr, Hohbach and Rowland appear to have been resolved," said Joseph Limber, Aclara's CEO. "Aclara had an opportunity to settle, and we don't believe we have done anything wrong, so we will go to court and let a jury decide."

Bob Luft, a San Jose-based attorney who represented the law firm, said terms and conditions of the settlement are confidential, and he would not comment on details of the case.

In a prepared statement, Dan Kisner, president and CEO of Moutain View-based Caliper, said the company welcomes the conclusion of this portion of the litigation. "We believe it validates our position and rights as we continue to build leadership in our industry through proprietary technology, aggressive product development and customer service."

Caliper Chief Financial Officer Jim Knighton described as ongoing the litigation against Aclara associated with the misappropriation of trade secrets and infringement litigation regarding Caliper's "Ramsey" patents, as well as Aclara's litigation against Caliper for infringement of Aclara's "015" patent.

A Markman hearing to construe the claims of Caliper's Ramsey patents is scheduled for November with a likely trial in mid-2001. The Ramsey patents stem from the work of Michael Ramsey, a Caliper co-founder and member of the company's scientific advisory board.

A similar hearing on Aclara's U.S. Patent 5,750,015 - the "015" patent - was held in June. Both companies said the ruling supported their interpretations.

Caliper designs, manufactures, and commercializes LabChip devices and systems that enable experiments that ordinarily require laboratories to be conducted on a chip small enough to fit in the palm of a child's hand. The chip contains a network of microscopic channels through which fluids and chemicals are moved in order to perform the experiment.

Aclara is a developer of lab-on-a-chip technology. Formerly Soane BioSciences, Aclara is developing microfluidic and microfabrication products for use in genomic and pharmaceutical research.

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