Unit of Enzo Biochem Files Suit in Federal Court Charging Digene With Patent Infringement Action, Citing Digene's Disregard for Patent and Continued Product Sales, Seeks Injunction and Treble Damages
FARMINGDALE, N.Y., Mar 21, 2002 (BW HealthWire) -- Enzo Diagnostics, Inc., a wholly-owned subsidiary of Enzo Biochem, Inc. (NYSE: ENZ chart, msgs) has filed a complaint in Federal District Court in Wilmington, Delaware, against Digene Corporation seeking an injunction and treble damages for willful infringement by Digene of Enzo Diagnostics' U.S. Patent No. 6,221,581 (" `581") by the sale of Digene's "Hybrid Capture" line of products.
In addition to the filing of Enzo Diagnostics' patent suit against Digene, Enzo Biochem filed an Answer to Digene's March 14 Declaratory Judgment action in which it requests that the Court summarily dismiss Digene's Declaratory Judgment suit because it incorrectly named as the adverse party Enzo Biochem, who has never owned the patent. Enzo Diagnostics, the true patent owner, stated today that if the Court grants its request to dismiss Digene's Declaratory Judgment action, only Enzo Diagnostics' patent suit against Digene would proceed on the issue of infringement of Enzo Diagnostics' patent.
Enzo Diagnostics charged that Digene has for many years known of the chain of its patent applications that led to the `581 patent, noting that the original application leading to the `581 patent has been public since October 1985, a date preceding Digene's founding.
"Digene has for many years known of the chain of patent applications that eventually lead to the `581 patent, but knowingly and willfully developed and brought to market its Hybrid Capture products in the face of Enzo Diagnostics' pending applications," Enzo Diagnostics said.
The complaint also indicates that, despite a good faith effort on Enzo Diagnostics' part to negotiate a business resolution with Digene, there is "the distinct possibility" that Digene may have attempted to wrongfully induce Enzo Diagnostics to forbear from suing Digene for infringement by misrepresenting an interest in taking a license under the `581 patent to obtain time to negotiate for an acquisition by a third party.
According to the complaint, Evan Jones, President of Digene, and Dr. Elazar Rabbani, President of Enzo Diagnostics, met in 2000 at which time, it is asserted, Mr. Jones was shown a copy of the allowed claims in Enzo Diagnostics' pending U.S. Patent Application which issued the following year in the `581 patent. The complaint says Dr. Rabbani informed Mr. Jones that the allowed claims covered the method employed by Digene in its Hybrid Capture products. "Dr. Rabbani explained to Mr. Jones that these allowed claims covered nucleic acid capture and detection using antibodies to double-stranded nucleic acid, specifically including DNA:RNA hybrids, which...is precisely the method now employed by Digene in its Hybrid Capture products," the complaint states.
The complaint also states that, following issuance of the `581 patent, several meetings were held between Mr. Jones and Dr. Rabbani, and others, and at no time during those discussions did Digene deny infringement or allege that the patent was invalid. Instead, the day after an announcement on February 19, 2002 that Digene had entered into an agreement to be acquired by Cytyc Corporation (currently the subject of a tender offer by Cytyc due to expire March 28, 2002), Digene informed Enzo Diagnostics that it was not permitted to further negotiate regarding a license.
Despite this, another meeting was held on March 14, 2002 at Enzo Biochem's offices attended by Mr. Jones, Dr. Rabbani and Patrick Sullivan, President and CEO of Cytyc, and Enzo's counsel, at which a draft term sheet with proposed terms of a license to Digene under the `581 patent was presented by Mr. Jones to Enzo Diagnostics. At that time, the complaint alleges, Mr. Jones stated his belief that, if such a license was granted on these terms, Enzo Diagnostics would realize "very substantial royalty payments" over the life of `581 patent on Digene's sale of its Hybrid Capture products and other products embraced by that patent.
Although no agreement was reached at the March 14 meeting, at its conclusion Digene stated that it would refine the license proposal based on the discussions at the meeting and provide Enzo Diagnostics with a revised proposal shortly, the complaint states. Instead, with no indication it would do so, Digene the following morning filed a Declaratory Judgment action against Enzo Biochem.
The complaint states that Digene's "Hybrid Capture" line includes products for detection of Human Papillomavirus (HPV) Cytomegalovirus (CMV), Chlamydia trachormatis (CT), Neisseria gonorrhoeae (GC) and Hepatitis B virus (HBV). It also asserts that Digene has made and used another such product for detection of Herpes Simplex Virus (HSV). "Digene's Hybrid Capture products clearly embody the invention of the `581 patent and infringe multiple claims of that patent. Digene itself characterizes the `unique feature' of its Hybrid Capture products to be the use of an antibody to DNA: RNA hybrids, which is specifically claimed in the `581 patent," Enzo Diagnostics stated.
Enzo Diagnostics seeks an accounting and award of damages for infringement, including treble damages, and an injunction against continued infringement of the `581 patent.
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