In a patent infringement case, a U.S. court awarded Invitrogen $16.2 million in damages as well as prejudgment interest and ruled that Stratagene must pay Invitrogen's attorney's fees in an amount yet to be determined. This decision by the United States District Court for the Western District of Texas approximately triples an earlier jury award.
Stratagene believes that the jury's verdict and the damages awarded were not supported by the facts of the case or the law and as a result the company intends to appeal the decision. It will challenge the finding of validity of the patent, the appropriateness of the damages determined by the jury, the tripling of a portion of the amount by the court, and the award of attorney's fees.
On July 25, 2006, the jury found that Stratagene had willfully infringed on Invitrogen's valid 4,981,797 patent by making and selling its competent E. coli cell products. The period of infringement was determined to be between May 23, 1997, and November 2, 2001, as Stratagene modified its manufacturing process under consideration post 2001. At the time, the jury awarded Invitrogen a 15% royalty on product sales during the aforementioned period for a total of $7.9 million.
The most recent court decision brought Invitrogen closer to its reported initial demand of $32 million in damages based on a lost profits argument. The jury, however, found that Invitrogen was not entitled to lost profits because Stratagene has had a noninfringing manufacturing process for competent cells in the last five years.
Stratagene reports that it currently has approximately $16.6 million in unrestricted cash and a $9-million revolving line of credit in place that has a zero balance currently outstanding. Its total amount of long-term debt is approximately $3.8 million and final payments on such long-term debt are not due until 2022. Stratagen’s stock dropped by 9.37% from October 31, 2006 to $6.19 per share.