Promega’s STR technology is used in forensics and paternity testing as well as genetic research, cell line authentication, bone marrow transplantation monitoring, forensic training, and various types of cancer analysis. The 2006 license agreement gave Life Tech the right to make, use, sell, offer to sell, or import the STR kits in two fields: paternity determinations as well as to identify individuals; and use in or preparation for legal proceedings, including ongoing training of forensic laboratory employees and population studies undertaken to increase the accuracy of DNA matches.
“I have determined that some of the uses of the kits sold by defendants are not permitted under that license agreement because those uses are outside the particular fields,” Judge Crabb said. She noted uses including chimerism, classifying molar specimens, cell line authentication, determination of fetal sex, cancer analysis, genetic research, maternal cell contamination, sample tracking, and noncasework related forensic applications such as general research or teaching/training of people not employed in a forensics lab.
A jury ruled that Life Tech and co-defendants Invitrogen and Applied Biosystems generated more than $707.618 million in total sales between Aug 2006 and January 31 of this year. All those sales were made in the U.S. After calculating that the licensing agreement permitted $636.856 million in STR kit sales, the jury subtracted that number from the total sales to conclude that about $70.762 million in sales were impermissible. Of that figure, the jury concluded, $52.010 million constituted profit lost by Promega as a result of Life Tech’s sales.
“They’ve done a pretty good job, as near as I can figure, of tying up this fairly narrow area, but one that is clearly valuable,” Thomas Moga, a partner in the Intellectual Property section of Shook Hardy & Bacon, told GEN.
How valuable? “It’s absolutely one of our most important technologies. It makes up a significant minority of our sales and profits,” Promega general counsel Craig Christianson told the Wisconsin State Journal.
All the more reason why Promega went to the length it did to fight Life Tech in court. The $52 million judgment represents as much as 17% of the company’s 2011 annual revenue of over $300 million. It is also why Promega is in an enviable enough position that Life Tech, facing the possibility of more than $150 million in damages, opted wisely to settle the case.