Federal Appeals Court Overturns Most of Igen-Roche Decision

A federal appeals court in Richmond, Va., on Wednesday overturned most of the $505 million in damages that Roche Holdings AG had been ordered to pay Igen International in a breach of contract lawsuit. The 4th U.S. Circuit Court of Appeals vacated $486.6 million of the damages a jury awarded Igen in January 2002, but allowed Igen to terminate its licensing agreement for its Origen biological detection technology with Roche.

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A federal appeals court on Wednesday overturned most of the $505 million in damages that Roche Holdings AG had been ordered to pay Igen International in a breach of contract lawsuit. The 4th U.S. Circuit Court of Appeals in Richmond, Va., vacated $486.6 million of the damages a jury awarded Igen in January 2002. The court upheld the remaining $18.6 million of the award. A federal jury in Maryland found that Roche Diagnostics, a Roche Holdings subsidiary, had violated the terms of a 1992 contract it had with Igen. But the appeals court upheld the lower court decision allowing Igen to terminate its licensing agreement with Roche for Origen. Roche had made an estimated $350 million in improvements to the diagnostic process and incorporated it into much of its lab work. Igen called Wednesday’s ruling a victory. “We’ve achieved our most important objective in the litigation — to terminate our license agreement with Roche and get the technology back from Roche,” said Igen spokesman Paul Caminiti. Roche Diagnostics head Heino von Prondzynski said in a statement that the company wants to continue working with Igen. “We believe it is in the interest of both parties to continue the collaborations started 12 years ago,” he said. Origen is used to detect biological compounds such as proteins, nucleic acids and enzymes. Igen says Origen can be used to test blood samples, develop new drugs and determine food safety. Igen signed an Origen licensing agreement with the German company Boehringer Mannheim in 1992. Roche acquired Boehringer in 1998 and renamed it Roche Diagnostics. That year, the Swiss company Laboratoires Serono sued Igen and Roche, claiming patent infringement. A Roche subsidiary bought Serono’s patent for $15 million in a bid to end the legal dispute. Igen, however, refused to let the case be dismissed and Roche went forward with Serono’s lawsuit. The federal court jury ruled Roche was in breach of contract by allowing the suit, and awarded Igen $4.8 million in compensation and $400 million in damages. The appeals court overturned that decision, saying Roche had a right to go ahead with the patent case. The appeals court also overturned a $82 million penalty Roche was ordered to pay for not acting in good faith. Trading of Igen shares was halted Wednesday afternoon on the Nasdaq market. Shares were down 75 cents to $32.93 when trading was stopped. The case is Igen International, Incorporated v. Roche Diagnostics GMBH. Copyright 2003 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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