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Originally published September, 1997
Patent claims hit immunochromatographic test industry
A looming battle over patent rights has manufacturers of immunochromatographic strip tests worried. Since at least 1992, the diagnostic and medical products maker Becton Dickinson and Co. (Franklin Lakes, NJ) has sued or sent warning letters to more than a dozen test makers, accusing them of infringing its patents. In June, BD's position was bolstered when Quidel Corp. (San Diego) agreed to pay it $1.9 million a year in licensing and royalties to settle an infringement claim against its strep infection test.
Meanwhile, the Anglo-Dutch firm of Unilever (London and Rotterdam) has also jumped into the patent fray. That firm has held European immunochromatography patents for more than a decade, including recent ones relating to the successful Clear Blue One Step pregnancy test, released through subsidiary Unipath. In April, Unilever received a new U.S. patent, and has since then quietly begun contacting test makers about possible infringement.
At stake is a growing, $600-million worldwide industry, with broad applications in agriculture and environmental assessment, drug abuse testing, and pregnancy, fertility, and infectious disease detection. More than 100 firms are involved in supplying test media and injection devices as well as in test manufacture.
The tests, also known as lateral-flow tests, offer the beauty of simplicity. All that's necessary is to apply a sample of blood, urine, or saliva to a small handheld device and wait to eyeball results, typically a color change on the test strip.
Test makers are worried about Unilever's patent, which experts say is soundly reasoned and well written. But many are resisting Becton Dickinson's claims. Some contend that the BD patents are weak, while others insist they aren't broadly applicable. Some experts say the BD and Unilever patents overlap one another and up to a dozen earlier patents, and are therefore vulnerable to court challenge.
Even Quidel questioned BD's patent rights. The settlement between the two companies was a purely financial decision, says Steven C. Burke, Quidel's chief financial officer. "We don't believe we infringed their patent. This was an economic settlement. We were looking at $2 million a year in legal fees."
Quidel has other business relationships with BD, and the company's pact does not necessarily set a precedent. But in a closely watched patent infringement case in North Carolina, Carter-Wallace, Inc. (Cranbury, NJ), also settled with BD. Although its financial terms remain confidential, the agreement included a stipulation by Carter-Wallace that the BD patent was valid and enforceable. Many in the industry have found the settlement puzzling, since Carter-Wallace is reported to be paying Unilever a licensing fee to distribute its products in the United States.
Citing "ongoing litigation in this area," Carter-Wallace chief counsel Stephen Lang declined to discuss the settlement. Unilever did not respond to repeated requests for information.
BD's chief patent counsel, Richard Rodrick, says his company believes that "the majority" of immunochromatographic strip tests on the market are covered by either or both of its two patents. The latest, known as the Rosenstein patent, was issued in January and will remain in force for 161/2 years, Rodrick says. The company's 1987 Campbell patent has seven to eight years to go, he adds.
"We feel very strongly that both our patents are not only presumed valid, but would withstand any legal challenge," says Rodrick. "The widespread licensing by many parties is itself an acknowledgment of the strength of the patents."
As long as BD and Unilever stick together, smaller manufacturers may be forced to capitulate. The courts presume that U.S. patents are valid. Any challenge must be sustained by clear and convincing evidence, a high legal standard. And few companies have the resources to fight billion-dollar companies like BD and Unilever.
Says Quidel's Burke: "There's a high degree of uncertainty in putting a highly technical issue before a jury. And these lawsuits can take two, maybe three years to fight. If they had won, we could have been forced to cease selling. Or they could have demanded very onerous terms."--Gale Holland
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