IVD Technology Magazine
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Originally published July, 1998

IVD Technology News

Vysis, Oncor settle dispute over FISHing rights

For almost three years, Oncor, Inc. (Gaithersburg, MD), has steadfastly denied that it infringed a patent for fluorescent in situ hybridization (FISH) held by Vysis, Inc. (Downers Grove, IL), and the University of California (UC). Oncor's denials now appear to be over, as the company recently signed a definitive agreement to settle the patent infringement suit brought against it by Vysis and UC.

Terms of the settlement stipulate that Vysis will acquire Oncor's nononcology FISH business, which garnered about $3 million in sales last year, while Oncor will receive a patent license. Vysis president and CEO John Bishop says that the license granted to Oncor is "nonexclusive and royalty-bearing, and is limited to Oncor's oncology-based FISH products."

DNA complements labeled by FISH. Photo Courtesy of Vysis.

The FISH system detects chromosomal copy number and rearrangement of large genetic structures. After chromosomes are spread on a standard microscope slide, fluorescent probes find and bind to complementary portions of DNA. The advantage of the technique over polymerase chain reaction (PCR) or restriction fragment length polymorphism (RFLP) techniques is that the DNA need not be extracted or purified.

The FISH patent (U.S. Pat. 5,447,841) was granted in 1995 to Joe Gray and Dan Pinkel, both professors at UC. That same year, Vysis obtained an exclusive license to the FISH technology. In defense of its new license, Vysis filed the first of two infringement suits against Oncor in September 1995. The first suit specifically targeted Oncor's sale and use of unique sequence DNA probes together with blocking DNA, a technique that reduces background fluorescence. The second suit, filed in 1996, aimed to prevent Oncor's marketing of imaging software for FISH and comparative genomic hybridization (CGH).

To disseminate its technology, Vysis began a program to offer nonexclusive licenses to many users, including FISH probe suppliers. Despite such efforts by Vysis and UC to reach a settlement with Oncor, discussions broke off. Noting that an Oncor mailing of February 1996 had taken "an erroneously narrow view of the patent, asserting it is not infringed by reagent sales," Vysis concluded that further discussions with Oncor were "unwarranted."

While Oncor alleged that the '841 patent was unenforceable because UC had provided false statements to the U.S. Patent and Trademark Office, a 1997 summary judgment by the San Francisco District Court upheld that Gray and Pinkel were the first to invent FISH technology and that the patent was valid. The judgment went on to state that Oncor was indeed infringing the patent with its Coatosome and Unique Sequence Her2/neu FISH probes. According to Vysis vice president, general counsel, and secretary, William Murray, "this judgment wiped out Oncor's major defense and left the company to rely on a more technical defense."

As the April 1998 trial date approached, Oncor's legal position continued to deteriorate. In a February 1998 letter to the court, Oncor suddenly conceded that all of the products for which Vysis had alleged infringement did in fact infringe the '841 patent. According to Oncor, this concession was made because documents found in the company's files indicated that its earlier positions were wrong. Furthermore, these documents had not been made available to Vysis during the earlier discovery phase of the lawsuit.

With its legal position crumbling, Oncor finally settled the suit by agreeing to license FISH technology from Vysis and UC. Along with Oncor's nononcology FISH business, Vysis will acquire existing inventory and intellectual property. Vysis and UC will also share an initial license fee of $500,000, with an additional $1.5 million due on April 8, 2000.

Murray says that Vysis is "obviously delighted" over the outcome, but downplays the precedental effects of the case. "With an entire sea of ongoing litigation, the whole industry is awash in patent infringement issues. But in reality, I don't think our case will have a great effect."—Gary Woo