Another Entry in the Genome Patent Rumble

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In what should come as no surprise, one of the world's largest manufacturers of cutting-edge high-tech is suing a major direct competitor for patent infringement. No, it's not a salvo in the ongoing Apple and Samsung battle -- Illumina (Nasdaq: ILMN  ) is none too happy about Life Technologies' (Nasdaq: LIFE  ) recent acquisition. At issue is Life Technologies' subsidiary Ion Torrent and its supposedly too-similar sequencing mechanism.

If recent legal history is any guide, this particular suit won't change much, but it's important to know what's at stake in the fast-growing sequencing industry.

If you can't beat 'em, sue 'em
Illumina's been down this road before. It settled with rival sequencer Affymetrix (Nasdaq: AFFY  ) for $90 million nearly three years ago, but it turned right around and countersued, a tactic that got the company a judicial smackdown in late 2010. Illumina also got into a tussle with Applied Biosystems involving patent-infringement suits and countersuits, also settled in 2010. Applied Biosystems, you might recall, was one of two companies that later became Life Technologies.

Life Technologies is no stranger to litigation, either. It lost a court battle with Pacific Biosciences (Nasdaq: PACB  ) over single-molecule sequencing last year. Interestingly, Life Technologies is currently tangled up with both Pacific and Illumina as co-defendants against tiny Helicos Biosciences in a different patent suit.

A little too specific
While most of these suits seem to have minimal impact on genome sequencing's largest players, the frequency of legal filings could threaten to hold back technological progress. Sequencing costs should soon become widely affordable, but if patents covering actual genes are upheld, the industry could run into roadblocks.

A recent case, Association for Molecular Pathology v. Myriad Genetics (Nasdaq: MYGN  ) , illustrates the difficulty the courts have had in the genetics arena. Biotech watchers will know the basics, but this important ruling seems to open the door to the patenting of gene sequences themselves. The matter may very well be resolved by the Supreme Court, and that seems a more important ruling than one over technology patents in an industry that may look very different in a few short years.

It's important to stay on top of the major legal tussles in this growing industry, whether you're an investor or an interested gene-sequencing observer. Add these companies to your Watchlist now to get all the coverage as you need it.

And although it's not in the gene-sequencing business, Motley Fool analysts have identified a fast- growing company in the retail industry that we are so confident in we named it The Motley Fool's Top Stock for 2012. Download our special free report and discover which company we are talking about and how you can profit from its future success.

Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter for more news and insights. The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Pacific Biosciences of California, Illumina, and Apple and creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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  • Report this Comment On January 09, 2012, at 4:08 PM, jjhantsch wrote:

    Actually Affymetrix uses AFFX as it's symbol. A completely unrelated company Affymax uses AFFY as it's symbol.

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