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Cepheid Files Countersuit against Abaxis in Reagent Patent Dispute

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Cepheid yesterday filed a countersuit against Abaxis claiming that it is not infringing any Abaxis patents and that, among other claims, Abaxis filed its suit "without reasonable basis and in bad faith."

Union City, Calif.-based Abaxis filed its suit in late June in the US District Court for the Northern District of California. In the suit, Abaxis claims that has Cepheid has been infringing a suite of patents covering reagents — US Patent Nos. 5,413,732; 5,624,597; 5,776,563; and 6,251,684 — through the sale of its Xpert MRSA test.

Abaxis also claims that Cepheid had ceased paying royalties on a license that it took to the '732 patent, saying that its Xpert MRSA test no longer infringes the patent. Abaxis said that it has sought information from Cepheid to evaluate its claims, but thus far Cepheid has not provided the information. Abaxis said that it is now seeking to obtain that information through the civil court process.

It also has asked the court to find that Cepheid has willfully infringed the patents and has asked for damages.

In its countersuit, Cepheid denied that it has failed to comply with terms of the licensing agreement, including all of its royalty obligations. In addition, Cepheid said that it was in the process of disclosing to Abraxis the information regarding its current process of manufacturing, which it said is not covered by the patents-in-suit, when Abaxis filed the suit.

Claiming that Abaxis had filed its suit despite a lack of information regarding Cepheid's manufacturing process, Cepheid said that Abaxis' "claims for patent infringement are brought without reasonable basis and in bad faith, warranting a finding that this is an exceptional case entitling Cepheid to an award of attorneys' fees and costs."

Cepheid also denied that it has infringed any of the other patents named in the suit, which had been licensed by Abaxis to Cepheid in September 2005, and has asked the court to declare all of the patents invalid for failing to meet conditions of patentability set forth in US law. It also has asked for a judgment that it is not in breach of the license agreement, that it is not liable as an infringer of the patents, and that it be awarded attorneys' fees and costs and any other relief the court decides is just.