http://www.buscom.com/letters/nbcnpromo/nbcn/nbcn.html
Nanogen, CombiMatrix Settle Suit
Nanogen, Inc. (10398 Pacific Center Court, San Diego, CA 92121; Tel: 619/546-7700, Fax: 619/546-7718; Website:
www.Nanogen.com) has settled its legal dispute with Donald Montgomery and CombiMatrix Corp., a subsidiary of Acacia Research (55 S. Lake Ave., No. 650, Pasadena, CA 91101-2676; Tel: 626/396-8300; Website:
www.acaciaresearch.com). The out-of-court settlement appears to be a clear victory for Nanogen.
Under the agreement, Nanogen will receive cash payments totaling $1 million, 17.5% of the outstanding shares of CombiMatrix common stock, and royalty payments of 12.5% on sales of products developed by either CombiMatrix or its affiliates that incorporate the disputed technology. The settlement also provides for minimum annual royalty payments and that the equity interest in CombiMatrix will be non-dilutive under certain circumstances for a period of up to 3 yr.
"We are extremely pleased with the terms of the settlement agreement with CombiMatrix and Montgomery," comments Howard C. Birndorf, executive chairman and chairman of the board of Nanogen. "It is important to note that as part of this settlement, Nanogen did not out-license any technology fundamental to our core product line. The cash payment of $1 million will compensate us for the litigation costs incurred in protecting our rights to the disputed technology, while the equity and royalty payments ensure that Nanogen will participate in any benefit resulting from CombiMatrix's further development and commercialization of this technology."
In November 2000, Nanogen filed a complaint in the United States District Court for the Southern District of California against CombiMatrix and Montgomery, a former employee of Nanogen, who is now employed by CombiMatrix. Nanogen says that Montgomery had misappropriated Nanogen technology after he left Nanogen by disclosing trade secrets to CombiMatrix and by filing patent applications on those trade secrets in his name. Nanogen's complaint sought a correction of inventorship on U.S. Patents 6,093,302, 6,280,595, and related patents or applications, assignment of rights in those patents or applications to Nanogen, an injunction preventing disclosure of trade secrets and damages for trade secret misappropriation.