Illumina Inc (ILMN.O), a gene-mapping company facing a $5.7 billion hostile takeover bid by Swiss drugmaker Roche Holding AG ROG.VX, was sued by Columbia University on Monday for allegedly infringing five patents related to DNA sequencing.
According to the complaint filed in the U.S. District Court in Wilmington, Delaware, Illumina commercialized its so-called next-generation sequencing (NGS) products despite knowing about the patents, obtained between 2009 and 2012 and assigned to Columbia.
The university said its patents cover NGS technologies that allow rapid and precise DNA sequencing, which are particularly important in using individuals' genomic DNA sequence information as a basis for providing health care.
Each patent has several inventors, including Columbia chemical engineering professor Jingyue Ju, according to the complaint. The university is seeking royalties, triple damages and other remedies.
Illumina makes products that decode a person's entire genome. "We believe these claims are without merit and we will defend against them vigorously," Illumina spokeswoman Jennifer Temple said in a statement about the lawsuit.
It is unclear whether Columbia might have similar claims against other companies.
"Columbia is proud of the outstanding research efforts of its faculty and will defend its patented technology," university spokesman Robert Hornsby said. He declined to comment about other potential claims.
The university filed its complaint hours after Roche extended its cash takeover bid for Illumina.
Roche's bid values Illumina at $44.50 per share, but the San Diego-based company said the offer is "grossly inadequate."
Acquiring the company would give Basel, Switzerland-based Roche a leading position in gene sequencing, which could help better identify patients who might benefit from using particular drugs.
Illumina in 2011 posted profit of $86.6 million on revenue of $1.06 billion.
In its annual report, the company projected that expansion in the sequencing market and its product portfolio would drive demand for its technology over the next several years.
Analysts expect Roche to raise its takeover bid, and shares of Illumina have traded above $44.50 since the original bid became public on January 25.
In afternoon trading, Illumina shares were down 15 cents at $50.31 on the Nasdaq.
The case is Trustees of Columbia University in the City of New York v. Illumina Inc, U.S. District Court, District of Delaware, No. 12-00376.
(Reporting By Jonathan Stempel in New York; Additional reporting by Caroline Copley in Zurich; editing by John Wallace and Gerald E. McCormick)