Inventor of a DNA Sequencing Technique Is Disputed

A small biotechnology company has emerged to claim that it invented a seminal technique crucial to biotechnology research. And the government says it will consider, nearly a quarter-century after the invention was made, whether it awarded the patent to the wrong party.

The United States Patent and Trademark Office has started a proceeding to determine the rightful inventor of the technique, automated DNA sequencing: scientists at the California Institute of Technology, who hold the patent, or those at Enzo Biochem, the small company.

If Enzo were to win the patent rights it could mean significant revenue for the company and could hurt Applied Biosystems, which licenses the patent in question from Caltech and dominates the DNA sequencing business. Applied Biosystems machines were the main ones used in the Human Genome Project to determine man’s genetic blueprint.

Applied Biosystems, a unit of Applera, recorded $540 million in sales of DNA sequencing machines and chemicals in the fiscal year ended June 30, accounting for 29 percent of its revenue. Caltech is estimated to have earned tens of millions of dollars from that and related patents.

Executives at Enzo, which is based in New York, say the company filed for a patent in June 1982, a few months before the Caltech scientists said they conceived of their invention. But Enzo’s application was continually rejected, delayed and amended in the patent office and remained unknown until now.

“We had to fight and fight with them,” said Eugene C. Rzucidlo, a New York patent lawyer who represents Enzo. “It’s only now that the patent office granted our claims and set up a proceeding to find who the real first inventor is.”

Patent law was changed in the 1990s to eliminate such “submarine patents,” which can lead to infringement by companies that develop a product on their own, never knowing about a patent that suddenly surfaces. But Enzo’s application is old enough to fall under the old rules.

If it were to get a patent it would last for 17 years from the date it is issued. Caltech’s patent was issued in 1998 and expires in 2015.

Spokeswomen for Caltech and Applied Biosystems said their organizations did not know enough yet to comment. But Edward R. Reines, a Silicon Valley patent lawyer who has represented Applied Biosystems, accused Enzo of trying to mine the patent system for money.

“Enzo appears to be attempting to claim credit for the invention of modern DNA sequencing 25 years after the fact when they have not brought a meaningful DNA sequencing product to market,” said Mr. Reines, who is with Weil, Gotshal & Manges.

Enzo executives disputed that, saying the company, founded in 1976, had long sold reagents for use in genetic analysis, though not sequencing machines. Enzo reported a net loss of $15.7 million in its last fiscal year on revenue of $39.8 million.

The Caltech sequencer attached a different color of fluorescent dye to each of the four chemical units of DNA, allowing the DNA sequence to be read by a machine. It made sequencing faster and set the stage for the Human Genome Project. The inventors include Leroy E. Hood, a biologist, and Michael W. Hunkapiller, who later ran Applied Biosystems.

The Caltech patents have withstood challenges before. A whistleblower lawsuit filed by a competitor of Applied Biosystems, said federal funds had been used in the invention, entitling the government to certain discounts and other rights. The government declined to pursue the lawsuit. And a former Caltech scientist filed a lawsuit claiming to be one of the inventors but lost in court.

R. Danny Huntington, a Washington lawyer who specializes in interference proceedings, said there were only about 100 such cases a year and they could take one or two years to resolve. The party with the earlier patent application date wins about two times out of three, he said.

While that would seem to favor Enzo, the patent office declaration of the interference criticizes Enzo’s patent claims for being unusually numerous, “erratically numbered” and “extraordinary in their flagrant disregard” of certain rules. The application is still not public, but lawyers said it contained about 1,200 claims.