SAN DIEGO, February 27, 2006 – LAWFUEL – The Law News Network – A patent litigation dispute between two medical diagnostic companies that had been fought in the U.S. and Europe for almost three years has reached a surprise ending this week: a win-win for both parties.
Inverness Medical Innovations, Inc. has agreed to acquire the rapid diagnostics business from ACON Laboratories, Inc for $175 million. The deal ends a patent infringement case brought by Waltham, MA-based Inverness in 2004 over some of ACON’s core rapid test diagnostic technology.
This would be one of the rare instances where an infringement case resolves with the plaintiff agreeing to purchase the defendant’s key business on mutually agreeable terms.
Law firm Morrison & Foerster, which has represented ACON in the underlying patent litigation, also advised the company on its acquisition by Inverness, a recognized leader in advanced diagnostic testing. The firm has represented ACON on corporate and intellectual property matters since the dispute began.
ACON, founded ten years ago by two brothers, is now one of the world’s leading providers of diagnostic testing kits for consumers, physicians and medical researchers. The company has its U.S. operations in San Diego. ACON’s “lateral flow immunoassay” business, which is what Inverness is acquiring, had 2005 revenue of $50 million and operating income in excess of $17 million. As part of the announced settlement, Inverness will also acquire ACON’s newly-constructed manufacturing facility in Hangzhou, China. That closing will take place later this year.
“This is a tremendous outcome for both companies, one that we have been hoping for ever since the patent litigation commenced several years ago,” said Morrison & Foerster partner David Doyle, who led the firm’s work on the patent case. “This is obviously the biggest single development in ACON’s brief history and we are pleased that the company has forged a partnership with Inverness to advance its innovative diagnostic capabilities internationally.”