Arguing over in $1 billion Igen suit

Roche is accused of breaking contract on use of technology

January 04, 2002|By Julie Bell | Julie Bell,SUN STAFF

Roche Diagnostics should pay more than $1 billion in damages to Igen International Inc., a company Roche sought to "damage and destroy" through breach of contract, an Igen lawyer told jurors yesterday in closing arguments in the nearly 5-year- old case.

As Igen Chairman and Chief Executive Officer Samuel J. Wohlstadter, members of his family and about 70 others looked on in U.S. District Court in Greenbelt, Igen lawyer Brent Gurney spent more than two hours arguing that the jury in the civil case should award $709.7 million in compensatory damages in addition to punitive damages.

The case, Gurney argued, came down to something so simple jurors had learned it as children: "You don't break your promises. You don't take something without paying for it, and you don't attempt to destroy somebody with fraud, trickery and deceit."

At issue is the Igen technology used in Roche's medical diagnostic tests, part of a fast-growing market that Igen now estimates at more than $7 billion. The technology ended up in Roche's hands under a 1992 contract Igen entered into with Boehringer Mannheim GmbH, which Igen sued in 1997 and Roche later acquired. Igen's technology consists of proprietary chemical compounds that emit light when they detect certain biological substances, allowing them to be used in the laboratory to test for the presence of thyroid or reproductive hormones or as markers for cancer, heart disease and osteoporosis.

The suit accuses Roche of, among other things, failing to pay Gaithersburg-based Igen the royalties it deserves, failing to aggressively sell the technology in markets Igen licensed to Roche as required by contract, and failing to maintain records needed to compute royalties.

U.S. District Judge Peter J. Messitte has found in earlier summary judgments that Roche was in violation of its contract with Igen on three of 14 counts.

Yesterday, Gurney told jurors the evidence presented in the trial, which began Oct. 23, showed Roche was trying to pressure Igen into either going out of business or selling out to Roche, allowing Roche to continue marketing the technology while freeing it from its royalty obligations and allowing it to keep all the profits. Igen now seeks to terminate the agreement.

But Roche lawyer Nancy J. Sennett said in her closing arguments that it was Igen that was seeking to take advantage of the Swiss company, which developed, manufactured and marketed Igen's diagnostic technology after licensing it from Igen for millions of dollars.

It was Roche's actions, at a cost of $350 million, that got the technology on the market to 7,000 customers, putting it to work in hospitals to help diagnose disease, she said.

"Now that the design and manufacture is completed, and the marketing strategy, Igen doesn't need Roche Diagnostics any more," she said. "Igen's purposes are clear: It's looking for ways to create problems instead of solve them so it can take the technology and sell it again."

Igen's shares closed in trading yesterday at $38.50, down 89 cents.

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