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Roche slapped with heavy fine — again

Roche is having to dig deep into its pocket once again swissinfo.ch

The pharmaceutical giant, Roche, is to pay $505 million in damages to the United States company, IGEN International, for violating a licensing agreement.

On Thursday, a US federal jury ruled that Roche Diagnostics, a subsidiary of Roche Holding, breached a licensing agreement with IGEN by underpaying royalties and selling the US company’s patented diagnostic test to markets, not included in the agreement.

The jury awarded IGEN $400 million in punitive damages and $105 million in compensatory damages.

The verdict terminates the legal dispute between Roche Diagnostics and the small US diagnostics company, which has been running for four years.

“We are pleased that the jury concurred with our view that Roche has engaged in an egregious pattern of misconduct over the years,” Samuel Wohlstadter, IGEN’s chairman and chief executive said.

IGEN said it will now use its rights to terminate the licensing agreement with the Swiss pharmaceutical company, but Roche was quoted as saying the judge had not ruled whether the US company was allowed to withdraw its blood-testing technology, Origen.

Roche appeal

In a statement from its headquarters in Basel, Roche said it would appeal the verdict. It said the license agreement could not be terminated until the appeal had been heard, a process that could take months.

“While any appeal is in progress, Roche Diagnostics will continue to provide its customers with the products and services and will drive forward all planned innovations based on the Origen technology,” the statement said.

IGEN cooperated with larger companies to develop Origen-based products, one of them was the German company Boehringer Mannheim, which Roche acquired in 1998.

Under the agreement, Boehringer had the rights to sell Origen-based products to hospitals, clinical reference laboratories and blood banks for which it was to pay IGEN a nine per cent royalty.

IGEN claimed in its suit, filed in September 1997, Boehringer sold Origen-based equipment directly to doctors, a market not covered by the agreement. It also claimed the German company paid only half of the agreed royalties.

Up until now Roche Diagnostics has been a unit that has not suffered with the rest of the embattled company, after the European Union fined the company € 462 million for its role in vitamins and additives cartels.

swissinfo with agencies

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