Patent litigation
In January 2012, Sequenom entered a patent battle with competing companies, Ariosa and Natera, accusing them of infringing the "540 patent" (US 6258540 ). The cases are Sequenom Inc. v. Natera Inc. 12-cv-0184, Sequenom v. Ariosa Diagnostics Inc., 12-cv-0189, U.S. District Court, Southern District of California (San Diego), and Ariosa v. Sequenom.
Verinatal Health and Stanford University later filed suit against Sequenom in a dispute over the 'Quake patent'. Verinata claims that Sequenom's lawyers sent it a letter in 2010 alleging that "'the practice of non-invasive prenatal diagnostics, including diagnosis of the Down Syndrome and other genetic disorders, using cell-free nucleic acids in a sample of maternal blood infringes' the '540 patent, as well as the claims of a pending United States Patent Application." The '540 patent was invented by Isis Ltd. and expires in 2017.
Stanford University owns the Quake patents and licensing rights; Verinata is its exclusive licensee.
In April 2012, Sequenom acquired two pending patents from Helicos Biosciences. In consideration for the sale and transfer of the purchased assets, Sequenom paid Helicos $1.3 million. The Helicos patent applications (US Patent application 12/709,057 and 12/727,824) cover methods for detecting fetal nucleic acids and diagnosing fetal abnormalities.
In July 2012, The United States District Court denied Sequenom's motion for a preliminary injunction motion against Ariosa Diagnostics.
In August 2013, The Court of Appeals for the Federal Circuit vacated the District Court decision and remanded that case to the District Court.
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In the Ariosa litigation, the District Court (N.D.Cal.) held that the '540 patent was invalid because it claimed a natural phenomenon, the presence of cell-free fetal DNA fragments in maternal blood. On June 13, 2015, the CAFC affirmed the District Court's judgment. Finally, on December 2, 2015, the Federal Circuit declined to rehear en banc.
SEQureDx scandal
In 2009, Sequenom Center for Molecular Medicine (SCMM) was expected to launch the SEQureDx prenatal screening tests for Down syndrome and Rhesus D. Subsequent investigation revealed significant flaws in the studies of the test's effectiveness. As a result, the board of directors of Sequenom fired CEO Harry Stylli, senior vice president of research and development Elizabeth Dragon and three other employees after a probe discovered that the company had failed to adequately supervise its Down syndrome test. CFO Paul Hawran also resigned. Board chairman Harry F. Hixson Jr. was named interim CEO and director Ronald M. Lindsay was appointed to replace Dragon. Dragon has since been charged by the Securities and Exchange Commission (SEC) because she "lied to the public about the accuracy of Sequenom's prenatal screening test for Down syndrome". She died on February 26, 2011.
In 2010, Sequenom paid $14 million to settle a shareholder class-action lawsuit that arose from the errors in the development of the Down syndrome test. Sequenom executives are under investigation by the SEC for insider trading before announcement of problems with the test.
On September 1, 2011, Sequenom entered into a cease-and-desist order with SEC.