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ADHB Challenges Bio-Tech Co.Over Claim For Patent


Auckland District Health Board is taking pre-emptive legal action against the Melbourne-based biotech company Genetic Technologies Ltd (GTG).

GTG holds patents which it claims cover the use and analysis of non-coding DNA. It has demanded substantial licence fees for standard DNA tests (such as those for cystic fibrosis) carried out by public health providers in New Zealand, and has threatened the ADHB with legal action for infringement of its patents.

Initially, GTG demanded from the public health sector an upfront payment of $10 million dollars along with an annual licence of $2 million a year. Later, after ADHB raised issues about the patents, the demand was reduced to a 'one off' licence fee of AU$560,000.

ADHB General Counsel, Bruce Northey, said ADHB decided to challenge GTG after subjecting its demands to rigorous scientific and legal scrutiny. ADHB is satisfied that its DNA testing does not infringe the patents and doubts that the patent claims are valid. GTG failed to answer specific questions about the application of its patents to ADHB's tests despite repeated requests for it to do so.

"Nowhere else in the world is a public health provider paying licence fees to GTG for tests that are standard globally," he said. "It is curious that GTG has chosen to make such demands in New Zealand for the first time."

Mr Northey said the ADHB's position was that, while New Zealand encourages and supports research and development and the commercial protection of this through patents, patent licence demands needed to be subjected to proper scrutiny before public money was spent.

The ADHB issued proceedings in the High Court in Auckland last week.


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