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Biolidics serves arbitration notice to biochip partner Sysmex over IP woes

CATALIST-LISTED medtech firm Biolidics on Thursday said it has issued a notice of arbitration (NOA) to Japan-based healthcare group Sysmex Corporation in light of disputes over intellectual property (IP).

This comes after Biolidics in October served a letter of demand to Sysmex, alleging that the latter had breached IP obligations under a collaboration agreement struck in 2016 for the joint development of biochips.

Biolidics had claimed that Sysmex had filed certain patent applications in the US, China, Japan and Europe which contain IP, technical information and/or know-how that belongs to Biolidics, and/or qualifies as newly developed or jointly developed IP under the development agreement.

According to Biolidics, both parties had agreed that any newly developed or jointly developed IP would be jointly owned. They would also need to discuss in which countries the patent applications will be made, as well as the percentage of each party's respective ownership share before the applications are filed. Such patent applications would then be filed by both parties after an agreement is reached.

In a bourse filing on Thursday, Biolidics noted that its claims against Sysmex include a declaration that the subject matter of the patent applications comprises wholly, or at least in part, Biolidic's background IP, and/or newly developed or jointly developed IP.

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The company is looking for Sysmex to deliver up all of Biolidics' background IP that continues to remain in its possession, and for Sysmex to rectify the patent applications to reflect Biolidics as sole proprietor, or joint proprietor, as the case may be.

Biolidics is also seeking an injunction to restrain Sysmex's directors, officers, servants, agents or affiliates from continued retention, use or disclosure of Biolidics' background IP. 

Among other things, Biolidics noted that Sysmex should affirm under oath a full listing of patent applications filed in respect, or in connection with the development agreement, or use of the firm's background IP in any commercial endeavours, or research and development programmes.

It is also seeking for Sysmex to bear the costs of the arbitration, along with a sum to be assessed.

Biolidics said it has been advised that, unless Sysmex voluntarily complies with the NOA claims, the arbitration is unlikely to conclude within FY2020. As such, the company will continue to incur legal fees expenditure to maintain the arbitration at this stage.

Separately, Biolidics on Thursday also noted that it has received a counterclaim from Sysmex's legal counsel on Nov 4 in response to Biolidics' letter of demand which was issued last month.

Under the counterclaim, Sysmex alleged that Biolidics had breached its obligations under a feasibility study agreement entered into between both parties in August 2014; specifically, that Biolidics had filed a patent application in May 2016 containing IP that may have belonged to Sysmex.

Sysmex's claims against the company include that this particular patent application and all related applications or patents be converted to one of joint ownership, with expenses to be borne by Biolidics.

Having consulted with its legal advisers, Biolidics is of the view that the counterclaim is "wholly without merit", and fails to satisfactorily address and/or comply with its letter of demand, it said.

As at 1.08pm on Thursday, Biolidics shares were trading at S$0.31, up S$0.01 or 3.3 per cent, amid broad market gains on the Singapore bourse and elsewhere in the region.

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