The complaint alleges that when Lynx Therapeutics was spun-out from Applied Biosystems (ABI) they wrongfully took intellectual property (IP) gained at ABI that should have remained there.
Three years later, in 1995, they used this IP to gain patents for 'sequencing-by-ligation' technology; a method of sequencing DNA using successive rounds of oligonucleotide probe ligation.
The technology is used in ABI's new 'sequencing by oligonucleotide ligation and detection' or SOLiD DNA analysis system and so ABI now need those patents.
Interestingly, the complaint does not make any claims for patent infringement.
Lynx Therapeutics were bought out by Solexa, in March 2005, who use different technology in their recently released 1G Analyser.
Solexa believes this DNA 'sequencing-by-synthesis' technology is not covered by the disputed patents and therefore the law suit should not impact its current or future business.
The SOLiD system, used for massively parrallel, ultra-high-throughput DNA analysis, was bought by ABI during their $120m (€91.6m) acquisition of Agencourt Personal Genomics in July.
Solexa recently strengthened their intellectual property portfolio surrounding the disputed technology in March 2006 with the award of a key US Patent.
"The granting of our latest patent around bead-based sequencing technologies reflects the emphasis we place on continuing to develop and strengthen our entire IP portfolio, including the extensive IP assets developed at Lynx Therapeutics prior to our business combination," stated John West, Solexa CEO.
"We believe our pioneering developments in the area of bead-based sequencing by ligation are valuable assets that provide us with additional technology development options as well as strategic licensing opportunities."
Solexa's recently released 1G Analyser uses a different technology known as DNA sequencing-by-synthesis and the company believes that the technologies covered by the law suit are not material to its current or future business.
The DNA sequencing-by-synthesis based 1G analyser makes up part of Solexa's Genome Analysis System, which comprises of the 1G Genetic Analyzer and their Cluster Station and is designed to generate over a billion bases of sequence per run.
Commenting on the 1G analyser release, West said: "This product introduction takes us a significant step closer to becoming the first company to deliver whole human genome sequencing at $100,000 per genome."
Solexa recently agreed to be acquired by Illumina in a $600m stock swap deal, subject to stakeholder agreement which is planned for January 26, 2007.
Illumina signed a multi-million dollar agreement in December with GlaxoSmithKline (GSK) to genotype two thousand DNA samples for an undisclosed, but specific, disease.