Affymetrix' position in the gene chip (DNA microarray) arena has taken a hit since it invented its GeneChip technology in the late 1980's, with companies such as Agilent, Illumina, Nimblegen ( now owned by Roche ), and Oxford Gene Technology having all become important players in the market.
Things have improved for Affymetrix this year, with the company's revenues for the quarter increasing 12 per cent to $94.9m compared with $84.7m during the same period last year.
Pretax profits increased to $3.7m from a loss of $14.4m as costs dropped, most notably with R&D accounting for 17 per cent of revenues compared with 26 per cent the previous year.
Meanwhile, Illumina's revenues have rocketed 82 per cent to $97.5m on the back of strong growth and its acquisition of Solexa earlier this year.
The Solexa acquisition has enabled Illumina to enter into the gene sequencing market and has shipped over 100 of its Genome Analysers since its release.
The company's profits didn't match its rocketing revenues with pretax profits up 14 per cent to $19.7m for the quarter.
While the figures look good for Illumina, it has been hit with another lawsuit from rival Affymetrix that alleges the company is in breach of eight of its patents and is seeking "all available remedies, including injunctive relief" .
Affymetrix asserts that Illumina's BeadArray technology, the platform on which the majority of its microarray chips are based, its BeadArray reader, and the Solexa sequencing technology used in its Genome Analyser are all in breach of its patents.
"We are disappointed to see that Affymetrix continues to choose to compete with Illumina in the court room rather than in the market place," said Jay Flatley, Illumina's CEO.
"Our policy is to respect the valid and enforceable intellectual property rights of others and to take licenses where appropriate."
He continued to state that he believes that Illumina is not in breach of the patents and that the company will "continue to defend and support our customers against Affymetrix' unfounded claims" .
This suit follows on from a lawsuit initiated in 2004 that led to the jury awarding Affymetrix damages of more than $16.7m and a royalty of 15 per cent on those products in breach of the patents.
The next phase of the trial, scheduled to start on February 11, 2008, will focus on the validity of Affymetrix' patents.
The phase after that will determine whether the infringement was wilful - if so the court could treble the damages awarded.
The results of these lawsuits could dramatically change the face of the DNA microarray market that has seen such growth due to the application of genetic information to drug discovery and 'personalised medicine'.