Cepheid (Nasdaq: CPHD) announced today that it has filed an answer and counterclaims in a patent suit brought by Abaxis on June 28, 2010 in the United States District Court for the Northern District of California. In its filing, Cepheid denied Abaxis' allegations of patent infringement, asked the Court to determine it has paid all royalties due and is in full compliance with all the terms of its license, and to find that Abaxis' patents are invalid.
In 2005, Cepheid entered into a royalty-bearing license agreement with Abaxis for certain patents relating to lyophilization technology. Since then, Cepheid has introduced an internally-developed manufacturing process outside the scope of Abaxis patents that has resulted in reduced royalty payments to Abaxis, although the Company continues to pay royalties associated with certain other products.