A U.S. federal court has ordered cancer-testing company Guardant Health to pay more than $245.2 million to biotechnology company TwinStrand Biosciences and the University of Washington following a long-running dispute over patented DNA-sequencing technology.

The judgment follows an earlier jury verdict finding that Guardant’s cancer-testing technology infringed patents held by TwinStrand and the university. The dispute centres on duplex sequencing, a DNA-sequencing technique designed to improve the accuracy with which genetic mutations can be identified.

The patent dispute

The litigation began with allegations that Guardant’s cancer-testing products infringed two patents covering duplex-sequencing technology developed by TwinStrand and researchers at the University of Washington.

In November 2023, a jury in Delaware federal court found Guardant liable for infringing the patents and determined that the infringement was willful. The jury initially awarded approximately $83.4 million in damages.

The finding of willful infringement was significant because it meant the court had the discretion to consider enhanced damages under U.S. patent law, potentially increasing the financial consequences for the infringing party.

Guardant subsequently challenged the verdict and the validity of the patents. However, the court declined to overturn the underlying finding of infringement.

Court imposes continuing royalty

The latest ruling substantially increases the financial consequences for Guardant. In addition to the damages, accrued royalties and interest, the court ordered Guardant to pay a 6% royalty on sales of certain products covered by the patents. The royalty applies to products including Guardant360, Reveal and Shield, which use blood samples to assist in cancer detection and treatment decisions.

The continuing royalty is particularly consequential because the affected products account for a substantial portion of Guardant’s business. According to an analyst cited by Investors’ Business Daily, 11 products subject to the royalty requirement account for roughly 90% of Guardant’s total revenue. The royalty is expected to remain in place until the relevant patents expire in March 2033, absent a successful appeal or other change in the legal position.

The court, however, rejected a request for enhanced damages, meaning Guardant was not subjected to an additional punitive increase on the basis of the willful-infringement finding.