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November 2012: Victory for Vermillion Inc. and Bio-Rad in High-Stakes Arbitration

November 2012

The firm recently obtained an arbitration victory for its clients Vermillion, Inc. (f/k/a Ciphergen Biosystems, Inc.) and Bio-Rad Laboratories, Inc. The case, originally filed in Santa Clara County Superior Court, involved surface enhanced laser desorption ionization (“SELDI”) technology—a protein separation and characterization technology with potential applications in the fields of proteomics, drug discovery, diagnostics, and disease treatment. The case was heard by a single arbitrator at JAMS after QE successfully convinced a panel of the California Court of Appeal, Sixth District, to reverse the Superior Court’s denial of Vermillion’s and Bio-Rad’s petition to compel arbitration.

Vermillion recently launched its first diagnostic product, OVA1 (the first blood test to evaluate ovarian masses for malignancies prior to surgery). The plaintiff sought compensatory damages, punitive damages, and injunctive relief. After a five-day trial, the Arbitrator found in favor of Bio-Rad on all causes of action alleged against it (i.e., no liability). The Arbitrator also found in favor of Vermillion on all causes of action alleged against it (i.e., no liability), with the exception that the Arbitrator found that Vermillion should provide a verification that its past royalty payments to the plaintiff had been correctly calculated. As a result of these rulings and pre-trial Section 998 offers, the plaintiff agreed to a Settlement and Consent Judgment in favor of Defendants, in which the plaintiff agreed not seek to vacate the Arbitration Award or otherwise exercise any right to appeal, and further agreed to relieve Vermillion of its contractual obligation to pay royalties on its future revenues.