(Yicai Global) July 15 -- Illumina has agreed to pay USD325 million to MGI Technology, a unit of Chinese life sciences company BGI Group, to end litigation in the United States over patent infringement of gene-sequencing technologies.

Under the terms of the agreement, MGI and Illumina will drop any challenges to US court judgments in Delaware and California, the Shenzhen-based company said in a statement today. Illumina will pay the sum to Complete Genomics, an MGI unit that develops DNA-analysis technology used to detect genetic diseases.

The agreement end a battle that began earlier in the year. San Diego-based Illumina had appealed after a Delaware court ruled in May that its two-channel DNA sequencing systems infringed on patents held by Complete Genomics, resulting in a forced payment of almost USD334 million. Before that, a court in California decided that one of Illumina's patents was invalid.

The parties also have pledged not to sue each other in the US for patent infringement or unfair competition in the next three years. So MGI will drop its antitrust lawsuit against Illumina in California. The settlement only covers the US market.

Illumina also gained something. The American firm will obtain licensing in the States for a two-channel sequencing technology from MGI and its subsidiary. MGI will start selling its related CoolMPS sequencing products in the US in August, and StandardMPS next January.

As of Sept. 10, Illumina and its units had filed as many as 30 patent and trademark infringement suits against MGI, its subsidiaries, distributors, and customers outside of China, involving 17 countries and regions including the United States and Germany, the Chinese firm said in its listing prospectus. Founded in 2016, MGI operates in over 70 countries and regions. 

The global market for gene sequencing gear was worth about USD4.1 billion in 2019, MGI said, citing a 2020 report by Grand View Research. Illumina’s had a market share of about 74 percent, with revenue of USD3.1 billion. MGI's gene sequencer income was about USD145 million, and its market share was less than 4 percent.

Editor: Emmi Laine, Xiao Yi