Advertiser Staff
Two Kona-based companies competing to produce algae-based products, Cyanotech Corp. and Aquasearch Inc., today announced that they have settled their intellectual property litigation without admission of liability by either party.
Terms of the agreement will remain confidential.
Under the agreement, Cyanotech has agreed to an injunction that prevents it from using any tube system for microalgal production that infringes Aquasearch’s U.S. patent. Aquasearch has agreed that Cyanotech’s current proprietary process for producing microalgae, known as the PhytoDome, does not infringe on that patent.
Cyanotech will pay undisclosed royalties to Aquasearch. Cyanotech officials say they believe that such payments will not have a material effect on Cyanotech’s financial condition or operations.
The settlement brings to a close a legal battle between the high-tech aquaculture companies that worked in partnership in the early 1990s and still operate just steps apart at the National Energy Laboratory near the Kona-Keahole International Airport.
Their legal differences reached U.S. District Court in November 1998. Cyanotech and its chairman, Gerald Cysewski, filed a complaint asking for a judgment that the company was not infringing on the 1996 patent that Aquasearch President Mark Huntley had secured for the company’s method of creating a red powder called astaxanthin, a microalgae used as a fish supplement and human vitamin supplement.
In December 1999, U.S. District Judge Alan C. Kay ruled for Aquasearch, finding that Cyanotech had infringed on the patent. A year ago, the judge denied a motion for reconsideration.
In their settlement, both Cyanotech and Aquasearch have agreed to dismiss all claims asserted in the litigation and to confirm that Aquasearch’s patent is valid and enforceable.
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