Codexis, Inc. (Nasdaq: CDXS), a leading developer of biocatalysts for the pharmaceutical and fine chemical industries, filed a lawsuit in February 2016 in the United States District Court for the Northern District of California against Suzhou, China-based EnzymeWorks,Inc (“EnzymeWorks”) and its founder, Junhua “Alex” Tao. The lawsuit alleges Tao and EnzymeWorks’s willful infringement of ten patents, trade secret misappropriation, breach of contract, interference with business relationships, and unfair competition. To date, Tao and EnzymeWorks have failed to contest Codexis’s charges of infringement, have not challenged the validity of Codexis’s patents, and have lost each motion they filed as the case has proceeded.

Codexis alleges that Tao first gained access to Codexis’s proprietary intellectual property when he participated in a collaboration with Codexis while he was an employee at a globally leading pharmaceutical company. After leaving that pharmaceutical company, Tao ultimately founded EnzymeWorks, with facilities in China and San Diego. According to the lawsuit, Tao and EnzymeWorks began using Codexis’s trade secret biomaterials to make exact duplicates of Codexis’s patented enzymes. As Codexis alleges in its court filings, a number of EnzymeWorks’s products were found to be 100% identical to Codexis’s enzymes, made by using exact copies of Codexis’s trade secret plasmids.

As the lawsuit has progressed, Tao and EnzymeWorks have not contested their infringement or the validity of any of Codexis’s ten patents, despite ample opportunities to do so. Tao and EnzymeWorks also recently stipulated to the Court adopting all of Codexis’s proposed interpretations of certain patent claim terms, without challenging the interpretation of a single claim in any of Codexis’s patents.

In May, Tao and EnzymeWorks filed an unsuccessful motion to dismiss Codexis’s five claims relating to breach of contract, unfair competition, and interference with business relationships. The Court denied that motion in all relevant parts, with the minor exception of a few issues of no significance to Codexis’s case. All five of those claims, in addition to the patent and trade secret claims, thus remain part of the lawsuit. Tao and EnzymeWorks also filed two additional motions related to discovery, each of which the Court denied.

“Codexis’s intellectual property rights, including its trade secrets, are some of the company’s most valuable assets. This form of blatant disrespect for our intellectual property harms not only our business and ultimately our shareholders, but also our customers, who, like Codexis, rely on intellectual property rights to protect their businesses and products,” said John Nicols, CEO and President of Codexis. “The fact that EnzymeWorks and its founder have not disputed our patent infringement claims reinforces the need for Codexis to rely on the legal process to be made whole for these unfair and illegal uses of our intellectual property and for the steps we have had to take to enforce our rights.”

Codexis remains committed to defending its innovations and to protecting and enforcing its rights, and looks forward to obtaining a judgment from the Court in its favour, an injunction barring Tao and EnzymeWorks’s illegal conduct, and to recovering its damages, costs, and attorneys’ fees.