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LEGAL PROCEEDINGS
3 Months Ended
Mar. 31, 2012
LEGAL PROCEEDINGS [Abstract]  
LEGAL PROCEEDINGS
NOTE 10—LEGAL PROCEEDINGS
 
The Company has been in the past, and continues to be, a party to litigation which has consumed, and may continue to consume, substantial financial and managerial resources. While the results of any litigation or any other legal proceedings are uncertain, the Company does not believe the ultimate resolution of any pending legal matters is likely to have a material adverse effect on the Company’s financial position or results of operations.
 
E8 Pharmaceuticals LLC
 
On July 1, 2008, the Company was named as a defendant in a complaint filed by plaintiffs E8 Pharmaceuticals LLC and Massachusetts Institute of Technology ("MIT") in the United States District Court of Massachusetts. In the complaint, the plaintiffs allege that the Company is infringing one patent owned by MIT and licensed to E8 Pharmaceuticals by making and selling the Company’s GeneChip® products to customers and teaching its customers how to use the products. The plaintiffs seek a permanent injunction enjoining the Company from further infringement, unspecified monetary damages, enhanced damages pursuant to 35 U.S.C. §284, costs, attorneys’ fees and other relief as the court deems just and proper. The Company will vigorously defend against the plaintiffs’ claims. There is no trial date set in this matter.
 
Enzo Litigation
 
On October 28, 2003, Enzo Life Sciences, Inc., a wholly-owned subsidiary of Enzo Biochem, Inc. (collectively “Enzo”), filed a complaint against the Company that is pending in the United States District Court for the Southern District of New York for breach of contract, injunctive relief and declaratory judgment. The Enzo complaint relates to a 1998 distributorship agreement with Enzo under which the Company served as a non-exclusive distributor of certain reagent labeling kits supplied by Enzo. In its complaint, Enzo seeks monetary damages and an injunction against the Company from using, manufacturing or selling Enzo products and from inducing collaborators and customers to use Enzo products in violation of the 1998 agreement. Enzo also seeks the transfer of certain Affymetrix patents to Enzo.
 
On November 10, 2003, the Company filed a complaint against Enzo in the United States District Court for the Southern District of New York for declaratory judgment, breach of contract and injunctive relief relating to the 1998 agreement. In its complaint, the Company alleges that Enzo has engaged in a pattern of wrongful conduct against it and other Enzo labeling reagent customers by, among other things, asserting improperly broad rights in its patent portfolio, improperly using the 1998 agreement and distributorship agreements with others in order to corner the market for non-radioactive labeling reagents, and improperly using the 1998 agreement to claim ownership rights to the Company’s proprietary technology. There is no trial date in the actions between Enzo and the Company.
 
On April 6, 2012, Enzo filed a complaint against the Company in the United States District Court for the District of Delaware. In the complaint, plaintiff alleges that Affymetrix are infringing U.S. Patent No. 7,064,197 by making and selling certain GeneChip® products. Plaintiff seeks a preliminary and permanent injunction enjoining the Company from further infringement and unspecified monetary damages. The Company will vigorously defend against this case.
 
Noteholder Litigation
 
On December 29, 2011, the Company received notice that Tang Capital Partners, LP, a holder of the Notes, had commenced class action litigation against the Company in the Superior Court of California, County of Santa Clara. The complaint alleged a variety of claims relating to the Company's previously announced proposed acquisition of eBioscience Holding Company, Inc., including that the acquisition would constitute a “Fundamental Change” under the indenture governing the Notes. The complaint sought unspecified damages, temporary and permanent injunctive relief against completion of the eBioscience acquisition, and other remedies. On January 21, 2012, the Company entered into an agreement to settle the purported class action litigation. As part of the settlement, the Company agreed that within two weeks it would commence a tender offer to repurchase the entire $95.5 million aggregate principal amount of Notes currently outstanding at par plus accrued interest. Tang Capital Partners, LP, which owned approximately $78.3 million principal amount of the Notes, agreed to tender all of its Notes into the offer. As described in further detail in “Note 8—Senior Convertible Notes,” on March 5, 2012, the Company completed the repurchase of $91.6 million in aggregate principal amount of the Notes and paid to the holders of the Notes aggregate consideration of $92.1 million, including accrued interest.
 
Administrative Proceedings
 
The Company’s intellectual property is subject to a number of significant administrative actions. These proceedings could result in the Company’s patent protection being significantly modified or reduced, and the incurrence of significant costs and the consumption of substantial managerial resources. For the three months ended March 31, 2012, the Company did not incur significant costs in connection with administrative proceedings.