Genolab Sues Thermo Fisher for Breach of Gene Sequencing Instrument Lease

A lawsuit filed on Sunday in the Central District of California by plaintiff Genolab Inc. against Thermo Fisher Scientific Inc. and Thermo Fisher Financial Services Inc. (collectively, Thermo Fisher) alleged breach of contract. The case concerns Genolab’s lease of Thermo Fisher’s gene sequencing tool, the Genexus Instrument.

The plaintiff is an organization based in California that “performs cutting edge, industry-leading molecular and genetic testing,” the complaint explains. In late 2020, Genloab was eager to acquire a gene sequencing instrument so that it could evaluate large data sets more efficiently, the complaint said.

Because the defendant regularly sells or leases gene sequencing instruments and software, Genolab engaged it in talks to lease a Genexus Instrument, reportedly described by the defendant as “the first turnkey next-generation sequencing (NGS) solution that automates the specimen-to-report workflow and can deliver results in a single day.”

During negotiations, Thermo Fisher was said to have represented that the Genexus Instrument would reliably sequence and interpret data. These promises purportedly led the plaintiff to sign a lease agreement to obtain Genexus Instrument for 36 months at just over $7,100 per month with a down payment of $30,000.

However, Genolab asserts that the problems began during the instrument’s setup. The instrument reportedly produced failed readings and failed to pass quality control. Additionally, a sensor issue was detected. Following troubleshoots, control runs, and test runs, the issue with the instrument remained unidentified.

According to the plaintiff, the agreement specified that the lease would not begin until “installation and operational qualification services” and training were completed. However, Thermo Fisher charged the plaintiff for the two months when the instrument was inoperable.

The Genexus Instrument then suffered a “catastrophic failure,” which Thermo Fisher responded to by sending replacement reagents which were not received until a month later. After replacing the reagents, the issue allegedly persisted and the instrument remains out of service as of the filing of the suit.

The plaintiff explains that “in attempting to use the Genexus Instrument in its unworkable form, Genolab has wasted several thousand dollars on reagents and support services.” Further, it alleges that its workflow capacity has been decreased by the issues, resulting in lost revenue and profits.

The complaint states counts for breach of contract and breach of warranty. Genolab seeks a jury trial, damages, costs, and interest. 

The plaintiff is represented by the Law Offices of Brian Nomi and Ayala Law, P.A.