Flipping through the quarterly report that Affymetrix issued last November, investors may have noticed a section entitled "The company may lose customers unless it improves its ability to manufacture its products and ensure their proper performance." Indeed, the firm took almost five years to address frequent complaints from researchers that it delivered chips that sometimes gave spurious results and often arrived months after they had been ordered. Fortunately for Affymetrix, until recently it had no real competitors to lose customers to, thanks largely to a formidable portfolio of issued and pending patents that now number more than 400, according to Stephen P. A. Fodor, its chief executive. "We have license agreements with 20 other companies," Fodor says. But he acknowledges that the licenses restrict those other firms to making arrays that have only about a tenth as many genetic probes as Affymetrix's gene chips do.

Other microarray producers responded in two ways: with lawsuits and with patents of their own on different microarray designs. Incyte Genomics, for example, uses robots to deposit up to 10,000 presynthesized genetic probes onto a glass slide. Motorola has prototypes of chips that hold the probes inside a thin slab of gel. But companies' aggressive patenting has led to a bewildering web of lawsuits (above)¿and it may only get worse. "If we want to make a medical diagnostic with 40 genes on it, and 20 companies hold patents on those genes, we may have a big problem," says Nicholas J. Naclerio, head of Motorola's BioChip division. "It isn't at all clear how this is going to work out."

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