Bio-Rad Labs., Inc., The Univ. of Chicago v. 10X Genomics Inc.
Docket No. 2019-2255, -2285
NEWMAN, O’MALLEY, TARANTO
August 3, 2020
Brief Summary: DC decision of infringement of ‘083 patent under DOE affirmed; preamble found to limit ‘407 and ‘193 patent claims, infringement therefore vacated; money damages affirmed but injunction reversed as to two of the four accused product lines.
Summary: 10X appealed DC finding three Bio-Rad (licensee) patents directed to microfluidic systems (‘083 patent and ‘407 and ‘193 continuations) valid and willfully infringed, its denial of 10X’s request for JMOL, and grant of a permanent injunction against 10X. 10X’s allegedly infringing product lines are Single Cell 3’ Gene Expression, Linked-Reads, Single Cell V(D)J, Single Cell ATAC-seq, and Single Cell CNV. The FC Aug. 2019 order allowed 10X to “continue to sell its Linked-Reads and CNV products subject to the royalty and deposit requirements of the original DC injunction order” (see FN2). 10X challenged the DC’s finding of infringement under the doctrine of equivalents (DOE) due to narrowing amendments made during prosecution (Festo I, US 2002; Festo II, FC 2003 (“[p]rosecution history estoppel arises when a patent applicant narrows the scope of his claims during prosecution for a reason ‘substantial[ly]…relating to patentability’…[a] narrowing amendment is presumed to be a surrender of all equivalents within ‘the territory between the original claim and the amended claim’” (prosecution history estoppel (PHE)) and claim vitiation (Brilliant Instruments, FC 2013 (“another bar to a finding of” DOE infringement); UCB, FC 2019; Deere, FC 2012). The FC panel explained that the presumption of PHE can be overcome if the patentee can show one of the “exceptions” applies (i.e., “tangential relation to the equivalent”, “equivalent was unforeseeable”, or “some other reason suggesting that the patentee could not reasonably be expected to have described the equivalent” (Festo II)). The DC held that the “tangential relation” exception applied and the FC panel agreed because prior art generally relates to the amended subject matter but not the particular subject matter disclosed by the prior art (Amgen, FC 2020; Eli Lilly, FC 2019). Regarding claim vitiation, the FC panel agreed with the DC that 10X’s use of a “negligibly-fluorinated microchannel…is insubstantially different from a non-fluorinated microchannel” such that “[t]he non-fluorinated microchannel claim limitation is not stripped of meaning, or ‘effectively eliminate[d]’”. The FC panel also agreed with the DC “that 10X’s products meet the claimed surface tension limitation”. The DC’s finding of infringement and denial of 10X’s motion for JMOL were therefore affirmed as to the ‘083 patent.
10X argued the DC misconstrued the ‘407 and ‘193 patents by failing to find that “the preambles of these patents’ independent claims are limiting”. 10X argued that the preamble (“[a] method for conducting a reaction in plugs in a microfluidic system, comprising the steps of…”) “limits the claims to…‘on-chip’ reactions only”, while “its accused products are ‘off-chip’ reactions”. The DC found the preambles “provide antecedent basis” but do “not necessarily convert the entire preamble into a limitation” citing TomTom (FC 2015). The FC panel found that the DC misapplied TomTom which “involved a partially-limiting preamble”, while in this case “the preamble…cannot be neatly packaged into two separate portions” and does not “simply recite a method for an intended use or purpose” (e.g., “The term ‘conducting’ in the preamble is not analogous to the non-limiting language at issue in TomTom.” Also citing Eaton, FC 2003; “Under the correct construction, the claimed methods are limited to on-chip reactions.”) The DC’s judgment of infringement of the ‘407 and ‘193 patents were vacated and remanded.
Regarding damages, the FC panel disagreed with 10X that the DC’s consideration of comparable licenses were erroneous (Georgia-Pacific, SDNY 1970; Radio Steel, FC 1986; LaserDynamics, FC 2012 (“This court has often excluded licenses that are technologically or economically non-comparable.”)) The FC panel also found BioRad’s reasonable royalty opinions to be supported by substantial evidence (e.g., expert “evaluated the various licenses at issue and applied the Georgia-Pacific factors”). The FC panel also disagreed with 10X’s apportionment argument (Elbit, FC 2019 (calculation “must reflect the value attributable to the infringing feature of the product, and no more”)), and found the expert testimony to have been properly admitted. The FC panel also found that the DC abused its discretion in granting an injunction against two of 10X’s four product lines since, e.g., the hardship to 10X cannot be mitigated by “non-infringing alternatives”.