IP Law Daily Damages of $24M for infringement of DNA patents affirmed
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Monday, August 3, 2020

Damages of $24M for infringement of DNA patents affirmed

By Brian Craig, J.D.

Despite vacating the district court’s judgment of infringement for two of three patents, the Federal Circuit found that substantial evidence supports the damages award of nearly $24 million.

The U.S. Court of Appeals for the Federal Circuit has affirmed a damages award of $23.9 million for 10X Genomics, Inc.’s ("10X") willful infringement of a patent owned by Bio-Rad Laboratories ( "Bio-Rad") relating to DNA technology. While vacating the federal district court in Delaware’s finding of infringement for two of three patents and ordering a new trial based on improper claim construction, the Federal Circuit affirmed the damages award because substantial evidence supports the jury award and the district court properly admitted certain expert testimony. The Federal Circuit also generally affirmed the district court’s grant of a permanent injunction but limited the scope of the injunction for two product lines (Bio-Rad Laboratories, Inc. v. 10X Genomics Inc., August 3, 2020, O'Malley, K.).

RainDance Technologies, Inc. and the University of Chicago filed suit against 10X alleging infringement of several patents. Bio-Rad Laboratories Inc. substituted for RainDance. The district court held a jury trial, and the jury found that the three remaining patents-in-suit— U.S. Patent Nos. 8,889,083 ("the ’083 patent"), 8,304,193 ("the ’193 patent"), and 8,329,407 ("the ’407 patent")—were valid and infringed, and that 10X’s infringement was willful. The patents- are directed to systems and methods for forming microscopic droplets (also called "plugs") of fluids to perform biochemical reactions. The jury awarded damages of $23,930,718. After the district court denied post-trial motions for judgment as a matter of law, a new trial, or remittitur, 10X appealed.

Infringement of the ’083 patent. The Federal Circuit first affirmed the district court’s judgment of infringement of the ’083 patent over objections based on prosecution history estoppel. Prosecution history estoppel arises when a patent applicant narrows the scope of his claims during prosecutionfor a reason substantially relating to patentability. The Federal Circuit also affirmed district court’s claim vitiation and doctrine of equivalents analysis as to the ’083 patent. Claim vitiation is not an exception or threshold determination that forecloses resort to the doctrine of equivalents but is instead a legal conclusion of a lack of equivalence based on the evidence presented and the theory of equivalence asserted. The appeals court held that the appropriate inquiry is whether a reasonable juror could have found that a negligibly-fluorinated microchannel performs the same function, in the same way, and achieves the same result, as a non-fluorinated microchannel. Here, based on the evidence presented at trial—including expert testimony—the district court concluded that a reasonable juror could find infringement. Furthermore, substantial evidence supports the jury’s verdict that 10X’s accused products meet the claimed surface tension relationship. Therefore, the district court properly denied 10X’s motion for judgment as a matter of law of non-infringement of the ’083 patent.

Infringement of other patents. The Federal Circuit vacated the district court’s judgment of infringement of the claims of the ’407 and ’193 patents and remand for a new trial on those issues based on the district court’s improper claim construction. The Federal Circuit agreed with the 10X’s argument that, contrary to the district court’s construction, the preambles of these patents’ independent claims are limiting. Whether a preamble is limiting is determined on the facts of each case in light of the overall form of the claim, and the invention as described in the specification and illuminated in the prosecution history. Here, the Federal Circuit found that the preamble cannot be neatly packaged into two separate portions. Under the correct construction, the claimed methods are limited to on-chip reactions. Even Bio-Rad concedes that the district court precluded 10X from arguing that the entire preamble is limiting. Accordingly, the Federal Circuit vacated the district court’s judgment of infringement of the ’407 and ’193 patents and remanded for a new trial on those issues.

Damages. Despite vacating the district court’s judgment of infringement of two of the patents, the Federal Circuit found that substantial evidence supports the damages award. The judgment of infringement of the ’083 patent covers all six accused product lines at issue. The jury verdict and jury instructions show that the damages award is not predicated on infringement of any one patent. The Federal Circuit found that the district court did not abuse its discretion in allowing the jury to consider testimony regarding the three licenses at issue. The appeals court rejected the argument from 10X that Bio-Rad’s expert did not apportion damages to the value of the patented technology. The district court properly admitted the expert testimony. Furthermore, the jury’s damages award is supported by substantial evidence.

Injunction. The Federal Circuit affirmed the district court’s grant of a permanent injunction but vacated the injunction dealing with two product lines. The Federal Circuit agreed that money damages will not be able to compensate Bio-Rad for the harms stemming from 10X’s first mover advantage. But the Federal Circuit found that the district court abused its discretion by enjoining sales of two product lines. As a much small company, 10X depends entirely on the sales of the enjoined products for its revenue. Although the district court concluded that the hardship to 10X is mitigated because it can sell its non-infringing alternatives, the district court failed to consider the lack of non-infringing products for two out of the five product lines.

The Federal Circuit concluded that the district court carefully crafted an injunction that allows existing 10X customers to continue their important research but attempts to mitigate the harm to Bio-Rad from 10X’s first mover advantage. The court also provided 10X with an opportunity to design non-infringing alternatives, which 10X has done for all but two infringing product lines. Therefore, the Federal Circuit found that the injunction should remain in place as to the other enjoined product lines.

This case is Nos. 19-2255 and 19-2285.

Attorneys: Edward R. Reines (Weil, Gotshal & Manges LLP) for Bio-Rad Laboratories, Inc. E. Joshua Rosenkranz (Orrick, Herrington & Sutcliffe LLP) for 10X Genomics Inc.

Companies: Bio-Rad Laboratories, Inc.; 10X Genomics Inc.

MainStory: TopStory Patent FedCirNews GCNNews

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