Bio-Rad Labs., Inc. v. 10X Genomics Inc.

• Decision Date: 03 August 2020
• Docket Number: 2019-2255, 2019-2285
• Parties: BIO-RAD LABORATORIES, INC., The University of Chicago, Plaintiffs-Appellees v. 10X GENOMICS INC., Defendant-Appellant
• Court: U.S. Court of Appeals — Federal Circuit

967 F.3d 1353

BIO-RAD LABORATORIES, INC., The University of Chicago, Plaintiffs-Appellees

v.10X GENOMICS INC., Defendant-Appellant

2019-2255, 2019-2285

United States Court of Appeals, Federal Circuit.

Decided: August 3, 2020

Edward R. Reines, Weil, Gotshal & Manges LLP, Redwood Shores, CA, argued for plaintiffs-appellees. Also represented by Christopher Shawn Lavin, Derek C. Walter.

E. Joshua Rosenkranz, Orrick, Herrington & Sutcliffe LLP, New York, NY, argued for defendant-appellant. Also represented by Elizabeth Moulton, Menlo Park, CA; Melanie L. Bostwick, Washington, DC; Azra Hadzimehmedovic, Tensegrity Law Group LLP, McLean, VA; Matthew D. Powers, Robert Lewis Gerrity, Redwood Shores, CA.

Steven R. Trybus, Locke Lord LLP, Chicago, IL, for amicus curiae The Broad Institute, Inc.

Before Newman, O'Malley, and Taranto, Circuit Judges.

O'Malley, Circuit Judge.

Bio-Rad Laboratories, Inc. and the University of Chicago (collectively, "Bio-Rad"), accused 10X Genomics Inc. ("10X") of infringing three patents: U.S. Patent Nos. 8,889,083 (" ’083 patent") ; 8,304,193 (" ’193 patent") ; and 8,329,407 ("’407 patent"). The United States District Court for the District of Delaware held a jury trial in November 2018. The jury found all three patents valid and willfully infringed. It also awarded damages in the amount of $23,930,716. Post-trial, the district court denied 10X's motion for judgment as a matter of law ("JMOL") under Federal Rule of Civil Procedure 50(b), rejecting 10X's arguments that (1) the accused products do not infringe; (2) 10X's infringement was not willful; (3) the asserted claims are invalid; and (4) Bio-Rad had failed to present a legally sufficient damages case. Bio-Rad Labs. Inc. v. 10X Genomics, Inc. , 396 F. Supp. 3d 368 (D. Del. 2019). The district court also granted Bio-Rad's motion for a permanent injunction. Bio-Rad Labs. Inc. v. 10X Genomics, Inc. , No. 15-cv-152-RGA, 2019 WL 3322322, at *1 (D. Del. July 24, 2019). This appeal followed. For the reasons discussed below, we affirm-in-part, reverse-in-part, vacate-in-part, and remand. Specifically, we affirm the judgment of infringement of the ’083 patent and the entirety of the jury's damages award. We reverse, however, the district court's construction of the asserted claims of the ’407 and ’193 patents and vacate the judgment of infringement of those patents. We remand for a new trial on the issue of whether 10X's accused products infringe the ’407 and ’193 patents under the proper claim construction. We also vacate the district court's injunction, but only with respect to 10X's Linked-Reads and CNV product lines.

I. BACKGROUND

A. The Claimed Technology and the Patents-in-Suit

The patents-in-suit are directed to systems and methods for forming microscopic droplets (also called "plugs") of fluids to perform biochemical reactions. Microfluidic systems—often called "labs-on-a-chip"—allow scientists to conduct microscale chemical and biological reactions. For example, the technology allows scientists to analyze and compare DNA, RNA, and proteins within large numbers of individual cells. This technology therefore has applications in medical diagnostics and high-throughput screening.

Microfluidic systems utilize chips that have "microfluidic channels," hair-width pathways through which cells and fluids flow. In these systems, biological samples can be partitioned into single-cell-width droplets, which function as mini-test tubes. Each droplet holds a single cell and the required reagents for the biochemical reaction. Droplets are formed by "pinching off"—flowing a carrier-fluid and substrate/plug-fluid (which are immiscible with each other) through the microfluid channels and applying pressure. The biochemical reactions may occur "on chip," i.e. , in the channels inside the microchips, or, the droplets may be collected to allow the reactions to occur "off chip."

The parties agree that claim 1 of the ’083 patent, copied below, is representative.

1. A microfluidic system comprising:

a non-fluorinated microchannel;

a carrier fluid comprising a fluorinated oil and a fluorinated surfactant comprising a hydrophilic head group in the microchannel;

at least one plug comprising an aqueous plug-fluid in the microchannel and substantially encased by the carrier-fluid, wherein the fluorinated surfactant is present at a concentration such that surface tension at the plug-fluid/microchannel wall interface is higher than surface tension at the plug-fluid/carrier fluid interface.

’083 patent, claim 1.

During prosecution of the ’083 patent, the inventors amended the claims to overcome a rejection based on the prior art U.S. Patent No. 7,294,503 ("Quake"). Quake disclosed microchannels formed or coated with Teflon (a fluorinated polymer) or other fluorinated oils. The inventors distinguished the prior art by arguing that, unlike Quake, the as-filed application for the ’083 patent attempts to prevent droplets from sticking to the walls of microchannels and requires that the "surfactant should be chemically similar to the carrier fluid and chemically different from the channel walls." J.A. 16640. The inventors amended the claims to require non-fluorinated microchannels and a fluorinated surfactant, which would not react with each other.¹ They explained that, as amended, the claims were distinct from Quake, which did not teach microchannels and carrier fluids that were chemically distinct. Rather, in their view, Quake taught coating the microchannels with a fluorinated oil and using fluorinated surfactants in the carrier fluid. The fluorinated microchannels and surfactants could, therefore, react with each other.

The other two asserted patents, the ’407 and the ’193 patents, are continuations of the same parent application. Claim 1 of the ’407 patent is reproduced below:

1. A method for conducting a reaction in plugs in a microfluidic system, comprising the steps of:

providing the microfluidic system comprising at least two channels having at least one junction;

continuously flowing an aqueous fluid containing at least one biological molecule and at least one reagent for conducting the reaction between the biological molecule and the at least one reagent through a first channel of the at least two channels;

continuously flowing a carrier fluid immiscible with the aqueous fluid through the second channel of the at least two channels;

forming at least one plug of the aqueous fluid containing the at least one biological molecule and the at least one reagent by partitioning the aqueous fluid with the flowing immiscible carrier fluid at the junction of the at least two channels, the plug being substantially surrounded by the immiscible carrier fluid flowing through the channel, wherein the at least one plug comprises at least one biological molecule and the at least one reagent for conducting the reaction with the at least one biological molecule; and

providing conditions suitable for the reaction in the at least one plug involving the at least one biological molecule and the at least one reagent to form a reaction product.

’407 patent, claim 1.

The only independent claim of the ’193 patent is identical to claim 1 of the ’407 patent, except that it specifies "an autocatalytic reaction" instead of a biological reaction. 10X maintains that its arguments regarding the ’407 patent "apply equally to the ’193 patent unless otherwise noted." Appellant's Br. 44 n.3.

B. The Accused Products

10X has five accused product lines: Single Cell 3’ Gene Expression, Linked-Reads, Single Cell V(D)J, Single Cell ATAC-seq, and Single Cell CNV. 10X claims to have successfully invented non-infringing alternatives for three of its five product lines but has not yet been able to design a replacement for two: Linked-Reads and Single Cell CNV.

Each product line uses a hardware instrument, microfluidic chips, and a variety of specialized reagents. The hardware instrument is called a "controller." The disposable microfluidic chips, which fit in the instrument, have networks of "microfluidic channels," each about the width of a human hair. In the accused products, droplets are formed at junctions in the microfluidic channels. The reagents encompass a variety of products such as enzymes, DNA barcodes, and 10X's proprietary microscopic beads.

The record does not establish which 10X products correspond to each of the product lines. For the ’083 patent, there were 6 accused products: Chromium Genome/Exome; Chromium Genome/Exome with Kynar; GemCode Long Read; Chromium Single Cell 3’; Chromium Single Cell 3’ with Kynar; and Chromium Single Cell V(D)J with Kynar. The jury found that all six products infringe all asserted claims (claims 1 and 9) of the ’083 patent. For the ’193 patent, there were two accused products: Chromium Genome/Exome and GemCode Long Read. The jury found both products infringe all asserted claims (claims 6 and 8) of the ’193 patent. For the ’407 patent, there were four accused products: Chromium Genome/Exome; GemCode Long Read; Chromium Single Cell 3’; and Chromium Single Cell V(D)J. The jury found these products infringe the asserted claims (claims 1, 10, and 11).

C. Procedural History

In February 2015, patent owner University of Chicago and its licensee RainDance Technologies, Inc. ("RainDance") filed this patent infringement suit against 10X. Bio-Rad subsequently purchased RainDance and, in May 2017, was substituted for RainDance in the litigation. After the litigation was filed, 10X modified its products to add 0.02% Kynar—a non-reactive amount of a fluorine-containing resin—to its microchannels. 10X concedes that the addition of this amount of Kynar is irrelevant to the functioning of its products. The district court held a jury trial in November 2018. The jury found the patents-in-suit not invalid and willfully infringed. The jury then awarded Bio-Rad damages in the amount of $23,930,716.

10X moved for JMOL, asserting that the accused products do not infringe, that its infringement was not willful, that...