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

• Decision Date: 30 April 2020
• Docket Number: CIVIL ACTION NO. 19-CV-12533-WGY
• Parties: BIO-RAD LABORATORIES, INC. and PRESIDENT AND FELLOWS OF HARVARD COLLEGE, Plaintiffs, v. 10X GENOMICS, INC., Defendant.
• Court: U.S. District Court — District of Massachusetts

BIO-RAD LABORATORIES, INC. and PRESIDENTAND FELLOWS OF HARVARD COLLEGE, Plaintiffs, v. 10X GENOMICS, INC., Defendant.

CIVIL ACTION NO. 19-CV-12533-WGY

UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

April 30, 2020

YOUNG, D.J.

MEMORANDUM AND ORDER OF DECISION

I. INTRODUCTION

In this motion to dismiss, 10X Genomics, Inc., ("10X") contests allegations of infringement on three patents. The President and Fellows of Harvard College ("Harvard") is the owner of two of these patents, U.S. Patent Nos. 9,919,277 (the "'277 patent"), and 8,871,444 (the "'444 patent"), both of which Bio-Rad Laboratories, Inc. ("Bio-Rad") licenses. Bio-Rad and Harvard together sue 10X for infringement of these two patents. Bio-Rad, owner of the U.S. Patent No. 10,190,115 (the "'115 patent") individually sues 10X for infringement of this patent.

10X moves to dismiss the claims of indirect infringement, willful infringement, and direct infringement under the doctrine of equivalents on the '277 and '444 patents. 10X moves to dismiss claims relating to the '115 patent for improper venue, or in the alternative, to sever and transfer the claims to the Northern District of California.

This Court concludes that Bio-Rad and Harvard have sufficiently pled all of their claims, and the motion to dismiss is thus DENIED in its entirety. The '115 patent, however, would be more conveniently litigated with its parent patent in the Northern District of California, and this Court therefore TRANSFERS the applicable claims to that District.

A. Factual Background

Because this is a motion to dismiss, this Court takes plaintiff's factual assertions as true and summarizes them here. Thomas v. Rhode Island, 542 F.3d 944, 948 (1st Cir. 2008). This Court has no duty to take plaintiff's legal conclusions as true. Id.

Bio-Rad and Harvard's complaint alleges that 10X infringed the '444 patent and the '277 patent. Compl. ¶ 2, ECF No. 1. Bio-Rad alone claims that 10X infringed the '115 patent. Id. ¶ 3.

10X and Bio-Rad are competitors in the arena of life science research tools. Id. ¶ 14, 22. A large portion of Bio-Rad's products are built around "Droplet Digital" technology, which enables biological analysis by placing samples in individual microdroplets. Id. ¶ 15. Similarly, 10X's productlines utilize droplet-based emulsion systems to conduct biological analysis. Id. ¶ 23.

Following Bio-Rad's victory in a previous patent infringement suit against 10X, 10X launched a new line of biological research products labeled the "Next GEM Platform" which was at the forefront of its September 2019 Initial Public Offering ("IPO"). Id. ¶¶ 24-27. This Next GEM Platform consists of a specialized instrument, the "Chromium Controller," along with specialized reagents for conducting reactions in microfluidic droplets. Id. ¶¶ 13, 25. It is this new platform that forms the basis of the alleged infringements. Id. ¶ 27.

Bio-Rad and Harvard allege 10X infringes on claims 1-2, 4, and 8 of the '444 patent pursuant to 35 U.S.C. § 271(a), literally or under the doctrine of equivalents, through its use of the Next GEM product line. Id. ¶ 32. Bio-Rad retains from Harvard an exclusive license to the '444 patent, which relates to the field of microfluidic systems, kits, and chips. Id. ¶ 31.

Bio-Rad also retains a license from Harvard for the '277 patent in the field of microfluidic systems, kits and chips. Id. ¶ 48. Bio-Rad and Harvard allege 10X infringes claims 1-6, 8-9, 11, and 13-14 of the '277 patent pursuant to 35 U.S.C. § 271(a) literally or under the doctrine of equivalents through its use of the Next GEM products. Id. ¶ 49.

Bio-Rad and Harvard further claim the infringement has been knowing and willful. Id. ¶¶ 33, 50.

Bio-Rad and Harvard allege 10X has induced infringement by selling, marketing, providing informational materials, and creating distribution channels for its Next GEM line with the intent that customers would use it to infringe the '444 and '277 patents. Compl. ¶¶ 37-41, 53-57.

Bio-Rad alleges that 10X knew of the '444 and '277 patents because the parties litigated a previous case in Delaware and through its own licensing agreements with Harvard. Id. ¶¶ 33-35, 50-52; see also RainDance Techs., Inc. v. 10X Genomics, Inc., Civ. A. No. 15-152-RGA, 2016 U.S. Dist. LEXIS 33875 (D. Del. March 4, 2016) (the "152 case"); Bio-Rad Labs., Inc. v. 10x Genomics, Inc., 322 F. Supp. 3d 537 (D. Del. 2018).¹ Furthermore, 10X's Co-Founder and Chief Scientific Officer, Dr. Hindson, stated that 10X knew of the work of Dr. Weitz, one of the inventors of the '444 and '277 patents. Compl. ¶¶ 33, 50. Additionally, Bio-Rad indicates that 10X has filed Information Disclosure Statements with the United States Patent Office citing to the U.S. Patent Application No. 2006/0078888, which isa published version of the priority application that the '444 patent continues. Id. ¶ 34

Bio-Rad owns the '115 patent labeled "Methods and Compositions For Nucleic Acid Analysis." Id. ¶ 62. Bio-Rad claims that 10X infringed claims 1, 4-15, and 18-26 pursuant to 35 U.S.C. § 271(a) literally or under the doctrine of equivalents through its use of the Next GEM platform. Id. ¶ 64. Bio-Rad claims this infringement was knowing and willful. Id. ¶ 65.

Bio-Rad alleges 10X has induced infringement of this patent by selling, marketing, providing informational materials, and creating distribution channels for its Next GEM line, intending that customers would use it to infringe the '115 patent. Compl. ¶¶ 69-73.

Bio-Rad alleges that 10X knew of the '115 patent because its sole inventor, Serge Saxonov ("Saxonov"), was a former Bio-Rad employee who left to co-found 10X. Id. ¶¶ 63, 65. Furthermore, 10X knew about the '115 patent at least from December 4, 2015, because it filed Information Disclosure Statements with the United States Patent Office citing to the U.S. Patent Publication No. 2015/0376609, a published version of the application that resulted in the '115 patent. Id. ¶ 66.

B. Procedural History

The Plaintiffs Bio-Rad and Harvard originally filed suit on the '444, '277, and '115 patents in the District of Delaware. See Am. Compl. ¶ 11; Bio-Rad Labs., Inc. v. 10X Genomics, Inc. ("Bio-Rad Del. Docket"), Civ. A. No. 19-01699-RGA (D. Del. Dec. 18, 2019), ECF No. 8. In that case, 10X argued that a license from Harvard entitled it to the use of the '444 and '277 patents and that this license agreement included a forum selection clause which required litigation to take place in the District of Massachusetts. Def.'s Opening Br. Supp. Mot. Dismiss 2, Bio-Rad Del. Docket, ECF No. 13; see also Decl. Jennifer K. Robinson, Ex. 3, License Agreement ¶ 11.6, Bio-Rad Del. Docket, ECF No. 18-1. Bio-Rad then voluntarily dismissed the Delaware claims and filed here. Pl.'s Notice Voluntary Dismiss, Bio-Rad Del. Docket, ECF No. 20.

Bio-Rad and Harvard filed the complaint against 10X in this District on December 18, 2019. See generally Compl. On January 21, 2020 Defendant 10X filed a motion to dismiss, and as to the '115 patent, a motion in the alternative to transfer the case. Def.'s Mot. Dismiss, ECF No. 24; Mem. Supp. Def.'s Mot. Dismiss ("Def.'s Mem."), ECF No. 25; Def.'s Mot. Transfer, ECF No. 26; Def.'s Mem. Supp. Mot. Transfer ("Def.'s Transfer Mem."), ECF No. 27. The parties fully briefed the motions. Pls.' Opp'n Def.'s Mot. Dismiss ("Pls.' Opp'n"), ECF No. 50; Pl.'s Opp'nDef.'s Transfer, ECF No. 51; Def.'s Reply Resp. Mot. Dismiss ("Def.'s Reply"), ECF No. 61; Def.'s Reply Resp. Def.'s Mot. Transfer, ECF No. 63.

10X has additionally filed a partial answer to the complaint as well as antitrust and patent infringement counterclaims against Bio-Rad. Def.'s Partial Answer & Countercl., ECF No. 32; Def.'s Am. Partial Answer Compl. Am. Counterclaim ("Def.'s Answer & Countercl."), ECF No. 53. Bio-Rad also filed a motion to sever and stay 10X's antitrust and patent infringement counterclaims, which the parties fully briefed. Pl.'s Mot. Sever & Stay 10X Antitrust Countercl., ECF No. 70; Pls.' Mem. Supp. Mot. Sever & Stay 10X Antitrust Countercl., ECF No. 71; Pl.'s Mot. Sever & Stay 10X Patent Infringement Countercl., ECF No. 73; Mem. Law Supp. Pl.'s Mot. Sever & Stay Patent Infringement Countercl., ECF No. 74; Def.'s Opp'n Pl.'s Alt. Mot. Sever & Stay Def.'s Antitrust Countercl., ECF No. 76; Def.'s Opp'n Pl.'s Mot. Sever & Stay Patent Infringement Countercl., ECF No. 79.

While this Court is not severing 10X's antitrust counterclaims, it will address them in a separate memorandum and order. As to 10X's patent infringement counterclaims, this Court has previously denied without prejudice the Motion to Stay and Sever. See Order, ECF No. 80.

II. ANALYSIS

10X argues that the claims of indirect infringement, willful infringement, and direct infringement under the doctrine of equivalents should be dismissed because Bio-Rad and Harvard do not plead sufficient facts to make these claims plausible. Def.'s Mem. 10-11. Specifically, 10X claims that there are insufficient facts to "make it plausible that 10X had actual knowledge of the Asserted Patents required for indirect and willful infringement," that Bio-Rad and Harvard allege nothing but legal conclusions for willful blindness, and that they do not show that 10X intended others to infringe. Id. at 11.

A. Standard of Review

For Bio-Rad and Harvard's claims to survive the motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), its complaint must contain "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). This Court is limited to those "facts and documents that are part of or incorporated into the complaint." Trans-Spec Truck Serv., Inc. v. Caterpillar Inc., 524 F.3d 315, 321 (1st Cir. 2008). "[F]actual allegations need only be enough 'to place the alleged infringer on notice. This requirement ensures that the accused infringer has sufficient knowledge of the facts alleged to enable it to answer the complaint and defend...