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Court Strikes BGI Defenses in Suit Against Illumina; Partly Upholds Patent Infringement Claim

This story has been updated to include comment from Illumina.

NEW YORK – A judge in the US District Court for the Northern District of California has granted in part and denied in part Illumina's motion to dismiss claims of patent infringement that were filed against it in October 2019 by BGI and its affiliates.

The court has also issued an order striking several of BGI's affirmative defenses in the patent infringement suit Illumina filed against the company last June.

Illumina had originally filed patent infringement suits in the US, Switzerland, and Turkey relating to BGI's sequencing instrumentation and chemistry in June. The suits targeted products that included the BGISEQ-500 and MGISEQ-2000 platforms. The US suit in particular was filed against Complete Genomics (CGI), which is part of MGI, the instrument manufacturing business of BGI Group, and other BGI entities. It alleged infringement of US Patent Nos. 7,566,537 and 9,410,200.

In October, BGI and its affiliates countersued Illumina. BGI denied infringement of the '537 and '200 patents, both entitled "Labelled Nucleotides," and alleged that the two patents were invalid. In addition, the company claimed that Illumina's NovaSeq 6000, HiSeq X Ten, HiSeq 3000, and HiSeq 4000 sequencing systems infringed several claims of US Patent No. 9,944,984, "Methods and Compositions for Efficient Base Calling in Sequencing Reactions," which is assigned to CGI, and that Illumina's infringement had been willful.

In the new court order, which was filed on Wednesday, the judge said that CGI sought to argue an inequitable conduct defense against Illumina, asserting that various arguments "regarding prior art made by Illumina's attorneys in prior invalidity proceedings were patently false and misleading and made with the intent to deceive the US Patent Trial and Appeal Board and the Federal Circuit Court of Appeals."

However, the judge was unconvinced by CGI's defense, noting that the allegations "do little more than challenge attorney interpretations of prior art that were litigated and decided on multiple occasions." He granted Illumina's motion to strike two of CGI's 12 affirmative defenses without leave to amend them. He also granted Illumina's motion to strike another six of CGI's affirmative defenses but granted the company 20 days to file an amended pleading for those six defenses.

The judge also ruled on Illumina's motion to dismiss CGI's patent infringement countersuit, dismissing the claim of willful infringement but allowing the claim for induced infringement to proceed.

To make a claim for willful infringement, a patent holder has to show that the infringer knows about the patent in question before the lawsuit is filed, the judge noted in his ruling. CGI was correct to say that it needed only "make out the barest factual assertion of knowledge" of the patent, the judge wrote, but merely stating that Illumina regularly monitors intellectual property in fields related to its products would not suffice to state a claim of knowledge for the purposes of willful or induced infringement.

The cases that CGI relied on when filing its countersuit "all included factual support of the accused infringer's knowledge of the patent at issue through specific interactions with the patented product," the judge added. "CGI's allegations of post-suit knowledge are not relevant to its claims for willful infringement." Therefore, the claim for willful infringement was dismissed.

For an allegation of induced infringement, however, a complaint has to show that the accused infringer intended another party to infringe a patent and knew that those actions constituted infringement, the judge wrote. He said that CGI had adequately pleaded induced infringement as it showed that Illumina sold its products to customers "for use in an infringing manner." CGI had claimed that Illumina provided customers with marketing materials, user guides, technical literature, and bioinformatics software applications that encouraged infringing use.

And although CGI's allegations that Illumina knew of the company's patent due to its routine monitoring of IP weren't adequate to uphold a claim of willful infringement, CGI can assert post-suit knowledge to support its claims of induced infringement, the judge ruled. Therefore, CGI can proceed with its claim of induced infringement.

In a statement, CGI parent company MGI said the company's induced infringement claim against Illumina "covers most of Illumina's current products on the market," adding that the firm "will aggressively defend our IP against any illegal use by Illumina or any other parties and strive for choice in the market."

For its part, Illumina said in a statement that it is "pleased" with the judge's decision, adding, "BGI's claims are without merit."

In January, Illumina filed two additional patent lawsuits against BGI in the UK and in Sweden. Both suits claim that BGI's sequencing platforms, including the DNBSeq-400, MGISeq-2000, DNBSeq-T7, and related reagents infringe intellectual property covering Illumina's sequencing-by-synthesis chemistry.

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