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Meet Ravgen, the Little-Known Company Rattling NIPTs Biggest Players in Court

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NEW YORK — In what is shaping up to be a David versus Goliath story, Ravgen is taking on some of the biggest names in the noninvasive prenatal testing space by taking them to court for alleged patent infringement.

So far, the small Maryland-based firm has scored one major court win and reached two settlements. Meanwhile lawsuits are pending against five other firms and negotiations continue with even more as it tries to secure royalties over commonly used methods to identify abnormalities in fetal cell-free DNA contained within a maternal blood sample. Whether Ravgen can extend its wins depends, in part, on its ability to fend off the challenges to the validity of US Patent Nos. 7,332,277 and 7,727,720, which are assigned to Ravgen, provide the basis for its lawsuits, and are under review by the Patent Trial and Appeal Board (PTAB) of the US Patent and Trademark Office.

Ravgen referred questions to its lead counsel, John Desmarais of Desmarais LLP, who said in an interview his clients hope to reach licensing agreements that could avoid more court cases.

"I don't see any more lawsuits on the horizon right now, but there are another dozen or so infringers — smaller companies that we're in negotiations with," Desmarais said. He declined to name specific companies but said, "Anyone who sells a noninvasive prenatal test is doing this, so it's pretty easy to compile a list."

In filings with the US PTAB, Ravgen said that "several third parties" had agreed to deals to avoid lawsuits. The names of those firms, however, were redacted from the publicly available documents.

In its biggest publicly disclosed case yet, Ravgen last month secured approximately $273 million in damages from Laboratory Corporation of America, convincing jurors Labcorp had violated the '277 patent and that a fair royalty would be $100 for each of the estimated 2.73 million NIPTs Labcorp sold since it launched its first test in October 2014. Labcorp signaled following the verdict that it was considering an appeal. It did not respond to inquiries seeking comment.

Following the jury verdict, Ravgen on Oct. 13 further asked the judge to add damages for sales after the verdict, interest on the total damages, and an ongoing royalty for Labcorp's infringing tests until the '277 patent expires in March 2023, which is also when the '720 patent expires, according to Desmarais.

Also earlier this month, Quest Diagnostics and Ravgen settled their infringement lawsuit. Desmarais declined to provide details about the terms of that settlement or last year's settlement with PerkinElmer, but he noted that Ravgen has been seeking royalties of $100 per test, similar to what it was seeking in the Labcorp lawsuit, a figure that he said is based on Ravgen's five existing licenses for its NIPT-related patents and other comparable licenses held by competitors.

Meantime, the firm has ongoing lawsuits against Illumina, BioReference Laboratories' Ariosa, Myriad Genetics, and Natera. Those companies also declined to comment.

Ravgen is also suing Biora Therapeutics, formerly named Progenity. In a statement, Biora said that it had closed its CLIA-certified laboratory and ceased all diagnostic testing in June 2021 as part of the company's shift toward therapeutics but declined further comment.

A company few knew of until recently

Who is Ravgen, a company founded in 2000 that has largely escaped attention until about two years ago?

As Ravgen tells it in court documents, company founder Ravinder Dhallan had been an emergency room physician prior to founding Ravgen, and he dedicated himself to improving prenatal diagnostic examinations early in his career after his wife had three miscarriages. At that time, prenatal testing options were limited to low-sensitivity and -specificity noninvasive assays or more precise tests that were invasive and carried the risk of inducing a miscarriage.

The complaints before the courts state that Ravgen spent millions of dollars researching novel methods to replace invasive prenatal testing procedures, and Dhallan saw that maternal blood samples contain enough fetal cell-free DNA for assays to detect chromosomal anomalies. Without any lysis-preventing treatments, however, the breakdown of maternal cells in the sample releases an overwhelming amount of maternal DNA. Dhallan defied conventional wisdom by using formaldehyde to stabilize cells in blood samples and increase the proportion of fetal cell-free DNA.

Dhallan secured the '277 patent in 2008 and the '720 patent in 2010, both titled "Methods for Detection of Genetic Disorders" that describe processes for finding chromosomal abnormalities in fetal cell-free DNA by using an agent to inhibit lysis of maternal blood cells and identifying ratios of alleles at locations that would indicate the presence of such an abnormality. That agent could be a cell lysis inhibitor, cell membrane stabilizer, or cross-linker.

Today, Ravgen has about 10 employees. The firm sends blood collection kits to customers, who ship samples back to Ravgen's Maryland laboratory for analysis. Desmarais said Ravgen runs a smaller, sole proprietor-run version of, for instance, Labcorp's NIPT process, although he said the volume of tests run by Ravgen is confidential.

Desmarais said Ravgen had tried to forge partnerships with various diagnostic companies in the years after receiving its patents. Ravgen's court filings describe meetings and email correspondence with some of the firms during the years prior, including talks of licensing or acquiring Ravgen's patent portfolio. Discussions with Labcorp had continued into 2016, Desmarais said.

Ravgen then pivoted to preparing for litigation and asked Desmarais' firm to investigate who was infringing on Ravgen's patents.

Ravgen filed lawsuits from June through December of 2020 accusing eight firms of infringing the patents with at least 21 products or product lines that have entered the market since 2011. Most are NIPTs, although four of the products use cell-free DNA for cancer diagnostics and one test from Natera is used to assess a patient's risk of kidney transplant rejection.

It's not clear whether Ravgen will be able to secure royalties through the courts for the non-NIPT claims. In the only case to go to trial, Ravgen only pursued a verdict related to infringement of one of the two patents and only applied it to Labcorp's NIPTs.

In September, Ravgen and Labcorp filed a joint notice to the court that Ravgen had agreed to dismiss its complaints that Labcorp infringed the '720 patent, citing a desire by both parties to "streamline the issues to be presented at the trial." That change removed the only allegations involving Labcorp's Resolution ctDx Lung assay for detecting mutations associated with non-small cell lung cancer, leaving only Labcorp's NIPTs under consideration.

Despite the jury's verdict to award Ravgen $273 million, Labcorp continues to try to get Ravgen's patents invalidated through inter partes reviews, which are trials before the USPTO PTAB. Separately, Illumina is taking the same strategy, and both it and Labcorp contend that Ravgen's methods should be considered unpatentable because they are obvious and anticipated through prior research results and commonly understood techniques.

Quest had also initiated reviews by the board but agreed to end that fight as part of its settlement with Ravgen, which took effect Oct. 12. A Natera spokesman said the company is a party to two of the inter partes reviews, although he did not say which ones, and filings before the board also indicate Natera had sought ex partes review — a reexamination by a patent examiner — of one of Ravgen's patents in 2021, but information on the status of that petition was not immediately available. Streck, which sells blood collection tubes used by most of the companies sued by Ravgen, is also pursuing an inter partes review targeting one Ravgen patent involving the use of an agent to inhibit cell lysis.

Labcorp wrote, in part, in its filings before the PTAB that methods of isolating cell-free fetal nucleic acid and inhibiting lysis in cells were already well known before Ravgen's patent filing, and it was also known that cell lysis in a blood sample releases DNA and increases assay background noise. It also argued that prior research findings together provide an obvious road map for finding fetal DNA mutations or abnormalities of interest by reducing maternal DNA within a blood sample.

Illumina, likewise, wrote to the board that the concept of collecting blood to analyze cell-free nucleic acid was established before Ravgen's patent filing. Using preservative agents in blood collection tubes was also already routine, and the blood collection tubes used by Ravgen's competitors contain key features not described in Ravgen's patents.

The PTAB filings by Illumina and Labcorp, for example, describe the routine use of acid citrate dextrose in blood collection vials, which stabilizes blood cell membranes in addition to preventing coagulation. And Illumina cited prior descriptions of the increase of cell-free DNA in serum upon storage and blood processing protocols that could reduce fluctuation of maternal DNA in plasma.

Ravgen countered that the examples cited by both companies to demonstrate prior use of agents to reduce lysis either describe the use of those substances for unrelated purposes or fail to demonstrate any reduction of lysis. It also argued that a typical technician performing genetic screenings was unlikely to combine the cited research findings related to blood testing and genetic analysis techniques.

According to Desmarais, though, Ravgen's innovations were obvious only in retrospect.

"Labcorp pursued at the jury trial an obviousness case," he said. "During the trial, we exposed the lack of merit of that defense and, halfway through the trial, they dropped it."

Daniel Boehnen, a partner at the law firm of McDonnell Boehnen Hulbert & Berghoff and litigator in biotechnology patent disputes, said that, when the PTAB agrees to institute an inter partes review, it is agreeing to review prior art that was not considered in approving the patent and the odds of a biotech or diagnostic patent owner escaping unscathed are no better than 50-50. But a challenger can still be in serious trouble over any claims that survive the review, he said.

Boehnen is not involved in any litigation involving Ravgen, although his company has represented Roche in unrelated matters. Roche owned Ariosa when Ravgen filed the lawsuits.

Boehnen said Ravgen's claims in its court complaints "are quite broad which, if you take it at face value, would indicate that they were pretty seminal — pretty fundamental — to opening up this new line of testing." But he noted that the validity of the patents remains in dispute.

Boehnen said that unlike the non-practicing entities — or "patent trolls" — that have launched barrages of patent lawsuits against large numbers of companies, Ravgen has a stronger position in court because the company is run by the inventor of the technology cited in its lawsuits and it is using those inventions.

"I think it does signify that there's a little more gravitas to the plaintiffs' position here than in some of the 'patent troll' cases, where they're just suing everybody that they can get jurisdiction over," he said.

A litigious market

The litigation by Ravgen is nothing new in a NIPT market where fights over patent rights are routine.

NIPTs have a relatively short history. Dennis Lo, a professor at the Chinese University of Hong Kong, is credited as the inventor of NIPT, and while the first NIPT-based approach for detecting whether a fetus has a genetic condition was developed in the late 1990s, NIPTs started to commercially catch fire when Sequenom launched the first noninvasive prenatal screening test for fetal aneuploidies in the US in October 2011.

Soon after the launch of Sequenom's test, then called MaterniT21, other firms followed suit, setting the stage for the battle over who owned the rights to the technology.

In some of those earliest lawsuits, Sequenom, which Labcorp acquired in 2016, took aim at Ariosa, which would later become part of Roche before Roche sold it to BioReference. Sequenom also sued Verinata Health, which would become part of Illumina, and Natera on allegations it infringed on US Patent No. 6,258,540, which related to the detection of cell-free DNA in the bloodstream of pregnant women. The three defendants countersued Sequenom on allegations it was deterring competition through overly aggressive patent enforcement and overly broad interpretation of the patent. Ariosa filed for an inter partes review of Sequenom's patents by the USPTO.

The US District Court for the Northern District of California invalidated the '540 patent in 2013 with a summary judgment that said the patent covered a phenomenon of nature, which is unpatentable. Sequenom tried to fight that ruling all the way to the US Supreme Court, which denied Sequenom a hearing.

Boehnen said he does not think the Sequenom case will have a substantial impact on the outcome of the litigation involving Ravgen.

Even excepting Ravgen's lawsuits, the pace of patent litigation had only slowed in recent years rather than halted. Last year, Illumina and Roche settled claims across four lawsuits related to sequencing methods used in NIPTs, while Progenity and Natera agreed to dismiss their patent litigation over patents held by Natera involving NIPTs and genetic data cleaning. Earlier this year, Natera launched a patent infringement lawsuit against CareDx over US Patent No. 11,111,544, titled "System and method for cleaning noisy genetic data and determining chromosome copy number."

Desmarais said Ravgen's experience was not unique — individual inventors and small companies often lack the legal experience and the wherewithal to go after large corporations. He also said Dhallan's company had been overwhelmed in the NIPT market and unable to compete against bigger diagnostic companies. Ravgen, he said, just wants to get what it feels it deserves.

"All he's looking for is to sort of level the playing field and, if they're going to use the invention, to give him a royalty so he can share in the upside that he created," Desmarais said.

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