NEW YORK – A Massachusetts court has declared that 10x Genomics is the exclusive licensee for a key patent family covering droplet technology used in single-cell analysis owned by Harvard University. The ruling raises uncertainty over Harvard's co-exclusive license to 1Cellbio, a codefendant in the case and a 10x competitor that was cofounded by the technology's inventor.
Following a trial in January, Suffolk County Superior Court Justice Karen Green found that 1Cellbio had not properly met certain conditions necessary to secure the co-exclusive license. On July 13, Green issued a judgment that 10x should be the exclusive licensee for the patent family and ordered Harvard "to take all actions necessary to perfect 10x's rights as exclusive licensee."
What those actions might be, however, is unclear. Harvard University and Harvard's Office of Technology Development did not immediately respond to request for comment.
"We are very pleased with the decision, which recognizes our exclusive rights in these patents as we continue to develop new technologies to support our customers’ important research," 10x Genomics said in a statement.
"1CellBio strongly disagrees with the court decision," CEO Colin Brenan said in a statement. "We remain confident in our position, and we will appeal."
Pleasanton, California-based 10x filed its lawsuit in 2018 after discovering information that led the firm to believe that 1Cellbio had not sufficiently met its conditions for a co-exclusive license, namely that it had not secured $1 million in funding. In 2013, 10x licensed droplet technology developed by Harvard's David Weitz; however, Harvard had left a carve out for a "co-exclusive license" for a company founded by Weitz, provided that such a company met certain conditions.
In 2016, Watertown, Massachusetts-based 1Cellbio obtained the co-exclusive license to the Harvard patent family after merging with 3BG, a firm cofounded by Weitz.
In its suit, 10x asked the court for a declaration that it should be recognized as the exclusive licensee.
The court order suggests that the case hinged on a $750,000 transfer from Dew Drop Investments — yet another firm founded by Weitz — to 3BG in 2016. The payment gave 3BG/1Cellbio a balance of more than $1 million, but the court said the words "funding" and "money," are not synonymous.
"Brenan testified that 1Cellbio 'consistently did not treat the $750,000 loan …as cash that 1Cellbio had available for operations' and 'never used it for operating expenses,'" Green wrote. "Thus, it was not 'funding' under […] the 10x License," Green wrote, leading 10x to "automatically" become the "sole exclusive licensee."
As part of its defense, 1Cellbio had alleged that in 2017 10x held bad faith discussions on a potential merger between the two firms as a ploy to get information later used in the lawsuit. However, the court said 1Cellbio failed to prove these allegations. "The evidence simply did not establish that 10x learned any material facts from 1Cellbio relevant to its claim," Green wrote.
Brenan noted that 1Cellbio believes 10x "has pursued this lawsuit as part of an ongoing effort to disrupt our business, regardless of the impact this could have on innocent third-party researchers who rely on our unique and distinctive products."
"We intend to take every legal step necessary to continue to supply and support without limitations our global customers with the tools they require for single-cell analysis while the appeal process progresses," he added.
Harvard and 1Cellbio have 30 days from the entry of the order to file an appeal in the Massachusetts Appeals Court. The January trial was held before the court only and not before a jury.