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With Summary Judgment in Hand, IP Suit Over SOLiD Tech Faces Trial in Jan. ’09

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The two-year patent-ownership lawsuit that Applied Biosystems filed against Illumina, Solexa, and former ABI IP counsel Stephen Macevicz is scheduled to go to trial on Jan. 5, 2009, according to an order issued by  judge this month.
 
The jury trial, which was originally scheduled to begin Sept. 29, was postponed several times by the court this fall because of its crowded trial schedule.
 
The dispute between the parties centers on ownership of three US patents that support ABI’s SOLiD technology. ABI kicked off the legal row in late 2006 when it sued Macevicz in a California state court for failing to disclose to it a patent application that he filed in his own name in 1995 while he was an ABI employee, and assigning it to another company.
 
Later that year, Macevicz assigned the application to his new employer, ABI-spinoff Lynx Therapeutics. In early 2005, Lynx merged with Solexa, which Illumina acquired last year.
 
The patent application gave rise to three patents, all owned by Illumina today: US Patent Nos. 5,750,341; 5,969,119; and 6,306,597. They are all entitled “DNA sequencing by parallel oligonucleotide extensions.”
 
In 2007 ABI moved its suit to federal court, and Solexa filed three counterclaims accusing ABI of willfully infringing all three patents.
 
The jury trial, which had previously been set for Sept. 29, will have two phases: The first phase will deal with issues regarding ABI’s complaint, while the second phase, under the same jury, will focus on Illumina’s counterclaims (see In Sequence 7/1/2008).
 
‘Feeble’ Infringement Theory
 
On June 17, Solexa asked the court for a partial summary judgment on whether ABI infringes the first claim in each of the three patents. Specifically, Solexa claimed that one-base-encoding probes and two-base-encoding probes used by ABI infringe the first claim of the ‘119 patent, and that a prototype version of the SOLiD system that used a one-base-encoding format infringes the first claims of patents ‘341 and ’597.
 
The same day, ABI filed its own motion, asking the court for a summary judgment of non-infringement. In particular, ABI claimed that no version of its SOLiD system — including one-base encoding prototypes — infringes “any asserted” claims of the ‘341 and ‘119 patents, and that two-base encoding versions of the system do not infringe ”the sole asserted claim” of the ‘597 patent.
 
After a pretrial hearing on Aug. 21, the judge denied Solexa’s request for summary judgment and granted ABI’s in part, ruling that ABI does not infringe the asserted claims of the ‘341 and ‘597 patents. However, he denied to rule on ABI’s non-infringement of the first claim of the ‘119 patent. In a September filing, ABI asked the judge to reconsider this denial, but he declined to do so.
 
In his order following the Aug. 21 hearing, the judge wrote: “Solexa’s infringement theory is feeble,” explaining that the SOLiD system does not identify a target base in individual cycles. In a later statement, the judge clarified that his order applied only to ABI’s two-base encoding technology, “not its prototype one-base version.”
 
“The Court reserves the issues of infringement on all asserted patents with respect to the one-base system for trial,” he wrote.
 
With that command, both parties on Aug. 29 filed a flurry of “motions in limine.” In its motions, ABI asked the court to exclude testimony regarding infringement damages by its one-base encoding prototype; to exclude evidence of willful infringement; and to exclude testimony from Solexa’s damage expert Gerald Siuta.
 
For their part, the three defendants in their motions asked the court to exclude ABI’s “disgorgement damages” theory and other theories of damages; to exclude reference to Macevicz as a fiduciary; to exclude testimony of ABI’s expert Alan Cox; to exclude ABI’s reliance on a late-produced UK patent owned by Carr and Cosstick; and to exclude ABI’s “invalidity contentions” that are not set forth in ABI’s “final invalidity contentions.”
 
At a final pretrial conference held on Sept. 8, the judge ruled on these motions. On ABI’s motions, he ordered that the defendants will not be permitted to seek damages for alleged infringement of the ‘341 or ‘597 patents by the one-base encoding process. ABI withdrew its request regarding evidence of willful infringement after the defendants said their allegation of willful infringement is only directed at Agencourt Personal Genomics before ABI acquired it in 2006. Siuta, Solexa’s damage expert, is allowed to submit a report on infringement damages for the ‘119 patent against Agencourt Personal Genomics only, according to the judge, and ABI may question him and submit a rebuttal to his report.
 
Regarding the defendants’ motions, the judge ruled that ABI may not recover damages or restitution from Macevicz or seek attorneys’ fees as part of a damages award; that ABI may refer to Macevicz as a fiduciary of ABI; that testimony by ABI scientist Kevin McKernan will be limited to the two-base encoding system, and that Cox, ABI’s expert, may only cite this system as a non-infringing alternative; and that the Carr patent may not be shown to the jury. The judge did not rule on the use of ABI’s “invalidity contentions.”
 
On Oct. 16, Solexa asked the court to strike two expert statements that ABI submitted in early October, both referring to non-infringing alternatives to the ‘119 patent, claiming that “the submission of such new opinions is untimely and a hardship to Solexa in preparing for trial.” In a cross-motion, ABI asked to strike Siuta’s supplemental report, as it relates to non-infringing alternatives.
 
Later that month, the judge granted Solexa’s request to strike the two expert statements, and denied ABI’s cross-motion. “Applied was given its opportunity at the final pretrial conference to supplement its expert reports with a new non-infringing alternatives analysis. It chose not to do so,” the judge wrote.
 
Illumina and Life Technologies, the company formed last month by the merger of Invitrogen and Applied Biosystems, declined to comment on the lawsuit last week.

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