United States District Court, D. Delaware
BIO-RAD LABORATORIES INC. and THE UNIVERSITY OF CHICAGO, Plaintiffs,
10X GENOMICS, INC., Defendant.
E. Farnan, Michael J. Farnan, FARNAN LLP, Wilmington, DE;
Edward R. Reines, Derek C. Walter, Amanda Branch, Christopher
S. Lavin, WEIL, GOTSHAL & MANGES LLP, Redwood Shores, CA;
Robert T. Vlasis III, WEIL, GOTSHAL & MANGES LLP,
Washington, DC. Attorneys for Plaintiffs.
Frederick L. Cottrell, III, Jason J. Rawnsley, Alexandra M.
Ewing, RICHARDS, LAYTON & FINGER, P.A., Wilmington, DE;
E. Joshua Rosenkranz, Melanie L. Bostwick, Elizabeth R.
Moulton, ORRICK HERRTNGTON & SUTCLIFFE LLP, New York, NY;
Matthew Powers, Azra Hadzimenmedovic, Robert Gerrity,
TENSEGRITY LAW GROUP LLP, Redwood Shores, CA; David I.
Gindler, Alan J. Heinrich, Lauren N. Drake, Elizabeth C.
Tuan, IRELL & MANELLA LLP, Los Angeles, CA. Attorneys for
ANDREWS, U.S. DISTRICT JUDGE.
before the Court is Plaintiffs' post-trial motion (D.I.
512). Plaintiffs seek a permanent injunction, attorneys'
fees, enhanced damages, supplemental damages, and pre- and
post-judgment interest. (Id.). I have reviewed the
parties' briefing and the related amicus curiae
submission from the Broad Institute, Inc. (D.I. 513, 524,
536, 522). For the following reasons, Plaintiffs' motion
is GRANTED with respect to the permanent
injunction, supplemental damages, and pre- and post-judgment
interest, and DENIED with respect to the
attorneys' fees and enhanced damages.
February 12, 2015, RainDance Technologies, Inc. and the
University of Chicago filed suit against 10X Genomics, Inc.
alleging infringement of several patents. On May 30, 2017,
Bio-Rad Laboratories Inc. substituted for RainDance. (D.I.
180). I held a jury trial from November 5 to 13,
2018. Only three patents remained at issue-U.S.
Patent Nos. 8, 889, 083 ("the '083 patent"), 8,
304, 193 ("the '193 patent"), and 8, 329, 407
("the '407 patent"). (See D.I. 499).
The jury found all three patents valid and infringed, that
the infringement was willful, and that Plaintiffs were
entitled to $23, 930, 718 in damages. (D.I. 476).
"may grant injunctions in accordance with the principles
of equity to prevent the violation of any right secured by
patent, on such terms as the court deems reasonable." 35
U.S.C. § 283. "According to well-established
principles of equity, a plaintiff seeking a permanent
injunction must satisfy a four-factor test before a court may
grant such relief." eBay Inc. v. MercExchange,
LLC, 547 U.S. 388, 391 (2006). "A plaintiff must
demonstrate: (1) that it has suffered an irreparable injury;
(2) that remedies available at law, such as monetary damages,
are inadequate to compensate for that injury; (3) that,
considering the balance of hardships between the plaintiff
and defendant, a remedy in equity is warranted; and (4) that
the public interest would not be disserved by a permanent
injunction." Id. "The essential attribute
of a patent grant is that it provides a right to exclude
competitors from infringing the patent." Acumed LLC
v. Stryker Corp., 551 F.3d 1323, 1328 (Fed. Cir. 2008).
following reasons, I find that Plaintiffs have satisfied the
eBay factors in support of their proposed permanent
injunction. (D.I. 513, Ex. A).
competition strongly suggests the potential for irreparable
harm absent an injunction. Presidio Components, Inc. v.
Am. Tech. Ceramics Corp., 702 F.3d 1351, 1363 (Fed. Cir.
2012) (vacating denial of a permanent injunction based on
finding no irreparable injury because the record showed
"direct and substantial competition between the
parties"); see also Douglas Dynamics, LLC v. Buyers
Prod. Co., Ill. F.3d 1336, 1345 (Fed. Cir. 2013)
("Where two companies are in competition against one
another, the patentee suffers the harm-often irreparable-of
being forced to compete against products that incorporate and
infringe its own patented inventions."). A patentee may
establish irreparable harm by showing "that [the
parties] were competitors and that [the patentee] lost market
share while [the infringer] gained it." See Broadcom
Corp. v. Emulex Corp., 732 F.3d 1325, 1338 (Fed. Cir.
2013) (upholding the district court's grant of a
argue that Bio-Rad and 10X are competitors in "the
market for products that perform genetic analysis on a
droplet platform," and within that market, they are
"undisputedly head-to-head competitors with their
single-cell droplet products." (D.I. 513 at 6-7). At
trial, 10X's counsel stated that Bio-Rad's ddSEQ
product competes directly with 10X's single cell product.
Tr. at 92:3-7, 1519:4-6. Ms. Tumolo, Bio-Rad's President
of Life Sciences, agreed. Id. at 168:4-8.
argues that Bio-Rad is not a direct competitor. 10X has five
accused product lines, each of which allegedly "profiles
different aspects of a sample and provides fundamentally
different biological information, using different
chemistries, data analysis, and visualization software."
(D.I. 524 at 7). Of those five, 10X argues that the only one
that may compete with Bio-Rad is the single cell product, but
that customers view Bio-Rad's product as inferior.
(Id. at 5, 7-8).
that 10X and Bio-Rad are direct competitors in the market for
products that perform genetic analysis on a droplet platform.
10X admitted at trial that its single cell product competes
directly with Bio-Rad's ddSEQ. Tr. at 92:3-7. Each of
10X's products are variants of the same infringing
droplet process. (See D.I. 536 at 4; D.I. 476).
Regardless, 10X's single cell product accounts for over
80% of 10X's sales. (See D.I. 536 at 4; PTX
1255). The fact that customers may prefer 10X's single
cell product to ddSEQ does not negate the fact that the
products are competing.
argue that, as direct competitors, 10X is causing Bio-Rad
lasting competitive harm by using infringing technology to
gain a lead in the emerging droplet market and derail
Bio-Rad's product roadmap. (D.I. 513 at 7). Ms. Tumolo
testified that Bio-Rad "felt a lot of pressure to get
[its single cell] product on the market because 10X had a
really, really big head start, frankly we felt using our
technology." Tr. at 130:3-6. Plaintiffs assert that the
same head start has allowed 10X to collaborate with early
adopters and key opinion leaders and develop
"sticky" customer relationships. (D.I. 513 at 7-8).
As a result, 10X has cultivated a market bias towards its
single cell product and Bio-Rad has been forced to increase
its marketing costs. (Id. at 8).
have shown that they will suffer irreparable competitive harm
absent an injunction. Plaintiffs are being forced to compete
with 10X's products that incorporate and infringe their
own patented inventions. See Douglas Dynamics, 717
F.3d at 1345. Based on those infringing products, 10X has
established a strong market lead over Bio-Rad-10X has sold
over 1000 of its single cell units, while Bio-Rad has sold
less than 100. (D.I. 398, Ex. Z, at K-2, J-3, J-4). It seems
likely that, absent an injunction, Bio-Rad will struggle to
regain its lost market share and will continue to suffer
associated harms such as increased marketing costs.
party seeking an injunction must also show a causal nexus
between the infringement and the harm. The infringing
features do not need to be the "exclusive or predominant
reason" that consumers buy the accused products, but
there must be '"some connection' between the
patented features and the demand for [the accused]
products." Apple Inc. v. Samsung Elecs. Co.,
809 F.3d 633, 642 (Fed. Cir. 2015). That is, "the
patented features impact consumers' decisions to purchase
the accused devices." Id.
argues that Plaintiffs have failed to show a causal nexus
because they have not proven that "simply using
droplets-as opposed to other, non-patented features-drives
demand for, or contributes to the success of, any 10X
products." (D.I. 524 at 5). 10X applies the wrong
standard. Plaintiffs need not show that the patented features
drive demand, but just that they "impact consumers'
decisions to purchase the accused devices."
Apple, 809 F.3d at 642; Genband U.S. LLC v.
Metaswitch Networks Corp., 861 F.3d 1378, 1384-85 (Fed.
Cir. 2017). The patented droplet technology is the foundation
of 10X's droplet products. In fact, 10X tried and failed
with other methods of partitioning such as capsules and wells
before moving to droplets. Tr. at 953:1-954:13; (D.I. 513 at
10). There is clearly "some connection" between the
patented technology and the demand for 10X's products.
Therefore, Plaintiffs have shown that they will suffer
irreparable harm from 10X's infringement absent
Remedies Available at Law
are inadequate to compensate for loss of market share.
Douglas Dynamics, l\l F.3d at 1345 ("[M]ere
damages will not compensate for a competitor's increasing
share of the market, a market which Douglas competes in, and
a market that Douglas has in part created with its investment
in patented technology."); E.I. DuPont de Nemours
& Co. v. Unifrax I LLC, 2017 WL 4004419, at *5 (D.
Del. Sept. 12, 2017) ("Monetary damages are inadequate
to compensate Plaintiff here because Plaintiff would be
forced to compete against a rival gaining market share with
Plaintiffs technology."), aff'd, 921 F.3d
1060 (Fed. Cir. 2019). The underlying concerns are
particularly strong here because 10X's infringement
coincided with the emergence of the droplet market, thus
allowing 10X to capture and define the market with its
infringing technology. See Illumina, Inc. v. Qiagen, N.
V., 207 F.Supp.3d 1081, 1093 (N.D. Cal. 2016) (finding
the patentee would suffer irreparable harm in part because,
being at a "crucial inflection point in the development
of the market," the infringer would be allowed to
"capture and define the market with pirated
argues that damages are adequate based on quantifiable
licensing fees derived from Bio-Rad's internal documents.
(D.I. 524 at 13). I disagree. Although Bio-Rad seems to have
had some interest in licensing the asserted patents (DTX 1481
at 26), they were never actually licensed. Cf. Nichia
Corp. v. Everlight Americas, Inc., 855 F.3d 1328, 1343
(Fed. Cir. 2017) ("[T]he fact of the grant of previous
licenses, the identity of the past licensees, the experience
in the market since the licenses were granted, and the
identity of the new infringer all may affect the district
court's discretionary decision concerning whether a
reasonable royalty from an infringer constitutes damages
adequate to compensate for the infringement.") (quoting
Acumed LLC v. Stryker Corp., 551 F.3d 1323, 1328
(Fed. Cir. 2008)).
I find damages inadequate to compensate for 10X's
Balance of Hardships
assessing the balance of hardships, it is appropriate for
courts to consider "the parties' sizes, products,
and revenue sources." i4i Ltd. P'ship v.
Microsoft Corp., 598 F.3d 831, 862-63 (Fed. Cir. 2010),
aff'd, 564 U.S. 91 (2011). Not relevant,
however, are the expenses incurred in creating the infringing
products and the consequences to the infringer of its
infringement, such as the cost of redesigning the infringing
products. Id. at 863.
injunction would prevent 10X from selling any of its current
products. (D.I. 524 at 14). 10X thus argues that an
injunction would devastate the company, possibly causing it
to go out of business. It is clear, however, that 10X has
been pursuing a design-around for some time. At the September
5, 2018 discovery conference, 10X's counsel represented
that the components of the new design were complete but the
"full commercialized product" was not. (D.I. 365 at
20:25-21:11). In January 2019, 10X's Dr. Schnall-Levin
testified that 10X intended to have its redesign on sale in
April 2019 and that 10X was "confident that the chip
will work as well" as the existing product. (D.I. 537,
Ex. 4 at 19:19-22, 25:17-25). His only caveat about an April
launch was that 10X might not have "all the training
materials" and "quite as much rigor around having
naive users try [the product] out." (Id. at
25:25-26:7). Thus, it now being July 2019, 1 would expect 10X
to be nearly ready, if not ready, to bring its design-around
other hand, Bio-Rad is undoubtedly a much larger operation.
Bio-Rad is a multibillion-dollar company with over 9, 000
products. (D.I. 524 at 14 (citing Bio-Rad 10-Q at 29)).
Bio-Rad's ddSEQ product accounted for only 0.2% of its $2
billion in sales in 2017. (Id. (citing D.I. 398, Ex.
Z at J-2)). Those revenues, however, are greatly outstripped
by Bio-Rad's investments in its droplet business. Ms.
Tumolo testified that Bio-Rad has spent over half a billion
dollars to develop its droplet products, including
acquisitions and $20 to $25 million a year on research and
development. Tr. at 121:6-22, 125:23-126:5.
who elects to build a business on a product found to infringe
cannot be heard to complain if an injunction against
continuing infringement destroys the business so
elected." Windsurfing Int'l Inc. v. AMF,
Inc., 782 F.2d 995, 1003 (Fed. Cir. 1986). The fact that
10X has gained commercial success from its infringing
products and thus risks losing that success does not shield
10X from injunctive relief. See i4i, 598 F.3d at 863
(finding the defendant "not entitled to continue
infringing simply because it successfully exploited its
infringement"); Broadcom Corp. v. Qualcomm
Inc., 543 F.3d 683, 704 (Fed. Cir. 2008) (same).
Regardless, given that 10X has a design-around that is
complete or very close to complete, I do not think 10X is
likely to be "devastated" if enjoined from selling
its existing products. On the other hand, although
Bio-Rad's ddSEQ currently accounts for only a fraction of
Bio-Rad's revenues, Bio-Rad has invested substantial
resources in developing its droplet business. Therefore, I
find the balance of hardships weighs in favor of granting
injunctive relief, or, at minimum, is neutral.
generally in the public interest to uphold patent rights.
Broadcom, 543 F.3d at 704 (citing Rite-Hite
Corp. v. Kelley Co.,56 F.3d 1538, 1547 (Fed. Cir.
1995)). However, "[i]f a patentee's failure to
practice a patented invention frustrates an important public
need for the invention, a court need not enjoin infringement
of the patent. Accordingly, courts have in rare instances
exercised their discretion to deny ...