Elawyers Elawyers
Ohio| Change

Verinata Health, Inc. v. Ariosa Diagnostics, Inc., 18-2198 (2020)

Court: Court of Appeals for the Federal Circuit Number: 18-2198 Visitors: 9
Filed: Apr. 24, 2020
Latest Update: Apr. 24, 2020
Summary: Case: 18-2198 Document: 92 Page: 1 Filed: 04/24/2020 NOTE: This disposition is nonprecedential. United States Court of Appeals for the Federal Circuit _ VERINATA HEALTH, INC., ILLUMINA, INC., Plaintiffs-Appellants v. ARIOSA DIAGNOSTICS, INC, ROCHE MOLECULAR SYSTEMS, INC., Defendants-Cross-Appellants _ 2018-2198, 2018-2303, 2018-2305, 2018-2306, 2018-2317 _ Appeals from the United States District Court for the Northern District of California in Nos. 3:12-cv-05501-SI, 3:14-cv-01921-SI, 3:15-cv-022
More
Case: 18-2198    Document: 92     Page: 1   Filed: 04/24/2020




        NOTE: This disposition is nonprecedential.


   United States Court of Appeals
       for the Federal Circuit
                  ______________________

     VERINATA HEALTH, INC., ILLUMINA, INC.,
               Plaintiffs-Appellants

                             v.

        ARIOSA DIAGNOSTICS, INC, ROCHE
           MOLECULAR SYSTEMS, INC.,
            Defendants-Cross-Appellants
              ______________________

  2018-2198, 2018-2303, 2018-2305, 2018-2306, 2018-2317
                 ______________________

      Appeals from the United States District Court for the
 Northern District of California in Nos. 3:12-cv-05501-SI,
 3:14-cv-01921-SI, 3:15-cv-02216-SI, Senior Judge Susan Y.
 Illston.
                  ______________________

                  Decided: April 24, 2020
                  ______________________

     EDWARD R. REINES, Weil, Gotshal & Manges LLP, Red-
 wood Shores, CA, argued for plaintiffs-appellants. Also
 represented by CHRISTOPHER SHAWN LAVIN. Plaintiff-ap-
 pellant Illumina, Inc. also represented by DEREK C.
 WALTER.

    MARK CHRISTOPHER FLEMING, Wilmer Cutler Pickering
 Hale and Dorr LLP, Boston, MA, argued for defendants-
Case: 18-2198     Document: 92     Page: 2    Filed: 04/24/2020




 2           VERINATA HEALTH, INC. v. ARIOSA DIAGNOSTICS, INC.




 cross-appellants. Also represented by TIMOTHY ANDREW
 COOK, KATHERINE P. KIECKHAFER; CHRISTOPHER ASTA,
 THOMAS SAUNDERS, Washington, DC; ROBERT J. GUNTHER,
 JR., OMAR KHAN, CHRISTOPHER R. NOYES, New York, NY;
 DAVID ISAAC GINDLER, ALAN J. HEINRICH, Irell & Manella
 LLP, Los Angeles, CA; LISA GLASSER, Newport Beach, CA.
                  ______________________

     Before REYNA, WALLACH, and HUGHES, Circuit Judges.
 REYNA, Circuit Judge.
      After trial on the merits, a jury found two U.S. patents
 valid and infringed. Ariosa Diagnostics, Inc., and Roche
 Molecular Systems, Inc., moved for judgment as a matter
 of law on invalidity and noninfringement. Verinata
 Health, Inc., and Illumina, Inc., moved for a permanent in-
 junction, supplemental damages, an accounting, and pre-
 and post-judgment interest. The district court denied the
 parties’ motions. Verinata and Illumina appeal the denial
 of the permanent injunction, supplemental damages, an ac-
 counting, and pre-judgment interest. Ariosa and Roche
 cross-appeal the denial of judgment as a matter of law on
 invalidity and noninfringement. We conclude that sub-
 stantial evidence supports the district court’s denial of Ari-
 osa’s motion for judgment as a matter of law on
 noninfringement and invalidity. We also conclude that the
 district court did not abuse its discretion by denying Veri-
 nata and Illumina’s motion for a permanent injunction,
 supplemental damages, an accounting, and pre-judgment
 interest. We affirm.
                         BACKGROUND
                               A
    Appellant Illumina, Inc., develops, manufactures, and
 markets integrated systems and tools for DNA analysis.
 Verinata Health, Inc., a wholly-owned subsidiary of Illu-
 mina (collectively “Illumina”), developed and offered a non-
Case: 18-2198    Document: 92      Page: 3    Filed: 04/24/2020




 VERINATA HEALTH, INC. v. ARIOSA DIAGNOSTICS, INC.          3



 invasive prenatal test (“NIPT”) for the early identification
 of fetal chromosomal abnormalities. Appellee Ariosa Diag-
 nostics, Inc., also conducts research and development in
 the field of NIPT for fetal chromosomal abnormalities.
 Roche Molecular Systems, Inc., acquired Ariosa in Decem-
 ber 2014. In an effort to “streamline issues in the [l]itiga-
 tion and avoid unnecessary discovery,” the parties
 stipulated that “Ariosa will be deemed the Defendant re-
 sponsible for the conduct that Illumina has accused of in-
 fringing the asserted claims” and that Roche would be
 dismissed from the litigation and subsequently “deemed a
 party to any judgment to the same extent as Ariosa.”
 J.A. 11606-07.
     Illumina owns U.S. Patent No. 7,955,794 (the “’794 pa-
 tent”), which is directed to custom DNA assay optimization
 techniques. The ’794 patent identifies seven inventors, in-
 cluding Dr. John Stuelpnagel and Dr. Arnold Oliphant. Dr.
 Stuelpnagel was a co-founder of Illumina, and Dr. Oliphant
 served as Illumina’s executive vice president of scientific
 operations.
     The ’794 patent describes the detection of DNA target
 sequences by introducing probes with complementary se-
 quences into a sample and observing whether hybridiza-
 tion occurs. An excerpt of claim 1 identifying the elements
 relevant to this appeal is set forth below:
     A multiplex for determining whether a sample con-
     tains at least 100 different target sequences, com-
     prising:
         a) providing a sample which may contain at
         least 100 different single-stranded target
         sequences attached to a first solid support;
         b) contacting said target sequences with a
         probe set comprising more than 100 differ-
         ent single-stranded probes, wherein each of
Case: 18-2198     Document: 92     Page: 4    Filed: 04/24/2020




 4           VERINATA HEALTH, INC. v. ARIOSA DIAGNOSTICS, INC.




        said more than 100 different probes com-
        prises:
             i) a first universal priming site,
             wherein each of said more than 100
             different probes has identical uni-
             versal priming sites, and
             ii) a target specific domain, such
             that different double-stranded hy-
             bridization complexes are formed,
             each of the different hybridization
             complexes comprising one of said
             more than 100 different single-
             stranded probes and one of the dif-
             ferent single-stranded target se-
             quences from the sample;

       ...
        d) contacting said probes of the hybridiza-
        tion complexes with a first enzyme and
        forming different modified probes;
        e) contacting said modified probes with:
             i) at least a first primer that hy-
             bridizes to said universal priming
             site;
             ii) NTPs; and
             iii) an extension enzyme;
     wherein said different modified probes are ampli-
     fied and forming different amplicons;
        f) immobilizing said different amplicons to
        a second solid support, and
        g) detecting said different amplicons immo-
        bilized to said second solid support, thereby
Case: 18-2198      Document: 92       Page: 5     Filed: 04/24/2020




 VERINATA HEALTH, INC. v. ARIOSA DIAGNOSTICS, INC.              5



           determining whether the sample contains
           at least 100 different target sequences.
 ’794 patent col. 68 ll. 46-67, col. 68 l. 65-col. 69 l. 12.
     Verinata owns U.S. Patent No. 8,318,430 (the “’430 pa-
 tent”), which is directed to methods for NIPT screening of
 fetal chromosomal abnormalities. An excerpt of claim 1 is
 appended below identifying the elements relevant to this
 appeal:
     1. A method for determining a presence or absence
     of a fetal aneuploidy in a fetus for each of a plural-
     ity of maternal blood samples . . . comprising fetal
     and maternal cell-free genomic DNA, said method
     comprising:
     ...
           (e) . . . enumerating sequence reads corre-
           sponding to enriched and indexed fetal and
           maternal non-random polynucleotide se-
           quences . . . ; and
           (f) . . . determining the presence or absence
           of a fetal aneuploidy comprising using a
           number of enumerated sequence reads cor-
           responding to the first chromosome and a
           number of enumerated sequence reads cor-
           responding to the reference chromosome of
           (e).
 ’430 patent at col. 63.
                                 B
      In 2008, both Dr. Stuelpnagel and Dr. Oliphant left Il-
 lumina. By late 2009, Dr. Stuelpnagel launched Ariosa.
 Dr. Oliphant rejoined Dr. Stuelpnagel at Ariosa shortly
 thereafter. They sought to develop a NIPT for the detection
 of fetal aneuploidies, which can lead to conditions such as
 Down Syndrome. Between 2010 and 2011, Ariosa provided
Case: 18-2198    Document: 92      Page: 6    Filed: 04/24/2020




 6          VERINATA HEALTH, INC. v. ARIOSA DIAGNOSTICS, INC.




 Illumina, as a prospective investor in Ariosa, technical in-
 formation about its product proposals under development.
 In January 2012, seven months after the ’794 patent is-
 sued, Ariosa entered into a three-year sale and supply
 agreement (“SSA”) with Illumina. J.A. 4326, J.A. 4349-
 4350 (excerpts from SSA).
                              C
     In March 2012, Ariosa launched a DNA-sequencing
 test called the Harmony Prenatal Test. The test consisted
 of materials supplied by Illumina. The Harmony Prenatal
 Test is a multiplex method that analyzes fetal cell-free
 DNA (or cfDNA). Ariosa designed two versions of the Har-
 mony test—“Harmony V1” and “Harmony V2.” For pur-
 poses of this appeal, we focus our discussion of the relevant
 technology on Harmony V2.
     Harmony V2 tests a sample of isolated fetal cfDNA for
 the presence of about 6800 gene sequences by using a la-
 boratory robot to perform the steps summarized below in
 Figure 1.
Case: 18-2198    Document: 92     Page: 7    Filed: 04/24/2020




 VERINATA HEALTH, INC. v. ARIOSA DIAGNOSTICS, INC.         7



                          Figure 1




 J.A. 3100-3101; J.A. 2067-2068. First, the sample’s double-
 stranded fetal cfDNA is separated, or “denatured,” into in-
 dividual strands. Next, a molecule called biotin is added to
 the end of each cfDNA strand (represented by “B” in Fig-
 ure 1). The robot then adds a solution containing a mixture
 of single-stranded oligonucleotides that are complemen-
 tary to the 6800 sequences Harmony V2 detects (orange
 lines in Figure 1). The mixture contains three different ol-
 igonucleotides for each of the 6800 target sequences, corre-
 sponding to the beginning, middle, and end portions of the
 target sequence. The oligonucleotide for the beginning of
 each sequence contains a “readout cassette,” which is a
 short, artificial DNA segment that is uniquely assigned to
 each of the 6800 sequences tested in Harmony V2. If the
 cfDNA sample contains one of the 6800 target sequences,
 each of the three oligonucleotides corresponding to that
 target sequence will hybridize to it, creating a section of
 double-stranded DNA with two gaps (between the first and
Case: 18-2198    Document: 92     Page: 8    Filed: 04/24/2020




 8          VERINATA HEALTH, INC. v. ARIOSA DIAGNOSTICS, INC.




 second and between the second and third oligonucleotides).
 If the cfDNA does not contain a certain target sequence,
 the oligonucleotides corresponding to that sequence will re-
 main unbound in solution.
     The test allows the oligonucleotides two hours to bind
 to target sequences. After the two hours elapse, the robot
 adds magnetic beads coated with a protein called streptav-
 idin, which binds strongly with the biotin on the cfDNA and
 links it to the beads. The robot then immobilizes the mag-
 netic beads (and therefore the sample DNA and any bound
 oligonucleotides) and washes away anything that is left in
 solution, including any unbound oligonucleotides.
     Next, the robot adds an enzyme that ligates, i.e., con-
 nects, the three oligonucleotides, creating a single DNA
 strand. This only happens if all three oligonucleotides cor-
 responding to the target sequence are bound to the sample
 cfDNA. The robot then denatures, i.e., separates, the
 newly-joined oligonucleotides from the sample cfDNA and
 amplifies the newly-joined oligonucleotides. Universal pri-
 mer sequences on the first and third oligonucleotides ena-
 ble this amplification.
      During processing, the copies that result from the am-
 plification step (termed “amplicons”) are purified and
 added to a mixture that cuts (“digests”) them into frag-
 ments. Then, detection begins by applying the digested re-
 action mixture, including the readout cassettes, to an
 array. An array is a chip (or device) containing thousands
 of short DNA sequences attached to a solid support. If a
 readout cassette corresponding to one of the 6800 target
 sequences is present, part of the readout cassette will bind
 to a DNA sequence on the array. The other part of the
 readout cassette remains unbound, hanging like a single-
 stranded tail off the double-stranded sequence attached to
 the solid support. Figure 2, below, shows how readout cas-
 settes indicating target sequences on chromosomes 18 and
Case: 18-2198    Document: 92     Page: 9    Filed: 04/24/2020




 VERINATA HEALTH, INC. v. ARIOSA DIAGNOSTICS, INC.         9



 21 bind to the array while other readout cassettes remain
 unbound.
                          Figure 2




 Any materials that do not bind to the array, e.g., chromo-
 somes Y, X, and 13 in Figure 2, are washed away. Readout
 cassettes remain bound to the array. Fluorescently labeled
 oligonucleotides that are complementary to the readout
 cassettes’ free single-stranded tails are then added. After
 the labeled oligonucleotides are given time to bind to the
 single-stranded tails on the readout cassettes, they are
 chemically joined or ligated to the DNA strand attached to
 the chip. The array is then heated up to separate the
 readout cassettes from the fluorescently tagged chip. The
 readout cassettes are then washed away, leaving only the
 labeled oligonucleotides attached to the DNA strands.
     A machine then analyzes the array and detects the dif-
 ferent colors of the fluorescent tags and their positions.
 From these data, and using algorithms and analyses, Ari-
 osa can calculate the probability that each of the 6800 se-
 quences was present in the cfDNA sample.
Case: 18-2198     Document: 92     Page: 10    Filed: 04/24/2020




 10          VERINATA HEALTH, INC. v. ARIOSA DIAGNOSTICS, INC.




                               D
     Starting late 2012, Illumina and Verinata filed several
 lawsuits against Ariosa and its parent company Roche ac-
 cusing the Harmony V1 and V2 tests of infringing the ’794
 patent and the ’430 patent. Verinata alleged Harmony V1
 infringed the ’430 patent, and Illumina alleged both Har-
 mony versions infringed the ’794 patent. Ariosa argued
 that the patents-in-suit were invalid and that it had an ex-
 press license to the ’794 patent. Ariosa also asserted a
 counterclaim for breach of contract.
     During claim construction, the parties disputed the
 construction of two terms of the ’794 patent: (a) “modified
 probes” and (b) “wherein said different modified probes are
 amplified and forming different amplicons.” The district
 court construed those claims as follows:
      • “modified probe” means “an enzymatically al-
      tered polynucleotide which contains a universal
      priming site and is capable of substantially hybrid-
      izing to a target sequence.”
      • “wherein said different modified probes are
      amplified and forming different amplicons” means
      “wherein the different modified probes are repli-
      cated, in whole or in part, to yield amplification
      products of each of the different modified probes.”
     The district court held a jury trial from January 8 to
 January 25, 2018. The jury returned a verdict finding the
 ’430 patent not invalid and infringed by the Harmony V1
 product and the ’794 patent not invalid and infringed by
 both the Harmony V1 and Harmony V2 products; that Ari-
 osa did not have an express license to the Harmony V1
 product under the SSA; and that Illumina did not breach
 the SSA by suing Ariosa. The jury awarded plaintiffs ap-
 proximately $27 million in damages. Thereafter, the par-
 ties filed post-trial motions.
Case: 18-2198    Document: 92     Page: 11    Filed: 04/24/2020




 VERINATA HEALTH, INC. v. ARIOSA DIAGNOSTICS, INC.         11



      Ariosa moved for judgment as a matter of law
 (“JMOL”), under Fed. R. Civ. P. 50(b), on the jury’s various
 infringement and validity determinations. Illumina moved
 for a permanent injunction, a Fed. R. Civ. P. 52 conclusion
 of law that Ariosa was estopped as an assignor from chal-
 lenging the validity of the ’794 patent, and an accounting,
 supplemental damages, pre-judgment interest at the prime
 rate and post-judgment interest.
     The district court denied Ariosa’s motions for JMOL.
 The district court found that substantial evidence sup-
 ported the jury’s findings of no anticipation of the ’794 pa-
 tent by U.S. Patent Application No. 2003/0228599 A1 to
 Straus (“Straus”); that the Harmony V2 product infringes
 the ’794 patent; that the ’430 patent meets the enablement
 requirement; and that the Harmony V2 product infringes
 the ’430 patent. The district court granted Illumina’s mo-
 tion for a Rule 52 conclusion of law and denied Illumina’s
 motion for an accounting, and supplemental damages. The
 district court granted pre-judgment interest at the 52-week
 Treasury Bill rate and granted post-judgment interest at
 the statutory rate but deferred on calculating post-judg-
 ment interest until after appeal once the final amount of
 the judgment is known.
     These appeals ensued. Illumina appeals the denial of
 a permanent injunction, supplemental damages, an ac-
 counting, and pre-judgment interest at the prime rate. Ari-
 osa cross-appeals the denial of JMOL on validity of the ’430
 patent and the ’794 patent and infringement of only the
 ’794 patent by Ariosa’s Harmony V2 product.
                         DISCUSSION
     We address Ariosa’s cross-appeal in §§ A, B, and C be-
 low. Then, in § D, we address Illumina’s appeal.
                              A
     We begin by addressing the district court’s denial of
 Ariosa’s motion for JMOL of noninfringement of the ’794
Case: 18-2198    Document: 92     Page: 12    Filed: 04/24/2020




 12         VERINATA HEALTH, INC. v. ARIOSA DIAGNOSTICS, INC.




 patent. Ariosa argues that Harmony V2 does not literally
 infringe claim 1, steps (a) and (b). Ariosa also argues that
 Harmony V2 does not infringe claim 1, steps (f) and (g) lit-
 erally or under the doctrine of equivalents. The district
 court’s denial of Ariosa’s motion for JMOL is supported by
 substantial evidence.
      We review denials of JMOL under the law of the rele-
 vant regional circuit, in this case, the Ninth Circuit. A
 TEN Int’l Co., Ltd. v. Uniclass Tech. Co., Ltd., 
932 F.3d 1364
, 1367 (Fed. Cir. 2019). The Ninth Circuit reviews a
 denial of JMOL de novo. Harper v. City of Los Angeles, 
533 F.3d 1010
, 1021 (9th Cir. 2008). JMOL is proper when the
 evidence permits only one reasonable conclusion that itself
 is contrary to the jury’s verdict.
Id. But the
jury’s verdict
 must be upheld if it is supported by substantial evidence.
Id. Substantial evidence
is “such relevant evidence as a
 reasonable mind might accept as adequate to support a
 conclusion.” TVIIM, LLC v. McAfee, Inc., 
851 F.3d 1356
,
 1362 (Fed. Cir. 2017) (citation and quotation omitted).
     A party asserting infringement under the doctrine of
 equivalents may prove its case by showing, on an element-
 by-element basis, that the accused product performs sub-
 stantially the same function in substantially the same way
 with substantially the same result as each claim limitation
 of the patented product. See, e.g., Crown Packaging Tech.,
 Inc. v. Rexam Beverage Can Co., 
559 F.3d 1308
, 1312 (Fed.
 Cir. 2009).
     Ariosa argues that its Harmony V2 does not literally
 infringe the step (a) “providing” and the step (b) “contact-
 ing” processes of the ’794 patent. Cross-App. Br. 40-47.
 Ariosa argues that Dr. Cooper, Illumina’s expert, offered no
 evidence that at least 100 different single-stranded target
 sequences remain completely unbound from any probe af-
 ter the two-hour hybridization period. Ariosa further ar-
 gued that Dr. Cooper presented no evidence that any
 unbound single-stranded target sequences would bind to
Case: 18-2198    Document: 92     Page: 13    Filed: 04/24/2020




 VERINATA HEALTH, INC. v. ARIOSA DIAGNOSTICS, INC.         13



 all three probes during the short period between the addi-
 tion of the streptavidin beads and the washing-away of the
 probes.
     Dr. Cooper detailed the reaction conditions in Ariosa’s
 Harmony V2 that practice the method recited in step (a).
 J.A. 1965-1968. He explained that Harmony V2’s anneal-
 ing reaction is less than 99% complete following the two-
 hour incubation time.
Id. He explained
that Harmony V2’s
 hybridization would occur after step (a) as a function of the
 relative rates of the slower “annealing reaction” compared
 to the faster “hybridization reaction.” J.A. 1951-1952; J.A.
 1955; J.A. 1964-1965; J.A. 2675-2676. Dr. Cooper con-
 cluded that, after annealing, at least 100,000 single-
 stranded target sequences attach to a solid support before
 hybridization takes place. J.A. 1967. Dr. Cooper testified
 that, given the reaction setup, the annealing reaction is
 “unlikely to complete or come close.” See J.A. 2676.
     Dr. Cooper also testified regarding how the solid sup-
 port first attaches to 100 different single-stranded target
 sequences and how the target sequences hybridize to the
 probes as recited in step (b). According to Dr. Cooper, after
 two hours, the solid support is added and the process is “al-
 low[ed] continued time to proceed.” J.A. 1964-1965. Dr.
 Cooper explained that the solid support streptavidin beads
 quickly attach to the target sequences given the “extremely
 strong” covalent bond between streptavidin and biotin-
 coated cell-free DNA fragments. J.A. 1951-1952. Given the
 additional time and the strong bond between the solid sup-
 port and the target sequences, Dr. Cooper testified that the
 reaction allows for the 100 single-stranded target se-
 quences to “hybridize with their oligos.” J.A. 1964-1965.
 Dr. Cooper concluded, therefore, that Ariosa’s Harmony V2
 practices steps (a) and (b) of claim 1. Dr. Cooper’s testi-
 mony constitutes substantial evidence supporting the ver-
 dict of infringement.
Case: 18-2198    Document: 92      Page: 14    Filed: 04/24/2020




 14         VERINATA HEALTH, INC. v. ARIOSA DIAGNOSTICS, INC.




      Ariosa argues that the Harmony V2 does not literally
 infringe claim 1, steps (f) and (g) of the ’794 patent because
 its readout cassettes do not meet claim 1’s “amplicons” ele-
 ment. Cross-App. Op. Br. 28-31. Ariosa argues that after
 the amplification step performed in Harmony V2, the
 readout cassette is only a portion of each of the amplified
 DNA segments and not the complete “amplicon” that is re-
 quired by the claims. Ariosa argues in the alternative that
 even if the readout cassettes are amplicons, Harmony V2
 does not practice step (g)’s “detecting said different ampli-
 cons immobilized to said second solid support.” ’794 patent
 69 ll. 10-12. Ariosa argues that because the readout cas-
 settes are washed away from the array before the detection
 step takes place, the amplicons are not detected while at-
 tached to a second solid support.
      Finally, Ariosa argues that Illumina failed to prove in-
 fringement of claim 1, steps (f) and (g) under the doctrine
 of equivalents. Cross-App. Br. at 31-35. Ariosa contends
 that the differences between the claimed amplicons and
 Ariosa’s readout cassettes are substantial such that no ev-
 idence supports a doctrine of equivalents analysis. Ariosa
 further contends that Illumina failed to prove that immo-
 bilizing and detecting readout cassettes leads to insubstan-
 tially different results from immobilizing and detecting
 amplicons. We disagree.
     Even were we to accept Ariosa’s arguments for literal
 infringement, Ariosa fails to demonstrate that a reasonable
 jury could not find infringement under the doctrine of
 equivalents. Dr. Cooper testified that the readout cas-
 settes and amplicons serve substantially the same function
 of “immobiliz[ing] onto a solid support”; in substantially
 the same way of “hybridization of [the] DNA molecule”; to
 achieve the same result of “detection of the target se-
 quences that were in the original mixture.” J.A. 2683-2684,
 J.A. 1979-1985. That testimony constitutes evidence that
 a reasonable mind could accept as proving infringement
 under the doctrine of equivalents.
Case: 18-2198    Document: 92     Page: 15    Filed: 04/24/2020




 VERINATA HEALTH, INC. v. ARIOSA DIAGNOSTICS, INC.        15



                              B
     Next, we address the district court’s denial of JMOL of
 invalidity of the ’794 patent. We conclude that the district
 court’s denial of JMOL is supported by substantial evi-
 dence.
      Ariosa appeals the district court’s holding of assignor
 estoppel—that Ariosa is barred from challenging the valid-
 ity of the ’794 patent because Drs. Stuelpnagel and Oli-
 phant are inventors of the ’794 patent, they assigned their
 rights to the patent to Illumina, and they are in privity
 with Ariosa. See Verinata Health, Inc. v. Ariosa Diagnos-
 tics, Inc., 
329 F. Supp. 3d 1070
, 1113-18 (N.D. Cal. 2018).
 Despite its finding of assignor estoppel, the district court
 analyzed anticipation of the ’794 patent and found it inva-
 lid. Because we affirm the jury verdict of no invalidity, we
 need not reach the issue of assignor estoppel.
     Ariosa contends that the district court improperly de-
 nied its motion for JMOL on anticipation of the ’794 patent
 based on the Straus prior art reference. Straus discloses
 multiplex methods for detecting more than 250 nucleic-acid
 sequences, such as the signature sequences of pathogens in
 a blood sample using DNA probes. See J.A. 5395-5441.
      Ariosa argues that a skilled artisan reading Straus and
 the method depicted in Straus Figure 5 would understand
 that it discloses “‘numerous’ pathogens includ[ing] using at
 least 100 different target sequences and over 100 different
 single-stranded probes” as claimed in claim 1 of the ’794
 patent. Ariosa further argues that Straus’s disclosure of “a
 large number of distinct ID probes” anticipates the claimed
 universal priming sites because those probes disclose “sub-
 stantial if not complete identity in the probes’ priming
 sites.” Finally, Ariosa argues that Straus need not disclose
 all the claimed limitations in a single disclosure or figure
 in order to anticipate.
Case: 18-2198    Document: 92      Page: 16     Filed: 04/24/2020




 16         VERINATA HEALTH, INC. v. ARIOSA DIAGNOSTICS, INC.




      Illumina disagrees, arguing that Dr. Cooper’s testi-
 mony shows why Straus fails to anticipate the ’794 patent.
 Dr. Cooper focused on Straus’s failure to disclose claim 1,
 step (b)(i) (“a first universal priming site, wherein each of
 said more than 100 different probes has identical universal
 priming sites”). Dr. Cooper testified that Straus discloses
 only forty-eight probes in Figure 5, well below the “level of
 multiplexing” required by the ’794 Patent, and that Straus
 is silent as to the actual number of primers that would be
 used. J.A. 2597-2598; see also J.A. 2602. Dr. Cooper fur-
 ther testified that Straus’s references to ID probes confirms
 that there is no anticipation because ID probes “teach to-
 wards multiple different amplification sequences” and not
 a single universal primer as required by claim 1, step (b)(i).
 See J.A. 2600-2602. Dr. Cooper opined that even if some
 isolated disclosure in Straus did disclose or suggest a uni-
 versal primer, that disclosure would fail to anticipate
 claim 1, step (b)(i), for it is unlinked to the disclosures on
 which Ariosa relies for anticipation, namely Figure 5. See
 J.A. 2654.
     Ariosa’s arguments are unavailing. Ariosa asks this
 court to reweigh the credibility of the parties’ respective ex-
 pert witnesses. This court does not engage in fact finding,
 nor does it weigh the credibility of expert testimony. See
 Impax Labs. Inc. v. Lannett Holdings Inc., 
893 F.3d 1372
,
 1382 (Fed. Cir. 2018). Our task is to review whether the
 jury’s verdict is supported by substantial evidence.
     Here, the jury heard conflicting expert testimony on
 whether Straus discloses a single universal primer. The
 jury was free to adopt Dr. Cooper’s testimony over that of
 Dr. Cantor’s in concluding that Straus did not disclose a
 single universal primer. See i4i Ltd. P’ship v. Microsoft
 Corp., 
598 F.3d 831
, 848 (Fed. Cir. 2010), aff’d, 
564 U.S. 91
 (2011). We conclude that the jury verdict on invalidity is
 supported by substantial evidence.
Case: 18-2198    Document: 92     Page: 17    Filed: 04/24/2020




 VERINATA HEALTH, INC. v. ARIOSA DIAGNOSTICS, INC.         17



     We therefore affirm the jury’s verdict of no invalidity
 and the district court’s subsequent denial of Ariosa’s mo-
 tion for JMOL.
                              C
     Next, we address whether substantial evidence sup-
 ports the district court’s denial of Ariosa’s motion for JMOL
 of no enablement of the ’430 patent. We conclude that the
 jury’s finding and the district court’s denial of JMOL are
 supported by substantial evidence.
     Enablement is a question of law reviewed de novo.
 Trustees of Bos. Univ. v. Everlight Elecs. Co., 
896 F.3d 1357
, 1361 (Fed. Cir. 2018). However, in the context of a
 jury trial, we review the factual underpinnings of enable-
 ment for substantial evidence.
Id. The enablement
re-
 quirement ensures that a patent contains a written
 description of the invention that enables “any person
 skilled in the art to which [the invention] pertains . . . to
 make and use the [invention]” without undue experimen-
 tation. 35 U.S.C. § 112(a); Storer v. Clark, 
860 F.3d 1340
,
 1345 (Fed. Cir. 2017).
      Ariosa argues that the ’430 patent does not meet the
 enablement requirement because the patent fails to dis-
 close an algorithm for determining the presence or absence
 of a fetal aneuploidy in the context of a targeted sequencing
 approach as claimed in claim 1, step (f). Cross-App. Br. 55-
 58. Ariosa agrees that the ’430 patent incorporates by ref-
 erence disclosures of “[m]ethods for determining fetal an-
 euploidy using random sequencing techniques.”
Id. at 56
 (citing J.A. 268 (12:49-55)). Ariosa contends, however, that
 a skilled artisan would not be able to adapt those random
 sequencing techniques into non-random sequencing data
 without undue experimentation. Ariosa relies on the testi-
 mony of Dr. Rava, a named inventor of the ’430 patent, and
 argues that Dr. Rava testified that a skilled artisan would
 be unable to use “random sequencing techniques . . . in a
 non-random method without modification.”
Id. (citing J.A.
Case: 18-2198    Document: 92      Page: 18    Filed: 04/24/2020




 18         VERINATA HEALTH, INC. v. ARIOSA DIAGNOSTICS, INC.




 1344-1345). Ariosa argues that the ’430 patent discloses no
 such modification. Ariosa argues that even if the disclo-
 sures incorporated by reference could be modified for use
 in random sequencing techniques, their limited disclosure
 would not suffice to enable the full scope of the claimed in-
 vention.
      In response, Illumina raises three main arguments.
 First, Illumina argues that Ariosa’s expert, Dr. Cantor, tes-
 tified that the Quake 1 and Craig 2 prior art references dis-
 close the alleged missing enablement teachings of the ’430
 patent and that a skilled artisan is presumed to be aware
 of all pertinent prior art. Appellant Reply and Resp. Br. 62
 (citing J.A. 2490). Illumina argues that these references
 disclose methods for analyzing targeted regions of DNA se-
 quences as claimed in the ’430 patent. Second, Illumina
 argues that Dr. Rava testified that “the algorithms for ran-
 dom . . . sequencing described in the publications refer-
 enced in the ’430 [p]atent can be ‘very similar to the ones
 that would be use[d] in a directed sequencing approach’ but
 ‘would have to be optimized.’”
Id. at 64
(citing J.A. 1344-
 1345). Illumina further contends that Dr. Cooper con-
 firmed that the references in the ’430 patent disclose nu-
 merous enabling techniques to determine fetal aneuploidy.
 Third, Illumina argues that, according to Dr. Cooper, “the
 exact statistical methods the ’430 Patent discloses based on
 Z-scores were in fact used by Roche scientists—and were
 ‘quite effective’ at determining fetal aneuploidy for the tar-
 geted approach.”
Id. (citing J.A.
2619-2621).
    We conclude that a reasonable mind might accept Dr.
 Cooper’s testimony that Roche scientists used the same


      1  U.S. Patent App. Pub. No. 2007/0202525 (pub-
 lished August 30, 2007, filed February 2, 2007).
     2   Craig, et al., “Identification of genetic variants us-
 ing bar-coded multiplexed sequencing,” Nature Methods,
 5(10):887-93 (2008).
Case: 18-2198    Document: 92      Page: 19     Filed: 04/24/2020




 VERINATA HEALTH, INC. v. ARIOSA DIAGNOSTICS, INC.           19



 statistical methods disclosed in the ’430 patent to deter-
 mine fetal aneuploidy in a targeted approach as evidence
 to support enablement of the ’430 patent. See Hybritech
 Inc. v. Monoclonal Antibodies, Inc., 
802 F.2d 1367
, 1384,
 (Fed. Cir. 1986) (finding specification was enabling where
 evidence showed the necessary screening and producing
 methods for making the monoclonal antibodies used in the
 claimed invention were known in the prior art). We there-
 fore affirm the jury’s verdict regarding enablement and the
 district court’s subsequent denial of Ariosa’s motion for
 JMOL.
                               D
      Finally, we address whether the district court abused
 its discretion in denying Illumina’s request for injunctive
 relief, supplemental damages, an accounting, and pre-judg-
 ment interest at the prime rate. We conclude that the dis-
 trict court did not abuse its discretion.
      We review a district court’s grant or denial of injunctive
 relief for abuse of discretion. Genband US LLC v.
 Metaswitch Networks Corp., 
861 F.3d 1378
, 1381 (Fed. Cir.
 2017). A district court abuses its discretion if its ruling is
 based on an erroneous view of the law or on a clearly erro-
 neous assessment of the evidence.
Id. A plaintiff
seeking
 a permanent injunction must satisfy a four-factor test be-
 fore a court may grant such relief. eBay Inc. v. Mer-
 cExchange, L.L.C., 
547 U.S. 388
, 391 (2006). A plaintiff
 must demonstrate that: (1) it has suffered an irreparable
 injury; (2) remedies available at law are inadequate to com-
 pensate for that injury; (3) considering the balance of hard-
 ships between the plaintiff and defendant, a remedy in
 equity is warranted; and (4) the public interest would not
 be disserved by a permanent injunction.
Id. Because we
 affirm the district court’s conclusion on irreparable injury
 and adequacy of monetary damages, we need not reach the
 district court’s conclusions on balance of harms and public
Case: 18-2198    Document: 92     Page: 20    Filed: 04/24/2020




 20         VERINATA HEALTH, INC. v. ARIOSA DIAGNOSTICS, INC.




 interest. See Nichia Corp. v. Everlight Americas, Inc., 
855 F.3d 1328
, 1340 (Fed. Cir. 2017).
      Regarding irreparable injury, Illumina argues that the
 district court failed to recognize that Roche and Illumina
 are direct competitors and that Roche’s infringement
 causes irreparable injury because each sale made by Roche
 is a sale forever lost by Illumina. Appellant Op. Br. 22-23.
 Illumina argues that the district court’s understanding of
 ActiveVideo Networks, Inc. v. Verizon Communications,
 Inc., 
694 F.3d 1312
(Fed. Cir. 2012), was too broad and
 caused it to err in its conclusion of no direct competition.
Id. at 26-30.
We disagree.
      In ActiveVideo Networks, we held a lack of direct com-
 petition is a substantial basis for finding no irreparable
 
harm. 694 F.3d at 1338
. We reversed the injunction be-
 cause the defendant (Verizon) competed with ActiveVideo’s
 third-party licensees but not with the patentee (ActiveVi-
 deo).
Id. The harm
to ActiveVideo was therefore indirect,
 and ActiveVideo’s loss was a “[s]traight-forward monetary
 harm” and “certainly not irreparable.”
Id. Here, the
dis-
 trict court found that Illumina licenses its patents and
 products under the SSA, allowing third party laboratories
 to conduct their own tests. J.A. 58 (citing J.A. 2109:9-15).
 The district court also found that Ariosa does not utilize a
 licensing model but instead sells its Harmony V2 test di-
 rectly.
Id. Relying on
ActiveVideo, the district court found
 that the different sales models evidenced a lack of direct
 competition because defendants compete with Illumina’s li-
 censees.
Id. The district
court concluded that defendants’
 losses would be quantifiable based at least on licensing fees
 per lost subscriber. J.A. 59. As we find no reason to disturb
 the district court’s findings on irreparably injury, we turn
 to the next eBay factor, available remedies.
     Illumina argues that the district court erred by finding
 that monetary relief would be adequate. Illumina reas-
 serts that the district court erred in its reliance on
Case: 18-2198    Document: 92      Page: 21     Filed: 04/24/2020




 VERINATA HEALTH, INC. v. ARIOSA DIAGNOSTICS, INC.           21



 ActiveVideo and its reasoning that, where licensees com-
 pete with the infringer, royalties are adequate forms of
 compensation. See J.A. 60 (citing 
ActiveVideo, 694 F.3d at 1338
). As noted above, the district court’s reliance on Ac-
 tiveVideo does not constitute an abuse of discretion. And
 Illumina does not challenge the district court’s finding that
 third-party licensees compete with Ariosa. See J.A. 58-59.
 Because Illumina failed to establish irreparable injury and
 inadequacy of monetary relief, the district court did not
 abuse its discretion in denying Illumina’s request for a per-
 manent injunction.
      Regarding Illumina’s request for supplemental dam-
 ages, and an accounting, Illumina argues that the district
 court’s order deferring its request until after the resolution
 of this appeal created confusion regarding whether it is en-
 titled to supplemental damages and an accounting. We de-
 cline to decide, in the first instance, whether Illumina is
 entitled to the supplemental damages it seeks. See La Van
 v. United States, 
382 F.3d 1340
, 1350 (Fed. Cir. 2004) (de-
 clining to award damages in the first instance on appeal).
 And we do not fault the district court’s decision to defer this
 issue. Cf., Sanofi-Aventis Deutschland GmbH v. Glenmark
 Pharm. Inc., USA, 
748 F.3d 1354
, 1357 (Fed. Cir. 2014) (ex-
 plaining that district court’s provision for an accounting of
 any additional damages that may accrue if the decision is
 affirmed on appeal did not negate finality of the judgment).
      Regarding the district court’s granting of pre-judgment
 interest at the 52-week Treasury Bill rate, Illumina re-
 quests we reverse and remand with an order to award pre-
 judgment interest at the prime rate. Appellant Op. Br. 50-
 51. But Illumina articulates no reason in its opening brief
 for why a higher rate is appropriate. District courts have
 wide latitude in the selection of interest rates, Uniroyal,
 Inc. v. Rudkin-Wiley Corp., 
939 F.2d 1540
, 1545 (Fed. Cir.
 1991), and prejudgment interest awards at the Treasury
 Bill rate are well within the court’s discretion. See Laitram
 v. NEC Corp., 
115 F.3d 947
, 955 (Fed. Cir. 1997). The
Case: 18-2198     Document: 92     Page: 22     Filed: 04/24/2020




 22          VERINATA HEALTH, INC. v. ARIOSA DIAGNOSTICS, INC.




 district court’s decision does not constitute an abuse of dis-
 cretion.
                       CONCLUSION
     We have considered the parties’ remaining arguments
 and find them unpersuasive. For the foregoing reasons, we
 conclude that substantial evidence supports the district
 court’s denial of Ariosa’s motion for JMOL of noninfringe-
 ment and invalidity. We also conclude that substantial ev-
 idence supports the district court’s denial of Ariosa’s
 motion for JMOL of no enablement of the ’430 patent.
     We conclude that the district court did not abuse its
 discretion in denying Illumina’s motion for a permanent in-
 junction. We conclude that the district court did not abuse
 its discretion in denying Illumina’s request for supple-
 mental damages and an accounting. Finally, we conclude
 that the district court did not abuse its discretion in award-
 ing pre-judgment interest at the 52-week Treasury Bill
 rate.
                         AFFIRMED
                            COSTS
      The parties shall bear their own costs.

Source:  CourtListener

Can't find what you're looking for?

Post a free question on our public forum.
Ask a Question
Search for lawyers by practice areas.
Find a Lawyer