Argument Recap

Last week the Federal Circuit heard only one case that attracted an amicus brief. In the case, Bio-Rad Laboratories, Inc. v. 10X Genomics Inc., the court confronted several patent-law-related questions. As we noted in our argument preview, these questions related to literal infringement, infringement under the doctrine of equivalents, claim construction, damages, and injunctive relief. The amicus brief, however, focused only on the appropriateness of injunctive relief. On Friday, the parties presented their arguments to a panel that included Judges Newman, O’Malley, and Taranto. This is our argument recap.

Arguing on behalf of the 10X, Joshua Rosenkranz began by identifying and framing two issues that the court needed to address. First, Rosenkranz argued that the district court had erroneously applied the doctrine of equivalents both to vitiate claim language and reclaim territory the inventors expressly surrendered during prosecution. Second, Rosenkranz argued that the court needed to correct an “egregiously flawed damages award” of a 15% royalty that was based on a non-comparable license. Rosenkranz addressed these issues in turn.

Starting with the doctrine of equivalence, Rosenkranz argued that the inventors consciously narrowed their claims and cannot now claim infringement under the doctrine of equivalents. Responding to a comment by the court that the doctrine of equivalents requires looking at the “purpose” of the invention rather than just the claim language, Rosenkranz stated that “vitiation and prosecution history estoppel, if they apply, prevent the question of equivalence from even getting to the jury.” Rosenkranz did concede that there are many cases that say one should consider the purpose of an invention, but he argued that there are also many cases “that say that an opposite cannot be an equivalent.” Here, Rosenkranz argued that the inventors chose to add “non-fluorinated” language in order to overcome “fluorinated” prior art. Moreover, Rosenkranz said that the inclusion of fluorine is not “peripheral to the conversation,” it is the “entire conversation.” Realizing how much time he had remaining, Rosenkranz turned briefly to address the damages issue.

Rosenkranz began by alleging that “a Bio-Rad expert cherry picked the three licenses with the highest rate to gerrymander a rate that was 15 times the rate paid [for] the license on the same patent.” Rosenkranz argued that, at a minimum, there should be a new trial because the district court conceded that one of the three licenses used to calculate this royalty was a non-comparable license. This means, he said, that the jury should not have heard about that specific license. Continuing this argument, Rosenkranz said there were multiple reasons why the inclusion of the non-comparable license could have affected the jury. First, the non-comparable license was the only license that applied such a high rate. Second, the non-comparable license was the only license with a straight 15% rate. Third, Bio-Rad’s expert led with the non-comparable license when testifying about apportionment.

Edward Reines, arguing on behalf of Bio-Rad, began by stating that “all of the patents at issue support the verdict,” such that finding against any one patent would require this case to go back to the district court for another trial on damages.

With respect to the doctrine of equivalents, Reines pointed out that case law surrounding the doctrine of equivalents clearly requires looking to the substance of the distinction made during prosecution. Along these lines, Reines stated that an executive “of 10X was questioned at trial and [it] was explicit that he could not identify any technological benefit or reason for [10X] adding the Kynar,” the added material forming the basis of 10X’s non-infringement defense with respect to a claim that included the term “non-flourinated.” Reines then argued that adding a de minimus amount of fluorine, as he argued 10X has done here, has no effect to justify defeating an allegation of infringement under the doctrine of equivalents. In response to a question about whether there is a minimal amount of fluorine that needed to be added to avoid infringement or if the amount of fluorine added here makes no functional difference, Reines argued that, based on expert testimony and the absence of any contrary expert testimony, the amount of fluorine added here had no effect on the system as a whole. Thus, Reines argued that adding something that “has no effect technologically whatsoever relative to a [claim] distinction” is completely tangential to “something that actually coats the walls with fluorine.” Reines argued that 10X is attempting to exploit claim construction to manipulate the patent system.

Turning to the damages issue, Reines argued that 10X never preserved the admissibility issue that it has raised with respect to the alleged non-comparable license. He also argued that, looking at the big picture, there are three licenses for similar products at a 15% royalty, about which experts testified.

Finally, the court asked about the granted injunction, about which the amicus brief was filed. Specifically, the court asked how Bio-Rad was able to claim irreparable injury sufficient for an injunction to issue when several of the enjoined 10X products do not have a competitor product made by Bio-Rad. Reines responded by explaining that these products had been on Bio-Rad’s product map and were coming down the pipeline until they were harmed because of 10X’s willful infringement.

In his brief rebuttal, Rosenkranz began by reminding the court that the Supreme Court has previously clarified that intent plays no rule in the doctrine of equivalents analysis. Rosenkranz then argued that in its opening brief 10X did preserve the admissibility and comparability arguments related to damages. Lastly, Rosenkranz argued that the injunction should be removed because 10X’s products excluded from the market serve “a vital role in the scientific community for ongoing research.”

We will monitor this case and report on its outcome.