Bio-Rad Laboratories, Inc. v. International Trade Commission, Appeal Nos. 2020-1475, -1605 (Fed. Cir. May 28, 2021)

In this week’s Case of the Week, the Federal Circuit considered an appeal from the International Trade Commission affirming an Administrative Law Judge’s finding that 10X’s products violated the Tariff Act by infringing multiple patents and that they did not infringe another. The Federal Circuit affirmed, addressing issues of claim construction, direct infringement, and indirect infringement.

The three patents at issue (’664 patent, ’682 patent, and ’635 patent) “relate generally to the field of microfluidics, and specifically to the generation of microscopic droplets.”

The asserted patents arise from research conducted by three inventors (Drs. Kevin Ness, Donald Masquelier, and Benjamin Hindson) at a company formerly known as QuantaLife. In 2011, Bio-Rad purchased QuantaLife along with all of its patent rights. For the following two years, the three inventors worked as Bio-Rad employees, during which time they assigned to Bio-Rad their rights to the then-applications for the ’664, ’635, and ’682 patents. Shortly thereafter, two of the inventors formed 10X and the third joined 10X soon after. 

In 2017, Bio-Rad filed a complaint with the Commission asserting that 10X violated section 337 of the Tariff Act of 1930, 19 U.S.C. § 1337, by importing microfluidic chips into the United States. Specifically, Bio-Rad alleged that 10X’s Chip GB infringed the asserted claims of the ’664 patent and that 10X’s GEM Chips infringed the asserted claims of all three patents at issue. An ALJ found that 10X’s Chip GB did not infringe the  ’664 patent; 10X’s GEM Chips did infringe the ’664, ’682, and ’635 patents; and 10X’s use of the GEM Chips “induce[d] and contribute[d] to its customers’ direct infringement of the ’682 and ’635 patents.” The Commission affirmed the ALJ’s findings. Bio-Rad appealed the Commission’s determination that the Chip GB did not infringe the ’664 patent, and 10X appealed the Commission’s determination that the GEM Chips infringed the asserted patents and that it induced and contributed to its customers’ infringement of the ’682 and ’635 patents.

The Court affirmed the Commission’s conclusions on all challenged issues. First, the Court addressed Bio-Rad’s challenge to the Commission’s determinations with regard to the Chip GB. The Commission found that the Chip GB did not infringe the asserted claims “because the monomer solution used by 10X in the Chip GB is not a ‘sample’ under the parties’ agreed upon construction.” Rather, the Commission explained that the monomers fell under the definition of a “reagent” because 10X used them to make gel beads rather than analyze the monomers as would be done with a sample. Bio-Rad first argued that the distinction between a “sample” and a “reagent” was improper because language in the ’664 patent suggested that the same compound could be both. The Court disagreed, explaining that Bio-Rad was improperly attempting to broaden the meaning of the term “sample,” and emphasized that the specification supported the Commission’s findings. Bio-Rad next argued that regardless of whether the monomers were a “sample,” the Chip GB had all the structural elements of the structural limitations set forth in the asserted claims. The Court rejected this argument, explaining that it “fails because it is premised on rewriting the claims in an oversimplified form and removing all limitations that differentiate the recited structures from each other.” The Court emphasized that “[i]nventors are masters of their claims, and the words they use to describe and claim their invention are decisive and binding.” The Court affirmed the Commission’s determination of noninfringement.

Second, the Court addressed 10X’s challenge to the Commission’s determinations with regard to the GEM Chips. 10X’s appeal was twofold. First, 10X challenged the Commission’s finding of direct infringement. 10X argued that the Commission improperly construed the term “droplet-generation region.” The Court disagreed, explaining that the Commission’s claim construction was substantially supported by intrinsic evidence such as the claim language and the specifications. Second, 10X argued that substantial evidence did not support the Commission’s findings of indirect infringement with regard to the knowledge requirement of both induced infringement and contributory infringement. Specifically, 10X asserted that the evidence only supported 10X’s knowledge of patent applications, but not of patents. Further, 10X argued that the evidence showed that the “inventors had an objectively reasonable belief that the use of GEM Chips would not infringe the patents.” The Court disagreed, finding that there was substantial evidence, based largely on the parties’ historical relationship, to support the Commission’s conclusions. The Court affirmed the Commission’s determinations of direct and indirect infringement.  

A copy of the opinion can be found here.

By Annie White

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