Background

This month, a Delaware federal jury determined that Illumina, Inc. (Illumina) willfully infringed two DNA sequencing patents owned by Complete Genomics, Inc. (CGI), while also invalidating three Illumina patents that CGI was accused of infringing in counterclaims. In so doing, the jury awarded CGI US$333.8 million in damages.¹

Analysis

The suit began in May 2019, when CGI, a unit of China’s BGI Ltd. (BGI), the world’s largest maker of commercial genetic sequencers, filed suit against San Diego-based Illumina, a publicly traded company with US$4.5 billion in revenue,²  claiming Illumina’s “two-channel” DNA sequencing systems infringe a patent for the technology, which deduces the identity of each nucleotide from two signals. In July 2020, CGI amended its complaint to add a patent that had been issued in May and covers the same technology.

Illumina filed counterclaims alleging certain models of CGI’s genetic sequencing instruments infringe three Illumina patents. Both companies maintained that they did not infringe and that the other’s patents were invalid. In a filing with the U.S. Securities and Exchange Commission in February 2022, Illumina said that as of 2021, CGI was seeking US$225 million in damages and an ongoing royalty of 5.5% on sales of the accused products until the patents expire in 2029.

On the second day of deliberations before Judge Maryellen Noreika, the jury found that Illumina directly infringed the two CGI patents at issue, induced its customers to infringe, and contributed to their infringement. The jurors rejected Illumina’s arguments that the patents are invalid as obvious and anticipated and for lacking adequate written description and not enabling a skilled person to make or use the invention. The jury also found that CGI did infringe two of Illumina’s patents, but it held that all of the asserted claims were invalid, so CGI was not liable for any damages.

Key Takeaways

This is not the first time these companies have squared off in court over their DNA sequencing patents. In November 2021, a Northern District of California jury found that CGI’s Chinese parent company willfully infringed four Illumina patents. Illumina was awarded US$8 million in damages. In December 2021, a UK appeals court upheld a lower court’s ruling that BGI infringed four of Illumina’s DNA sequencing patents. There have also been patent disputes between the companies in Germany, Switzerland, and the Northern District of California.

The verdict in Delaware, at almost US$334 million, however, is a significant win for CGI. Because the jury found that Illumina’s infringement was willful, the judge could choose to increase the damages award up to three times that amount³ and award CGI its reasonable attorney fees.⁴

The case is yet another high-profile patent dispute in the Delaware district court, which saw 22% of the 4,063 new patent cases filed in 2021, an amount second only to the Western District of Texas.⁵