Bio-Rad Co-ownership Defense Fails at the CAFC

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On April 29, 2021, the United States Court of Appeals for the Federal Circuit (CAFC) affirmed an International Trade Commission (ITC) decision holding the importation and sale by Bio-Rad Laboratories, Inc. (Bio-Rad) of certain microfluidic systems and components used for gene sequencing or related analyses infringed certain 10X Genomics Inc. (10X) patent claims and, moreover, that 10X practiced the patent claims satisfying the requirement of a domestic industry.

In particular, the CAFC decision included an analysis of the ITC determinations regarding both infringement and the domestic industry requirement by Bio-Rad and 10X. However, we will focus on an argument advanced by Bio-Rad regarding a co-ownership defense.

More specifically, a number of inventors of the 10X patents had previously worked for Bio-Rad. Accordingly, as an affirmative defense, Bio-Rad claimed that it co-owned the asserted 10X patents by advancing arguments that the inventors conceived of the ideas embodied in the 10X patents while they were still employed by Bio-Rad and/or its predecessor company.

During the ITC proceeding, an Administrative Law Judge (ALJ) rejected the defense by concluding that Bio-Rad had not shown that the “inventive concept” of the asserted patents was conceived before the inventors left Bio-Rad. On review, the Commission agreed with the ALJ.

In particular, Bio-Rad argued that while working at Bio-Rad (or its predecessor company), the inventors had ideas that contributed to the post-employment inventions at issue, which required assignment of their co-ownership interest to Bio-Rad.

However, the CAFC indicated that the evidence argued by Bio-Rad that included, inter alia, certain slides and an email failed to support the co-inventorship contention of the 10X patents being conceived by the inventors while they were employed by Bio-Rad. Additionally, as to the possibility of post-employment conception by the inventors, the CAFC analyzed the assignment provisions and noted that they were limited temporally and the applicable governing law of California provided a confirmatory reason not to read the assignment provisions at issue more broadly. Additionally, the CAFC provided analysis of various decisions cited by Bio-Rad, and the CAFC held that these decisions, as applicable, supported a position that an assignment provision was limited to intellectual property developed during the term of employment. Accordingly, the CAFC affirmed the ITC decision.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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