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Illumina Owes BGI $333.8 Million Over Gene-Sequencer Patents (2)

May 6, 2022, 7:45 PMUpdated: May 9, 2022, 4:14 PM

Illumina Inc. owes BGI Group, the world’s largest maker of commercial genetic sequencers, $333.8 million after a federal jury in Delaware found Friday that some of its DNA sequencing systems infringe two patents related to technology that deduces each nucleotide’s identity from two signals.

The jury, which started deliberating Thursday afternoon, also found that sequencers sold by BGI’s Complete Genomics Inc. infringe two of three Illumina patents, but it said all three shouldn’t have been issued in the first place, mooting any potential award, according to the verdict issued in the U.S. District Court for the District of Delaware.

The trial began April 25 and featured competing allegations that each company’s DNA sequencing systems infringe the other’s patents. Each company sought a reasonable royalty for the alleged infringement of its patents by certain features of the accused products.

An Illumina spokesperson said the company disagrees with the verdict and plans to appeal.

“Illumina invented its 2-channel technology before the BGI patents, and BGI was unable to make 2-channel chemistry work until it copied Illumina’s technology,” the spokesperson said in a statement. “We do not anticipate that this decision will affect our ability to supply and service our customers.”

David Bilsker, a lawyer from Quinn Emanuel Urquhart & Sullivan LLP who represented Complete Genomics, said the jury’s findings “shows the strength” of Rade Drmanac’s inventions. The doctor “has been at the forefront of next-generation sequencing, having created the first-generation sequencing method,” Bilsker said in a statement. He said the company “is also pleased that the jury invalidated” the case’s three Illumina patents.

A spokesperson for MGI Tech Co., which owns Complete Genomics, said MGI is pleased with verdict.

Complete Genomics filed the suit in May 2019, claiming San Diego-based Illumina’s “two-channel” DNA sequencing systems infringe a patent for the technology, which deduces the identity of each nucleotide from two signals.

The BGI unit said Illumina’s customers infringe the patent, which Bloomberg Law estimates will expire in January 2029, when they use certain systems in combination with its recommended sample preparation and sequencing kits.

In July 2020, Complete Genomics amended its complaint to add a patent that had been issued that May and covers the same technology. It has the same estimated expiration as the first patent.

BGI’s suit targeted Illumina systems including the NovaSeq 6000, the NextSeq 500/550/550x and 1000/2000 Series, and the MiniSeq. It also targeted Illumina’s library preparation kits and cluster generation and sequencing kits compatible with one or more of the systems, according to court papers.

In July 2019, Illumina filed counterclaims alleging certain models of the BGISEQ and MGISEQ genetic sequencing instruments infringe three Illumina patents. One is estimated to expire in December 2025, another in January 2026—the jury found BGI’s products infringe those two—and a third in February 2026. All were invalidated in Friday’s verdict.

The companies have a history of heated courtroom clashes.

In late March, a federal judge in San Francisco upheld a jury’s November verdict awarding Illumina $8 million for BGI Genomics’ infringement of at least one valid claim in three of the five genetic-sequencing patents at issue. Those patents weren’t part of the Delaware case.

Judge William H. Orrick’s March 27 order in the U.S. District Court for the Northern District of California resolved a spate of issues in two suits between the rivals, including by its denial of BGI’s bid for a new trial.

Orrick also issued a permanent injunction blocking BGI from selling CoolMPS products in the U.S. until after Aug. 23, when the only valid patent at issue against that sequencer will have expired. It also bars U.S. sales of StandardMPS products through Jan. 21, 2023.

BGI’s appeal of the ruling is pending.

BGI Group is the corporate parent of both MGI, Complete Genomics’ owner, and of BGI Genomics.

Complete Genomics is represented by Young Conaway Stargatt & Taylor LLP and Quinn Emanuel. Illumina is represented by Ashby & Geddes PA and Weil, Gotshal & Manges LLP.

The case is Complete Genomics Inc. v. Illumina Inc., D. Del., No. 19-cv-970, verdict issued 5/6/22.

(Updates May 6 story with comment from MGI in seventh paragraph and adds additional details throughout on BGI's corporate structure.)

To contact the reporter on this story: Christopher Yasiejko in Wilmington, Del., at cyasiejko@bloombergindustry.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Steven Patrick at spatrick@bloomberglaw.com