A Delaware federal jury delivered a major victory to BGI Group this month, awarding the Chinese genetic sequencing giant $333.8 million after finding that Illumina Inc. willfully infringed two DNA sequencing patents. The verdict represents one of the largest patent damages awards in the biotechnology sector and marks a significant escalation in the ongoing intellectual property battle between the world's leading genetic sequencing companies.
Patent Infringement Ruling
The jury found that Illumina's "two-channel" DNA sequencing systems infringe patents owned by Complete Genomics Inc. (CGI), BGI's subsidiary. The disputed technology deduces the identity of each nucleotide from two signals, a fundamental process in modern DNA sequencing. Judge Maryellen Noreika presided over the case, with the jury reaching its verdict after two days of deliberations.
The infringement was found to be willful, with the jury determining that Illumina directly infringed the two CGI patents, induced its customers to infringe, and contributed to their infringement. This finding of willful infringement carries significant implications, as it could allow the judge to increase the damages award up to three times the original amount and award CGI reasonable attorney fees.
Background of the Legal Dispute
The lawsuit originated in May 2019 when CGI filed suit against San Diego-based Illumina, a publicly traded company with $4.5 billion in revenue. CGI initially claimed that Illumina's two-channel DNA sequencing systems infringed a patent for the nucleotide identification technology. In July 2020, CGI amended its complaint to include an additional patent covering the same technology that had been issued in May of that year.
Illumina responded with counterclaims, alleging that certain models of CGI's genetic sequencing instruments infringe three Illumina patents. Both companies maintained their innocence while arguing that their opponent's patents were invalid. According to Illumina's February 2022 filing with the U.S. Securities and Exchange Commission, CGI was seeking $225 million in damages and an ongoing royalty of 5.5% on sales of the accused products until the patents expire in 2029.
Jury's Comprehensive Verdict
The jury rejected Illumina's comprehensive defense strategy, which included arguments that the CGI patents were invalid as obvious and anticipated, and that they lacked adequate written description and failed to enable a skilled person to make or use the invention. Despite these challenges, the patents were upheld as valid and infringed.
In the counterclaim portion of the case, the jury found that CGI did infringe two of Illumina's three asserted patents. However, in a significant blow to Illumina, the jury determined that all of the asserted claims in these patents were invalid, eliminating any potential damages award to the company.
Ongoing Global Patent Wars
This Delaware verdict represents just one battle in a broader global patent war between BGI and Illumina. The companies have previously faced off in multiple jurisdictions, with mixed results. In November 2021, a Northern District of California jury found that CGI's Chinese parent company willfully infringed four Illumina patents, resulting in an $8 million damages award to Illumina.
The international scope of these disputes extends beyond U.S. courts. In December 2021, a UK appeals court upheld a lower court's ruling that BGI infringed four of Illumina's DNA sequencing patents. Additional patent disputes between the companies have also played out in Germany, Switzerland, and other California federal courts.
Market Impact and Industry Implications
BGI Ltd. holds the distinction of being the world's largest maker of commercial genetic sequencers, positioning this patent victory as particularly significant for the competitive landscape of DNA sequencing technology. The substantial damages award could reshape licensing negotiations and competitive dynamics in the rapidly growing genomics market.
The willful infringement finding adds another layer of significance to the verdict, as it demonstrates the jury's belief that Illumina's infringement was not merely inadvertent but deliberate. This determination could influence future patent enforcement strategies and settlement negotiations between major players in the genetic sequencing industry.
