Illumina Inc. v. BGI Genomics Co., Ltd.

Background

BGI Genomics Co., Ltd., BGI Americas Corp., MGI Tech Co., Ltd., MGI Americas, Inc., and Complete Genomics, Inc. moved for leave to amend their answer to add an inequitable-conduct affirmative defense. Inequitable conduct is a defense alleging that someone involved in obtaining a patent withheld or misrepresented material information to the patent office with a specific intent to deceive it.

The proposed defense concerned the ’444 and ’973 patents. BGI alleged that Illumina’s inventors, Drs. Xiaohai Liu and XiaoLin Wu, failed to disclose a 1988 paper by Terez Kovacs and Laslo Otvos, called “Simple Synthesis of 5-Vinyl and 5-Ethynyl- 2’ Deoxyuridine- 5’-Triphosphates.” BGI alleged that the paper described a method similar to one used by the inventors to convert nucleosides into nucleotides. BGI also relied on a difficult-to-read handwritten reference to the paper in an April 2001 notebook entry by Sarah Lee, who worked in the same laboratory.

The notebook had been produced to BGI in April 2020 as one of more than 300 notebooks. BGI said it found the reference while preparing for Dr. Wu’s deposition in early December 2020 and moved to amend on December 9, 2020. Illumina opposed the amendment, arguing that BGI had not acted diligently, that the amendment would cause prejudice, and that the proposed defense was futile.

Reasoning on Amendment

Under Federal Rule of Civil Procedure 15(a), courts should generally allow amendments when justice requires, although leave is not automatic. The court considered bad faith, undue delay, prejudice, futility, and whether the pleading had previously been amended. Prejudice to the opposing party is the most important factor.

The court found that BGI acted with reasonable diligence. The relevant notation was handwritten, difficult to decipher, and appeared to contain the wrong publication year. The court also found it reasonable that reviewing more than 300 notebooks would take time and that BGI might first review notebooks belonging to the patent inventors.

The court found no undue prejudice. Adding the defense could require Illumina to investigate Sarah Lee’s role and could lead to additional discovery, including a possible deposition, but the potential costs did not appear substantial enough to be unduly burdensome.

The court also concluded that the proposed defense was not clearly futile at the pleading stage. Under Federal Rule of Civil Procedure 9(b), allegations of inequitable conduct must identify the specific “who, what, when, where, and how” of the alleged omission or misrepresentation. The court found that BGI had adequately alleged that Liu and Wu had a duty of candor, may have known about Kovacs, failed to disclose it, and were connected to a methodology similar to the one described in that paper.

The court recognized that BGI’s allegations of deceptive intent were relatively sparse. Nevertheless, it found that the allegations could plausibly support an inference that Liu and Wu knew of Kovacs and intended to deceive the patent office. The court also declined to make a fact-intensive determination at this stage about whether Kovacs was material and not cumulative of other prior art. BGI had plausibly alleged that Kovacs disclosed something different or more detailed than the other references submitted to the patent office.

The court therefore granted BGI’s motion for leave to amend. This ruling allowed BGI to assert the defense; it did not decide whether Illumina actually committed inequitable conduct.

Other Motions and Disposition

The court granted Illumina’s request to file a sur-reply because BGI’s reply included new factual assertions, including assertions about prior-art references submitted during prosecution of the ’444 patent.

The court denied BGI’s motion to seal portions of its reply brief and supporting exhibits. Illumina had not filed the required substantive declaration supporting sealing, and the court determined that the documents did not appear to contain information suitable for sealing. The court ordered the provisionally sealed documents unsealed on the docket.

In conclusion, BGI’s motion to amend was granted; Illumina’s motion to file a sur-reply was granted; and BGI’s motion to seal documents associated with its reply brief was denied. BGI was instructed to file its proposed corrected first amended answer as a separate docket document.