Complete Genomics, Inc. v. Illumina, Inc.

Background

Complete Genomics, Inc., BGI Americas Corp., and MGI Americas, Inc. referred to themselves collectively as CGI. They brought antitrust claims against Illumina, Inc. and Illumina Cambridge Ltd., which they referred to collectively as Illumina. The claims arose from patent-infringement litigation that Illumina had filed against CGI in an earlier related action.

CGI alleged two main types of anticompetitive conduct. First, it alleged that Illumina fraudulently obtained two patents—the ’444 and ’973 patents—by withholding the Kovacs reference from the Patent Office. This was described as a Walker Process fraud claim, which is an antitrust claim based on obtaining or enforcing a patent through fraud. The theory overlapped with an inequitable-conduct defense that CGI had been allowed to add in the related patent case.

Second, CGI alleged that Illumina’s assertion of the ’025 patent against CGI’s CoolMPS technology was objectively and subjectively baseless and therefore constituted sham litigation. CGI asserted monopolization and attempted-monopolization claims under Section 2 of the Sherman Act and unfair-competition claims under California Business and Professions Code section 17200. It sought, among other relief, injunctions, treble damages, and restitution.

Motion to Stay

Illumina moved to stay, or pause, the antitrust case until the related patent-infringement proceedings were resolved. It argued that CGI’s claims overlapped with issues in the patent case, that resolving the patent case might narrow or eliminate the antitrust claims, and that the patent case was much further advanced. CGI opposed the motion, arguing that the stay would conflict with its jury-trial rights, delay its requested relief, harm competition and consumers, and possibly lead to lost evidence.

The court applied factors concerning possible harm from a stay, hardship or unfairness from requiring the case to proceed, and whether a stay would promote an orderly and efficient resolution of the issues.

Court’s Analysis

The court found that the patent case could substantially narrow or entirely moot the antitrust case. CGI’s Walker Process claim relied on essentially the same facts and evidence as its inequitable-conduct defense in the patent case. CGI’s sham-litigation theory concerning the ’025 patent also depended on whether CoolMPS infringed that patent.

The court rejected CGI’s argument that its legal Walker Process claim had to be tried to a jury before the equitable inequitable-conduct defense was resolved in the separate patent case. The court distinguished cases involving legal and equitable claims within the same action and concluded that resolving the related patent case first would not violate the Seventh Amendment. The patent case was substantially more advanced: fact discovery had ended, dispositive motions were scheduled for July, and trial was scheduled for November. The antitrust case had only recently been filed and had no case schedule.

The court also found that proceeding immediately could require expensive and potentially unnecessary antitrust discovery. Prior materials produced to the Federal Trade Commission would not necessarily cover all requested materials, depositions, or expert discovery. In contrast, the court found no substantial prejudice to CGI from a stay. It reasoned that resolution of the patent case was likely either to lift the preliminary injunction affecting CGI’s ability to sell CoolMPS in the United States or to moot the antitrust claims. The court also found that the relevant evidence—business records, corporate testimony, and expert analysis—was less likely to deteriorate or disappear than evidence dependent on unique fact witnesses.

Disposition

Judge William H. Orrick granted Illumina’s motion to stay pending resolution of the related patent-infringement action. The court ordered that the antitrust case be stayed. The opinion did not decide whether CGI’s antitrust claims ultimately had merit.