After Intense Patent Litigation Bio-Rad and 10x Genomics Settle through Cross Licensing

Recently, in an announcement made by Pleasanton, California based 10x Genomics, Inc. (“10x”) with US Stock exchanges and SEC (Securities and Exchange Commission), the company informed that it has entered into a global settlement and cross-license agreement with Hercules, California, based Bio-Rad Laboratories, Inc (“Bio-Rad”). The agreement to cross-license single-cell technologies aims to resolve all outstanding litigation and other proceedings between the two companies across all jurisdictions around the world and dismissing all infringement claims with prejudice. With this settlement, legal proceedings between the companies before forums such as federal courts, the US International Trade Commission, and the US Patent Office Patent Trial and Appeals Board will be dismissed, ending one of the major legal, especially patent disputes in the biotech industry.

Under the terms of the Settlement and Patent Cross License Agreement, as submitted with SEC, dated July 26, the companies have granted to each other a non-exclusive, worldwide, royalty-bearing license to develop products and services related to single-cell analysis. The agreement excludes products related to spatial analysis and in situ analysis and excludes digital PCR products in the case of 10x. The term of the Agreement is for the life of the licensed patents. The Company and Bio-Rad have agreed not to sue each other on licensed products and licensed services on other patents owned or exclusively licensed by each company. The companies have agreed that each company’s patents are owned by each respective company.

As per the deal, each company is also required to pay the other royalties from licensed products and licensed services through 2030. 10X further disclosed in the statement that it expects future royalty payments will impact the company’s gross margins by less than one percent during the royalty period.

While the exact payment terms have not been disclosed, 10x is expected to pay Bio-Rad an undisclosed fee in part to settle previous lawsuits with Bio-Rad. As disclosed by 10x in the announcement, post adjustment as per the Agreement, it will pay Bio-Rad US$29.4 million in royalties and interest related to the sales of its GEM products between November 14, 2018, and March 31, 2021. However, 10x will also pay Bio-Rad royalties on future revenues from its newer Next GEM products and its patents. At the same time, Bio-Rad too will similarly pay 10x an undisclosed fee for settling 10x’s patent infringement lawsuit against Celsee, a single-cell genomics firm Bio-Rad acquired earlier.

Some of the patents that were wrangled in dispute and now have been settled include:

• 10x’s U.S. Patent No. 9,689,024 titled “Methods for Droplet-Based Sample Preparation”
• 10x’s U.S. Patent No.9,695,468 titled “Methods for Droplet-Based Sample Preparation”

The above two describes methods of preparing samples that can include fragmenting molecules, isolating molecules, and/or attaching unique identifiers to particular fragments of molecules.

• 10x’s U.S. Patent No. 9,856,530 titled Methods and systems for processing polynucleotides
• Bio-Rad’s U.S. Pat. No. 9,562,837 titled Systems for handling microfludic droplets, and
• Bio-Rad’s U.S. Patent No.9,896,722 titled Systems for handling microfluidic droplets

In the past, in 2018, Bio-Rad won $34.5 million in damages and a permanent injunction providing for royalty payments from 10x in a jury verdict. 10x on the other hand was able to secure a decision in their favor with the US International Trade Commission in early 2020 when the ITC upheld a finding that certain microfluidics products imported by Bio-Rad indirectly infringed patents held by 10x.

Author: Arindam Purkayastha, a patent attorney at IIPRD. In case of any queries please contact/write back to us at [email protected].