Case 1:20-cv-00125-GBW Document 662 Filed 09/05/23 Page 1 of 22 PageID #: 64467
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`NATERA, INC.,
`
`Plaintiff,
`
`V.
`
`C.A. No. 20-125-GBW
`(CONSOLIDATED)
`
`ARCHERDX, INC., ARCHERDX, LLC, and
`INVITAE CORP.,
`
`Defendants.
`
`Jack B. Blumenfeld, Derek J. Fahnestock, Anthony D. Raucci, MORRIS, NICHOLS, ARSHT &
`TUNNELL LLP, Wilmington, Delaware; William G. Gaede, III, Jodi L. Benassi, MCDERMOTT
`WILL & EMERY LLP, San Francisco, California; Bhanu K. Sadasivan, Cecilia Choy,
`MCDERMOTT WILL & EMERY LLP, Menlo Park, California; Mandy H. Kim, MCDERMOTT
`WILL & EMERY LLP, Irvine, California; Sarah Chapin Columbia, MCDERMOTT WILL &
`EMERY LLP, Boston, Massachusetts
`
`Counsel for Plaintiff
`
`Brian E. Farnan, Michael J. Farnan, FARNAN LLP, Wilmington, Delaware; Edward R. Reines,
`Derek C. Walter, Karnik F. Hajjar, WEIL, GOTSHAL & MANGES LLP, Redwood Shores,
`California; Aaron J. Curtis, Kathryn Leicht, Barry Zhang, Ian Moore, WEIL, GOTSHAL &
`MANGES LLP, New York, New York; Priyata Y. Patel, Matthew D. Sieger, WEIL, GOTSHAL
`& MANGES LLP, Washington, D.C; Elizabeth Ryan, WEIL, GOTSHAL & MANGES LLP,
`Dallas, Texas
`
`Counsel for Defendants
`
`September 5, 2023
`Wilmington, Delaware
`
`OPINION
`
`

`

`Case 1:20-cv-00125-GBW Document 662 Filed 09/05/23 Page 2 of 22 PageID #: 64468
`
`GREGORYB. WILLIAMS
`UNITED STATES DISTRICT nJDGE
`
`On June 22, 2023, the Court held a one-day bench trial in this action on the issue of whether
`
`U.S. Patent Nos. 10,557,172 ("the' 172 patent") and 10,731 ,220 ("the '220 patent") (collectively,
`
`the "Asserted ctDNA Patents") are unenforceable due to prosecution laches. Presently before the
`
`Court are the parties' post-trial briefing on this issue. D.I. 644; D.I. 650; D.I. 655. 1 In connection
`
`with the briefing, the parties submitted proposed findings of fact and conclusions oflaw. D.I. 642;
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`D.I. 643 .
`
`Pursuant to Federal Rule of Civil Procedure 52(a), and after having considered the entire
`
`record in this case and the applicable law, the Court concludes that Defendants ArcherDX, Inc.,
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`ArcherDX, LLC, and Invitae Corporation (collectively, "Defendants") have not shown by clear
`
`and convincing evidence that the Asserted cfDNA Patents are unenforceable due to prosecution
`
`laches.
`
`The Court's findings of fact and conclusions oflaw are set forth below.
`
`I.
`
`FINDINGS OF FACT2
`
`A. The Parties
`
`1)
`
`Plaintiff Natera, Inc. ("Natera") is a corporation organized and existing under the
`
`laws of Delaware, having a principal place of business at 201 Industrial Road, San Carlos,
`
`California 94070. D.I. 579, Ex. 1 (Joint Statement of Uncontested Facts) ("JSUF") ,r 1.
`
`1 All D.I. citations refer to C.A. No. 20-125-GBW unless otherwise noted.
`
`2 The Court's Findings of Fact are cited as "FF, Section_ ,r _."
`
`1
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`

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`Case 1:20-cv-00125-GBW Document 662 Filed 09/05/23 Page 3 of 22 PageID #: 64469
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`2)
`
`Defendant Invitae Corporation ("Invitae") is a corporation organized and existing
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`under the law of the state of Delaware, having a principal place of business at 1400 16th Street,
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`San Francisco, California 94103. JSUF 13.
`
`3)
`
`Defendant ArcherDX, LLC ("Archer"), formerly ArcherDX, Inc., is a corporation
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`organized and existing under the laws of the state of Delaware, having a principal place of business
`
`at 2477 55th Street, Suite 202, Boulder, Colorado 80301. JSUF 1 2. On October 2, 2020,
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`ArcherDX, Inc. merged with Apollo Merger Sub A Inc., which then merged with Apollo Merger
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`Sub B LLC to form Archer. JSUF 1 2.
`
`4)
`
`5)
`
`Archer is a wholly-owned subsidiary of Invitae. JSUF 14.
`
`The Court has subject matter jurisdiction and personal jurisdiction over all parties.
`
`B. Procedural History
`
`1)
`
`This is an action for patent infringement arising under the patent laws of the United
`
`States, Title 35, United States Code, § 1, et seq., which Natera filed against ArcherDX, Inc. on
`
`January 27, 2020, for infringement of U.S. Patent No. 10,538,814 ("the ' 814 patent"). D.I. 1. On
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`April 15, 2020, Natera filed a First Amended Complaint, adding the ' 172 patent, in addition to
`
`U.S . Patent Nos. 10,590,482 ("the ' 482 patent") and 10,597,708 ("the ' 708 patent"). D.I. 17.
`
`2)
`
`On August 6, 2020, Natera filed another patent infringement suit against
`
`ArcherDX, Inc. for infringement of the '220 patent. See C.A. No. 20-1047-GBW, D.I. 1.
`
`3)
`
`On September 25, 2020, Civil Action No. 20-1047-GBW was consolidated with
`
`Civil Action No. 20-125-GBW. D.I. 52. All filings were made in the lead case-Civil Action No.
`
`20-125-GBW. D.I. 53 .
`
`2
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`

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`Case 1:20-cv-00125-GBW Document 662 Filed 09/05/23 Page 4 of 22 PageID #: 64470
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`4)
`
`On January 12, 2021 , Natera filed a Second Amended Complaint to add Defendants
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`Invitae and Archer in view of Archer DX, Inc. ' s merger with In vitae, which caused Archer DX, Inc.
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`to merge with various subsidiaries to form Archer. D.I. 116.
`
`5)
`
`On October 27, 2021 , Natera filed a Third Amended Complaint to include the
`
`corrected language of claim 1 of the ' 482 patent. D .I. 3 91.
`
`6)
`
`On January 24, 2023 , the Court heard oral argument on, inter alia, Natera's motion
`
`for summary judgment on no unenforceability of the Asserted cfDNA Patents due to prosecution
`
`laches (D.I. 429). D.I. 549. On February 6, 2023 , the Court, inter alia, denied Natera' s summary
`
`judgment motion on no prosecution laches. D.I. 550.
`
`7)
`
`On April 21, 2023 , the Court ordered Natera to narrow the number of claims and
`
`patents it can assert at trial. D.I. 573. Specifically, the Court ordered Natera to identify "no more
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`than 10 asserted claims across no more than 3 asserted patents that it intends to assert at trial" to
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`Defendants. D.I. 573.
`
`8)
`
`At trial, Natera alleged infringement of the Asserted cfDNA Patents and the ' 708
`
`patent. JSUF 16.
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`9)
`
`Natera accused the following products of infringing the Asserted cfDNA Patents:
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`LiquidPlex, STRA T AFIDE, and Personalized Cancer Monitoring ("PCM"), and all assays based
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`on the above-listed products, including comprehensive kits. JSUF 111.
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`10)
`
`Natera accuses the following products of infringing the ' 708 patent: V ariantPlex,
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`FusionPlex, STRA T AFIDE, and PCM, and all assays based on the above-listed products,
`
`including comprehensive kits. JSUF ,-i 12.
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`11)
`
`A five-day jury trial was held during the week of May 8, 2023. On May 15, 2023 ,
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`the jury returned a verdict finding, inter alia, that Natera had proven by a preponderance of the
`
`3
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`

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`Case 1:20-cv-00125-GBW Document 662 Filed 09/05/23 Page 5 of 22 PageID #: 64471
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`evidence that Defendants directly infringe claims 1, 6, and 8 of the ' 172 patent; claims 1, 3-4, and
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`6-7 of the '220 patent; and claims 1 and 19 of the ' 708 patent. D .I. 609 at 1.
`
`12)
`
`In addition, the jury found that Natera had not proven by a preponderance of the
`
`evidence that Defendants indirectly infringe claims 1, 6, and 8 of the ' 172 patent; claims 1, 3-4,
`
`and 6-7 of the ' 220 patent; and claims 1 and 19 of the ' 708 patent. Id at 3-4.
`
`13)
`
`The jury also found that Defendants had not proven by clear and convincing
`
`evidence that claims 1, 6, and 8 of the ' 172 patent; claims 1, 3-4, and 6-7 of the ' 220 patent; and
`
`claims 1 and 19 of the ' 708 patent were invalid. Id at 5-9. Specifically, the jury found that claims
`
`1, 6, and 8 of the '172 patent and claims 1, 3-4, and 6-7 of the '220 patent are not invalid due to
`
`anticipation. Id at 5. Claims 1 and 19 of the ' 708 patent are not invalid due to obviousness. Id.
`
`at 6. Claims 1, 6, and 8 of the '172 patent and claims 1, 3-4, and 6-7 of the ' 220 patent are not
`
`invalid due to lack of written description or for failure to claim what the inventors regarded as their
`
`invention. Id. at 7-8. Claims 1 and 19 of the ' 708 patent are not invalid due to indefiniteness. Id.
`
`at 8. Claims 1, 6, and 8 of the ' 172 patent and claims 1, 3-4, and 6-7 of the ' 220 patent are not
`
`invalid due to improper inventorship. Id. at 9.
`
`14)
`
`Additionally, the jury found that Natera is entitled to $9,356,886 for its lost profits
`
`as a result of Defendants' infringing sales of the PCM products and awarded a ten percent
`
`reasonable royalty rate for Defendants' past sales of the accused products other than PCM. Id. at
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`10. At the ten percent royalty rate, the jury awarded Natera $5,430,181 for sales in the United
`
`States and $4,564,963 for sales outside of the United States. Id.
`
`15)
`
`On May 31, 2023 , the Court scheduled a one-day bench trial on Defendants'
`
`prosecution !aches defense. D.I. 618. The bench trial was held on June 22, 2023. "Tr.
`
`"
`
`4
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`

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`Case 1:20-cv-00125-GBW Document 662 Filed 09/05/23 Page 6 of 22 PageID #: 64472
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`C. The Asserted cIDNA Patents and Their Prosecution
`
`1)
`
`The ' 172 patent entitled, "Methods for Simultaneous Amplification of Target
`
`Loci," issued on February 11 , 2020. JTX-3 . U.S. Patent Application No. 16/399,103 ("the '103
`
`Application"), which ultimately led to the '172 patent, was filed on April 30, 2019, and published
`
`on August 22, 2019. Id.
`
`2)
`
`3)
`
`The assignee listed on the face of the ' 172 patent is Natera. Id.
`
`Natera did not seek or receive any term adjustment or extension for the ' 172 patent.
`
`JTX-3.1; Tr. at 217 :13-15.
`
`4)
`
`The ' 220 patent entitled, "Methods for Simultaneous Amplification of Target
`
`Loci," issued on August 4, 2020. JTX-5. U.S. Patent Application No. 16/743,724 ("the ' 724
`
`Application"), which ultimately led to the '220 patent, was filed on January 15, 2020, and
`
`published on May 7, 2020. Id.
`
`5)
`
`6)
`
`The assignee listed on the face of the '220 patent is Natera. Id.
`
`Natera did not seek or receive any term adjustment or extension for the ' 220 patent.
`
`JTX-5.1; Tr. at 217:13-15.
`
`7)
`
`The Asserted cfDNA Patents recite, "methods for simultaneously amplifying
`
`multiple nucleic acid regions of interest in one reaction volume as well as methods for selecting a
`
`library of primers for use in such amplification methods. The invention also provides library of
`
`primers with desirable characteristics, such as minimal formation of amplified primer dimers or
`
`other non-target amplicons." JTX-3.1 ; JTX-5 .1. At a high-level, the Asserted cfDNA Patents
`
`recite performing nested polymerase chain reactions ("PCR") on cell-free DNA to sequence the
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`DNA. JTX-3; JTX-5.
`
`5
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`

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`Case 1:20-cv-00125-GBW Document 662 Filed 09/05/23 Page 7 of 22 PageID #: 64473
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`8)
`
`The Asserted cfDNA Patents share a specification, which is approximately 125
`
`pages long, and collectively includes forty-three claims. JTX-3 ; JTX-5.
`
`9)
`
`Natera requested, and was granted, prioritized examination pursuant to 37 C.F.R. §
`
`l.102(e) for the '103 Application and the ' 724 Application. JTX-3.l ; JTX-5.1; Tr. at 214:22-24,
`
`215: 14-21 . As a result, the '172 patent issued about 287 days after the '103 Application was filed,
`
`and the '220 patent issued about 202 days after the ' 724 Application was filed. JTX-3.1; JTX-5.1.
`
`10) Defendants retained Nathan Kelley as an expert in the field of patent prosecution
`
`and procedure. Tr. at 103 : 10-15. Mr. Kelley testified that Natera was "able to get [its] [ Asserted
`
`cfDNA Patents] very quickly," in "less than a year, which is very fast. " Tr. at 131:15-23.
`
`11) The Asserted cfDNA Patents were filed post-GATT. JTX-3; JTX-5. Accordingly,
`
`the term of the Asserted cfDNA Patents are 20 years from the filing date of the earliest U.S. or
`
`international application to which priority is claimed. See Manual of Patent Examining Procedure
`
`("MPEP") § 2701.
`
`12) Natera did not submit any nonpublication requests during the prosecution of the
`
`Asserted cfDNA Patents or for any family applications. Tr. at 231:19-21, 232:6-8.
`
`13) Natera did not delay publication or issuance of any application or patent during the
`
`prosecution of the Asserted cfDNA Patents or for any family applications. Tr. at 232: 1-5.
`
`14) Natera has disclosed all members of the Asserted cfDNA Patents, including all
`
`abandoned applications, to the public. Tr. at 158:25-159:3.
`
`15) Natera did not make any attempt to keep its invention disclosures secret from the
`
`public. Tr. 231 :22-25.
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`6
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`

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`Case 1:20-cv-00125-GBW Document 662 Filed 09/05/23 Page 8 of 22 PageID #: 64474
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`16) The Asserted cfDNA Patents claim priority to U.S. Patent Application No.
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`13/300,235 ("the '235 Application"), which was filed on November 18, 2011. JTX-3.1 ; JTX-5.1 ;
`
`JTX-84.
`
`17) The '235 Application is entitled "Methods for Non-Invasive Prenatal Ploidy
`
`Calling" and "provides methods for determining the ploidy status of a chromosome in a gestating
`
`fetus from genotypic data measured from a mixed sample of DNA comprising DNA from both the
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`mother of the fetus and from the fetus, and optionally from genotypic data from the mother and
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`father." JTX-84.1.
`
`18)
`
`The ' 235 Application published and was available in the public domain on October
`
`25, 2012. JTX-84.1; Tr. at 142:20-25, 143:9-13, 231 :8-18. As such, the disclosure of the
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`inventions claimed in the Asserted cfDNA Patents was available to the public by, at the latest,
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`October 25, 2012. Id.
`
`19)
`
`From the filing date of the '235 Application to the issuance date of the Asserted
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`cfDNA Patents-approximately a seven to eight year time period-"Natera prosecuted 13
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`additional applications in the same family, 6 of which issued as patents claiming various other
`
`aspects of the inventions disclosed in these related applications." D.I. 499 at 2.
`
`20)
`
`Natera prosecuted several patent applications in the same family as the Asserted
`
`cfDNA Patents. Below are examples of patent applications that are incorporated by reference in
`
`the Asserted cfDNA Patents. JTX-3 ; JTX-5.
`
`a. U.S. Patent Application No. 13/335,043 ("the '043 Application") was filed on
`December 22, 2011. DTX-66. The ' 043 Application is entitled "Methods for
`Non- Invasive Prenatal Paternity Testing." Id.
`
`b. U.S. Patent Application No. 13/780,022 ("the '022 Application") was filed on
`February 28, 2013. DTX-69. The ' 022 Application is entitled "Informatics
`Enhanced Analysis of Fetal Samples Subject to Maternal Contamination." Id.
`
`7
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`

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`Case 1:20-cv-00125-GBW Document 662 Filed 09/05/23 Page 9 of 22 PageID #: 64475
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`c. U.S. Patent Application No. 14/225 ,356 ("the '356 Application") was filed on
`March 25, 2014. DTX-70. The '356 Application is entitled "Methods for
`Preimplantation Genetic Diagnosis By Sequencing." DTX-70.
`
`21) When asked "can you state when Natera began work on prosecuting the asserted
`
`patents?," Matthew Rabinowitz, co-founder and executive chairman of Natera, responded as
`
`follows:
`
`Well, you have got to be more specific in what you mean by "work" because the IP
`that went into the patents started very early on. I mean, I would say before 2010.
`And the provisional patents that are relevant here have a very early filing date, I
`believe around 2011 ; so the technology was developed by Natera for a long time.
`The particular patents that are at issue [the Asserted cfDNA Patents], I believe we
`were working on those particular patents from around -- you know, it must have
`been about a year before they were issued; so I would say around 2019 time frame
`is when that, you know, particular work on these particular patents started.
`
`Tr. at 79:18-80:7.
`
`22) When asked why Natera prosecuted the Asserted cfDNA Patents, Dr. Rabinowitz
`
`testified:
`
`Natera develops a lot of technology. We had described that technology in a lot of
`detail, and then we were applying that technology in a market of oncology. And we
`started to see that that technology was being infringed upon and needed to be
`protected; so when other people are threatening our position in the market and we
`have a unique technology capability that we spend a lot of time and effort
`developing, that is when we -- that is when we want to protect our technology by
`prosecuting patents.
`
`Tr. 80: 17-81 :6. Dr. Rabinowitz also testified:
`
`[T]here's a lot of stuff going on all the time. You know, Natera's been coming
`from behind and defining the leading edge of genetic testing in women's health and
`becoming the leader in women's health genetic testing. And then we've been doing
`a lot of technology development in oncology and organ transplantation. You know,
`there 's a ton of stuff that we just don't get to. And I think that's relevant in both the
`technology development arena as well as in the legal arena. And so, a lot of things
`that you might say, it makes no sense for Natera to not have gotten to those things,
`the simple reality is, we are just too busy all the time. You know, we 're drinking
`from a firehose and we're becoming the leaders in three separate markers - three
`separate markets. And so there' s a lot of stuff that we just can' t get to even though
`it would be very important. I can sort of augment what I said earlier, with that
`general description, that there' s just a lot to cover in a lot of the time.
`
`8
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`

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`Case 1:20-cv-00125-GBW Document 662 Filed 09/05/23 Page 10 of 22 PageID #: 64476
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`Tr. at 76:13-77:7.
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`23)
`
`Between February 27, 2019 and January 15, 2020, Natera filed twenty-six patent
`
`applications in the same family as the Asserted cfDNA Patents that are directed to both cell-free
`
`DNA and nested PCR. Tr. at 131:9-14, 131:24-132:6, 138:25-139:11.
`
`24)
`
`Defendants retained Robert Stoll as an expert in the field of patent prosecution and
`
`procedures. Tr. at 209:4-13 . During the bench trial, when asked, "in your analysis of the file
`
`histories of the '172 and the '220 patent family , did you see any evidence of repetitive requests for
`
`the maximum extension of time to respond to office actions?," Mr. Stoll responded "[n]o." Tr. at
`
`229:12-16.
`
`25) When asked, " (i]n your analysis of the file histories of the ' 172 and the '220 patent
`
`family, did you see any evidence of repeated failure to file applications without missing parts or
`
`other improper formalities to extend to prosecution?," Mr. Stoll responded "[n]o." Tr. at 229:17-
`
`21.
`
`26) When asked, "[i]n your analysis of the file histories of the ' 172 and the '220 patent
`
`family, did Natera withhold any allowed claims from issuance?," Mr. Stoll responded "(n]o." Tr.
`
`at 229:22-25.
`
`27)
`
`Natera did not (1) deliberately make repetitive requests for the maxunum
`
`extensions of time to respond to office actions when prosecuting the Asserted cfDNA Patents or
`
`related applications, Tr. at 156:15-19, 229:12-16; (2) repeatedly fail to file applications without
`
`improper formalities, such as missing parts, to extend prosecution of its patents, Tr. at 157: 12-16,
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`229:17-21; or (3) deliberately refile continuation applications for claims that had already been
`
`adjudicated on the merits to unreasonably delay prosecution in order to delay the issuance of its
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`patents, Tr. at 156:20-25, 230:1-5.
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`9
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`Case 1:20-cv-00125-GBW Document 662 Filed 09/05/23 Page 11 of 22 PageID #: 64477
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`D. Natera's Awareness of Defendants' Products
`
`1)
`
`On February 5, 2014, Bernhard Zimmermann, Natera's Chief Scientific Officer
`
`and an inventor on the Asserted cfDNA Patents, wrote to Joshua Babiarz, a senior scientist at
`
`Natera and also an inventor on the Asserted cfDNA Patents, stating that Dr. Babiarz should attend
`
`Advances in Genome Biology and Technology' s ("AGBT") presentation on "Targeted Next
`
`Generation Sequencing for Oncology Research." DTX-140. AGBT's presentation was on
`
`Defendants' anchored multiplex PCR ("AMP") technology. Id. ; Tr. at 92: 10-13. Specifically, Dr.
`
`Zimmermann wrote:
`
`YES!!!
`ask them what the IP behind it is (cause I think they violate ours!). Find out as
`much as possible on the method ... Where does the anchored come from?
`
`See DTX-140.
`
`2)
`
`On April 1, 2014, Dr. Babiarz forwarded links to a presentation on Defendants'
`
`AMP technology to the email address "md." DTX-141. Dr. Babiarz wrote:
`
`Hi all,
`
`Here are links to the presentations by Enzymatics on their Archer Dx
`technology. It uses a one-sided nested PCR to look at recurrent fusions from
`mRNA.
`
`Let me know if you want to hear about my notes on the talks.
`
`Josh
`
`Id.
`
`3)
`
`When John Fesko, Natera' s Chief Business Officer, was asked, " [w]hen is the
`
`earliest you feel comfortable saying that Natera as a company knew Archer was a competitor?,"
`
`he testified, "I don't know what others thought, but I do know that 2017 to 2018 was the time when
`
`people were talking about Archer, at least in the meetings I was in." Tr. at 59:11-15.
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`

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`Case 1:20-cv-00125-GBW Document 662 Filed 09/05/23 Page 12 of 22 PageID #: 64478
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`E. Defendants' Investments During the Alleged Delay Period
`
`1)
`
`Defendants first sold the following products in the United States at or around the
`
`following dates:
`
`a. LiquidPlex in August or September 2016;
`
`b. Stratafide in August 2019; and
`
`c. PCM in January 2020.
`
`See Tr. at 168:11-16; 190:11-18.
`
`2)
`
`From July 2015 to 2020, Defendants grew from 50 employees to 400 employees,
`
`''which is almost an eight-fold increase." Tr. at 169:7-15. Jill Stefanelli, an employee of
`
`Defendants between July 2015 to October 2021 who held several positions including executive
`
`director and vice president, stated that, during that time period, the following teams at
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`Archer/Invitae were growing in size: regulatory, quality, commercial, sales marketing, and
`
`research and development ("R&D") teams. Tr. at 166:24-170:4, 172:8-173:15.
`
`3)
`
`From 2015 to 2017, Defendants' "total operating expenses were approximately 20
`
`million with almost half of that being the R&D itself." Tr. at 172:8-16; DTX-759. From 2018 to
`
`2020, Archer invested about $8.2 million, $34.2 million, and $75.7 million in R&D, respectively.
`
`DTX-759; Tr. at 172:24-173:15.
`
`4)
`
`From 2017 to 2019, Defendants entered into five "design locks" for its AMP
`
`technology with five separate pharmaceutical companies, one of which was AstraZeneca. Tr.
`
`175:6-25.
`
`5)
`
`Defendants' 30(b)(6) witness, Joshua Stahl, who was the Chief Operating Officer
`
`and Chief Scientific Officer of Archer and is currently the President of Oncology at Defendant
`
`In vitae, was designated to testify about Defendants' "knowledge of facts relating to whether Natera
`
`11
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`

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`Case 1:20-cv-00125-GBW Document 662 Filed 09/05/23 Page 13 of 22 PageID #: 64479
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`delayed unduly in the prosecution of the asserted patents and any prejudice to you." Tr. at 197:3-
`
`14.
`
`6)
`
`When Mr. Stahl was asked, "[w]ould Archer have changed its course of action in
`
`terms of its R&D, product development, commercialization, if it had known that Natera would be
`
`asserting its patent against Archer?," he testified "I don't think it would have changed anything."
`
`Tr. at 202:25-203:9.
`
`7)
`
`Mr. Stahl also testified that, "as a result of this litigation, we have not changed our
`
`course at all. We've proceeded as if it wasn't present. We continue to develop products. We ' ll
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`continue to commercialize them, and we don't really slow down." Tr. at 202:12-19.
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`II.
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`PROSECUTION LACHES
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`A. Legal Standard
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`Prosecution laches is an equitable affirmative defense to patent infringement. Personalized
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`Media Commc 'ns, LLC v. Apple Inc., 57 F.4th 1346, 1354 (Fed. Cir. 2023) ("Personalized
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`Media"); Hyatt v. Hirshfeld, 998 F.3d 1347, 1359-60 (Fed. Cir. 2021). The doctrine of prosecution
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`laches "may render a patent unenforceable when it has issued only after an unreasonable and
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`unexplained delay in prosecution that constitutes an egregious misuse of the statutory patent
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`system under the totality of the circumstances." Cancer Rsch. Tech. Ltd. v. Barr Lab ys Inc. , 625
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`F.3d 724, 728 (Fed. Cir. 2010) (citation and quotation marks omitted); see also Hyatt, 998 F.3d at
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`1359-60. Prosecution laches requires proving two elements: "(l) the patentee's delay in
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`prosecution must be unreasonable and inexcusable under the totality of circumstances and (2) the
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`accused infringer must have suffered prejudice attributable to the delay." Personalized Media, 57
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`F.4th at 1354 (citing Hyatt, 998 F.3d at 1362). To establish the prejudice necessitated in the second
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`element, an accused infringer must show evidence of "intervening rights," i.e., '" that either the
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`accused infringer or others invested in, worked on, or used the claimed technology during the
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`period of delay."' Hyatt, 998 F.3d at 1369 (quoting Cancer Rsch. , 625 F.3d at 729). While there
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`are no "firm guidelines" to determine when prosecution laches should apply, see Symbol Techs.,
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`Inc. v. Lemelson Med. , Educ. & Rsch. Found., 422 F.3d 1378, 1385 (Fed. Cir. 2005), courts should
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`weigh the totality of the circumstances as a matter of equity to determine the reasonableness of
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`prosecution, see id. at 1386. Ultimately, the doctrine "should be used sparingly lest statutory
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`provisions be unjustifiably vitiated. The doctrine should be applied only in egregious cases of
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`misuse of the statutory patent system." Id. at 1385.
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`When prosecution laches is raised as a complete defense to patent infringement, courts
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`have applied the clear and convincing standard. See, e.g., Shire Orphan Therapies LLC v.
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`Fresenius Kabi USA, LLC, C.A. No. 15-1102-GMS, 2018 WL 2684097, at *24 (D. Del. June 5,
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`2018); Seagen Inc. v. Daiichi Sankyo Co., Ltd. , C.A. No. 20-337-JRG, 2022 WL 2789901, at *4
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`(E.D. Tex. July 15, 2022).3
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`3 In Seagen, the Court provided the following helpful analysis explaining why courts apply "the
`clear and convincing evidence standard when the enforceability of an issued patent is challenged
`for prosecution laches," 2022 WL 2789901, at *4 (citations omitted):
`
`[ Applying the clear and convincing standard when the enforceability of an issued
`patent is challenged for prosecution laches] is consistent with the presumption of
`validity, and with the application of the clear and convincing evidence standard to
`other invalidity and unenforceability defenses. See 35 U.S.C. § 282(a) (presumption
`of validity), § 282(6 )(1) (unenforceability is a defense to patent infringement); Am.
`Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350, 1358-59 (Fed. Cir. 1984)
`(the burden under § 282 "is constant and never changes and is to convince the court
`of invalidity by clear evidence"), abrogated on other grounds, Therasense, Inc. v.
`Becton, Dickinson & Co., 649 F.3d 1276, 1290-91 (Fed. Cir. 2011) (abrogating the
`"sliding scale" approach to inequitable conduct but nonetheless maintaining the
`clear and convincing evidence standard); see also Radio Corp. of Am. v. Radio
`Eng'g Labs., 293 U.S. 1, 8 (1934) (Cardozo, J.) ("[O]ne otherwise an infringer who
`assails the validity of a patent fair upon its face bears a heavy burden of persuasion,
`and fails unless his evidence has more than a dubious preponderance."); contra
`Hyatt, 998 F.3d at 1370-71 (applying a preponderance of the evidence standard in
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`B. Discussion
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`a. Natera did not engage in an unreasonable or inexcusable delay in prosecution
`of the Asserted cIDNA Patents
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`Defendants argue that there are three primary reasons why Natera's delay in prosecuting
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`the Asserted cfDNA Patents was unreasonable: (1) Natera waited nearly a decade before
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`presenting its claims in the Asserted cfDNA Patents; (2) Natera's delay in prosecuting the Asserted
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`cfDNA Patents was unreasonable "given Natera's longstanding knowledge of the details of
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`Archer's products and Natera' s own alleged market strategy;" and (3) Natera failed to provide any
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`explanation as to its delay in prosecuting the Asserted cfDNA Patents. D.I. 644 at 6-13 ; D.I. 655
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`at 3-9.
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`The Court must examine, under the totality of the circumstances, Natera's prosecution
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`conduct, "including the prosecution history of all of a series of related patents and overall delay in
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`issuing claims[.]" Symbol, 422 F.3d at 1386; see also Hyatt, 998 F.3d at 1362. Natera' s conduct
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`is different from the conduct in the handful of cases that have found prosecution laches. In fact,
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`the Federal Circuit addressed prosecution laches earlier this year. Personalized Media, 57 F.4th
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`at 1346. In Personalized Media, the Federal Circuit affirmed the district court's finding that the
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`asserted patent was unenforceable due to prosecution laches. Id. at 1358. The following facts
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`were relevant to the Federal Circuit' s-and district court' s-analysis: (1) the patentee had filed
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`a de nova civil action to obtain a patent under§ 145). The Federal Circuit has also
`confirmed that the PTO may issue laches rejections during prosecution. In re
`Bogese, 303 F.3d 1362, 1367-68 (Fed. Cir. 2002). Where the PTO has not, it is
`presumed to have acted correctly. Consistent with these principles, and its prior
`practice, the Court applies the clear and convincing evidence standard to
`prosecution laches when raised as a complete defense to patent infringement.
`
`Id. The Court agrees with the analysis in Seagen.
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`Case 1:20-cv-00125-GBW Document 662 Filed 09/05/23 Page 16 of 22 PageID #: 64482
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`hundreds of GAIT-Bubble applications,4 (2) " [the patentee's] applications derive from two earlier
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`applications[;]" (3) [the patentee's] applications were long and complex, "containing over 500
`
`pages of text and over 22 pages of figures[;]" ( 4) "the patentee filed each of its applications with
`
`a single claim, then subsequently amended the claims, sometimes to recite identical language
`
`across different applications[;]" (5) the patentee greatly increased the total number of claims in the
`
`range of 6,000 to 20,000 claims; and (5) " [the patentee] waited eight to fourteen years to file its
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`patent applications and at least sixteen years to present the asserted claims for examination." Id.
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`at 1350-51. The district court found, and the Federal Circuit affirmed, that the patentee "employed
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`an inequitable scheme to extend its patent rights" out to thirty to fifty years. Id. at 1350, 1356.
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`Natera' s conduct does not amount to the egregious misconduct described in Personalized
`
`Media. See FF, Section C ,r,r 1-27, Section D ,r,r 1-3. For example, Natera did not file hundreds
`
`of GATT-Bubble applications. The Asserted cfDNA Patents are post-GAIT patents and, thus,
`
`have a fixed 20-year patent term from the filing of the earliest priority application. FF, Section C
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`,r 11. Natera did not seek or receive any term adjustment or extension for the Asserted cfDNA
`
`Patents. FF, Section C ,r,r 3, 6. The Asserted cfDNA Patents share a specification, which is
`
`approximately 125 pages long, and there are a total of forty-three claims. FF, Section C ,r 8.
`
`4 The Federal Circuit explained in a footnote:
`
`During negotiations of the Agreement on Trade-Related Aspects of Intellectual
`Property ("TRIPS Agreement") at the Uruguay Round of the General Agreement
`on Tariff and Trade ("GATT"), the U.S. agreed to change the term of U.S. patents
`from 17 years following the date of issuance to 20 years following the patent's
`priority date. Hyatt, 998 F.3d at 1352. In the months leading up to the law change,
`the U.S. Patent and Trademark Office ("PTO") saw an enormous influx of so-called
`"GATT Bubble" applications as applicants sought to take advantage of the existing
`law providing a patent term keyed from issuance. Id. at 1352-53.
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`Personalized Media, 57 F.4th at 1350 n.2.
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`The facts in this case are more akin to the facts in Seagen, where the district court, after a
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`bench trial, found that the moving party had failed to meet its burden of clear and convincing
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`evidence to show that the asserted patent should be unenforceable under prosecution laches.
`
`Similar to Seagen, Natera "did not bulk-file hundreds of patent applications with hundreds of
`
`thousands of claims to 'unduly increase[] the administrative burden on the PTO' in an effort to
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`artificially inflate the life of its patents." 2022 WL 2789901 , at *6 (citing Hyatt, 998 F.3d at 1370;
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`Personalized Media, 552 F. Supp. 3d at 687); FF, Section C ,r,r 1-27. The Asserted cfDNA Patents
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`are "not a submarine patent that has ' been in the patent office for an extended period of time(cid:173)
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`intentionally or otherwise. '" Seagen, 2022 WL 2789901 , at *6 ( quoting Personalized Media, 552
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`F. Supp. 3d at 671 (internal quotations omitted)); FF, Section