[00:00:00] Speaker 00: The United States Court of Appeals for the Federal Circuit is now open and in session. [00:00:06] Speaker 00: God save the United States and this honorable court. [00:00:11] Speaker 05: We'll hear argument in number 20, 1785 Biorad Labs against the ITC. [00:00:18] Speaker 05: Mr. Cannon, begin whenever you're ready. [00:00:21] Speaker 06: Thank you, Your Honor. [00:00:23] Speaker 06: Good morning. [00:00:24] Speaker 06: May it please the court, this is Brian Cannon for Biorad. [00:00:28] Speaker 06: Your Honor, this case is about being able to sequence expressed DNA from a single individual cell. [00:00:36] Speaker 06: The work that solved this problem was started at a company called Quantalife. [00:00:40] Speaker 06: It was largely completed at Quantalife, but it was patented shortly after at 10x. [00:00:46] Speaker 05: Mr. Cannon, this is Judge Taranto. [00:00:48] Speaker 05: Can I just ask, I guess they're kind of housekeeping questions. [00:00:53] Speaker 05: Are both the Quantalife and BioRat assignment provisions [00:00:58] Speaker 05: still enforceable, are both relevant here? [00:01:01] Speaker 05: Did the Bio-RAD ones supersede the Quantilife one? [00:01:04] Speaker 05: And I guess relatedly, do you see any difference between the Quantilife pair of agreements and the Bio-RAD pair of agreements? [00:01:16] Speaker 06: Thank you, Judge. [00:01:17] Speaker 06: The work that was performed was performed pursuant to the Quantilife agreement, and that is at Appendix Site 3199. [00:01:26] Speaker 06: So that is the agreement, the language of which the parties have been focusing on, because the two inventors in question, Heinzen and Saxenos, they did their work at Quantilife, under the Quantilife agreement. [00:01:39] Speaker 06: BioRat acquired Quantilife. [00:01:41] Speaker 06: Another employment agreement was entered. [00:01:44] Speaker 06: And then the two inventors left within about a year to start 10X. [00:01:51] Speaker 05: Right. [00:01:52] Speaker 05: What about my last question? [00:01:53] Speaker 05: Do you see any difference in scope between the quanta life pair and the PEP pair? [00:02:00] Speaker 06: There's no real significant difference in scope. [00:02:03] Speaker 06: The quanta life agreement, yeah. [00:02:04] Speaker 06: I'm sorry. [00:02:05] Speaker 06: Did I answer the question, Your Honor? [00:02:06] Speaker 05: Yeah. [00:02:06] Speaker 05: Slightly different wording, and I just wanted to know if you were making anything of the difference, but you're not. [00:02:11] Speaker 05: We are not. [00:02:13] Speaker 06: We are not. [00:02:14] Speaker 06: One difference, the Quantum Life Agreement does have this provision where the inventors have to disclose those three months after they leave the company, disclose any IP they come up with, but that provision was not actually litigated and was not particularly relevant to the issues on appeal. [00:02:32] Speaker 07: Okay. [00:02:32] Speaker 06: But in terms of the assignment provision and who owns what, there's no significant difference between them and the relevant provisions are at Appendix 3199. [00:02:44] Speaker 06: And Your Honor, the reason the 10X has these patents is because the two of the, I think, total six inventors on these patents worked at Quantilife, and then when BioRad acquired Quantilife, they left and they formed 10X. [00:03:01] Speaker 06: And it's our position that under the contract that Your Honor has identified, BioRad owns... I'm sorry, did someone ask a question? [00:03:11] Speaker 05: No. [00:03:12] Speaker 06: BioRat owns a share of the later filed patents based on the work that was done on the contract. [00:03:19] Speaker 06: So I want to be clear that BioRat is not seeking complete ownership of these patents. [00:03:25] Speaker 06: It is seeking ownership based on the work that was done at Quantilife. [00:03:30] Speaker 05: And the critical error... Can I ask you this question? [00:03:33] Speaker 05: So we have an agreement that, I think, [00:03:38] Speaker 05: you characterize in your reply brief as requiring assignment of quote-unquote intellectual property. [00:03:47] Speaker 05: Why isn't the right way to look at this as follows? [00:03:51] Speaker 05: There has to be intellectual property, which is to say legally protected property in ideas. [00:04:01] Speaker 05: And while an eventual invention [00:04:07] Speaker 05: is such a thing, whether conception or completion with reduction to practice. [00:04:16] Speaker 05: Work that goes into that, even if a significant contributor, is not itself intellectual property. [00:04:25] Speaker 05: And since the timing rule is that the intellectual property must exist during the term of employment, [00:04:37] Speaker 05: work that is merely a significant contributor in a way that would justify joint inventorship, that doesn't qualify. [00:04:50] Speaker 06: Your Honor, I agree with part of your premise, but not the complete premise. [00:04:55] Speaker 06: And the reason is twofold. [00:04:56] Speaker 06: First, the contract is broadly written. [00:04:58] Speaker 06: It really could not have been more broadly written. [00:05:01] Speaker 06: And I know it refers to IP. [00:05:02] Speaker 06: But the key issue is its ideas. [00:05:05] Speaker 06: It's the broadest possible description of IP you could come up with. [00:05:09] Speaker 05: But that, of course, is so broad that it would be problematically broad unless it were limited, as at least your reply brief description does, to intellectual property. [00:05:27] Speaker 05: And that limitation is more or less, or maybe even more, [00:05:32] Speaker 05: implicit in the opening phrase of the assignment paragraph about an employee's entire right in the thing so that there has to be some legal cognizability of a right in the particular idea and for which I think intellectual property is a pretty good term. [00:05:51] Speaker 05: So on the assumption that there does have to be intellectual property, how does work that merely becomes a significant contributor to a post-employment [00:06:02] Speaker 05: piece of intellectual property qualify? [00:06:06] Speaker 06: Your Honor, and this is where I think the principles of joint inventorship come significantly into play. [00:06:12] Speaker 06: And I'd like to answer that in two ways. [00:06:17] Speaker 06: Looking back to the film tech case from 1992, in that case, an invention was started at one company and then completed at a second. [00:06:26] Speaker 06: And just because the invention was completed at a second company, [00:06:29] Speaker 06: did not negate the work that was started at the first company. [00:06:33] Speaker 06: And with respect to joint inventorship... I'm sorry, was that the film tech? [00:06:37] Speaker 05: Is that what you were referring to? [00:06:39] Speaker 06: Yes, it was. [00:06:40] Speaker 06: Film tech, the hydronautics, 982F2, 1546. [00:06:46] Speaker 05: Correct me if I'm wrong, and I may well be. [00:06:49] Speaker 05: My recollection is that that was the case about a contract that mirrored a statute that said anything conceived [00:06:59] Speaker 05: in the scope of the project had to be assigned to the United States. [00:07:06] Speaker 05: And the court said, yes, this was conceived during the scope of the project. [00:07:14] Speaker 05: I'm not sure that involves kind of work that is no more than a significant contribution to a later conception, let alone complete invention. [00:07:26] Speaker 06: Your Honor, I think that's the other film set case. [00:07:27] Speaker 06: There was two film set cases from 1992. [00:07:31] Speaker 06: In this particular film set case, there was an invention. [00:07:34] Speaker 06: The defendant was Hydronautics. [00:07:36] Speaker 06: In this case, the invention was started at the first company, and then the limitations were not completed at the second company. [00:07:43] Speaker 06: And under the contract, the Federal Circuit, Judge Lurie, ruled that [00:07:52] Speaker 06: the first company had an ownership interest in the contract. [00:07:56] Speaker 06: But I would like to get back to joint inventorship principles, because I think those are very helpful guidance. [00:08:02] Speaker 06: I don't think the buyer needs to prove by clear and convincing evidence, certainly not, joint inventorship. [00:08:09] Speaker 06: But the principles can guide the contract interpretation here. [00:08:13] Speaker 06: And in the AT&T case that we cited in our reply, and that was Judge Mayer's case, the court said, if you're interpreting a contract, [00:08:20] Speaker 06: You can look to patent principles to guide what is being meant or what is being understood by the contract. [00:08:27] Speaker 06: And here, any individual joint inventor, if you have multiple inventors, which is the case here, each inventor does not have to conceive of the entirety of the invention. [00:08:37] Speaker 06: And in fact, inventions can happen over time. [00:08:39] Speaker 06: And that is actually codified under the Patent Act. [00:08:42] Speaker 06: So if you have an inventor that starts an invention, let's say inventor A, makes significant work on the invention and passes it [00:08:51] Speaker 06: us to inventor B, a second person, even if there's no complete invention. [00:08:56] Speaker 06: Once the invention is completed, there's no retroactive negation of the earlier work. [00:09:01] Speaker 06: In fact, the law says that the earliest inventor, inventor A, is a fully valid joint inventor. [00:09:07] Speaker 06: And I think the idea that inventions can happen over time is codified under the Patent Act. [00:09:13] Speaker 06: And it's a common sense way of looking at how inventions happen. [00:09:17] Speaker 06: If significant work is started, if ideas are come up [00:09:21] Speaker 06: are developed, even if they're not finally completed until later, the later work doesn't negate the earlier contributions, even if it's by the same person. [00:09:32] Speaker 04: Mr. Cannon, this is Judge Chen. [00:09:34] Speaker 04: Let me just ask a quick hypothetical. [00:09:37] Speaker 04: If the only inventor involved in this case was Hinson himself, and Hinson did all the work that you allege Hinson and Saxonoff did at BioRad, [00:09:50] Speaker 04: And then Hinson by himself moved over and started 10x and then invented everything that's involved in these 10x patents. [00:09:58] Speaker 04: So all we have is inventor A at BioRad moving over and then inventor A at 10x. [00:10:09] Speaker 04: Would you still be able to make the same joint inventorship argument that you're making today? [00:10:15] Speaker 06: Yo, whether co-inventors are involved. [00:10:18] Speaker 06: Understood. [00:10:19] Speaker 06: Yes, your honor because joint inventorship is the appropriate guideline. [00:10:22] Speaker 06: It's the appropriate sort of common-sense framework to look there's only a single actor though. [00:10:26] Speaker 06: It's mr. Hinson Right, but if he made significant contributions that in a certain way would qualify him as a joint inventor at the earlier at the earlier company that would be enough I believe to trigger these contracts because the contracts were intended to [00:10:40] Speaker 06: to protect to the fullest extent intellectual property, as Judge Torrento pointed out. [00:10:45] Speaker 04: But then we would be in a position where we have to say he somehow self-collaborated in order to apply your joint inventorship theory. [00:10:56] Speaker 06: I don't think so, Your Honor. [00:10:57] Speaker 06: I don't think you have to sort of make that leap to that final position, because under the film set case, that's essentially what happened. [00:11:03] Speaker 06: There was an invention for a membrane with certain qualifications, certain limitations, [00:11:10] Speaker 06: which was started at one company and the same inventor finished it, completed the final limitations that were patented at the second company, and the first company had rights. [00:11:20] Speaker 06: And I think the reason for that is because it's joint inventorship is certainly an appropriate guideline, but it is not. [00:11:26] Speaker 04: In film tech, didn't we say that the claims were conceived in their entirety at MRI, like the first company? [00:11:37] Speaker 06: They were conceived within the meaning of the contract. [00:11:40] Speaker 06: And what's interesting about that is, even if a contract says conception or invention, it's not strictly limited to the patent laws. [00:11:48] Speaker 06: And, you know, it's not a strict patent law technical definition of that concept. [00:11:53] Speaker 06: And that was set forth in the AT&T case, also from 1992, that we cited. [00:11:58] Speaker 06: But, you know, if you look at appendix... Mr. Cannon, can I just... I just need to clarify something. [00:12:03] Speaker 05: I thought I heard you say that there were two film cases [00:12:07] Speaker 05: One was the one that I had in mind, and I think the only one cited in the briefs, 982 F.Sec. [00:12:12] Speaker 05: and 1546. [00:12:13] Speaker 05: Are you talking about a different film tech case now? [00:12:16] Speaker 06: I'm talking about 982 F.Sec. [00:12:19] Speaker 06: and 1546. [00:12:21] Speaker 05: Oh, OK. [00:12:21] Speaker 05: I thought there was only one. [00:12:23] Speaker 05: OK. [00:12:23] Speaker 05: And that is the one that says the relevant statute then copied into the contract. [00:12:33] Speaker 05: says the United States gets anything conceived during the thing and during the term of the project, and the work done in the opinion was all about when was the invention conceived, and the answer was during the term of the project. [00:12:50] Speaker 05: I'm not sure where this mere significant contribution that is less than conception is coming from. [00:12:58] Speaker 06: Well, the issue in that case, I think, and I'm pulling up the opinion now, [00:13:03] Speaker 05: uh... is that certainly limitations were not complete uh... trying to find the actual right right at the court that the court said uh... one thing that neither the contract the contract wouldn't allow uh... in order to fulfill its intent because the statute also wouldn't allow is uh... you know adding in uh... a few minor limitations into the claims and uh... [00:13:29] Speaker 05: But what one has to look at is the, you know, the common core invention. [00:13:35] Speaker 05: But still, that's what was conceived. [00:13:38] Speaker 06: Well, Your Honor, I would argue two things. [00:13:40] Speaker 06: One, I'm looking at the decision, and the argument was FilmTech argues that the membrane did not constitute conception of the claimed [00:13:49] Speaker 06: invention because their flux and salt rejection were below the limits stated in the claims. [00:13:54] Speaker 06: I mean, if something's in the claims, it's in the claims, and then the Federal Circuit rules. [00:13:57] Speaker 06: However, those facts will not defeat a finding that the inventor conceived the invention within the meaning of the contract. [00:14:03] Speaker 06: I know I'm into rebuttal time, Your Honor, but I really would like to point the court to the image live. [00:14:10] Speaker 01: Mr. Cannon, this is Judge Stoll. [00:14:12] Speaker 01: I actually want to ask you a question, too. [00:14:14] Speaker 01: So, the commission held that even under, you know, your theory based on joint inventorship principles, BiORAD had not shown that the ideas relied on were distinct from the prior art. [00:14:31] Speaker 01: I mean, again, borrowing from joint inventorship principles [00:14:35] Speaker 01: That would seem to suggest that those ideas, if they're not distinct from the prior, even if your theory is we should be borrowing from joint inventorship principles, then what Dr. Saxonoff and Dr. Hinson developed was just in the prior is not actually a part of the claim to mention. [00:14:55] Speaker 01: I mean, or at least their joint inventors, you know, when they were at BioRad, their contributions weren't joint inventorship contributions. [00:15:06] Speaker 06: Still, thank you for asking that question because I want to make very clear that the appendix site I was talking about and the work that was done in 2011 was absolutely not prior art at that time. [00:15:19] Speaker 06: At the time, it was confidential, it was maintained confidential, and it was cutting edge research about how to use droplets to tag barcodes. [00:15:29] Speaker 06: May I just finish the answer to that question? [00:15:31] Speaker 06: Yes. [00:15:31] Speaker 06: Go ahead, please. [00:15:33] Speaker 06: And so the 059 patent and the commission below points to the 059 patent to say, look, this was just in the prior art. [00:15:40] Speaker 06: But I want to be very clear, the 059 patent, which has Saxonoff as an inventor, and that's in Appendix 2111, that patent was not published until December 2012 after the inventors left to form 10X and after the work that was done at Quantilife. [00:15:59] Speaker 05: So on that point, Mr. Kinnon, can you just clarify, when you argued anticipation under the 059, was that a 102E argument, or was that a 102A or B argument? [00:16:12] Speaker 05: And it's sort of related to the question whether you accept the conception date of the current patent as no earlier than January 2013. [00:16:21] Speaker 06: Your Honor, we argued the 059 patent included all of the limitations, and we lost on that. [00:16:28] Speaker 05: I didn't make my question clear. [00:16:32] Speaker 05: Is that a 102E argument or under a different subsection of 102? [00:16:37] Speaker 06: I believe it was a 102A argument, although, like I said, we lost that. [00:16:41] Speaker 05: OK, so that was then public prior art before the conception date, if only by a month. [00:16:49] Speaker 06: It was technically after the fact that the publication date was December 2012, so it was published later. [00:16:56] Speaker 06: Now, retroactively it became Prior Art because of its initial filing date, but at the time the work was done, at the time our joint inventorship principles applied, it was not Prior Art and it was not public domain. [00:17:08] Speaker 06: It was published later. [00:17:09] Speaker 06: And then the patents, I also want to just make a final point, the patents certainly don't exclude [00:17:16] Speaker 06: overlapping subject matter. [00:17:18] Speaker 06: The contracts don't say you get one patent and then you... Mr. Cannon, this is Judge Cannon. [00:17:22] Speaker 04: I got lost in this colloquy. [00:17:25] Speaker 04: Just so I'm following, below you have an invalidity argument in which you relied on the 059 patent as prior art against these three patents. [00:17:38] Speaker 04: Is that right? [00:17:40] Speaker 06: Correct. [00:17:41] Speaker 04: Okay. [00:17:42] Speaker 04: That's all I need to know. [00:17:45] Speaker 06: And if I may just respond that if a joint inventor provides prior art, the idea on the joint inventorship principles is that the alleged joint inventor is just providing what's already known at the time, public domain information. [00:18:00] Speaker 06: If inventing and development work is all happening at the same time and it's not public, I don't think that principle ought to apply. [00:18:06] Speaker 05: And what is the particular idea that you say was not public [00:18:15] Speaker 05: prior art at the time of the Hinson-Saxonoff quanta life work that you're relying on? [00:18:25] Speaker 06: It is three appendix sites I would like to give you. [00:18:31] Speaker 06: Appendix site 3442, which is reproduced in the blue brief at page 27, and that shows droplets being tagged for next-generation sequencing to obtain single-cell level resolution, and then [00:18:45] Speaker 06: Appendix site 2904, which shows the double junction microfluidic device, which is claimed in the 468 patent. [00:18:55] Speaker 06: And then appendix site 2907, which is an April 2011 email from Saxonoff that sets forth using oligonucleotides, specifically oligonucleotides as barcodes to tag single cells within droplets. [00:19:11] Speaker 06: That is the material that was not public domain, not prior at that time, that we allege is the basis under the contracts for Bio-Ed's ownership share. [00:19:21] Speaker 06: Thank you. [00:19:21] Speaker 06: Your Honor, I know I've gone over, so I appreciate you letting me answer. [00:19:26] Speaker 05: Unless there are further questions, we'll hear from Mr. Richards and restore your rebuttal time. [00:19:35] Speaker 05: Thank you. [00:19:46] Speaker 05: Mr. Richards? [00:19:48] Speaker 03: Yes, Your Honor. [00:19:50] Speaker 03: I'm ready to proceed, if I may. [00:19:51] Speaker 05: Yes, please do. [00:19:54] Speaker 03: Thank you. [00:19:55] Speaker 03: And may it please the court? [00:19:56] Speaker 03: I'd like to just jump right into the ownership issues, since that's really the sole issue on appeal that's going to touch on all three of the asserted patents. [00:20:05] Speaker 03: The ownership issue here is not nearly as complex as it has been made out to be. [00:20:10] Speaker 03: Henson & Faxnaws signed short employment agreements, first at Quantilife, then at BioRad, [00:20:16] Speaker 03: We would agree that for the purposes of this appeal, there's no substantive difference between those employment agreements. [00:20:24] Speaker 03: They both included assignment clauses. [00:20:25] Speaker 03: And in those assignment clauses, Henson and Faxenoff were obligated to assign their rights and patents and, I'm sorry, their rights and inventions and ideas if they were conceived during the term of their employment, either at quantilife or at BiORAS. [00:20:41] Speaker 03: That durational limitation is in both sets of contracts. [00:20:45] Speaker 03: And what that means is that Henson and Saxonov are only obligated to assign inventions and ideas that they conceived while they were actually employed at BioRad. [00:20:57] Speaker 03: Here, that makes the single operative question, did Henson and Saxonov conceive of the inventions claimed in the Tenet's patents while they were at BioRad or Quantilife? [00:21:06] Speaker 05: Mr. Richards, this is just Toronto, so let me, I think you're kind of right at the core of at least what is in my mind. [00:21:14] Speaker 05: When you said, and that makes the question, it seems to me you asserted a conclusion to the question that is, I think, actually at issue. [00:21:26] Speaker 05: Why doesn't it include significant contributions to the later conception of the invention? [00:21:34] Speaker 03: So the answer to that, Your Honor, I'm sorry, did I interrupt you? [00:21:38] Speaker 05: No, no you didn't. [00:21:39] Speaker 03: Go ahead. [00:21:42] Speaker 03: I think as you suggested in your question to my friend a moment ago, the issue here is that what Biorad is claiming is ownership interests in the complete invention in the 10X patents. [00:21:56] Speaker 03: That's what it needs here to find relief from the violation of Section 337 is ownership of the patents, not ownership of discrete individual ideas. [00:22:07] Speaker 03: So, right, while it is absolutely true that the plain language of the contract says they are broad enough to cover ideas, even unpatentable ideas, which I suppose could be a trade secret or something like that, the fact that they're broad enough to cover that is immaterial to the ownership rights BIORAD is actually seeking here. [00:22:26] Speaker 03: It's seeking ownership rights in complete patented inventions. [00:22:31] Speaker 03: And so the question under the contracts is whether the thing it's seeking ownership rights in was conceived [00:22:37] Speaker 03: by Hinson and Saxonoff during the term of their employment. [00:22:43] Speaker 03: Now the ALJ addressed this question. [00:22:46] Speaker 03: She credited Hinson's timeline of when conception happens, which leads to conception in the January to February of 2013 time period, which is eight months after Hinson and Saxonoff left BioRad. [00:23:00] Speaker 03: And as has been noted, it was with the help of additional non-BioRad inventors. [00:23:06] Speaker 03: Notably, and I think I heard it again this morning, BioRAS has never actually disputed that conception of the complete inventions claimed in the 10X patents were conceived in that 2013 timeframe. [00:23:21] Speaker 03: That should be the end of this question altogether. [00:23:24] Speaker 03: Instead, what we know from BioRAS reply brief is it's now trying to rewrite these assignment obligations so that they cover, quote, [00:23:33] Speaker 03: all possible intellectual property that may arise from Hinson and Saxonov's work at Quantilife or BioRad. [00:23:41] Speaker 03: That is a very different obligation from what's actually written in the contracts where Hinson and Saxonov are obligated to assign their rights in inventions they conceived during the term of their employment. [00:23:54] Speaker 05: Notably, that's the kind of language that's similar to what we saw in the Stanford case where... What do you make of the whether or not [00:24:03] Speaker 05: patentable or language, I don't think I can find it. [00:24:09] Speaker 05: Yeah, whether or not patentable language at 3199. [00:24:15] Speaker 03: Well, again, what I would say, Your Honor, is that that language is scoping what intellectual property can be assigned, right? [00:24:22] Speaker 03: So these assignment obligations may entitle BioRAD to ownership of an unpatentable idea, whatever that means. [00:24:30] Speaker 03: BIORAD has never explained what rights are attached to unpatentable ideas. [00:24:35] Speaker 03: And of course, ownership of an unpatentable idea is not the same thing as ownership of an examined patented invention, which is what we're talking about in this case. [00:24:45] Speaker 03: And what BIORAD would have to show ownership rights then to get relief from the commission's finding of a violation of Section 337. [00:24:52] Speaker 03: So I don't think the commission disputes the plain language of that contract is broad enough to cover these unpatentable ideas. [00:25:00] Speaker 03: But I don't think there's any dispute that the unpatentable ideas are not the patented inventions in the 10X patents. [00:25:12] Speaker 03: If I could make a couple points responding to what my friend mentioned in just a minute ago, concerning the FilmTech case, I want to be clear. [00:25:22] Speaker 03: I think as Judge Chin pointed out, FilmTech at page 1553 found conception of the invention. [00:25:31] Speaker 03: That wasn't the case where there was this idea of partial conception. [00:25:35] Speaker 03: It found complete conception. [00:25:37] Speaker 03: What happened in film tech is that this desalination membrane was discovered entirely at one employer. [00:25:44] Speaker 03: But then when it was actually patented in the court zone verbiage, some narrow performance limitations, essentially how effective the membrane would be at desalinating seawater, was added. [00:25:56] Speaker 03: And the court held the addition of those narrow performance limitations wasn't sufficient to take it outside of the scope of the assignment clause. [00:26:04] Speaker 03: Factually, that's not where we're at here. [00:26:07] Speaker 03: There's been no assertion that what was added after the fact was narrow performance limitations. [00:26:10] Speaker 04: I guess what I'm trying to figure out about film tech though is it wouldn't be factually accurate, would it, to say that the entire claimed invention in that case was in fact conceived of by the inventors [00:26:25] Speaker 04: when they were at the first company? [00:26:28] Speaker 04: Because in fact, the claims did in fact include those certain performance elements or whatever they were that were unquestionably not thought of back at the first company. [00:26:41] Speaker 04: Is that correct? [00:26:43] Speaker 04: It felt like the opinion seemed to be doing more of a, well, what is the true heart of the invention type of an inquiry [00:26:55] Speaker 04: in examining the claim, you know, doing more of a central claiming analysis rather than a peripheral claiming analysis to try to imagine what the heart of the invention is. [00:27:09] Speaker 04: And so that's how we'll judge conception of the claimed invention. [00:27:13] Speaker 03: Is that fair to say? [00:27:16] Speaker 03: I'm not sure it's entirely fair to say. [00:27:18] Speaker 03: I understand that reading. [00:27:20] Speaker 04: Well, you talked about limitations and key distinction [00:27:24] Speaker 04: between the claim and the prior art, right? [00:27:28] Speaker 04: Was the structure? [00:27:30] Speaker 03: Well, it did. [00:27:31] Speaker 03: That's certainly true, Your Honor. [00:27:33] Speaker 03: It did look to the point of novelty as one way of sort of focusing on what was important for conception. [00:27:38] Speaker 03: The part I wanted to make a distinction about is I'm not actually sure the film tech opinion ever comes to a conclusion of saying those performance limitations weren't thought of at the prior company. [00:27:50] Speaker 03: I think the issue is that there was no evidence [00:27:53] Speaker 03: one way or the other, you know, you've got the claims that show these performance limitations. [00:27:58] Speaker 03: And you have, I think what it was, was evidence showing the structure of the membrane from the prior employer. [00:28:04] Speaker 04: But before you go, I mean, for purposes of the opinion that was written by this court, it was entirely beside the point where those performance elements were invented slash discovered, whether it was at company A or company B. Is that a fair way to read the opinion? [00:28:24] Speaker 03: I think that's true, Your Honor. [00:28:26] Speaker 03: And if you were to apply that here in this case, I should ask. [00:28:30] Speaker 03: May I finish my answer? [00:28:32] Speaker 03: Yes, please do. [00:28:34] Speaker 03: Yes. [00:28:35] Speaker 03: If you were to apply that point from the FilmTech case about looking to the point of novelty, again, we know because BioRad argued anticipation below. [00:28:44] Speaker 03: We know what ends failed and didn't appeal it. [00:28:48] Speaker 03: We know that the point of novelty is this porous gel bead with releasably attached oligonucleotides. [00:28:54] Speaker 03: or rather I should say we know it's at least that. [00:28:58] Speaker 03: I will note that of all the ideas BioRat has pointed to as being conceived at Quantilife, a porous gel bead with releasably attached barcodes is not among them. [00:29:12] Speaker 03: Of that laundry list of ideas in its brief, there is no mention of releasably attached oligonucleotide barcodes. [00:29:20] Speaker 03: So if you were to apply the film tech idea of when conception occurs, [00:29:24] Speaker 03: BIORAD would fail under that as well. [00:29:26] Speaker 03: Thank you. [00:29:31] Speaker 05: Thank you. [00:29:31] Speaker 05: And Mr. Powers. [00:29:36] Speaker 02: Thank you, Your Honor. [00:29:38] Speaker 02: May it please the court, I'd like to begin by addressing Judge Tarantro's question about why BIORAD does not have an interest in the patents based on [00:29:52] Speaker 02: an interest in what Bio-Ed contends are constituent elements of some of the limitations of the claims that are, quote, ideas, close quote, conceived at Quantilife. [00:30:04] Speaker 02: And I think the answer to that begins with the point that Judge Toronto made earlier, which is there is no right to something until it exists, and there is no protectable interest in patent claims until it was conceived. [00:30:20] Speaker 02: There's no dispute in this record, and there can't be, that the claims to which BiORAD seeks rights did not exist as a claim until 2013. [00:30:34] Speaker 02: There was no conception until then. [00:30:38] Speaker 05: Mr. Parrish, can you, I think you'll understand my question, address the point that Judge Chen was pressing about how [00:30:46] Speaker 05: FilmTech seems to rely on something less than conception of the claims as written. [00:30:53] Speaker 02: Certainly, Your Honor. [00:30:54] Speaker 02: So FilmTech is clear in the sense that it was relying on a contract which, as Your Honor, Judge Toronto pointed out, is based on a government statute. [00:31:09] Speaker 02: And the decision at 1288 is, I think, quite clear. [00:31:17] Speaker 02: Hydronautics argues, quote, that the district... I'm sorry. [00:31:21] Speaker 02: I'm sorry. [00:31:22] Speaker 02: 1288? [00:31:23] Speaker 02: Oh, that's USPQ 3rd. [00:31:26] Speaker 02: So it's 980, 1540... Hold on. [00:31:29] Speaker 02: My... 1551. [00:31:32] Speaker 02: Thank you. [00:31:33] Speaker 02: It's a paragraph that starts... Hydronautics argues that the district court erred as a matter of law by resolving the issue of title to the 344 patent according to the patent claims rather than according to the terms of the contract. [00:31:47] Speaker 02: We agree, as we determined above, under the contract, the government has titled to all inventions on in situ condensation polymer membranes conceived or first produced to practice by CADET at MRI between two dates. [00:32:02] Speaker 02: We conclude that the invention of the 344 patent was conceived while CADET was at MRI and that the district court erred in not so holding. [00:32:11] Speaker 02: I think that is clear. [00:32:14] Speaker 02: that it's being governed by that particular contract with a particular term relating to the government's rights. [00:32:23] Speaker 02: I think the more applicable case is the Amgen case. [00:32:28] Speaker 02: The Amgen case, your honors will recall, had three claims, one of which, claim one, was conceived during the term of an agreement. [00:32:38] Speaker 02: And therefore, the first company, the company in bio-exposition, had rights to it. [00:32:45] Speaker 02: The claims two and three were conceived after the agreement. [00:32:49] Speaker 02: The court's holding is quite clear that the party and BioRag's position had no rights to claims two and three as claims two and three because it was conceived after the term of the agreement. [00:33:03] Speaker 05: Given the language of the agreement, I guess my takeaway from all of this is that one needs to look at the languages of the agreement and they're the language of the agreement. [00:33:14] Speaker 05: we interpreted to be limited as to assignment or as to ownership to what was in fact conceived during the term of the project, even therefore to exclude post-project conceptions that were essentially follow-on work to what was done during the project. [00:33:41] Speaker 05: But, and I take it your point is the contract language here is, we have to pay attention to the particular contract language here. [00:33:54] Speaker 05: Exactly so, Your Honor. [00:33:56] Speaker 05: Similar enough and different enough from the film tech language. [00:34:03] Speaker 02: Exactly so, Your Honor. [00:34:04] Speaker 02: And the reasoning of the Amgen case and the language of the Amgen case is quite clear. [00:34:10] Speaker 02: that even though there were the claims two and three were argued to be a follow on from claim one, the earlier company in bio ads position had no rights as to those claims. [00:34:20] Speaker 02: And the only reason there was a pro rata interest in the patent was because the claims were all included in the same path, but they had no rights to those claims. [00:34:29] Speaker 02: And so that if claims two and three had been in a separate patent, the party in bio ads position would have had no rights in them at all. [00:34:38] Speaker 02: That reasoning and language is irreconcilably inconsistent with Bayard's position here. [00:34:45] Speaker 02: Bayard also relies on the Stanford case. [00:34:47] Speaker 05: Can you talk about the three particular ideas at 3442, 2904, and 2907 that Mr. Cannon identified, none of them involving the porous gel [00:35:07] Speaker 05: speed with releasably attached oligonucleotides that is involving that combination. [00:35:14] Speaker 05: Each of which, I think he said, were not in the public domain at the time that Mr. Hinson recorded those ideas while he was at Quantalife. [00:35:30] Speaker 05: The droplet tagging second [00:35:35] Speaker 05: junction and use of oligonucleotides as the tags. [00:35:40] Speaker 02: Yes, Your Honor. [00:35:41] Speaker 02: I think the first and most important point is the point you just made, which is none of that includes releasable barcodes or porous gel beads. [00:35:53] Speaker 02: And the invention requires those two things. [00:35:57] Speaker 05: So there's... Right, but I guess what I probably should have introduced it by saying, let's assume that [00:36:05] Speaker 05: we think that there's a possibility that the contract here would reach something that would qualify as a significant contribution for joint inventorship purposes. [00:36:18] Speaker 05: And I know your main argument is no, it doesn't reach that. [00:36:21] Speaker 05: Let's assume it does. [00:36:22] Speaker 05: Then the question is, is it nevertheless an affirmance because the commission and ALJ [00:36:30] Speaker 05: reasonably found that none of these ideas, which seemed like fairly significant contributions to the ultimate combinations in these three patents, that none of those really were significant contributions because they were all public. [00:36:47] Speaker 02: So the first response is exactly that, Your Honor, which is that although they were not public at the time Dr. Hineson noted them down, [00:36:57] Speaker 02: We're in fact part of the prior art in the 059 patent. [00:37:02] Speaker 02: And secondly, they're actually quite different. [00:37:04] Speaker 02: So this is all part of a droplet and droplet architecture, which is a very different architectural approach to the gel bead or gem architecture that is the core of the patents. [00:37:16] Speaker 02: And if you're within a joint inventorship regime, which first I don't think you can be because [00:37:26] Speaker 02: it's the same human beings, which goes to Judge Chen's point about Dr. Heintzen being the sole inventor. [00:37:32] Speaker 02: I think that hypothetical is a perfect hypothetical. [00:37:35] Speaker 02: But second, even if you got past that, there was no collaboration between the earlier versions of Dr. Saxonoff and Heintzen and their later version, because this is simply using what's in the prior art in the 059 patent and then building on it. [00:37:52] Speaker 02: Under their theory, every prior artist [00:37:55] Speaker 02: who contributes something would then become a joint inventor of another invention made later using one of those limitations to make a broader invention or a narrower invention. [00:38:05] Speaker 05: Mr. Powers, are all three of the ideas you were just discussing prior art before January of 2013? [00:38:14] Speaker 02: I believe all three are in the 059 patent, which was being argued as prior art below. [00:38:21] Speaker 02: I will note, for example, that 3442 [00:38:25] Speaker 02: is really just a future possibility being discussed for what's a very different type of technology, which is DDPCR, which is what Kwana Life commercialized. [00:38:37] Speaker 02: This is just a slide saying, oh, by the way, perhaps this technology, this droplet and droplet technology, which is very different architecture from the gel beads, might be used for this type of single cell analysis. [00:38:55] Speaker 02: That is not a conception of all single cell analysis. [00:38:59] Speaker 02: That's merely saying maybe we could use this droplet and droplet architecture for that. [00:39:05] Speaker 04: Mr. Powers, this is Judge Chan. [00:39:09] Speaker 04: In terms of the double junction microfluidics device, does the article beating Poisson at A2684, figure 1B, [00:39:23] Speaker 04: illustrate an example of that kind of microfluidics device? [00:39:31] Speaker 02: Yes, it does, Your Honor, and that is prior art. [00:39:34] Speaker 02: I mean, the double junction, I don't think there's a dispute, was in prior art. [00:39:40] Speaker 02: Not just Dr. Hineson's, but otherwise. [00:39:48] Speaker 05: Can I just ask, at least for me, one final question? [00:39:53] Speaker 05: Is it your position, and do you know, does everybody agree that we should be addressing all three patents, even though I gather all of the products are covered by the first two, but there's at least one product that's just not covered by the 530? [00:40:10] Speaker 02: I'm not sure, Your Honor. [00:40:18] Speaker 02: All three are certainly on appeal as to whether there's a product that's covered by 530 that's not covered by the first two. [00:40:26] Speaker 05: Is that your question? [00:40:26] Speaker 05: No, no, no. [00:40:27] Speaker 05: I remember the government brief saying the other way, that there's one product not accused, that you didn't accuse under the 530, but that everything accused under the 530 is also accused and indeed excluded under the 024 and 468. [00:40:43] Speaker 05: That's correct, Your Honor. [00:40:44] Speaker 05: But does that moot the issue about the 530 or which maybe has a, I don't know even whether it has a different expiration date. [00:40:54] Speaker 05: That's I guess the question. [00:40:57] Speaker 02: I don't, let me look to see the expiration date. [00:41:11] Speaker 02: The 530 has, [00:41:12] Speaker 02: a slightly later expiration date than the first two, by two years. [00:41:17] Speaker 02: Okay. [00:41:17] Speaker 04: Mr. Powers, is the earliest priority date that your client is claiming for these three patents, January 2013? [00:41:26] Speaker 04: Yes, you are. [00:41:28] Speaker 02: Okay. [00:41:29] Speaker 02: And there's no dispute in the record on that because the ALJ found that an attempt to argue inconsistently with that would be precluded [00:41:39] Speaker 02: And that ruling has not been appealed. [00:41:44] Speaker 02: So that is not disputable on this record by BioRad. [00:41:49] Speaker 04: If Hinson and Saxonoff had come up with the gem architecture at BioRad, then would you agree that BioRad owns these patents, at least in part, if not the whole thing? [00:42:00] Speaker 02: If they'd conceived of the claim, yes. [00:42:04] Speaker 04: No, just gem architecture. [00:42:05] Speaker 04: The use of a gel bead as a vehicle [00:42:10] Speaker 04: you know, releasably attach a million oligonucleotide barcodes so that you can tag all these different DNA fragments. [00:42:19] Speaker 02: Just that piece, which is a big piece, but nevertheless, that piece. [00:42:23] Speaker 02: If just that piece, then the answer I think is still no, because there's not a complete conception that BioRat could claim ownership in, because it doesn't exist yet. [00:42:34] Speaker 05: And just to return to where we sort of started, how does that answer square with FilmTech? [00:42:41] Speaker 02: Because FilmTech is being governed by a different agreement with which the court relied upon as tracking, as your honor noted, a statute that has different purposes. [00:42:55] Speaker 02: And the holding there was it was entirely conceived during the term of the agreement and therefore governed by it. [00:43:01] Speaker 02: That holding can't apply here. [00:43:04] Speaker 05: OK. [00:43:05] Speaker 05: If my colleagues have no further questions, we should shift this back to [00:43:11] Speaker 05: Mr. Cannon for rebuttal, and you'll have six minutes. [00:43:22] Speaker 06: Thank you, Your Honor. [00:43:22] Speaker 06: Brian Cannon for BioRad. [00:43:24] Speaker 06: I just want to address some of the points that were raised. [00:43:30] Speaker 06: I forget, I think Judge Chen raised the beating Poisson article at Appendix Site 2684, and I do not believe that shows a double junction. [00:43:38] Speaker 06: That is a single junction microfluidic device, but it does show the use of gel beads to encapsulate, excuse me, droplets to encapsulate gel beads. [00:43:49] Speaker 06: The commission, actually before I get to what the commission argued, Tennex's counsel did concede that when Dr. Heinssen wrote the ideas down, [00:43:57] Speaker 06: for these slides together with Dr. Saxonoff, they were not public at the time. [00:44:01] Speaker 06: So the appendix sites that I tried to focus the court on, this was not public domain information at the time. [00:44:09] Speaker 06: In fact, Ken X, one of Ken X's arguments is, oh, this is just forward-looking research plans. [00:44:14] Speaker 06: Well, they're a little bit more than forward-looking research plans. [00:44:16] Speaker 06: They really do go through almost every element of the claim in really quite a bit of detail. [00:44:23] Speaker 06: It's not just a hope. [00:44:25] Speaker 06: to do next-generation sequencing to isolate single cells, it's an actual step-by-step process to do so. [00:44:31] Speaker 06: And that is the significance of the information set forth on 3442. [00:44:35] Speaker 06: It includes droplets, single cells, barcodes, and then ultimately amplifying the material in order to sequence the DNA. [00:44:47] Speaker 06: And counsel for the ITC said that there's nothing [00:44:51] Speaker 06: about using oligonucleotides as the barcodes at Quantilife. [00:44:54] Speaker 06: That's actually not accurate. [00:44:56] Speaker 06: At 2907, which is the Saxonoff email, Dr. Saxonoff at Quantilife specifically discloses using oligonucleotides, which is a short DNA sequence, as a barcode for use in a system. [00:45:11] Speaker 06: to isolate a single cell and track through the sequence for the express DNA from that single cell. [00:45:19] Speaker 06: And I think the questions about film tech are exactly on point because in film tech, you know, a limitation in the claim is a limitation. [00:45:26] Speaker 06: And if that final limitation is not done, then you do not have complete conception under the patent laws. [00:45:33] Speaker 06: And in film tech, I think it's clear that those final limitations happened later. [00:45:37] Speaker 06: And applying the contract, [00:45:39] Speaker 06: you know, complete conception was not required, just like complete conception was not required under the BIORAD quantalized contract. [00:45:49] Speaker 04: Just very quickly, can you tell me what was wrong with what the commission had said during its response that what this contract represents is BIORAD's entitlement to any protectable ideas that Saxonoff and Hinson worked on at BIORAD, but it doesn't, [00:46:09] Speaker 04: it isn't so far reaching that it also reaches out and grabs any patentable inventions that are later actually conceived and invented that may arise in part from those ideas. [00:46:27] Speaker 06: Thank you, Judge Chen. [00:46:28] Speaker 06: I disagree with that interpretation of the contract. [00:46:31] Speaker 06: The contract, by its clear terms, does not require a complete conception under the patent laws, meaning every single limitation of the claims, [00:46:39] Speaker 06: to have occurred at Quantilife and BioRight. [00:46:42] Speaker 06: As I believe Judge Carranto raised at the beginning, it has a broad definition of IP. [00:46:47] Speaker 06: And in this case, looking at joint inventorship as a guideline, as I mentioned before, if a significant amount of work is done at Quantilife, and that can count as joint inventorship or not, but just because an inventor left, finished the invention somewhere else, does not retroactively negate the prior work that was done on the contract. [00:47:09] Speaker 06: If, you know, companies that invest in research and have these contracts, I think they're entitled to a broad, you know, broad enforcement and broad scope of that contract. [00:47:17] Speaker 06: And an employee cannot just leave, complete something that was started, and then retroactively get out of a contract that they were in before. [00:47:24] Speaker 06: And it is like film tech, and it's a little bit like the Stanford v. Roche case where one inventor out of three worked at Roche, came up with, you know, whatever he came up with, went to Stanford, [00:47:35] Speaker 06: and then Roche had a pro rata ownership of the later patented invention at Stanford. [00:47:41] Speaker 05: Well, one difference between this and Stanford was explained in our decision a few months ago in the Whitewater case that Stanford actually is ultimately not a case about employment because Holodny was essentially [00:48:02] Speaker 05: part of a contractual relationship between Stanford University and what was then called CEDIS, which eventually became Roche. [00:48:09] Speaker 05: And so the very strict California law limits on post-employment restraints for employees didn't apply. [00:48:20] Speaker 05: But here they do, and it seems not to say anymore, somewhat worrisome. [00:48:30] Speaker 05: about using language no more precise than the language in this contract to reach inventions conceived after employment, worrisome for, let's just call them, 16600 and Whitewater reasons. [00:48:47] Speaker 06: Well, Your Honor, 16600 was raised as a defense in the Stanford v. Roche case. [00:48:52] Speaker 06: And the reason it was not applied is because it was not because of the particular, I think, employment relationship. [00:49:00] Speaker 06: It was because at the time, Dr. Holodny was a Stanford scientist who temporarily went to CEDIS to do some work for about six months at CEDIS and learned about PCR at CEDIS, which was cutting edge and new at the time. [00:49:13] Speaker 06: The issue there was Holodny's contribution to the patents was based upon his PCR work done at CEDIS that he brought back to Stanford. [00:49:23] Speaker 06: And then Dr. Holodny's co-inventors, Dr. Merrigan and Dr. Zyrowski, they did additional work. [00:49:29] Speaker 06: Roche, which is then Cedis, owned that particular portion, Holodny's portion of the patent because it was based on the work that he did at Cedis. [00:49:41] Speaker 06: And it could not have been complete conception because there were additional inventors just like here that were done at the joint. [00:49:48] Speaker 05: Didn't the district court there say that Holodny, that the conception was done [00:49:57] Speaker 05: while Holodny was visiting Cetus, but the work was not completed, i.e. [00:50:04] Speaker 05: reduced to practice until after. [00:50:07] Speaker 05: But that conception was, in fact, complete. [00:50:10] Speaker 05: I think that's kind of the first half of the sentence, the second half of which you closed. [00:50:15] Speaker 06: Yeah, you know, the district court, Your Honor, made two statements in that case. [00:50:20] Speaker 06: She used the word [00:50:22] Speaker 06: conceived when Holodny developed the PCR essay, although I think one could read that to be, you know, Holodny's work, Holodny's conception of his portion of the joint invention. [00:50:34] Speaker 06: Because later in the opinion, the district court judge, Judge Patel, said clearly the work performed at Stanford by Holodny, Merrigan, and Izraelsky was not insubstantial. [00:50:44] Speaker 06: So there was definitely additional work by Stanford scientists done at Stanford, but Holodny's sort of conceptive intellectual mental work was done while he was at CEDIS before he returned to Stanford. [00:50:57] Speaker 05: Can I ask you just one more question for me? [00:51:00] Speaker 05: You have a district court case pending, right, which has been stayed while the ITC proceeding is underway, is that right? [00:51:07] Speaker 05: I believe that's correct. [00:51:09] Speaker 05: And because of the absence of issue preclusion in that case, [00:51:13] Speaker 05: Would you still be free to make an argument based on the, what is it, the April 15th, 2011 email that referred, in which Saxonoff says, you know, Ben says, let's use beads or something like that in a way that you were barred from doing here by Order 43? [00:51:37] Speaker 06: Your Honor, I haven't, I don't have a, [00:51:43] Speaker 05: Okay, I'm not asking for a commitment. [00:51:45] Speaker 06: Yeah, I don't believe we would be precluded by any evidentiary decision made at the ITC, but I don't have a hard commitment to give you on that. [00:51:54] Speaker 05: Okay, well, I think we have fairly long-standing case law that ITC decisions don't generate issue preclusion. [00:52:03] Speaker 05: Or maybe any kind of preclusion. [00:52:05] Speaker 05: That I don't remember. [00:52:07] Speaker 05: Okay, any further questions from the bench? [00:52:13] Speaker 05: Okay, hearing none, I thank all counsel and say the case is submitted and that concludes our session for this morning. [00:52:26] Speaker 00: The honorable court is adjourned from day to day.