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Illumina, Inc. v. Qiagen, N.V.

United States District Court, N.D. California

July 18, 2016

ILLUMINA, INC., and ILLUMINA CAMBRIDGE LTD., Plaintiffs,
v.
QIAGEN NV, QIAGEN GmbH, QIAGEN GAITHERSBURG, INC., QIAGEN SCIENCES, LLC, QIAGEN INC. USA, QIAGEN REDWOOD CITY, INC., and INTELLIGENT BIO-SYSTEMS, INC., Defendants.

          ORDER RE MOTION TO DISMISS AND MOTION TO TRANSFER OR, IN THE ALTERNATIVE, STAY

          WILLIAM ALSUP UNITED STATES DISTRICT JUDGE

         INTRODUCTION

         In this patent infringement action, six of seven defendants move to transfer this action to the District of Delaware, or in the alternative to stay the action. The remaining defendant moves to dismiss for lack of personal jurisdiction. For the reasons stated below, the motion to dismiss is Held in abeyance pending jurisdictional discovery. The motion to transfer or stay is Denied, reserving on a final determination until jurisdictional discovery is completed.

         STATEMENT

         Plaintiffs Illumina, Inc., and Illumina Cambridge Ltd. (collectively “Illumina”), supply DNA sequencing equipment. Illumina Cambridge, a wholly-owned subsidiary of Illumina, Inc., owns U.S. Patent No. 7, 566, 537. Illumina, Inc., is the exclusive licensee of the ’537 patent with the right to sue to enforce its exclusivity (Compl. ¶¶ 6-7).

         In 2012, defendant Intelligent Bio-Systems, Inc., and non-party the Trustees of Columbia University in the City of New York sued Illumina in the District of Delaware for infringement of several patents relating to technology called “sequencing by synthesis.” In its answer to the complaint in the Delaware action, Illumina asserted counterclaims against Intelligent Bio-Systems for infringement of the ’537 patent. After Qiagen N.V., a defendant herein, became the ultimate parent of Intelligent Bio-Systems, Illumina added it as a new party in the Delaware action and asserted counterclaims against it. Illumina’s counterclaims against both parties related to Intelligent Bio-Systems’s use of a chemical group known as a “protecting group” on a nucleotide during a DNA sequencing process in its MAX-Seq and MINI-20 DNA sequencing equipment, each of which sold only one unit. Qiagen N.V. moved to dismiss for lack of personal jurisdiction in Delaware, and Illumina voluntarily dismissed all claims against it without prejudice. Illumina maintained its claims against Intelligent Bio-Systems.

         In 2013, the Delaware action was stayed pursuant to a joint request pending inter partes review of both sides’ respective patents, although some fact discovery was allowed to go forward. In November 2015, Illumina sought discovery from Illumina Bio-Systems regarding the development and marketing of a new DNA sequencing system called the GeneReader NGS System, which had been announced and promoted by Qiagen N.V. and its subsidiaries (several of which are named as defendants herein). The complaint in Delaware did not assert claims relating to the GeneReader. Nevertheless, Intelligent Bio-Systems produced certain documents regarding the GeneReader. Nothing more came of it in the Delaware action.

         In January 2016, Peer Schatz, the CEO of Qiagen N.V. (and of as each of its subsidiaries) gave a presentation at the J.P. Morgan Healthcare Conference in San Francisco. The schedule identified Schatz as a representative of Qiagen N.V. (Walter Decl., Exhs. B, D, E). His presentation included technical details of the GeneReader and included the following statement: “[W]e’ve created solutions that actually give you results that matter and that will allow therapeutic or scientific decision-making” (id., Exh. C at 5-6).

         Qiagen N.V. did not itself sell or develop the GeneReader. Instead, its direct and indirect subsidiaries shared responsibilities (all named as defendants herein) as follows: Qiagen Inc. (USA) sold and marketed it, Qiagen Redwood City developed related software, Intelligent Bio-Systems, Inc., led the technical development, Qiagen GmbH manufactured the reagents, and Qiagen Sciences, LLC, shipped consumables for the product (id., Exh. D). An Executive Committee made all final decisions “that ha[d] a material and/or global impact on QIAGEN’s employees, business and future” (id., Exh. F at 2). The signature block on the Executive Committee’s charter had no individual’s name or actual signature, but it identified the document as emanating from the “QIAGEN Chief Executive Officer” without identifying which Qiagen entity is referenced (id. at 5).

         Illumina commenced this action in the Northern District of California in May 2016 alleging that the GeneReader infringes the ’537 patent and that each defendant’s conduct with regard to the product constituted direct or induced infringement of that patent. Qiagen N.V. moves to dismiss all claims against it for lack of personal jurisdiction, and the remaining defendants move to transfer the action to the District of Delaware or to stay it here pending resolution of claims against Qiagen N.V. (Defendants do not specify the purpose of any stay, but merely note that the case against Qiagen N.V. could be stayed here while the remaining claims could be transferred to Delaware.) After Qiagen N.V. moved to dismiss, it allowed Illumina to take limited informal discovery, which consisted of several informal requests for documents and responses to interrogatories. Qiagen N.V. refused, however, to allow depositions. This order follows full briefing and oral argument.[1]

         ANALYSIS

         1. Motion to Transfer or Stay.

         Defendants contend that this action should be transferred to the District of Delaware, favoring the forum where Illumina filed its first counterclaims for infringement of the ’537 against Intelligent Bio-Systems. Neither side addresses whether the law of the Ninth Circuit or the law of the Federal Circuit controls the question of deference to the jurisdiction of an earlier-filed action. Indeed, each side cites decisions from both circuits (as well as district court decisions inconsistently applying either circuit’s law). Although there do not appear to be substantial differences between the law of the Ninth Circuit or the law of the Federal Circuit on this issue, this order notes that “[r]esolution of whether [a] second-filed action should proceed presents a question sufficiently tied to patent law that the question is governed by [Federal Circuit] law.” Futurewei Techs., Inc. v. Acacia Research Corp., 737 F.3d 704, 708 (Fed. Cir. 2013) (citing Elecs. for Imaging, Inc. v. Coyle, 394 F.3d 1341, 1347 (Fed. Cir. 2005)).[2]

         “When two actions that sufficiently overlap are filed in different federal district courts, one for infringement and the other for declaratory relief, the declaratory judgment action, if filed later, generally is to be stayed, dismissed, or transferred to the forum of the infringement action.” Ibid. (citing Merial Ltd. v. Cipla Ltd., 681 F.3d 1283, 1299 (Fed. Cir. 2012)). This deference to the jurisdiction of an earlier-filed action “exists to avoid conflicting decisions and promote judicial efficiency. But the rule is not absolute; exceptions may be ...


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