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Court of Appeals: Former employees infringed on former employer’s patents

| Jun 1, 2021 | Patents

As regular readers of our Minneapolis Intellectual Property Blog know, it is not uncommon for companies that hold patents to clash with former employees over patent rights and allegations of patent infringement.

Though most employers require new hires to sign employment contracts containing a confidentiality agreement and pre-invention assignments that assign invention rights and patent rights to the company, IP disputes with former employees can still arise.

The U.S. Court of Appeals for the Federal Circuit (CAFC) recently decided a case involving Bio-Rad Laboratories, Inc. and 10X Genomics, Inc., in which several employees left Bio-Rad to form 10X.

Water and oil don’t mix

Bio-Rad accused 10X of infringing three of its patents involving the generation of microscopic two-phase droplets. Each droplet consists of an inner fluid with is encased in an outer layer of oil. The inner fluids are from a wide variety of water-based fluids that can then be subjected to chemical reaction tests.

Because the inner fluids are water-based and the outer fluid is oil, the two do not mix, meaning that each droplet can be isolated and tested.

Microfluidic technology has applications in many research fields, including life sciences.

A hard reality

Bio-Rad filed a complaint with the International Trade Commission, alleging that two of 10X’s commercial products infringed on its droplet-generating technology patents.

One of 10X’s arguments was that while it had knowledge of Bio-Rad patent applications, the evidence didn’t show that they had evidence of the patents themselves.

That claim ran up against a hard reality: three of the named inventors on the Bio-Rad patents left the company to form 10X and assumed key positions there:

  • Chief Science Officer
  • Director of Engineering
  • Chief Technology Officer/Chief Operations Officer

Attempt to distract

The CAFC rejected 10X’s argument, stating in its decision: “10X’s various arguments attempt to distract from the reality of this case: named inventors of the asserted patents sold their company and patent rights to Bio-Rad, worked for Bio-Rad for a short time, left Bio-Rad to start a new company, and launched new products that have been determined to infringe the patents they assigned to Bio-Rad.”

The court added this kicker: “10X was willfully blind to the fact that its technology would infringe Bio-Rad’s patents.”

It should be noted that the court decided in April a separate appeal involving these two, ruling in that case that Bio-Rad had infringed on 10X patents.

A law firm experienced in IP litigation can protect patent rights across a broad spectrum of industries.

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