Challenging a Competitor’s Patent in the Patent Office: Great When it Works, but Failure Increases the Risk of a Court-Issued Injunction

 

 

 

 

 

By Thomas Tuytschaevers. A member of our Patent Practice Group

Recent developments in an infringement dispute in San Francisco yield valuable lessons regarding the hazards that may befall a company that challenges the validity of a rival’s patent in the United States Patent and Trademark Office. If the company loses its challenge, it may be that much more vulnerable to a preliminary injunction in subsequent infringement litigation.

Illumina, Inc. sells gene-sequencing equipment in the clinical laboratory market, where it competes with Qiagen, N.V and its subsidiaries.  In April 2016, Qiagen introduced its new GeneReader NGS system with a vigorous marketing campaign that seemed to be asking for trouble:  It claimed that the new system works in the “same way as Illumina’s machines.”  Illumina sued Qiagen and its subsidiaries for infringing US patent 7,566,537, and took the unusual step of asking the trial court for a preliminary injunction to halt the sale of Qiagen’s new product during the litigation.

As its name implies, a preliminary injunction in a patent case is a pre-trial order prohibiting an accused infringer from selling its product during the infringement trail.  It is a “drastic and extraordinary” remedy because it takes effect before infringement is proven, and before trial has even begun. (Patent suits often take two years or longer to get to trial.)   If granted rashly, a preliminary injunction causes potentially grievous harm to the accused infringer’s business, but if denied, risks irreparable injury to the patent owner.

Consequently, a court will grant a preliminary injunction only if the patent owner can show that (1) it is likely to prove the alleged infringement at trial; (2) it is likely to suffer irreparable harm if the injunction is not granted; (3) in measuring the hardship of an injunction on the accused infringer against the hardship of continuing infringement on the patent owner, the balance of hardships weighs in the patent owner’s favor; and (4) an injunction is in the public interest.  Despite the attractiveness of the preliminary injunction, patent owners rarely seek them, and courts rarely grant them, because the burden of proof is so high.

In Illumina v. Qiagen, however, Illumina was successful thanks in large part to assistance from Qiagen itself.  First, Qiagen chose to mount a difficult defense: It did not deny that Illumina was likely to succeed in showing infringement, so argued instead that Illumina’s patent was invalid in view of certain prior art.  An invalidity defense is difficult because U.S. law presumes a patent to be valid, so while the patent owner needs only to prove infringement by a preponderance of the evidence (i.e., that infringement is more likely than not), the accused infringer must prove invalidity by the higher “clear and convincing evidence” standard. More...