10x Genomics and Stanford’s Genomic Patents Determined Patent Eligible

On Sept. 14, 2023, the U.S. District Court for the District of Delaware denied defendant Parse Biosciences Inc.’s (Parse) motion to dismiss a complaint filed by plaintiffs 10x Genomics Inc. (10x) and the Board of Trustees of Leland Stanford Junior University (Stanford) asserting willful infringement of six patents covering technologies in the field of genomics.

10x is based in Pleasanton, CA, and asserts that it has invested more than $1 billion in research and development to invent its genomic analysis products, including instruments, reagent kits and analysis software, which are used to discover, for example, molecular mechanisms that lead to certain cancers. 10x is the owner of three of the asserted patents and exclusively licenses three Stanford patents also asserted in the case.

As stated in the complaint, 10x’s Chromium platform analyzes samples on a single-cell basis, rather than using the traditional “bulk analysis,” by “tagging” the molecules in each cell with a unique nucleic acid barcode to trace the molecule’s cellular origin. A key strength of the platform is its ability to probe DNA, RNA and protein within a given sample. Part of the Chromium platform is a technology called ATAC-seq, an abbreviated term for “assay for transposase-accessible chromatin by sequencing.” Defendant Parse sells a competing product called Evercode Whole Transcriptome.

In its order, the district court held the asserted claims are directed to patent-eligible concepts under Alice step 1, without finding it necessary to reach Alice step 2. The court, citing the Federal Circuit decisions in Illumina, CellzDirect and XY, found the 10x and Stanford patent claims at issue to include “physical process steps” rather than merely the observation of a natural phenomenon. Order at 11 – 12, 16.

Specifically, the court found that the asserted claims of three Stanford patents are directed to “a man-made composition” and “unconventional laboratory methods for analyzing genomic DNA samples” with an “insertional enzyme complex” that is “engineered and is not found in nature.” Id. at 12 – 14.

The court also found that ­the claims of the 10x patents are not directed to an abstract concept but “govern methods that differentiate previously undifferentiable pools of polynucleotides within a population of cells and count each distinct polynucleotide within each cell.” Id. at 19. They include the physical steps of “generating a plurality of tagged polynucleotides,” “sequencing the tagged polynucleotides,” “amplifying the tagged polynucleotides prior to the sequencing step,” generating the tagged nucleotides “through at least one ligation reaction” and “providing an extension product by primer extension.” Id. at 16 – 19.

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This is not the only case where Stanford’s patents have been challenged under Section 101. Earlier this year, Stanford filed a petition for writ of certiorari to the Supreme Court in a separate matter, CareDx, Inc. & Board of Trustees of Leland Stanford Junior University v. Natera, Inc., appealing a Federal Circuit decision affirming that Stanford’s patents covering methods for detecting transplant rejection are patent ineligible. The patents in CareDx relate to measuring the proportion of the donor’s DNA in the recipient’s bloodstream that increases the likelihood of an organ transplant rejection. The Federal Circuit held the claims were “indistinguishable” from the diagnostic method claims in Mayo directed to observing a natural correlation between naturally occurring antibodies and neurological diseases. In 2021, the Federal Circuit, in a different case, In re Board of Trustees of Leland Stanford Junior University, affirmed the rejection of claims directed to steps for receiving and analyzing information “which humans could process in their minds” to determine haplotype phase, an indication of the parent from whom a gene is inherited. The Federal Circuit was not moved by the argument that the claimed invention yielded a greater number of haplotype predictions than previously achievable under the prior art.

The 10x and Stanford decision comes in the wake of proposed new legislation, the “Patent Eligibility Restoration Act of 2023,” introduced by U.S. Sens. Thom Tillis, R-NC, and Chris Coons, D-DE, to amend the Patent Act to create clearer standards for patent eligibility. Under the proposed bill, an “unmodified natural material, as that material exists in nature” or a “process” that “occurs in nature wholly independent of, and prior to, any human activity” shall not be eligible for patent protection. Under the proposed legislation, the six 10x and Stanford patents at issue would concern patent-eligible subject matter because they involve some “human activity” by inserting a man-made enzyme complex and unconventional laboratory methods conducted by humans. It remains to be seen whether the bill is enacted and whether there will be further debate around the term “human activity.”