Wednesday, March 09, 2016

Oxford's Riposte To Illumina Trade Action

Along with the "No thanks, I've already got one" online session, the other big Oxford Nanopore news is the public release of Oxford's response to the trade complaint filed by Illumina which was attempting to exclude all Oxford Nanopore devices from the U.S. markets.  Nature News' Erika Check Hayden has posted the document on Dropbox, which was a big help.  While no documents from Oxford's side concerning the simultaneous patent lawsuit have yet surfaced, it is reasonable to expect that it will use many of the same arguments.
The necessary preamble: if you are reading this, your guide is an utter amateur in patent law, and can't even claim that for trade actions.  I'm reading the document and reacting, but I do not know any of the legal subtleties.  If you know better due to actual training, then please teach me if you feel so inclined. Indeed, if you are Boston-based I'd love to get schooled over drinks; just trying to read these things has sprung all sorts of questions that never came up before (for example, how one defends against patent infringement claims if your defense rests on trade secrets -- must you disclose them to the suing party?).  However, please don't mistake this repeat performance for an interest in getting into intellectual law as a profession; if start expressing such ideas please, please somebody arrange an intervention!

I'm going to characterize many of the key points in the filing as Allegations, for in my personal scheme of things this is what they are.  Again, I don't know what they are in a technical legal sense, but for it underlines that Oxford wants to prove these are true and they tend to make Illumina not look very good (or indeed, look extremely bad). Conversely, Oxford is making what I would term Counter-claims to Illumina's allegations in the original action.   There's also an aspect of Oxford trying to subdivide the space of the complaint into parts, so that if they are ruled to infringe in some areas it does not apply to everything.  As I mentioned in the post on Illumina's complaints, this is standard practice in patens, and so it would make sense it is standard in defending patents.  In a sense, you want the legal system to see your arguments as ORed together, so if one is false you don't have the whole thing evaluate to FALSE, and in turn you try to convince the system that your opponents arguments are linked solely by ANDs, so that the failure of any one kills their entire suit.  I've made the general classes of Oxford's claims headers.

Denying Infringement and Excluding Most of the Platform

Oxford opens by making a categorical denial.
Oxford Nanopore categorically denies that i
t is rted patents.

Footnote 1 at the end of that paragraph is the beginning of the partitioning of Illumina's claims.: even if Oxford was found guilty of infringement (to which they vigorously deny is the case), the claim is made that excluding all components of Oxford's platform would be inappropriate, because the only infringement that could occur would be in terms of the pore used.  So the flowcells could be in scope, but the MinION devices, software, sequencing kits, etc. are not.  I'd need to read the patents in question much more carefully than I want to, but I don't remember much beyond the pore itself. 

A second, related assertion is that Oxford has never imported (in a commercial sense) a PromethION into the U.S., and so this device cannot be in scope either.  

Third, Oxford asserts that their devices can be configured to a wide range of pores, and while Illumina might claim so, "the MspA pore is not particularly special nor is it the best pore for use in DNA sequencing".  Oxford goes on to emphasize the wide array of work they have done on wildtype and mutant pores, and their collaboration with VIB (announced yesterday) on the CsgG pore from E.coli. BTW, I just BLASTed E.coli CsgG against M.smegmatis, and no significant alignments come up, so it would appear there is no question if CsgG falls under the MspA patent space (but please do your own search to confirm).

Asserting Illumina is a Monopolist

In multiple places in the document, Oxford paints Illumina as a monopolist, starting with

and again as a section header

and again near the end of the document, asserting that the trade action is yet another attempt to block a potential competitive threat.

there's a bunch more, but I need those snaps for some other areas.

Asserting Illumina Is Not Serious In the Nanopore Field

Oxford makes a series of arguments designed to show that Illumina isn't really serious about nanopore sequencing beyond trying to block anyone else (particularly Oxford) from working in the space.

 In contrast to Oxford delivering devices to researchers, Illumina hasn't done much (according to Oxford), and in any case Oxford asserts they could block Illumina with their own patent portfolio

Alleging Illumina Acted in an Unethical Manner During the Partnership

Here comes the real mud: Oxford is putting out in public what has been asserted privately for quite a while, that Illumina behaved very badly during their collaboration.  First, it is asserted that Illumina did the licensing deal for University of Washington's patents without informing Oxford while simultaneously claiming to have performed a Freedom to Operator (FTO) analysis for Oxford that saw no issues, and then stonewalled any inquiries as to this (shown in the above image). 

 Oxford is also asserting that Illumina CEO Jay Flatley failed to disclose his conflict-of-interest after Illumina licensed the patents and while he was still an observer on the Oxford Board of Directors.

Oxford further asserts that Illumina dumped their large stake in Oxford in a manner deliberately targeting further Oxford fundraising efforts.

Why does this matter?  Oxford is asserting that Illumina has "unclean hands", which is apparently an actual legal doctrine.  My quick Google search found only references to this doctrine in terms of obtaining a patent (a patent is potentially invalid if the applicant willfully deceived the patent office during the patenting process), not in enforcing a license.  I'm much too tired to try to dig through that soup -- just looking up all the Latin phrases could knock me out.  But, it would seem to be laying a defense along the lines of "we were trapped by a two-faced partner".

Blocking Oxford Technology Would Not Be in the Public Interest.

From the various filings, both Illumina and Oxford have acknowledged that the law enabling this sort of trade action has a carve-out for technologies whose exclusion from the U.S. would harm the public interest.  Of course, Illumina is trying to show that this is not the case, whereas Oxford wishes to demonstrate the public interest would be harmed.

Oxford first goes after Illumina's claim that if MinION and PromethION were excluded, there are plenty of other technologies which could replace it.  It's hard not to side with Oxford here (at least for me): Illumina is here making the risible (IMHO) claim that hulking, expensive machines are drop-in replacements for highly portable MinIONs for any application, including field ones. 

Several paragraphs tout various hot-button scientific applications for MinION and highlight how other sequencers don't perform well, from Ebola and Zika testing in the field to copy number measurements in cancer.

Oxford closes out the response with this argument that blocking their technology would harm research, and that this is a valid public interest.

KR's Closing Thoughts

Okay, I'm worn out -- please feel free to flag any important sections I left out.  Oxford has offered what appears (to this amateur) to be vigorous and comprehensive response to the trade complaint (though some aspects of the patent suit were not addressed -- for example, Oxford apparently supplying MspA protein to academics).  Undoubtedly Illumina and its lawyers believe differently.  I have no idea how quickly or episodically these fights are waged, so who knows how long until the next event occurs in the saga.  Stay tuned.


Anonymous said...

If the dates around the licensing from U. Wash by Illumina are accurate then it would be very difficult for Illumina/Flatley to defend against this allegation. It will all be clearly documented and admissible.

Flatley may have got lucky in acquiring a British technology but he did an amazing job at commercialisation. Questionable due diligence and questionable contract management look like they have resulted in the current situation.

I guess he's not up for the fight but at least as a retiring CEO he might now be reasonably free to access share options without affecting the share price, after all, looks like the share price might have its own battle.

Anonymous said...

well having worked with Illumina at Applied Biosystems when we were jointly developing bead arrays , hearing of unethical behavior is very unsurprising. In our case illumina mot only acted unethically IMHO they lied explicitly to our faces using us as a free r&D department with no intention of ever finishing the collaboration

Anonymous said...

..If thats true then there seems to a pattern of behavior here, also if we think about Syntrix/Syntrex...

David Eccles said...

I find it interesting that ONT's response does not explicitly suggest that the Illumina patents are invalid due to being encompassed by earlier ONT patents (which seems to be the case from my naive reading of the patents, especially US5795782A). Perhaps the specificity of this Illumina patent excludes that invalidity.

Anonymous said...

That's for a court to decide. Regardless, the MspA is not in the products as ONT have confirmed.

It could have been in previous development versions but the fact that it hasn't been selected for the commercial products, whoever owns it and whatever mutations, is evidence that it does not have commercial value for ONTs applications, hence, ONT have not financially benefited from its use and could actually argue that testing the pore actually cost them ie it was an unproductive use of their time and resources and provided no meaningful insight into the use of other pores.

Anonymous said...

Warning Illumina, Inc. (NASDAQ:ILMN) optimists! Jay Flatley just Sold 10,000 shares.
by Linda Rogers — March 23, 2016