PacBio's Quixotic Patent Litigation

I'm feeling very glad I closed out the Illumina/U. Washington litigation vs. Oxford Nanopore the other night, albeit very belatedly, as now Oxford is facing a similar set of legal actions, but this time initiated by Pacific Biosciences.  PacBio has filed a complaint with the U.S. International Trade Commission (ITC) alleging that Oxford is infringing on an issued U.S. patent, 9,404,146 (aka 146 Patent).  Surely PacBio's management thought this was a good idea, but from this perspective

I want to be very clear on a few points before I dive into some criticisms.  Pacific Biosciences has an amazing technology, just short of sorcery.  They watch individual DNA polymerases operating in real time; just savor that concept for a moment.  This is accomplished via an astounding physics trick that enables illuminating a vanishingly small volume containing the polymerase without illuminating the mob of fluorophore-tagged nucleotides swimming behind it.

PacBio taught the world how to use long, noisy reads, at a time when many thought that this was sheer folly.  Innovative scientists at PacBio such as Jason Chin (@infoecho) have developed amazing software to use these long reads to solve increasingly challenging projects, starting with hybrid assembly (using Illumina data to clean up the PacBio reads), then straight PacBio assembly of haploid genomes and now assembling diploid genomes with PacBio reads.  They've collaborated with other companies, such as BioNano Genomics, to assemble a complete human genome de novo and a fish genome as well, achieving amazing quality.  All that amazing, sophisticated software?  PacBio has made it standard policy to release all of it open source.

Personally, they've always been the nicest of people, no matter what I've written about the company.  In my professional work, PacBio non-hybrid long read assembly was truly a quantum leap, changing a critical problem from one I could not solve except with by a lot of other scientists' lab work and a ginormous dose of luck, to one we solved routinely.  PacBio scientists were generous with their time to help me get this up-and-running.  I can't say enough nice things about the company and its personnel.

Unfortunately, if I turn off my personal warmth and look with a critical eye, PacBio is a threatened company.  There are three general classes of existential threats to the company, and unfortunately the marketplace cares not about them being a good citizen or a pioneer.  Should better technology come along, PacBio is in trouble.

Both the glory and the Achilles Heel of PacBio are their instruments.  As extolled above, they are wonders of technology.  They are also very complex optical devices with moving parts to allow hands-off operation through multiple flowcell runs.  The Sequel improves substantially on the the original RSII, being about half the size and weight and only $350K , but it is still a large, expensive box in a world which is moving away from that.

PacBio has several other vulnerabilities.  For good results, a very labor-intensive library prep is required. Ultra-long reads (>50Kb) are still relatively rare;  laser-induced polymerase damage still leaves an exponential decay component to the read length distribution.  They've worked wonders showing 85+% accuracy reads are usable, but there is still market resistance to that level of accuracy.

The first threat to PacBio is Genia, which may well deliver very long reads with very high accuracy on very compact instruments.  Genia hasn't yet launched, and it isn't clear how close they are, but should they do so it could be very devilish for PacBio.  Awkwardly, Genia was purchased by Roche, which is PacBio's key strategic partner.  Perhaps they have a tacit agreement to carve up sequencing applications space, with Genia going after markets with poor penetration or applicability of PacBio (exomes and targeted panels).  But it still can't be very comfortable watching your partner incubate a potential downfall.

The second threat are linked read sequencing chemistries such as 10X Genomics and iGenomX.  These enable gaining long-range information on Illumina hardware.  Both require some level of expensive equipment (about $150K for 10X and $250K for iGenomX, but the tradeoff for a big lab is that they can shift their library-making onto these platforms.  Linked reads can capture very long range information (>100Kb) that is difficult to get on PacBio, but conversely these short read platforms can't be expected to resolve long VNTR repeats (such as the CAG repeats in Huntington's disease), and may have difficulty resolving very long, high accuracy repeats (this really hasn't been properly explored, IMHO).   These systems can perform with low nanogram amounts of input DNA; PacBio appears to require at least 50 nanograms of input material.  So it is a complex decision as to which platform to use, with not all the data one would like yet available.

Oxford Nanopore offers a particularly devastating scenario for PacBio.  PacBio's one big advantage over MinION is the error profile; PacBio has purely random errors, whereas MinION has a significant systematic (primarily homopolymer) error problem.  Otherwise, MinION has a lot of advantages.  Oxford essentially gives the devices away, requiring no capital cost.  The newest chemistry is delivering 5-10Gb of data per run.  The newest (but not yet available) library kit will require only 5 minutes of hands on time, which is also the amount of wallclock time.  This will replace the extant 10 minute rapid kit.

With my previous diving into the Illumina-Oxford dispute, I've (for better or worse) established myself as someone willing to do this again.

@OmicsOmicsBlog Care to do some patent digging? https://t.co/gJc9zRKsoV

— Lex Nederbragt (@lexnederbragt) November 2, 2016

Part of my ethos is that if charged with a task, I dive in with unbridled enthusiasm

@lexnederbragt @tom_biotech @YahooFinance oh joy. Thanks - I think

— Keith Robison (@OmicsOmicsBlog) November 2, 2016

On the bright side, this meant that some initial explorations were done before I even knew the trade action had been initiated.

@BioMickWatson sounds like it. US009404146 claims a lot @OmicsOmicsBlog @lexnederbragt pic.twitter.com/71fZ43Q4p9

— James Hadfield (@CIgenomics) November 2, 2016

@CIgenomics @BioMickWatson @OmicsOmicsBlog Based on that figure I'd say it's the hairpin adapter...

— Lex Nederbragt (@lexnederbragt) November 2, 2016

Okay, I've skimmed through the patent twice.  PacBio definitely thought ahead when they wrote their patent for Circular Consensus Sequencing.  As written, it covers a wide range of schemes (including nanopore sequencing) in which a hairpin adapter enables both strands of a template to be read and the information combined to yield a more accurate consensus.  One quirk that may be due to prior art: explicit reference is made to inserts of 500 bases or more.

So Oxford has two possible routes forward.  The less likely one, in my opinion, will be to vigorously attack the PacBio patent.  I haven't found any devastating prior art, but I've also made a cursory look.  ONT will obviously be far more motivated.  Or perhaps they would claim the idea of combining reads from both strands was obvious, given the routine use of this approach in Sanger sequencing.  But Sanger sequencing isn't single molecule sequencing and two independent reads from a cloned fragment is different than running around a hairpin.  Obviousness rules aren't remotely obvious, so this is a point of uncertainty.

But there is an obvious course forward for Oxford: abandon their double-stranded (2D) sequencing kits, at least in the U.S. (I haven't found an international companion to the US patent).  Oxford's Clive Brown recently expressed a preference for a purely 1D platform being the future of Oxford.  If PacBio had been paying attention, the base accuracy for 1D reads is around 90% now, better than PacBio.  Except, of course, for the systematic homopolymer problem, but it is dangerous bet to think that Oxford can't ameliorate this with better software or further engineering on the pore and motor proteins.  

@BioMickWatson @OmicsOmicsBlog @lexnederbragt I suppose this is another reason why ONT could prefer people to use their 1D protocol

— David Eccles (@gringene_bio) November 2, 2016

So PacBio has filed litigation that Oxford can again play matador to, yanking away the cape to expose a void.  At least with Illumina this wasn't obvious at the time the litigation was filed; Oxford must have been in the licensing discussions for the CsgG pore already, but was able to dramatically reveal it.  This time Oxford's feint option is already known.  Tilting at this windmill can't help but appear to be a desperation move and one which could erode the support PacBio has gotten from stock analysts. I welcome input in the comments, but winning a trivial tactical victory makes no strategic sense to me.