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CareDx Patents Deemed Invalid in Court Battle Against Natera, Eurofins Viracor

NEW YORK – In a ruling filed on Tuesday, Chief Judge Colm Connolly of the United States District Court for the District of Delaware declared invalid three patents held by Stanford University and licensed exclusively to CareDx.

The patents are at the center of an infringement lawsuit that Stanford and CareDx originally filed against Natera and Eurofins Viracor in March 2019. At the time, the plaintiffs claimed that the defendants had infringed on US Patents Nos. 9,845,497 and 8,703,652, which cover methods of cell-free DNA analysis for noninvasive monitoring of organ transplant rejection. CareDx uses them as the basis for its AlloSure organ transplant diagnostics. The company asserted that Natera had infringed on that intellectual property through its marketing and performance of a kidney transplant rejection test to analyze cell-free DNA from transplant patients to inform rejection.

A year later, CareDx and Stanford amended their suit to claim that the defendants had also infringed on US Patent No. 10,329,607, which covers noninvasive monitoring of organ transplant rejection through cell-free DNA analysis. They said that Natera had infringed on that patent by performing its Kidney Transplant Rejection test in the US.

After motions were exchanged between the parties, Natera asked the court in June 2020 for a summary judgement of invalidity on all three patents, "because they claim unpatentable subject matter." That motion was accompanied by declarations from Harvard professor and genome scientist John Quackenbush asserting that neither the written descriptions nor the claims of the subject matter that Stanford and CareDx were claiming to patent "disclose nonconventional techniques for performing genotyping and/or multiplex/ high-throughput sequencing, individually or in combination."

In December, the judge denied the motion, noting that CareDx and Stanford had pointed to several techniques in the patent that they believed were nonconventional. The plaintiffs also submitted a declaration from their own expert and cited several scientific articles in support of their position, discussing the limitations and "nascent nature" of some of the disclosed techniques, the judge said.

In his new ruling, however, the judge said he determined after an evidentiary hearing that "there are no genuine disputes of material fact and that summary judgments in defendants' favor are warranted because the asserted patents claim patent-ineligible subject matter and are therefore invalid."

Connolly said that the patents' own written descriptions said that the techniques referred to are, "unless otherwise indicated, conventional techniques of immunology, biochemistry, chemistry, molecular biology, microbiology, cell biology, genomics, and recombinant DNA, which are within the skill of the art."

However, the judge added, "Nowhere in the written description do the patents 'otherwise indicate' that any of these techniques are nonconventional." Indeed, he noted, the written description rather does the opposite, "confirm[ing] their conventionality."

CareDx had also argued that these specific admissions that the claimed techniques are routine and conventional is a sort of verbatim disclaimer that appears in various patents and patent applications covering different technologies that are not limited to DNA sequencing, and said in its argument to the court that it would be "unfair to read this widely repeated passage in biotech patents referencing generic publications about biochemistry basics to be some sort of supposed voluntary confession that there is no inventive concept in the specification."

The judge was unconvinced by this argument, pointing out that the company had cited no case law to support it. "I reject it out of hand," he wrote. "The idea that a patentee is bound by the words it uses in its patent — whether in the claims or elsewhere in the specification — is a fundamental tenet of the patent law."

He also accused CareDx of mischaracterizing its own written patent descriptions in several instances to make them seem as if they did describe new and emerging techniques. For example, the company had filed a supplemental brief in May 2021, citing nine lines of the written patent description as evidence that the patents' "discussion of digital PCR" described it as an "emerging technique." However, the judge said, the description filed by CareDx said no such thing about digital PCR, but only said that the technique was more accurate and reliable than conventional PCR — and that would not classify it as an "emerging technique."

In another instance, CareDx argued that the patents' written description "unambiguously state[s] that the [inventors] applied a never-before-used combination of techniques to better measure the correlation and specifically contrast their invention with how the prior art attempted to conquer the very same long-standing problem," the judge wrote. But in reciting the lines from the actual patent that CareDx references, the judge said he could find "no suggestion, let alone 'unambiguous statement,' in these cited excerpts" of a never-before-used combination of techniques.

Overall, the judge said he didn't want to "reward CareDx for being dishonest."

In a statement, Natera said it was "pleased" that the Delaware US District Court ruled the patents invalid, and said it "expects this ruling will be upheld on appeal and continues to forcefully pursue its own claims that CareDx infringes Natera's '658 and '724 patents," which relate to Natera's organ health IP portfolio.

In its own statement, CareDx said it "respectfully disagrees with the court's ruling and intends to appeal." The company also noted that the court's finding has no impact on its ability to continue providing AlloSure, but that it continues to "believe Natera and Eurofins Viracor are infringing these patents. We have deep respect for our partners at Stanford University, whose ground-breaking innovation enabled noninvasive organ transplant monitoring, and we are proud to defend the patents that resulted from their ingenuity."

In a separate lawsuit in which CareDx and Natera have sued and countersued each other for false advertising, the District Court confirmed on Tuesday that case will proceed to trial, and set a trial date of Oct. 25.

The two companies have been locked in battle in this case since April 2019 when CareDx filed suit against Natera, accusing the company of trying to "mislead" patients and clinicians into thinking that Natera's Prospera kidney transplant test was superior to CareDx's AlloSure organ transplant diagnostics.

Natera countersued in February 2020, accusing CareDx of false advertising, "tortious interference with Natera's prospective economic advantage," unfair competition, and violations of the Delaware Uniform Deceptive Trade Practices Act.