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NeuMoDx Files Defense, Counterclaims in BD Patent Infringement Suit

NEW YORK – NeuMoDx has filed a response with the District of Delaware courts defending itself against claims levied by Becton Dickinson that the molecular diagnostics developer infringed on certain patents.

In court documents filed in Delaware on Friday, the Ann Arbor-based maker of high-throughput and mid-throughput PCR-based molecular diagnostic instruments and assays denied that it infringes any claim of the asserted patents and said that the asserted patents are invalid.

In a statement, the company also said that the lawsuit should never have been filed because of a prior agreement between the parties concerning the development and commercialization of the NeuMoDx technology that is the subject of BD's suit.

BD's original complaint was filed in June, as previously reported. It states that BD has suffered "severe competitive harm, irreparable injury, and significant damages," and, because the "remedy at law is inadequate," BD seeks injunctive relief in addition to damages.

Specifically, the suit alleges that NeuMoDx — a firm founded by former executives from HandyLab, a company acquired by BD in 2009 — knowingly violates six US patents held by BD. The patents, which include patent numbers 8,273,308; 8,703,069; 7,998,708; 8,323,900; 8,415,103; and 8,709,787, cover technologies for microfluidic cartridge-based molecular diagnostic assays and instruments.

In the court documents NeuMoDx noted that the company commissioned a review of patents sometime before 2017 before making, using, selling or offering to sell its molecular diagnostic products.

The company said it told BD about this "on a confidential basis" solely for the purpose of BD's consideration of NeuMoDx when NeuMoDx was being offered for sale, and "public disclosure by BD violates that obligation of confidentiality."

NeuMoDx subsequently signed a merger agreement with Qiagen in 2018 granting it the right to acquire all remaining shares of the firm for approximately $234 million.

NeuMoDx offered affirmative defenses to BD's suit in the documents. It said the '308, '069, '708, '900, '103, and '787 patents are invalid and unenforceable under US patent laws due to failure to meet one or more of the requirements for patentability. Namely, that there is prior art and other evidence that anticipates or renders obvious the claims of the '308, '069, '708, '900, '103, and '787 patents. The firm also cited several other "prior art references" for each of the patents BD claims is being infringed.

For the '708 patent specifically, NeuMoDx said the patent is unenforceable due to "inequitable conduct."

NeuMoDx claimed in the documents that even though its CEO Jeffrey Williams and President Sundaresh Brahmasandra are named co-inventors on the '708 patent from their HandyLab days, BD changed the patent in 2010, specifically changing the word "microdroplet" to the word "sample."

NeuMoDx claimed that BD told the US Patent and Trademark Office it was doing so to improve readability, but that this was actually "intentionally incorrect and affirmatively misleading," and, "an intentional and purposeful broadening of the claim beyond the scope of the invention contemplated by the inventors."

Finally, NeuMoDx alleged that BD was aware of its technology since the beginning. In 2011, Williams and Brahmasandra contacted senior executives at BD and shared Williams' intentions to actively pursue, with the support of venture capital, a startup nucleic acid testing systems company. Brahmasandra informed BD that he was interested in joining on, but that he was prevented from doing so because of the non-compete agreement with BD. He requested a waiver of his non-compete agreement to work with Williams to develop a nucleic acid-based system for performing rapid identification, the documents claim.

In December 2011, NeuMoDx said that BD, "through a senior executive responsible for the diagnostics business," granted Brahmasandra's request "based upon Williams and Brahmasandra's 'good track record.'" In return, BD asked for access to review the technology for "future potential partnership interest."

NeuMoDx said that BD and Brahmasandra entered into an amendment to employment agreement in February, 2012, in which BD acknowledged that Brahmasandra would be "permitted to engage in any activity relating to nucleic acid-based testing as it relates to the nucleic acid-based system for performing rapid identification" and that the proposed business, which was called Molecular Systems Corporation before changing its name to NeuMoDx, "shall not be deemed to compete with or be competitive with" HandyLab or any of its affiliates.

The amendment required Brahmasandra to use "commercially reasonable efforts" to schedule a meeting with "representatives of BD's exploratory technology group for the purpose of providing additional information" about the business, according to the court documents.

On several occasions during 2012 and 2013, NeuMoDx said it shared its business purposes, system architecture, technology, patents and patent applications, and financing and financing plans with BD under confidentiality. And, in an effort to inquire about BD's interest in entering a venture capital round, NeuMoDx also sent a two-page summary of the technology in July 2013.

NeuMoDx said that after 2013, the company met with representatives of BD "at least annually" at industry trade shows "at which NeuMoDx provided BD with demonstrations of the NeuMoDx products and answered questions about the technology," the firm said in the documents, adding that the last meeting was at a trade show in April, 2019.

BD explained to NeuMoDx that the meetings were intended to keep BD informed about NeuMoDx’s technology in the event BD had "partnership interests" or was interested in acquisition, NeuMoDx alleged in the documents.

"During the parties' meetings, NeuMoDx shared its technology, including confidential aspects of its technology, with BD. At no point from 2012 to December 2018 did BD ever suggest that any NeuMoDx product violates or infringes any BD patents, let alone the patents acquired by BD from HandyLab. Furthermore, on several occasions BD R&D personnel and executives commented on the uniqueness and novelty of the NeuMoDx products," NeuMoDx said in its documents filed last week.

It also said it invited and met with two BD executives in February 2019 at its Ann Arbor facilities to discuss inter partes review petitions filed by Qiagen against BD's '708 and '900 patents.

NeuMoDx is claiming that BD is committing breach of contract of the employee agreement with Brahmasandra by suing him for doing something the contract stipulated he was permitted do. The company is seeking a jury trial as well as damages for BD's breach of the amendment to Brahmasandra's employment agreement.