Verinata Health Inc. v. Ariosa Diagnostics Inc.

Northern District

U.S. District Judge Susan Y. Illston

Plaintiff's Lawyers: Edward R. Reines, Derek T. Walter, Robert T. Vlasis III, Weil, Gotshal & Manges LLP

Defense Lawyers: David I. Gindler, Alan J. Heinrich, Lisa S. Glasser, Sandra L. Haberny, Irell & Manella LLP

To determine fetal health, doctors formerly had to perform the prenatal test known as amniocentesis. It involved withdrawing a sample of amniotic fluid from the womb with a needle, sometimes causing miscarriage. Now there's a simple blood test that can safely analyze DNA to predict Down Syndrome and other genetic diseases. Courtroom battles over the patents involved have followed.

In January 2018, a federal jury awarded more than $26 million in lost profits to Redwood City-based maternal health firm Verinata Health Inc. It found that defendant Ariosa Diagnostics Inc. of San Jose, maker of the Harmony prenatal test, infringed on two Verinata patents -- licensed from Stanford University -- critical to its Verifi prenatal test.

Illumina Inc. of San Diego acquired Verinata in 2013; its separate suit was consolidated against Ariosa. Verinata Health Inc. et al. v. Ariosa Diagnostics Inc. et al., 12-CV05501 (N.D. Cal., filed Oct. 25, 2012).

"Within the technical complexities, the story was compelling and human," said Edward R. Reines of Weil, Gotshal & Manges LLP, representing Illumina and Verinata. "Illumina's technology is so vital for mothers' health. It replaces an invasive test with a scary needle which in 5 percent of cases led to fetal termination. Our test is noninvasive, it's respectful of the mother's health and it's cheaper, faster, better, safer. When you explain that to a jury, they get it."

Verinata contended that Ariosa infringed its '430 patent ("Methods of Fetal Abnormality Detection") and its '794 patent ("Multiplex Nucleic Acid Reactions").

Ariosa's lawyer, David Gindler, was unavailable for comment, an Irell & Manella LLP spokesperson said. A subsidiary of Roche Holdings AG, Ariosa contended that both patents were invalid. In a counterclaim, which the jury rejected, it asserted breach of contract and breach of the covenant of good faith and fair dealing regarding a supply agreement between Ariosa and the plaintiffs.

Ariosa appealed the verdict to the U.S. Court of Appeals for the Federal Circuit. Illumina appealed the judge's denial of a permanent injunction.

Reines presented an array of biotech luminaries as experts to back Verinata and Illumina's claims. They included Illumina's executive chairman, Jay T. Flatley, a personalized genomic medicine leader; Rich Rava, who invented technology allowing DNA to be analyzed on a chip; and Jeff Bird, a longtime executive at Gilead Sciences Inc. and a former CEO of Verinata.

"There was a bit of star power on our side," Reines said.

Thanks to the jury's verdict for his client, Reines said, "it is now clear that our massive investment will be free from copyists and free riders. It's very important to promote investments like this, because they aren't easy."

"Without fair patent protection for diagnostics, an opposite result wouldn't bode well for the industry," he added.

-- John Roemer