Aria Diagnostics, Inc v. Sequenom, Inc

Filing 198

ORDER DENYING MOTIONS TO STAY 166 in case 3:11-cv-06391-SI; 77 in case 3:12-cv-00865-SI; 61 in case 3:12-cv-05501-SI (Illston, Susan) (Filed on 6/11/2013)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

United States District Court
For the Northern District of California

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ARIOSA DIAGNOSTICS, INC.,

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Plaintiff/Counterclaim-Defendant,

SEQUENOM, INC., et al.
ORDER DENYING MOTIONS TO STAY
Defendants/Counterclaim-Plaintiffs.
/

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VERINATA HEALTH, INC., et al.,
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Plaintiffs/Counterclaim-Defendants,
v.
SEQUENOM, INC., et al.,
Defendants/Counterclaim-Plaintiffs.
/

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VERINATA HEALTH, INC., et al.,

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C 11-6391 SI;
C 12-0865 SI;
C 12-5501 SI

v.

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Nos.

Plaintiffs/Counterclaim-Defendants,
v.
ARIOSA DIAGNOSTICS, INC.., et al.,
Defendants/Counterclaim-Plaintiffs.
/

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Currently before the Court are three motions to stay in these related cases. Pursuant to Civil

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Local Rule 7-1(b), the Court finds these matters appropriate for resolution without oral argument and

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hereby VACATES the June 14, 2013 hearing on these motions. Having considered the papers

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submitted, and for good cause shown, the Court DENIES the motions to stay.
In No. C 11-6391 SI, Ariosa moves to stay all litigation regarding Sequenom’s licensed patent,

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the ‘540 Patent. Ariosa argues a stay is warranted because the Patent Trial and Appeals Board (PTAB)

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granted a request for inter partes review (IPR) of the ‘540 patent on March 19, 2013. Natera joins the

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motion to stay. Verinata supports the motion to stay, as long as the related litigation regarding

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Verinata’s patents it not stayed. Sequenom opposes the motion to stay arguing that Verinata’s conduct

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United States District Court
For the Northern District of California

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– initiating this case, then seeking an IRP and now attempting to stay the litigation it commenced – is

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inequitable. Sequenom also argues that staying the case will not provide significant efficiencies because

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Natera and Verinata would still be able to assert the full panoply of prior art as a defense in this Court

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even though Sequenom will be estopped from relying on prior art raised in the IPR. Finally, Sequenom

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contends that a stay would unfairly harm it because Sequenom has limited time left to commercially

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enforce the ‘540 patent before it expires in 2018.

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In No. C 12-865 SI, Sequenom asks the Court to stay the litigation as to Verinata’s separate

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patents (the ‘017/’018/’415 patents) if the Court grants Ariosa’s motion to stay litigation on the ‘540

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patent. Sequenom argues the stay is warranted because the PTO recently declared “interferences”

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between Verinata’s ‘017 and ‘018 patents and a patent application filed by the inventor of the ‘540

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patent (which are all licensed to Sequenom). Ariosa supports the contingent motion and Natera takes

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no position. Verinata opposes the contingent stay, arguing there is no need to stay because its patents

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are wholly unrelated to the ‘540 patent. With respect to the interferences, Verinata argues it should not

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be precluded from asserting its patents during the lengthy interference proceedings which, if successful,

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will only lead to an appeal from the PTO to a federal district court, and thereby negate any potential

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efficiencies from staying this case in light of the interference proceedings.

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In No. C 12-5501 SI, Ariosa moves to stay litigation regarding the two Verinata patents asserted

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against it (the ‘076 and ‘430 patent) in light of Ariosa’s filing of requests for IPR against the Verinata

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patents. Ariosa argues that in light of all of the actual and potential PTO and PTAB proceedings related
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to the patents in the suits, the best case management procedure would be to stay all of these related

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cases. Verinata opposes the motion, pointing out that the PTAB has not acted on either of the requests

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for IRP, even if granted there is no guarantee that the IRP will narrow the issues raised in this case, and

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a stay will severely prejudice Verinata which has litigated this (and the related cases involving its

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patents) with urgency.
The Court has considered all of the arguments raised in the related stay motions and DENIES

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each of the motions. The Court recognizes that there are numerous ongoing PTO and PTAB

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proceedings involving the patents in these suits, but finds that those proceedings are unlikely to simplify

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all or a significant portion of the issues raised in the cases before the Court on a timely basis. The Court

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United States District Court
For the Northern District of California

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recognizes that the field covered by the patents in suit – non-invasive prenatal testing and diagnosis –

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is nascent but has rapidly developed into a multi-billion dollar industry. The need for a final

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determination of the validity and scope of patents in issue, as well as their potential infringement,

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counsels strongly against staying these cases for a significant period of time while the PTO and PTAB

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consider the prior art and priority issues before them. Finally, this case is on the cusp of claim

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construction and significant discovery has been already taken. All of these issues counsel in favor of

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denying the motions to stay and proceeding with the litigation in this venue.

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IT IS SO ORDERED.

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Dated: June 11, 2013
SUSAN ILLSTON
UNITED STATES DISTRICT JUDGE

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