In Natera Inc. v. NeoGenomics Laboratories, Inc. the Federal Circuit affirmed the District Court's grant of a preliminary injunction against NeoGenomics in patent infringement litigation involving Natera's U.S. Patent Nos. 11,519,035 and 11,530,454 directed to methods for amplifying targeted genetic material and methods for detecting variations in genetic material indicative for diseases and disorders, respectively.

Claim 1 of the '035 is representative and recites:

1. A method for amplifying and sequencing DNA, comprising:
tagging isolated cell free DNA with one or more universal tail adaptors to generate tagged products, wherein the isolated cell-free DNA is isolated from a blood sample collected from a subject who is not a pregnant women;
amplifying the tagged products one or more times to generate final amplification products, wherein one of the amplification steps comprises targeted amplification of a plurality of single nucleotide polymorphism (SNP) loci in a single reaction volume, wherein one of the amplifying steps introduces a barcode and one or more sequencing tags; and
sequencing the plurality of SNP loci on the cell free DNA by conducting massively parallel sequencing on the final amplification products, wherein the plurality of SNP loci comprises 25-2,000 loci associated with cancer.

The opinion explains that cell-free DNA (cfDNA) fragments are found in human blood and that a subset of these fragments are derived from tumor cells (termed ctDNA); detection of these latter species can provide a way to detect relapse in cancer patients as "molecular residual disease." These fragments were detected using Natera's Signatera product, and in its infringement suit Natera accused NeoGenomics of infringing by selling its competing RaDaR product. Both products "identify ctDNA within the bloodstream to assess the efficacy of cancer treatment and the risk of cancer recurrence" (i.e., "they are designed from a patient's genetic information based on a tissue biopsy of the patient's tumor").

The District Court granted Natera's motion for preliminary injunction because it held that Natera satisfied the four-prong test, specifically 1) there being a likelihood of success on the merits (infringement of at least one asserted claim of the '035 patent); 2) irreparable harm to Natera caused by NeoGenomics' infringement; 3) that the injunction would be in the public's interest; and 4) that the balance of the hardships were in Natera's favor. The details of the injunction not only prohibited NeoGenomics from making, using, selling or offering to sell its competing RaDaR product, but also from "promoting, advertising, marketing, servicing, distributing, or supplying the RaDaR assay to allegedly induce infringement"; the injunction exempted patients already using RaDaR as well as "finalized or in-process research projects, studies, and clinical trials." The District Court granted NeoGenomics' motions to permit three not-yet-initiated clinical testing contracts to proceed (despite testing of samples not having yet begun but for which third parties had designed the experiments and testing protocols using RaDaR), based on the public interest in this research and the negative effect that the injunction could have on these third parties. The Court also permitted NeoGenomics to test patient samples it had received but not yet tested at the time of the injunction. Finally, the District Court permitted NeoGenomics to use its RaDaR product in three "negotiation-stage" research contracts (but that had finalized protocols and approvals) because enforcing the injunction under these circumstances would cause "delay and hardship." On the other hand, the Court did not permit another potential contract to go forward because the evidence for this contract was "only a conclusory statement that the sponsoring organization had done significant work designing the study." NeoGenomics appealed.

The Federal Circuit affirmed in an opinion by Chief Judge Moore, joined by Judges Taranto and Chen, expressly assessing three of the four prongs of the test in turn (the opinion does not address the "balance of the hardships" prong). With regard to the likelihood of success on the merits for infringement of at least one asserted claim of the '035 patent, the opinion sets out the evidence for the likelihood that Natera would prevail on the question of infringement, and separately the likelihood that NeoGenomics would be unable to establish invalidity. On the infringement question, NeoGenomics argued that the District Court erred by not engaging in explicit claim construction, but the Federal Circuit rejected this argument, noting that "[a] district court has no obligation to definitively construe claims at the preliminary injunction stage," citing Sofamor Danek Grp., Inc. v. DePuy-Motech, Inc., 74 F.3d 1216, 1221 (Fed. Cir. 1996) (while certainly a decision directed to the preliminary injunction standard Sofamor it is also curiously one handed down by the Court a few months before the Supreme Court rendered its decision in Markman v. Westview, which decision altered the claim construction landscape considerably). Here, the parties did not present a claim construction dispute to the District Court and for its part NeoGenomics did not raise the issue despite having several opportunities to do so ("in its opposition brief before the district court, at the technology tutorial, or at the preliminary injunction hearing," only finally doing so in its motion to stay the injunction). The Federal Circuit did not disagree with the District Court's construction nor that NeoGenomics' RaDaR product infringed the expressly recited steps of claim 1 of the '035 patent. The Court also distinguished the facts in Amgen Inc. v. Sandoz Inc., 923 F.3d 1023 (Fed. Cir. 2019), asserted by NeoGenomics as being analogous and, as in that case, non-infringing, the Court finding no clear error in the district court's determination thereof.

On the invalidity question, the opinion rejected NeoGenomics' argument that the District Court applied an incorrect legal standard regarding their obviousness contentions, and that "mere vulnerability" to invalidation is enough to defeat a preliminary injunction motion, citing Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d 1343, 1358–59 (Fed. Cir. 2001). While the Court recognized that an accused infringer "need not make out a case of actual invalidity" under Amazon the proper standard is to show a "substantial question" of invalidity, and "[t]he relevant inquiry is therefore whether the patentee has shown it is more likely than not to prevail over an invalidity challenge." On the merits, NeoGenomics argued that the '035 patent claims were obvious over a poster presented by Fiona Kaper and colleagues and reproduced in the 2010 PROC. OF THE 101ST ANN. MEETING OF THE AM. ASS'N FOR CANCER RES. entitled "Parallel Preparation of Targeted Resequencing Libraries From 480 Genomic Regions Using Multiplex PCR on the Access Array System," which disclosed "a system for tagging, amplifying, and adding barcodes to DNA locations of interest" termed the "Fluidigm Access Array." The opinion finds no error in the District Court's decision based in large part by the Court's assessment that NeoGenomics' assertions were "little more than conclusory argument with no meaningful supporting documentation" set forth in [only] "four paragraphs." Citing KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 418–19 (2007), the Federal Circuit asserted that "[i]t is not sufficient to merely allege that the individual elements of the claimed invention were each known in the prior art," and that "NeoGenomics failed to articulate a reason why a skilled artisan would have been motivated to use the Fluidigm Access Array system with cfDNA for cancer detection as claimed by the '035 patent." The Court further held that the District Court did not commit clear error in rejecting NeoGenomics' allegations of sufficient motivation to combine the Fluidigm Access Array system with cfDNA and a reasonable expectation of success thereof in the face of Natera's "significant evidence of obstacles to using cfDNA in the present setting that would have been known to a skilled artisan." Nor was NeoGenomics persuasive in arguing that the District Court erred in assessing the obstacles raised by Natera based on being able to amplify and sequence ctDNA "with precision" because the '035 patent claims contained no such precision requirement. The Federal Circuit held that while "[u]nclaimed factors relevant to the feasibility of creating a useful claimed invention can impact the motivation to combine analysis," citing Auris Health, Inc. v. Intuitive Surgical Operations, Inc., 32 F.4th 1154, 1159 (Fed. Cir. 2022), here the District Court did not abuse its discretion in deciding against NeoGenomics on whether a skilled worker would have expected the method to be practiced with some level of "precision."

Turning to the issue of irreparable harm, the Court opined that the standard is whether Natera could show a "causal nexus" between infringement and the harm alleged, citing Luminara Worldwide, LLC v. Liown Elecs. Co., 814 F.3d 1343, 1352 (Fed. Cir. 2016). Such evidence can include "head-to-head" competition and "lost market share" and can arise where the injury alleged is not quantifiable (the old bromide being "no adequate remedy at law"). Natera's evidence of direct competition between the parties in a "two-player" market meant to the Court that "any growth experienced by NeoGenomics would therefore result in lost sales to Natera" which was sufficient to satisfy the standard for irreparable harm. The Federal Circuit rejected NeoGenomics' argument that the District Court had misinterpreted Presidio Components, Inc. v. American Technical Ceramics Corp., 702 F.3d 1351 (Fed. Cir. 2012), to create a per se standard for competition in the two-player market situation. According to the opinion, the District Court assessed the circumstances, including the potential for "biopharmaceutical partnerships, business relationships, clinical opportunities, and market share" to be lost by Natera because of competition from NeoGenomics if permitted to continue to compete (recognizing that in Presidio, as here, the patentee was unwilling to grant a license to the accused infringer). Other factors considered by the Court were the necessity for cancer patients for "continuity of care" which would inhibit patients using a different diagnostic test once NeoGenomics' test was used instead of Natera's test (resulting in loss of current sales plus loss of repeat business/future sales). Regarding another NeoGenomics' argument the Federal Circuit rejected the aspect of both the Signatura and RaDaR tests as being tumor-informed testing, which was not a claimed limitation of the '035 patent, based in Natera's evidence that the method claimed in the '035 patent was "critical to overcoming challenges associated with successfully amplifying and sequencing cfDNA in the claimed ctDNA context" and "would be impossible to achieve without practicing the particular methods claimed in the '035 patent." Finally the Court rejected NeoGenomics' argument that Natera delaying in bringing suit, based on its involvement with other infringement cases and Natera having brought suit within days (Medicare coverage) of NeoGenomics obtaining regulatory approval and or months of NeoGenomics achieving commercial availability.

Regarding the public interest, the Court noted that the District Court considered evidence that Natera's Signatura and NeoGenomics' RaDaR products were approved for use with patients having the same cancer diagnoses and that Natera had commercial capacity to satisfy any increased demand caused by imposition of the injunction. The Federal Circuit noted that the District Court had carved out sales to existing patients or those involved in "ongoing clinical trials or research projects." The Federal Circuit also rejected NeoGenomics' claims that the public was harmed because their RaDaR product was superior to Natera's Signatura product in the face of controverting evidence from Natura. Nor was the Court convinced by testimony of NeoGenomics' expert that their product was superior for certain specific cancers, finding that "the [expert's] letter provides no scientific basis for its broad and conclusory assertions" nor does it "point to any evidence that RaDaR is effective for more types of cancers than Signatera" (while on the contrary Natera provided evidence that its product was approved for all the cancer indications that the RaDaR product was approved for). And while NeoGenomics provided testimony from a "key opinion leader" as well as market reports and other evidence of its RaDaR product being superior to Natera's Signatura product, none of this evidence was sufficient to convince the panel that the District Court had erred regarding the public interest prong of the preliminary injunction standard.

Finally, the opinion does not set forth its review of the District Court's consideration of the balance of the hardships (or equities, as termed in the opinion) being in Natera's favor, merely stating that "[w]e have considered NeoGenomics' remaining arguments and find them unpersuasive."

Natera, Inc. v. NeoGenomics Laboratories, Inc. (Fed. Cir. 2024)
Panel: Chief Judge Moore and Circuit Judges Taranto and Chen
Opinion by Chief Judge Moore

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