By Kevin Stawicki

Law360 (September 10, 2020, 7:19 PM EDT) -- A California federal judge has shot down Illumina's attempt to scrap a magistrate judge's order requiring the biotechnology company to make the inventors of a DNA sequencing patent it's accusing BGI Genomics of infringing available for deposition.

Illumina Inc. prematurely cried foul over U.S. Magistrate Judge Thomas Hixson's Aug. 24 order that it can't stop Shenzhen-based BGI Genomics Co. Ltd. from deposing seven of its former employee-inventors of its DNA sequencing products, U.S. District Judge William H. Orrick said Wednesday.

The California-based company also unnecessarily asked that it not face sanctions if it can't meet the court's requests due to health risks related to the coronavirus pandemic, the judge said, noting that the magistrate's ruling was "thoughtful and well considered."

"Illumina has not been sanctioned yet," Judge Orrick said, noting the magistrate's willingness to be lenient on sanctions if the company makes a serious effort to comply with the depositions.

"If Illumina has acted in good faith and with diligence, it would not be penalized for any inability to enforce its contractual rights," the judge continued. "It knows how to appeal if it thinks it is sanctioned unfairly."

Judge Hixson said on Aug. 24 that BGI had reasonably requested to depose Illumina's former employee-inventors.

"Defendants are asserting written description and enablement defenses, and the inventors are logical witnesses with respect to these defenses ... the suggestion that defendants should be limited to deposing the inventors chosen by their opponents does not even merit discussion," Judge Hixson said.

Illumina argued in its brief on Tuesday that it's trying to make the inventors participate, but there's only so much it can do to make them available, especially considering risks related to COVID-19, so it shouldn't be subject to sanctions for non-compliance.

"Illumina should not be exposed to sanctions if a former employee does not appear for deposition," it said. "The order was apparently provoked by bad speculation that Illumina misled these non-parties to believe that they had to travel to the United States for their depositions or would otherwise risk contacts exposing them to COVID-19."

Wednesday's order is the latest twist in a suit launched last June by Illumina claiming BGI and its subsidiary Complete Genomics Inc. infringed its DNA sequencing technology. Illumina claims BGI is importing infringing sequencers to use in its facility in San Jose, California, and it's threatening to sell them throughout the U.S.

In August, Judge Orrick said BGI can continue developing its DNA sequencing products as it appeals the scope of a preliminary injunction issued in June, which gave Illumina total control of the U.S. market for the technology. The Federal Circuit is considering whether the injunction order improperly threatened to restrict activities that didn't infringe Illumina's patents; notably, BGI is not challenging the preliminary infringement findings.

BGI urged the court in its July motion to pause the preliminary injunction to narrow the scope of the order so that it doesn't block non-commercial development processes that don't infringe Illumina's patents. 

"This broad preliminary injunction threatens to block noninfringing activity," BGI said in July.

"Such a limited, targeted stay is appropriate to protect BGI against irreparable harm that it otherwise faces and to ensure that the playing field is not unduly skewed before substantial questions can be decided on appeal," it added.

Judge Orrick ruled on June 15 that BGI failed to make the case that it would be permanently harmed by an injunction against the sale of its products in the U.S., also finding that Illumina successfully showed that BGI's products likely infringed its patents.

Counsel and representatives for the parties did not immediately respond to requests for comment.

The patents-in-suit are U.S. Patent Nos. 7,566,537; 9,410,200; and 9,944,984.

Illumina is represented by Edward R. Reines and Derek C. Walter of Weil Gotshal & Manges LLP.

BGI is represented by Derek Shaffer, Andrew Naravage, Joe Milowic and David Bilsker of Quinn Emanuel Urquhart & Sullivan LLP.

The case is Illumina Inc. et al. v. BGI Genomics Co. Ltd. et al., case number 3:19-cv-03770, in the U.S. District Court for the Northern District of California.

--Additional reporting by Tiffany Hu and Dorothy Atkins. Editing by Adam LoBelia.

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