Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_16-cv-02788/USCOURTS-cand-3_16-cv-02788-7/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:145 Patent Infringement

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

ILLUMINA, INC., and ILLUMINA

CAMBRIDGE LTD.,

Plaintiffs,

 v.

QIAGEN NV, QIAGEN GmbH, QIAGEN

GAITHERSBURG, INC., QIAGEN

SCIENCES, LLC, QIAGEN INC. (USA),

QIAGEN REDWOOD CITY, INC., and

INTELLIGENT BIO-SYSTEMS, INC.,

Defendants. /

No. C 16-02788 WHA

ORDER RE MOTION TO

DISMISS AND MOTION TO

TRANSFER OR, IN THE

ALTERNATIVE, STAY

INTRODUCTION

In this patent infringement action, six of seven defendants move to transfer this action to

the District of Delaware, or in the alternative to stay the action. The remaining defendant

moves to dismiss for lack of personal jurisdiction. For the reasons stated below, the motion to

dismiss is HELD IN ABEYANCE pending jurisdictional discovery. The motion to transfer or stay

is DENIED, reserving on a final determination until jurisdictional discovery is completed. 

STATEMENT

Plaintiffs Illumina, Inc., and Illumina Cambridge Ltd. (collectively “Illumina”), supply

DNA sequencing equipment. Illumina Cambridge, a wholly-owned subsidiary of Illumina, Inc.,

owns U.S. Patent No. 7,566,537. Illumina, Inc., is the exclusive licensee of the ’537 patent with

the right to sue to enforce its exclusivity (Compl. ¶¶ 6–7).

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In 2012, defendant Intelligent Bio-Systems, Inc., and non-party the Trustees of

Columbia University in the City of New York sued Illumina in the District of Delaware for

infringement of several patents relating to technology called “sequencing by synthesis.” In its

answer to the complaint in the Delaware action, Illumina asserted counterclaims against

Intelligent Bio-Systems for infringement of the ’537 patent. After Qiagen N.V., a defendant

herein, became the ultimate parent of Intelligent Bio-Systems, Illumina added it as a new party

in the Delaware action and asserted counterclaims against it. Illumina’s counterclaims against

both parties related to Intelligent Bio-Systems’s use of a chemical group known as a “protecting

group” on a nucleotide during a DNA sequencing process in its MAX-Seq and MINI-20 DNA

sequencing equipment, each of which sold only one unit. Qiagen N.V. moved to dismiss for

lack of personal jurisdiction in Delaware, and Illumina voluntarily dismissed all claims against

it without prejudice. Illumina maintained its claims against Intelligent Bio-Systems.

In 2013, the Delaware action was stayed pursuant to a joint request pending inter partes

review of both sides’ respective patents, although some fact discovery was allowed to go

forward. In November 2015, Illumina sought discovery from Illumina Bio-Systems regarding

the development and marketing of a new DNA sequencing system called the GeneReader NGS

System, which had been announced and promoted by Qiagen N.V. and its subsidiaries (several

of which are named as defendants herein). The complaint in Delaware did not assert claims

relating to the GeneReader. Nevertheless, Intelligent Bio-Systems produced certain documents

regarding the GeneReader. Nothing more came of it in the Delaware action.

In January 2016, Peer Schatz, the CEO of Qiagen N.V. (and of as each of its

subsidiaries) gave a presentation at the J.P. Morgan Healthcare Conference in San Francisco. 

The schedule identified Schatz as a representative of Qiagen N.V. (Walter Decl., Exhs. B, D,

E). His presentation included technical details of the GeneReader and included the following

statement: “[W]e’ve created solutions that actually give you results that matter and that will

allow therapeutic or scientific decision-making” (id., Exh. C at 5–6). 

Qiagen N.V. did not itself sell or develop the GeneReader. Instead, its direct and

indirect subsidiaries shared responsibilities (all named as defendants herein) as follows: Qiagen

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 Illumina filed a motion for a preliminary injunction, scheduled for a hearing on August 25.

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Inc. (USA) sold and marketed it, Qiagen Redwood City developed related software, Intelligent

Bio-Systems, Inc., led the technical development, Qiagen GmbH manufactured the reagents,

and Qiagen Sciences, LLC, shipped consumables for the product (id., Exh. D). An Executive

Committee made all final decisions “that ha[d] a material and/or global impact on QIAGEN’s

employees, business and future” (id., Exh. F at 2). The signature block on the Executive

Committee’s charter had no individual’s name or actual signature, but it identified the document

as emanating from the “QIAGEN Chief Executive Officer” without identifying which Qiagen

entity is referenced (id. at 5).

Illumina commenced this action in the Northern District of California in May 2016

alleging that the GeneReader infringes the ’537 patent and that each defendant’s conduct with

regard to the product constituted direct or induced infringement of that patent. Qiagen N.V.

moves to dismiss all claims against it for lack of personal jurisdiction, and the remaining

defendants move to transfer the action to the District of Delaware or to stay it here pending

resolution of claims against Qiagen N.V. (Defendants do not specify the purpose of any stay,

but merely note that the case against Qiagen N.V. could be stayed here while the remaining

claims could be transferred to Delaware.) After Qiagen N.V. moved to dismiss, it allowed

Illumina to take limited informal discovery, which consisted of several informal requests for

documents and responses to interrogatories. Qiagen N.V. refused, however, to allow

depositions. This order follows full briefing and oral argument.1

ANALYSIS

1. MOTION TO TRANSFER OR STAY.

Defendants contend that this action should be transferred to the District of Delaware,

favoring the forum where Illumina filed its first counterclaims for infringement of the ’537

against Intelligent Bio-Systems. Neither side addresses whether the law of the Ninth Circuit or

the law of the Federal Circuit controls the question of deference to the jurisdiction of an earlierfiled action. Indeed, each side cites decisions from both circuits (as well as district court

decisions inconsistently applying either circuit’s law). Although there do not appear to be

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 Defendants’ motion to transfer is solely based on deference to the “first-filed” action in Delaware. 

Defendants do not argue that convenience warrants a transfer under Section 1404(a) of Title 28 of the United

States Code.

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substantial differences between the law of the Ninth Circuit or the law of the Federal Circuit on

this issue, this order notes that “[r]esolution of whether [a] second-filed action should proceed

presents a question sufficiently tied to patent law that the question is governed by [Federal

Circuit] law.” Futurewei Techs., Inc. v. Acacia Research Corp., 737 F.3d 704, 708 (Fed. Cir.

2013) (citing Elecs. for Imaging, Inc. v. Coyle, 394 F.3d 1341, 1347 (Fed. Cir. 2005)).2

“When two actions that sufficiently overlap are filed in different federal district courts,

one for infringement and the other for declaratory relief, the declaratory judgment action, if

filed later, generally is to be stayed, dismissed, or transferred to the forum of the infringement

action.” Ibid. (citing Merial Ltd. v. Cipla Ltd., 681 F.3d 1283, 1299 (Fed. Cir. 2012)). This

deference to the jurisdiction of an earlier-filed action “exists to avoid conflicting decisions and

promote judicial efficiency. But the rule is not absolute; exceptions may be made if justified by

considerations of judicial and litigant economy and the just and effective disposition of

disputes.” Ibid. (citations omitted). 

Our case does not involve a claim for declaratory relief that mirrors the claims pending

in the Delaware action or vice versa. Illumina’s claims herein involve a new product, developed

after Qiagen acquired Intelligent Bio-Systems — the only party in common with the Delaware

action — and an entirely new infringement claim, albeit one directed at the same “protecting

group” at issue in the Delaware action. Indeed, Qiagen N.V. denied any relationship to the

claims already pending in Delaware when it asserted it could not be subject to personal

jurisdiction there. The remaining Qiagen defendants also do not offer any nexus to the claims

pending in Delaware, they simply state they would concede to personal jurisdiction in

Delaware. 

True, our case involves the same patent and the same claim as the Delaware action, but

there has been no decision on the merits there. Such a decision is unlikely, inasmuch as

Illumina intends to dismiss its claims there (which involved only two sales, one of each of the

products at issue therein), but offered no explanation of why that dismissal has not yet occurred. 

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 Illumina does not contend that Qiagen N.V. is subject to general jurisdiction in California.

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Additionally, Illumina must have believed the use of the same protecting group in the

GeneReader constituted sufficient overlap with the claims pending in Delaware to justify

seeking discovery into the GeneReader there. On the other hand, Illumina would have needed

to file a supplemental complaint in order to expand that case to reach the GeneReader device,

and a transfer would deny Illumina the traditional plaintiff’s choice of forum. (As stated, the

Delaware action involved Illumina’s counterclaims.)

This order holds these circumstances do not require us to defer to the jurisdiction of the

earlier-filed Delaware action. Accordingly, this order will not transfer the action on the basis of

the present record. Nevertheless, jurisdictional discovery may reveal facts that warrant a

discretionary transfer, so this order reserves a final determination on the issue until after the

personal jurisdiction issue regarding Qiagen N.V. is resolved.

2. QIAGEN N.V. AND PERSONAL JURISDICTION.

Qiagen N.V., a Dutch parent company of various entities around the world, including all

of the other defendants herein, contends it is not subject to personal jurisdiction in California. 

Both sides agree that Federal Circuit law governs the issue of personal jurisdiction. See

Pennington Seed, Inc. v. Produce Exchange No. 299, 457 F.3d 1334, 1343 (Fed. Cir. 2006). 

California’s long-arm statute permits the exercise of jurisdiction to the extent consistent with

due process. Cal. Code Civ. Proc. § 410.10. Thus, the inquiry collapses to the Federal Circuit’s

test for the exercise of specific personal jurisdiction: “(1) whether the defendant purposefully

directed its activities at residents of the forum state, (2) whether the claim arises out of or relates

to the defendant’s activities with the forum state, and (3) whether assertion of personal

jurisdiction is reasonable and fair.” Celgard, LLC v. SK Innovation, Co., 792 F.3d 1373, 1377

(Fed. Cir. 2015). For claims under federal law, a defendant that is not subject to personal

jurisdiction based on its contacts in any one state may nevertheless be subject to personal

jurisdiction by applying the same test to its contacts with the United States as a whole. Rule

4(k)(2); Touchcom, Inc. v. Bereskin & Parr, 574 F.3d 1403, 1414 (Fed. Cir. 2009).3

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Illumina contends that Qiagen N.V. is subject to personal jurisdiction in California

based on (i) C.E.O. Peer Schatz’s presentation about the GeneReder at the J.P. Morgan

Healthcare Conference on behalf of Qiagen N.V., (ii) Qiagen N.V.’s participation in the

Executive Committee, and (iii) Qiagen N.V.’s maintenance of a website accessible in

California. Thus, Illumina alleges that by promoting the GeneReader in California, by

controlling the subsidiaries producing it, and by promoting it on the Internet, Qiagen N.V.

induced infringement of the ’536 patent in California and can be subject to personal jurisdiction

here. 

Qiagen N.V. responds that Schatz’s presentation at the J.P. Morgan conference targeted

investors, not customers, and so cannot be the basis for a claim for infringement. It further

argues that the Executive Committee is not a committee of Qiagen N.V., but rather an

independent governing body, and, in any case, the Executive Committee does not control the

day-to-day operations of the several Qiagen entities. Finally, Qiagen N.V. argues that Qiagen

Inc., not Qiagen N.V., operates Qiagen.com. Thus, Qiagen N.V. argues it had no contacts with

California that related to the allegations herein.

Although Qiagen N.V.’s participation in the Executive Committee and Schatz’s

presentation on behalf of Qiagen N.V. at the J.P. Morgan conference occupied center stage in

the portion of Illumina’s complaint describing Qiagen N.V.’s conduct, Qiagen N.V. addressed

those issues only briefly in its initial motion. Instead, it waited for its reply brief to introduce

evidence that the Executive Committee was an independent entity and that Schatz’s

presentation at the J.P. Morgan conference narrowly targeted investors rather than customers. 

The day after Qiagen N.V. filed its reply, Illumina filed an objection identifying

numerous factual issues raised by Qiagen N.V.’s reply evidence that could not be resolved

through the limited discovery it had already conducted. For example, a page on Qiagen.com

stated “QIAGEN’s Managing Board, which has two members, is accountable for the actions

and decisions of the Executive Committee,” but it is unclear which Qiagen entity is referenced

or how that oversight is carried out in practice (Compl., Exh. 49). Additionally, in the same

reply declaration stating that the J.P. Morgan conference focused on investors, Qiagen N.V.’s

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declarant stated that hundreds of healthcare companies also attended that conference (Gilardi

Reply Decl. ¶ 4). Moreover, Schatz’s speech referred to the GeneReader’s ability to “give you

results” regarding therapeutic decision-making, suggesting he intended to promote the product

to healthcare providers that might make such decisions as well as investors. 

Illumina sought to take depositions of the declarants before the hearing on this motion. 

Qiagen N.V. offered to arrange a meet and confer to discuss requests for further discovery,

although it had made clear throughout the earlier discovery that it did not believe depositions

would be proportionate or necessary. Illumina never responded to Qiagen N.V.’s offer. 

Qiagen N.V. contends that its reply declarations were not improper, inasmuch as

Illumina’s theory that Qiagen N.V. controlled the Executive Committee or that the J.P. Morgan

conference targeted customers did not expressly appear in the complaint. Additionally, the

parties stipulated that Qiagen N.V. could submit additional declarations in its reply, although

the stipulation offered no explanation of the scope of those declarations. 

Whether or not Qiagen N.V.’s reply evidence is considered, there are too many factual

disputes to resolve without more thorough jurisdictional discovery, a problem that has been

compounded by Qiagen N.V.’s refusal to allow Illumina to take any depositions. Qiagen N.V.’s

declarations do not resolve the enigmatic role of the Executive Committee, nor do they address

Schatz’s specific statements regarding the therapeutic advantages the GeneReader would

provide to members of the audience at the J.P. Morgan conference.

Additionally, pursuant to Rule 4(k)(2), for a claim arising under federal law, “serving a

summons or filing a waiver of service establishes personal jurisdiction over a defendant if: 

(A) the defendant is not subject to jurisdiction in any state’s courts of general jurisdiction; and

(B) exercising jurisdiction is consistent with the United States Constitution and laws.” The

Federal Circuit has held that courts may apply Rule 4(k)(2) without analyzing jurisdiction for

each of the fifty states if “the defendant contends [it] cannot be sued in the forum state and

refuses to identify any other where suit is possible . . . .” Touchcom, 574 F.3d at 1415.

Neither side addressed Rule 4(k)(2) in the briefs on this motion. Qiagen N.V. was

ordered to identify a state in which it could be sued for the claims herein, but it stated “the

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present action could not properly have been brought against QIAGEN N.V. in any jurisdiction

in the United States” (Dkt. No. 59). Nevertheless, Qiagen N.V.’s response to one of Illumina’s

interrogatories indicated that “QIAGEN” — without specifying which entity — attended four

conferences throughout the United States, including the Annual Meeting of the American

Society of Clinical Oncology (which appears likely to have targeted healthcare providers, rather

than investors). Illumina’s supplemental jurisdictional discovery should also, therefore, address

whether Qiagen N.V.’s contacts with the nation as a whole could establish personal jurisdiction

for these claims.

CONCLUSION

For the reasons stated above, defendants’ motion to transfer or stay is DENIED, reserving

on a final determination on this issue until after jurisdictional discovery has concluded. Qiagen

N.V.’s motion to dismiss is HELD IN ABEYANCE pending supplemental jurisdictional discovery.

Illumina shall be entitled to two full-day and two half-day depositions, twelve requests

for production of documents, and twelve interrogatories. This discovery is in addition to the

informal discovery that Qiagen N.V. has already volunteered. Stonewalling will lead to adverse

inferences. Overbroad discovery requests will lead to striking without replacement. Counsel

shall cooperate to expedite discovery. All jurisdictional discovery shall be completed by

AUGUST 25. Illumina shall supplement the record by SEPTEMBER 15, including a brief up to

TWENTY PAGES, and Qiagen N.V. may likewise respond by SEPTEMBER 29. A further hearing

is hereby scheduled for OCTOBER 13 AT 8:00 A.M.

Meanwhile, general discovery shall proceed as to all other parties, and the briefing and

hearing on Qiagen N.V.’s motion for a preliminary injunction shall proceed as scheduled.

IT IS SO ORDERED.

Dated: July 18, 2016. WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

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