Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_12-cv-05501/USCOURTS-cand-3_12-cv-05501-35/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

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

VERINATA HEALTH, INC., et al.,

Plaintiffs,

v.

ARIOSA DIAGNOSTICS, INC,

Defendant.

Case No. 12-cv-05501-SI 

ORDER GRANTING MOTION FOR

LIMITED LIFT OF STAY

Re: Dkt. No. 249

Now before the Court is Illumina’s motion for a limited lift of stay, scheduled for 

argument on August 28, 2015. Pursuant to Civil Local Rule 7-1(b), the Court finds this matter 

appropriate for resolution without oral argument and hereby VACATES the hearing. For the 

reasons stated below, the Court GRANTS Illumina’s motion.

BACKGROUND

This is a patent infringement action. Plaintiffs Illumina Inc., Verinata Health, Inc. and the 

Board of Trustees of the Leland Stanford Junior University (collectively “Illumina”) accuse 

Ariosa’s HarmonyTM Prenatal Test of infringing U.S. Patent No. 8,296,076 (“the ’076 patent”), 

U.S. Patent No. 8,318,430 (“the ’430 patent”), and U.S. Patent No. 7,955,794 (the ’794 Patent).

Defendant Ariosa has filed a counterclaim for breach of contract.

In May 2013, Ariosa filed petitions for inter partes review, requesting that the Patent Trial 

and Appeal Board (“PTAB”) review claims 1-30 of the ’430 patent and claims 1-13 of the ’076 

patent. On October 25, 2013, the PTAB instituted inter partes review of claims 1-30 of the ’430 

Patent on obviousness grounds. On November 20, 2013, PTAB instituted inter partes review of 

claims 1-13 of the ’076 Patent on anticipation and obviousness grounds. On October 23, 2014, the 

PTAB issued two orders holding that Ariosa had failed to show that claims 1-30 of the ’430 Patent

are unpatentable. See Ariosa Diagnostics, Petitioner, IPR2013-00276, 2014 WL 5454541(Oct. 23, 

2014); Ariosa Diagnostics, Petitioner, IPR2013-00277, 2014 WL 5454542 (Oct. 23, 2014). On 

Case 3:12-cv-05501-SI Document 257 Filed 07/30/15 Page 1 of 3
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United States District Court

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November 19, 2014, the PTAB issued an order finding that the challenged claims of the ’076 

Patent are unpatentable. See Ariosa Diagnostics, Petitioner, IPR2013-00308, 2014 WL 6617697 

(Nov. 19, 2014). These PTAB rulings have all been appealed to the Federal Circuit. On January 8, 

2015, PTAB instituted inter partes review of claims 1-22 of the ’794 Patent. See Ariosa 

Diagnostics, Inc., Petitioner, IPR2014-01093, 2015 WL 153677 (Jan. 8, 2015).

On August 7, 2014, this Court held that Ariosa was entitled to pursue its counterclaims for 

breach of contract and the convenant of good faith and fair dealing in a judicial forum, 

notwithstanding an arbitration clause in the underlying contract between the parties. C. 14-cv1921, Docket No. 40. These counterclaims are of central importance to Ariosa’s defense, because 

they relate to its assertion that Illumina granted it an express or implied license to practice the ’794 

Patent. Id. at 5. On September 8, 2014, Illumina appealed this Court’s ruling to the Federal 

Circuit. C. 14-cv-1921, Docket No. 56.

On February 2, 2015, this Court granted Ariosa’s third motion to stay pending the final 

exhaustion of the inter partes review proceedings to which the ’794 Patent is subject, the Federal 

Circuit appeals from inter partes review to which the ’430 and ’076 Patents are subject, and the 

appeal from the Court’s order finding that it has subject matter jurisdiction to hear Ariosa’s breach 

counterclaims. Docket No. 229.

On June 23, 2015, the Federal Circuit issued a two-sentence opinion, finding that it did not 

have jurisdiction to hear Illumina’s appeal of this Court’s order refusing to enforce the arbitration 

clause. Illumina had appealed this Court’s order under 9 U.S.C. § 16(a)(1), which permits direct 

appeal of a court’s order denying a motion to compel arbitration. While the substance of 

Illumina’s motion asked the court to compel arbitration, it was styled as a motion to dismiss 

Ariosa’s counterclaims. The Federal Circuit found this formality divested it of jurisdiction to hear 

the appeal, ruling that “[i]n order to resolve uncertainty affecting our jurisdiction, we remand the 

case to the district court to afford [Illumina] the opportunity to move to compel arbitration. The 

district court may take such action as is appropriate.” Docket No. 249, Exh. 3.

Case 3:12-cv-05501-SI Document 257 Filed 07/30/15 Page 2 of 3
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DISCUSSION

Illumina filed a motion to compel arbitration concurrently with the present motion for 

limited lift of stay. Docket No. 250. The motion to compel arbitration evidently advances new 

arguments, and relies on different evidence than did its original motion to dismiss. Ariosa 

contends that this constitutes an improper attempt to have a second bite at the apple:

Although the Federal Circuit gave Illumina a chance to correct that 

jurisdictional defect, under no circumstances did the Federal Circuit 

suggest that Illumina could use that second chance to make new 

arguments and offer new evidence to obtain a substantively different 

result. Nonetheless, Illumina stretches the bounds of the Federal 

Circuit’s generosity and, under the guise of responding to the 

Federal Circuit’s order, attempts to achieve these improper ends. 

That attempt should be rejected. 

Def. Opp’n at 2-3.

Ariosa insists that the proper course should be to lift the stay solely to permit Illumina to 

file a motion to compel arbitration which is substantively identical to its motion to dismiss so that 

it may receive an appealable order. However, Ariosa cites no case holding that the scope of this 

remand must be circumscribed to this narrow purpose. While it may seem unfair to Ariosa that 

Illumina should get a second bite at the apple as a windfall for bringing the wrong motion in the 

first instance, there is nothing in the Federal Circuit’s order remanding this action which would 

suggest that this Court should not or cannot consider new arguments or evidence advanced by 

either party. Indeed, the Federal Circuit’s language, directing the Court to “take such action as is 

appropriate,” suggests that this Court enjoys broad discretion in how to proceed.

The Court therefore declines to require Illumina to merely parrot the language of its 

original motion to dismiss. Both parties may litigate the motion to compel as they see fit. 

Accordingly, the Court GRANTS Illumina’s order for a limited lift of the stay, and it will 

consider the motion to compel filed on July 20, 2015. This order resolves Docket No. 249.

IT IS SO ORDERED.

Dated: July 30, 2015

________________________

SUSAN ILLSTON

United States District Judge

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