In In re Certain Microfluidic Devices, the US International Trade Commission (ITC) held that Section 337's public interest factors require exempting infringing medical devices used in ongoing research, including cancer and cardiovascular studies, from Section 337 remedial orders.
On January 10, 2020, in In re Certain Microfluidic Devices—a patent-based investigation under Section 337 of the Tariff Act (19 U.S.C. § 1337)—, the US International Trade Commission (ITC or Commission) held that remedies barring importation of infringing microfluidic chips should include a carve-out for existing medical research projects with a documented need for the chips, based on the likely adverse impact of a broader ban on the public health and welfare ( (Inv. No. 337-TA-1068 (January 10, 2020)).
The ITC instituted this investigation on September 6, 2017 based on a complaint filed by Bio-Rad Laboratories, Inc. and Lawrence Livermore National Security, LLC (Complainants). The complaint alleged violations of Section 337 based on the importation of microfluidic "chips" by 10X Genomics, Inc. that infringed five US patents (US Patent Nos. 9,089,884, 9,500,664, 9,636,682, and 9,649,635, collectively the patents-in-suit).
The patents-in-suit generally relate to the analysis of chemical and biological materials. The accused chips, when used in a system including a 10X "controller," allow researchers to isolate cell samples, such as human cells obtained from a biopsy, so that the samples can be used in various forms of analysis, such as genetic sequencing.
On September 20, 2018, the presiding Administrative Law Judge (ALJ) issued an Initial Determination (ID) finding:
A violation of the statute based on direct and indirect infringement of three patents by 10X's existing chips.
Non-infringement by 10X's prototype chip ("Next GEM" or "Chip SE").
After the parties petitioned the Commission to review the ID, the Commission agreed to review certain patent issues and ordered briefing on remedy, the public interest, and bonding. Although the Commission had ordered the parties to make their evidentiary record on the public interest factors while the investigation was before the ALJ, 10X submitted new, third-party evidence during briefing to the Commission. The evidence included correspondence from medical researchers asserting that a forced, mid-study switch in products would cause major research setbacks. The Commission then reopened the submission period to allow for supplemental public interest briefing.
On review, the Commission affirmed, with modifications, the ALJ's conclusions on infringement. The Commission rejected Complainants' argument that the Next GEM chip was still a prototype that could not be adjudicated as non-infringing, finding that the imported prototype design was "sufficiently fixed such that an infringement determination could be made."
The Commission also agreed with the ALJ's recommendation on remedies, except that it found that the remedies should be tailored in light of the evidence from medical researchers that was not before the ALJ. In particular, the Commission considered it persuasive that:
The medical studies involve the type of basic research fundamental to the statutory public interest factors.
The 10X infringing chips are not interchangeable with competitors' chips.
The 10X infringing chips are not interchangeable with 10X's non-infringing, Next GEM chips without significant disruption to ongoing studies, including loss of:
experimental consistency; and
research funds invested into prior experiments.
The disruption could result in delays that might compromise the availability of medical treatments for patients.
The Commission rejected Complainants' argument that the 10X chips only relate to a preparatory step for research experiments and not the actual genetic sequencing, because the preparatory step is critical to the research.
Based on the third-party evidence, the Commission concluded that the LEO and CDO:
Should exempt infringing 10X chips for use by researchers that:
are using the chips in the US at the time the remedies go into effect; and
can document a need to continue receiving the devices for an ongoing research project that cannot be met by an alternative product, including the Next GEM chip.
Should not exempt infringing chips for use in new studies.
To avoid potential abuse, the ITC added other requirements, including that 10X customers:
Complete a questionnaire under oath that:
identifies the date the research began; and
states whether other products, including the Next GEM chips, could meet the researcher's needs.
Maintain records to support their declarations in case of audit or future enforcement proceeding.
The remedial orders also require 10X to:
Provide the completed questionnaires to US Customs and Border Protection, if requested.
Report monthly to the Commission the number of chips imported and/or sold, the identity of customers, their research project, and the project's anticipated completion date.
The remedial orders are still subject to presidential review on policy grounds for a 60-day period after their issue date (19 U.S.C. § 1337(j)).