-
Federal Circuit Upholds Preliminary Injunction Barring Sale Of Cancer Test
07/30/2024On July 12, 2024, the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) affirmed a decision by the U.S. District Court for the Middle District of North Carolina granting a preliminary injunction that barred NeoGenomics Laboratories, Inc. (“NeoGenomics”) from making, using, selling, advertising, or distributing its cancer assay test. Natera, Inc. v. NeoGenomics Lab’ys, Inc., No. 2024-1324, at *2 (Fed. Cir. July 12, 2024).
Natera, Inc. (“Natera”) owns U.S. Patent No. 11,519,035 (the “’035 Patent”) and U.S. Patent No. 11,530,454 (the “’454 Patent”), which are directed to methods of amplifying and detecting genetic material, respectively. Id. at *2-3. Natera manufactures and sells a “Signatera” product, which is covered by the two patents, and NeoGenomics offers a product called “RaDaR,” which competes with Signatera. Id. at *3. Natera sued NeoGenomics, alleging infringement of the ’035 and ’454 Patents, and moved for a preliminary injunction barring NeoGenomics from, among other things, the use, sale, marketing, and distribution of the RaDaR product. Id. at *4. The district court granted the preliminary injunction and NeoGenomics appealed that grant. Id.
In considering the merits of the injunction, the Federal Circuit evaluated three factors: (1) Natera’s likelihood of success on the merits, (2) whether it could demonstrate irreparable harm, and (3) the public interest.
Likelihood of Success
First, on the likelihood of success, the Federal Circuit found that Natera was likely to prove infringement and prevail on validity. Natera, Inc., No. 2024-1324 at *6.
With respect to infringement, the Federal Circuit explained that the district court was not obligated to explicitly construe claims before assessing the likelihood of infringement, but did not err when it did so, noting that NeoGenomics first raised its claim construction argument in its motion to stay the preliminary injunction pending appeal. Id. at *7.
With respect to validity, the Federal Circuit found that, considering the “well-known barriers” in the field, the district court was well within its discretion in finding the proffered evidence of motivation to combine and reasonable expectation of success insufficient. Id. at *11-12. Thus, the Federal Circuit found that the district court did not err in concluding that NeoGenomics failed to raise a substantial question of obviousness. Id. at *12.
Irreparable Harm
Second, the Federal Circuit found that Natera would likely suffer irreparable harm based on the two parties being direct competitors in a “two-player market.” Id. at *12. The Federal Circuit agreed with the lower court’s finding that Natera would lose “potential customers, profits, business relationships, and clinical opportunities,” and that it would be “impractical” to transition patients from one diagnostic test to the other once the patient had started, resulting in a loss of “repeat business from patients tied to a single testing methodology.” Id. at *13-14.
The Court was not persuaded by NeoGenomics’s argument that the causal nexus analysis conducted by the lower court improperly tied the alleged harm to an unclaimed feature of the inventions. Id. at *14. It evaluated arguments presented at the district court including Natera’s evidence that the patented method was directly tied to consumer demand for the RaDaR device as well as critical to overcoming challenges associated with successfully amplifying and sequencing genetic material. Id. at *15. The Federal Circuit concluded that the district court did not err in its analysis of the nexus. Id.
The Court also disagreed with NeoGenomics that Natera had unreasonably delayed bringing suit because it waited seven months after the issuance of the ’035 Patent. Id. at *15. The Court found that Natera was already involved in related infringement litigation prior to and during the seven-month period, and that it had brought suit shortly after the RaDaR device became commercially available and approved for Medicare coverage, thus, the delay was reasonable. Id. at *15-16.
Public Interest
Lastly, the Federal Circuit agreed with the district court’s finding that, because the Signatera and RaDaR tests may be used to detect cancer in the same patient population, and because Natera has the capacity to satisfy any increased demand for cancer testing, the public would not be harmed. Id. at *16. Despite NeoGenomics’s arguments regarding the advantages of the RaDaR device, including the test’s increased sensitivity and ability to detect small numbers of certain mutations, the Court found the assertions “broad and conclusory.” Id. at *16-18.
