Welcome to Skilled in the Art. I’m Law.com IP reporter Scott Graham. I’m in San Diego today at the Doe v. GirlsDoPorn trial, which—as you’ll see Friday—does have an IP angle. In the meantime, here’s what I’ve got today:

• Gene sequencing company 10x Genomics files to go public, despite that little injunction thingy.

• Juniper Networks wins the second and final “showdown” before Judge Alsup.

• Another slap on the wrist for Northern District on patent eligibility. 

In the meantime, you can always email me your thoughts and follow me on Twitter.

We Can’t Sell Our Product, but Wouldn’t You Love to Invest?

You’ve heard of launching a product “at risk” of infringement. How about launching an entire business?

10x Genomics, the Pleasanton, California-based single-cell gene sequencing company, filed to go public on Monday. That’s a mere four weeks after U.S. District Judge Richard Andrews enjoined the company from marketing all five of its product lines.

Of course, 10x is appealing Andrews’ order, seeking a stay pending appeal, and attempting to design around patents that a jury found it infringed. Still, that seems like a pretty big risk factor for a $100 million IPO—even by Silicon Valley standards.

10x is a late-stage venture company backed by SoftBank, Fidelity Investments and others. Bio-Rad Laboratories and Weil Gotshal & Manges asserted patents originally developed by the University of Chicago. A jury awarded $23 million, with another $12 million added for supplemental damages and interest. Andrews also enjoined 10x from marketing its GEM chips and associated consumables, which 10x concedes in its S-1 “have historically constituted substantially all of our product sales.” Andrews did grandfather in products that 10x has already sold to researchers, and said it could continue to supply consumables if it pays a 15% royalty to Bio-Rad.

Also on Monday, 10x asked the Federal Circuit to stay Andrews’ injunction. In a motion signed by Orrick, Herrington & Sutcliffe partner Josh Rosenkranz, the company says 10x is “overwhelmingly likely to prevail on appeal.”

Investors had better hope so, because Rosenkranz concedes that a new, non-infringing system that 10x is developing will cover only three of its five product lines, and that without a stay, “implementing an abrupt, rushed transition to the new design will disrupt 10x’s business.”

Or, as stated in the S-1, there’s no assurance “that we will be able to manufacture the Next GEM microfluidic chips in sufficient volumes in a timely fashion.” In addition, “Our Next GEM microfluidic chips may be subject to future claims of infringement by Bio-Rad or others.”

The stakes aren’t high only for investors. Bio-Rad’s injunction has prompted “an outpouring of alarm” from scientists at research institutions such as Memorial Sloan Kettering Cancer Center and the Broad Institute, Rosenkranz writes to the Federal Circuit. “These scientists described how indispensable 10x’s products are to their research on diseases as varied as cancer of the prostate, breast, colon, and brain; endometrial and ovarian cancer; multiple myeloma; graft-versus-host disease; and pediatric immune disorders.”

It was a busy weekend for 10x and Andrews. On Thursday the company filed an emergency motion with the judge so that it could immediately hash out the amount of the supersedeas bond it must post while pursuing its appeal. The briefing is under seal, but I’m guessing the emphasis was on perils to cancer research, rather than Silicon Valley’s closing IPO window.

In any event, Andrews ordered bond set at $52 million Monday morning and 10x filed its S-1 around the same time. The filing says 10X has accrued $55 million for the Bio-Rad litigation as of June 30.

Photo illustration: Jason Doiy/ALM

Juniper Goes 2 for 2 at the Alsup Corral

The shootout at the Alsup corral is over and Juniper Networks is the last party standing.

Finjan dismissed its patent claims earlier this month after a trial last December and a round of summary judgment motions this spring didn’t go its way.

U.S. District Judge William Alsup used a procedure he calls The Showdown (originally dubbed The Shootout). He instructs the patentee to pick its strongest asserted claim and the accused infringer to pick the weakest. The judge then conducts summary judgment and trial—if necessary—on an expedited schedule. “This gets to the heart of the matter so quickly and so cleanly,” the judge explained at a 2018 hearing. If the first showdown doesn’t resolve the case, the parties repeat the procedure.

Finjan and Juniper went through two showdowns over six cybersecurity patents that Finjan asserted in 2017. The first went to trial and ended in a defense verdict for Juniper. In the second round, Alsup ruled on summary judgment in May that Juniper’s accused products didn’t infringe after construing a key claim term consistently with the Patent Trial and Appeal Board, but contrary to U.S. District Judge Haywood Gilliam in a different case. “At no point during those proceedings did Judge Gilliam have the opportunity to address the specific issues raised in the instant motion,” Alsup wrote.

After a few more months of motion practice Finjan dismissed its remaining claims and is now free to challenge Alsup’s claim construction, summary judgment and post-trial orders on appeal.

Jonathan Kagan, who was part of the Irell & Manella team that represented Juniper, said the showdown format is probably most helpful for parties that are looking to settle. In this instance, both parties pursued their cases aggressively. “I think that would have happened regardless of the format of the case,” he said. But with the showdowns, they were able to zip through two rounds of summary judgment and a trial in less than two years. “There aren’t many cases where you’re going to have that much activity in that little time,” he said.

Juniper’s team also included Irell partners Rebecca Carson and Alan Heinrich and associates Josh Glucoft, Dennis Courtney and Ingrid Petersen.

The Federal Circuit has sent another message to the Northern District of California about resolving Alice motions on the pleadings.

A divided panel on Friday sent an eligibility dispute back to U.S. District Judge Lucy Koh, saying she needs to construe the word “toolbar” before deciding whether an automated method for modifying them is an ineligible abstract idea.

“The district court never addressed the parties’ claim construction dispute,” Judge Jimmie Reyna wrote in MyMail v. ooVoo. “Nor did the district court construe ‘toolbar’ or adopt MyMail’s proposed construction” before ruling.

Judge Alan Lourie dissented, saying the court was throwing away “a thorough and well-reasoned district court decision based on a claim construction issue that is little more than a mirage.”

The Supreme Court’s 2014 Alice decision gave accused infringers a tool for resolving patent disputes early, before litigation costs add to patent owners’ settlement leverage. But the Federal Circuit tapped the brakes on that last year with its Berkheimer and Aatrix decisions, saying that eligibility will often involve factual disputes that can’t be resolved on the pleadings.

Twice in the last two months the appellate court has had to remind the Northern District of California about those decisions. In June the court threw out an eligibility decision—and fee award—from U.S. District Judge Yvonne Gonzalez Rogers. Like Koh, she had ruled just after Berkheimer and Aatrix were issued and and didn’t cite them.

MyMail’s patent is directed in part to “a method for dynamically modifying a toolbar.” The Eastern District of Texas in another MyMail case had construed toolbar as “a button bar that can be dynamically changed or updated via a Pinger process or a MOT script.” MyMail argued to Koh that that shows the patent is directed to a technological improvement of a computer-oriented device.

Koh didn’t construe the term, instead concluding that the patent falls in the category of “transmitting data, analyzing data, and generating a response to transmitted data,” which the Federal Circuit has repeatedly found ineligible for patent protection.

“We conclude that the district court erred by failing to address the parties’ claim construction dispute before concluding, on a Rule 12(c) motion, that the MyMail patents are directed to patent-ineligible subject matter under Section 101,” Reyna wrote. Judge Kathleen O’Malley concurred.

Lourie argued in dissent that the claims are “clearly abstract, regardless of claim construction,” and that “we should resolve the legal question of eligibility and simply affirm.”

That’s all from Skilled in the Art today. I’ll see you all again on Friday.