Edward Reines of Weil, Gotshal & Manges

SAN FRANCISCO — In a high-stakes litigation showdown in the burgeoning market for non-invasive prenatal testing, Illumina Inc. has scored a patent infringement verdict against rival Ariosa Diagnostics.

A federal jury found that Ariosa's Harmony test infringed two of Illumina's gene-sequencing patents. The jury awarded $26.7 million in damages, about a quarter of the $104 million Illumina wanted. Perhaps more importantly, the jury found that the latest version of Ariosa's test infringes Illumina's patented gene-sequencing technology. That finding leaves open the possibility that Illumina can seek an injunction from U.S. District Judge Susan Illston of the Northern District of California.

The jury verdict, which came after two weeks of trial in Illston's courtroom, is a milestone in the legal fight between the business-partners-turned-rivals. The parties and their affiliates have fought at the Federal Circuit five times and at the Patent Trial and Appeal Board at least five more times over the past half-decade.

Illumina's lead lawyer, Edward Reines of Weil, Gotshal & Manges, wasn't immediately available for comment.

Ariosa's lead lawyer, Irell & Manella's David Gindler, declined to comment.

San Diego-based Illumina claimed its DNA sequencing and patents have been licensed by all major lab testing companies that perform NIPT—screenings for genetic defects that analyzes mothers' blood samples rather than a more invasive procedure involving extracting amniotic fluid. At trial, Weil's Reines said that most in the industry pay about $75 per test to license Illumina's technology. Reines painted Ariosa as the exception and accused it of undercutting Illumina's licensees by offering the Harmony test at artificially deflated prices.

Irell's Gindler argued Ariosa had a license to one of the patents by virtue of a supply agreement it had with Illumina to provide gene-sequencing supplies. He also argued that Illumina acted in bad faith by timing the lawsuit to scuttle Ariosa's initial public offering.

Jurors rejected those arguments and declined to award Ariosa anything on its counterclaims. The jury, however, declined to find that Ariosa willfully infringed Illumina's patents, a finding that would have left open the possibility that Illston could triple the damages figure.