A federal jury has sided against NanoString in a patent infringement lawsuit lobbed by 10x Genomics concerning the company’s hardware for profiling the spatial distribution of RNA and protein expression across a tissue sample.
The Delaware district court awarded 10x Genomics about $31 million in total damages—including $25 million linked to lost profits and $6 million in royalty payments—though NanoString said it plans to appeal the decision.
10x Genomics first filed its suit in May 2021 alongside Prognosys Biosciences, the owner of seven patents at issue in the case. The companies claimed that NanoString’s GeoMx Digital Spatial Profiler infringed their exclusively licensed methods for mapping out the inner workings of tissues and cells.
“We remain resolute in our belief that the patents that 10x Genomics has asserted describe a fundamentally different scientific method than that which is used for our GeoMx system,” NanoString President and CEO Brad Gray said in a statement issued after the verdict. “Simply put, we believe the asserted patents are invalid, that we don’t infringe these patents, and that we should be vindicated on appeal.”
“This verdict does not prevent NanoString from continuing to sell GeoMx products anywhere in the world,” Gray added. “We believe that we will defeat any request by 10x Genomics for a potential future injunction and that we will continue to sell our GeoMx products worldwide without interruption.”
Meanwhile, 10x Genomics said it plans to seek—in addition to the aforementioned sales-stopping injunction—additional damages and royalties as well as payments for attorneys’ fees.
“In the last six months, three separate courts have found that both NanoString's CosMx and GeoMx products infringe nine separate 10x patents,” said Eric Whitaker, 10x Genomics’ chief legal officer, referring to two previous judgements in European courts. In September, the European Unified Patent Court issued a preliminary injunction against NanoString covering its CosMx Spatial Molecular Imager instruments and reagents.
“At some point, NanoString must drop the charade that it is 'confident' it does not infringe the 10x patents and the patents are invalid,” Whitaker said.
At the same time, NanoString has countersued 10x Genomics in an antitrust case that includes Harvard University.
NanoString has claimed the two were “pursuing an ill-gotten monopoly” through the courts, because the underlying technology behind the patents in 10x Genomics’ lawsuits was developed at Harvard using millions in public grant money from the National Institutes of Health—which would include provisions that those patents only be licensed through nonexclusive deals.
Following the most recent Delaware federal court verdict, NanoString’s stock price dropped about 50%, down to 64 cents. The company also said it would withdraw its financial guidance and revenue projections for the fourth quarter and the full year of 2023 pending a review of the litigation’s impact.
In its full third-quarter earnings report, posted Nov. 6, NanoString logged $28.9 million in spatial biology revenue out of $48.1 million in total sales.
Gray also said at the time that the company had reduced its cash burn by “nearly 50% sequentially,” in part after announcing plans to lay off about 110 staff and reduce the company’s head count by about 20% before the end of this year.