Item 7.01 Regulation FD Disclosure.
The ITC 1068 Action
As previously disclosed: (a) on July 31, 2017, Bio-Rad Laboratories, Inc.
("Bio-Rad") and Lawrence Livermore National Security, LLC filed a complaint
against 10x Genomics, Inc. (the "Company") in the U.S. International Trade
Commission ("ITC") pursuant to Section 337 of the Tariff Act of 1930, accusing
substantially all of the Company's products of infringing U.S. Patent Nos.
9,089,844, 9,126,160, 9,500,664, 9,636,682 and 9,649,635 (the "ITC 1068
Action"); and (b) in September 2018, the presiding Administrative Law Judge
issued an initial determination (the "Initial Determination") (i) finding that
the Company's legacy Gel bead in Emulsion microfluidic chips ("GEM microfluidic
chips") infringe the '664, '682 and '635 patents but not the '160 patent,
(ii) finding that the Company's gel bead manufacturing microfluidic chip and new
microfluidic chip ("Next GEM microfluidic chip") do not infringe any of the
patent claims asserted against them, (iii) recommending entry of an exclusion
order against the Company's legacy GEM microfluidic chips and (iv) recommending
a cease and desist order that would prevent the Company from selling imported
legacy GEM microfluidic chips.
On December 18, 2019, the ITC issued its final determination in the ITC 1068
Action (the "Final Determination"), which was received by the Company on
December 19, 2019. The Final Determination affirmed the Administrative Law
Judge's ruling in the Initial Determination that the Company's Next GEM
microfluidic chips and gel bead manufacturing microfluidic chips do not infringe
any of the claims asserted against them. As previously disclosed, since
August 28, 2019, all Chromium instruments that the Company sells and has sold
operate exclusively with the Company's Next GEM solutions and the Company
believes that the Company's Chromium products utilizing the Company's Next GEM
microfluidic chips will constitute substantially all of the Company's Chromium
consumables sales by the end of 2020.
The Final Determination affirmed the Administrative Law Judge's ruling that the
Company's legacy GEM microfluidic chips infringe the '664, '682 and '635 patents
but not the '160 patent. The ITC issued (1) a limited exclusion order
prohibiting the unlicensed importation of the legacy GEM microfluidic chips into
the United States and (2) a cease and desist order preventing the Company from
selling such imported legacy GEM microfluidic chips in the United
States. However, in response to the multiple submissions from leading
researchers regarding the importance of research enabled by the Company's
products to "ameliorate [such] significant public interest concerns," the ITC
expressly allowed the importation and sale of the legacy GEM microfluidic chips
for use by researchers who are using such chips as of December 18, 2019, and who
have a documented need to continue receiving such chips for a specific current
ongoing research project for which that need cannot be met by any alternative
product.
Prior to the second quarter of 2019, all of the Company's microfluidic chips
were manufactured outside of the United States, but beginning in the third
quarter of 2019, the Company's United States manufacturing facilities achieved
volume production of certain of the Company's legacy GEM microfluidic chips
accounting for the majority of the Company's United States consumable revenue in
that period.
The Final Determination is subject to a 60-daypresidential review period before
taking effect. During the presidential review period, the Company is permitted
to continue importation and sales of the legacy GEM microfluidic chips subject
to payment of a bond. The ITC overturned the Administrative Law Judge's
recommendation in the Initial Determination that the bond be one hundred
(100) percent of the entered value of the accused microfluidic chips
(approximately $7 per microfluidic chip) (the "Entered Value") and reduced the
bond to three (3) percent of the Entered Value in the Final Determination.
Forward-Looking Statements
Statements in this Current Report on Form 8-K that are not statements of
historical fact are forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended (the "Securities Act"), and
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), which are subject to the "safe harbor" created by those sections. Such
forward-looking statements include, without limitation, statements concerning
the Company's plans, objectives, goals, beliefs, including the Company's belief
that Chromium products
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utilizing the Company's Next GEM microfluidic chips will constitute
substantially all of the Company's Chromium consumables sales by the end of
2020, business strategies, future events, business conditions, results of
operations, financial position, business outlook, business trends and other
information. Forward-looking statements generally can be identified by the use
of forward-looking terminology such as "may," "will," "should," "expect,"
"plan," "anticipate," "could," "intend," "target," "project" "contemplate,"
"believe," "estimate," "predict," "potential" or "continue" or the negatives of
these terms or variations of them or similar terminology. Among the factors that
could cause actual results to differ materially from those indicated in the
forward-looking statements are risks and uncertainties associated with the
Company's business and financial condition in general, including the risks and
uncertainties described under "Risk Factors" in the Company's prospectus filed
with the Securities and Exchange Commission ("SEC") on September 12, 2019, and
in the Company's Quarterly Report on Form 10-Q filed with the SEC on
November 12, 2019, as such risk factors may be updated from time to time in the
Company's periodic filings with the SEC. Such prospectus, such Quarterly Report
on Form 10-Q and the Company's other periodic filings are accessible on the
SEC's website at www.sec.gov. You are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date of this
report. All forward-looking statements are qualified in their entirety by this
cautionary statement, and the Company undertakes no obligation to revise or
update any forward-looking statements to reflect events or circumstances after
the date of this report.
Information Furnished Pursuant to Item 7.01
The information furnished pursuant to Item 7.01 in this Current
Report on Form 8-K shall not be deemed "filed" for purposes of Section 18 of the
Exchange Act, or otherwise subject to the liabilities of that section, nor shall
it be deemed incorporated by reference into any other filing under the
Securities Act or the Exchange Act, except as expressly set forth by specific
reference in such a filing.
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