By Kevin E. Noonan --
Yesterday, counsel for defendants/appellants filed a petition for rehearing before the Federal Circuit in Association for Molecular Pathology v. U.S. Patent and Trademark Office. Defendants assert a single ground for rehearing, based on the standing issue and particularly related to their allegations that Dr. Harry Ostrer (the only plaintiff found to have standing) no longer has the capacity for "immediately begin[ning] to perform BRCA 1/2-related genetic testing" upon invalidation of the Myriad patents. This allegation is based on Dr. Ostrer's move from his academic position at New York University to a position at Montefiore Hospital and the Albert Einstein School of Medicine of Yeshiva University. In addition, defendants ask the Court to dismiss the appeal and the case for lack of standing while not vacating the panel decision on patent-eligibility of claims to isolated DNA.
The gist of defendants' argument is that the panel found Dr. Ostrer (at left) to have standing because "he remains in the same position with respect to his ability and desire to provide BRCA testing as in the late 1990's." The change in Dr. Ostrer's academic position destroys this predicate for "no change in position" according to defendants. The petition states that Dr. Ostrer's standing was not personal to him but was based on his relationship with NYU: "[b]ecause the communication [offering a license] was directed at NYU, involved the testing that was being performed at NYU, and offered to grant a license to NYU," the only basis for Dr. Ostrer to have standing "derived solely from his position at NYU" (emphasis in original). These assertions are based on Dr. Ostrer's declaration testimony that:
Through the Human Genetics Program and Molecular Genetics Laboratory at the NYU Langone Medical Center that I direct, my staff and I engage in both research and clinical practice relating to genetic relate susceptibility to disease. . . . My laboratory has all of the personnel, expertise, and facilities necessary to do various types of sequencing of the BRCA1 and BRCA2 genes and I have a strong desire for my lab to provide such sequencing services. We could, and would . . . do full sequencing [and other procedures used for diagnostic genetic testing (emphasis in original)].
According to the petition, "[t]hese statements . . . make clear that [Dr. Ostrer's] claim to standing depended entirely on his employment at NYU." The petition asserts that the panel recognized this, by stating that "his lab has the personnel, facilities and expertise" to perform the testing, and that this had not changed from the time that Myriad offered NYU a license in 1998. Dr. Ostrer's academic move thus removes the basis for the panel's determination that nothing had changed and at the same time destroyed the basis for the panel's determination that Dr. Ostrer has standing, defendants contend.
Defendants made similar, albeit less extensive, arguments in a letter to the Court the day before the panel rendered its decision (see "Myriad Writes to Federal Circuit on Standing Issue"), and plaintiffs responded a day later with their own letter (see "Standing in AMP v. USPTO: The Plot Thickens"), stating that Dr. Ostrer's "change in circumstances" did not change his capacity to perform the testing but merely the situs where the testing would be performed. Defendants assert three arguments for why plaintiffs' response is inadequate to preserve Dr. Ostrer's standing to sue. First, defendants argue that the move eliminates any controversy between Myriad and NYU. The panel's decision on standing, the petition maintains, was based on Myriad's offer of a license to NYU as an institution, and that was the circumstance that the panel considered not to have changed (because NYU's employee, Dr. Ostrer, asserted the unchanged capacity and intention to practice the claimed invention should Myriad's patents be invalidated). The petition contains a highlighted portion of Myriad's letter to NYU, illustrating that the offer to license was to the institution and was not personal to Dr. Ostrer:
The petition also notes as significant that, had NYU agreed to the proffered license, the right to perform BRCA testing would not have migrated with Dr. Ostrer when he moved from NYU to Montefiore. Thus:
If the mere offer of a collaborative license to an institution constitutes a threat sufficient to support declaratory-judgment jurisdiction, then declaratory-judgment jurisdiction must be rooted in the actions being taken at the institution offered the license.
Second, there is no current controversy between Myriad and Montefiore, an institution that has not offered BRCA testing services in the past and with which Myriad has not "communicated" either now or earlier. Plaintiffs' assertions in their responsive letter that Montefiore has "the same immediate capability" of performing BRCA genetic testing is not evidence, say defendants, and even if true, make Montefiore no different than "hundreds of laboratories around the United States" that have similar capabilities. That is not enough to provide standing for declaratory judgment, the defendants assert, citing the panel opinion that declaratory judgment jurisdiction requires "affirmative acts by patentee directed at specific Plaintiffs" (emphasis in original).
Finally, defendants' petition contends that plaintiffs' letter to the Court (in response to their own) is insufficient to establish an "immediate controversy," based at least on the fact that in plaintiffs' letter Dr. Ostrer was characterized as having a "wish to engage in [diagnostic BRCA] sequencing" (emphasis in original). The petition notes that the panel found similar statements from other named plaintiffs to be inconclusive and that such "some day intentions" were insufficient to establish standing for other named plaintiffs, including Drs. Kazazian and Ganguly. In addition, there is no evidence that Montefiore is willing to permit Dr. Ostrer to perform BRCA-directed genetic diagnostic testing.
The petition asks the Court to dismiss the current appeal, and the underlying declaratory judgment action, for failure of any of the plaintiffs to have standing, saying that the case is moot because Dr. Ostrer's move from NYU will not "make a difference to the legal interests of the parties (as distinct from their psyches, which might remain deeply engaged with the merits of the litigation)," citing Nasatka v. Delta Scientific Corp., 58 F.3d 1578, 1580 (Fed. Cir. 1995). In addition, defendants argue that "[b]ecause the mootness was caused by plaintiff Ostrer's unilateral action," the panel decision should not be vacated. This argument is based on the principle that vacating a panel opinion is only appropriate when "mootness arises through no fault of the parties (such as external causes or mere 'happenstance')," citing United States v. Munsingwear, Inc., 340 U.S. 36, 40 (1950). The policy behind this standard is that a party subject to an adverse panel decision could otherwise always "seek to eliminate the unfavorable precedent by manufacturing mootness during the course of the appellate process," defendants contend. The petition cites Tafas v. Kappos, 586 F.3d 1369, 1371 (Fed. Cir. 2009), as an instance where the Court refused to vacate a panel decision unfavorable to a party (the USPTO) when the party's "voluntary act" caused the action to be moot. Unless there is a countervailing public interest that would be served by vacatur (and defendants argue there is none in this case), the petition argues that the Court should maintain the patency of the panel decision.
The defendants' petition does not address any other issue, suggesting that Myriad has decided not to contest invalidation of the method claims included in the lawsuit. Perhaps this is because there are other claims remaining to be asserted against a future infringer that are more likely to withstand a patent-eligiblity challenge than the claims in this case, or perhaps it is because of the impending Supreme Court decision in Mayo Collaborative Svcs. v. Prometheus Labs., Inc., which is expected to shed additional light on the patent-eligibility of medical diagnostic method claims regardless of whether they encompass a transformation step. In any case, defendants' petition provides the Federal Circuit with an opportunity to revisit the standing issue, both as it applies to Dr. Ostrer and to the American College of Medical Genetics and Ms. Ellen Matloff (as argued in plaintiffs' petition). Reaching a decision of "no standing" in this case would go a long way towards putting the genie of the patent-eligibility of gene patents back in the bottle, perhaps long enough for Myriad's patents to expire and moot the entire controversy. There are worse outcomes.