BRCA Patent Suit to Continue in Southern District of New York

    By Kevin E. Noonan --

Judge Robert W. Sweet of the Southern District of New York ruled against the defendants' motions to dismiss in Association for Molecular Pathology v. U.S. Patent and Trademark Office (see Opinion).

The defendants brought these motions under Federal Rules of Civil Procedure 12(b)(1) (for lack of subject matter jurisdiction), (b)(2) (for lack of personal jurisdiction), and (b)(6) (for failure to state a claim).  The judge denied the U.S. Patent and Trademark's motion under Fed. R. Civ. Pro. 12(b)(1) that the plaintiff's claims lacked subject matter jurisdiction, distinguishing the legal precedent asserted by the Office as being limited to instances where there was alleged "a statutory violation for which the Patent Act provided a remedy."  Here, the District Court found that the "novel circumstances presented by this action against the USPTO, the absence of any remedy provided in the Patent Act, and the important constitutional rights the Plaintiffs seek to vindicate establish subject matter jurisdiction over the Plaintiff's claims against the USPTO."  The Court further ruled that the plaintiffs have standing to sue the Patent Office for "constitutional violations" for similar reasons of a lack of statutory remedy.

As for Myriad and the Directors of the Utah University Research Foundation ("UURF," a not-for-profit corporation alleged by Plaintiffs to be "operated, supervised and/or controlled" by patent assignee University of Utah), the District Court found that the plaintiffs had standing to sue arising from the Supreme Court's broad interpretations of the contours of the Declaratory Judgments Act in MedImmune Inc. v. Genentech, Inc.  Like the non-breaching licensee in MedImmune, the District Court found that the Plaintiffs were not required to infringe Myriad's claims in order to challenge their constitutional validity.  The existence of the patent, and Myriad's actions in threatening enforcement, were sufficient to establish standing to sue.  (Although it seems likely that the Court would have found standing even under the Federal Circuit's pre-MedImmune "reasonable apprehension of suit" test, the MedImmune decision enabled the District Court to distinguish precedent asserted by Myriad and its Directors challenging standing.)  Using the Supreme Court's "all the circumstances" test, said the lower court, there was an actual "case or controversy" alleged by Plaintiffs that conferred standing; in particular the District Court found that the "cease and desist" letters and other actions by Myriad and its Directors satisfied the "affirmative acts" prong of the test with regard to two of the named Plaintiffs (Drs. Kazazian and Ganguly) and noted prior litigation against alleged infringers in support of its analysis.  The Plaintiff researchers asserted readiness, willingness, and ability to undertake infringing activity was sufficient for the Court to find that the "meaningful preparations for infringing action" prong was also satisfied.

The personal jurisdictional challenge denied by the District Court relates to the UURF Directors, and the Court's analysis was performed under Federal Circuit law and New York State's "long-arm" statute with regard to both general and specific jurisdiction.  The standard is merely that Plaintiffs have made a prima facie showing, and all uncontroverted facts alleged in the complaint are accepted as true, with factual conflicts being resolved in the plaintiff's favor.  The claims asserted by Plaintiffs were not directed towards the Directors personally, but in their capacity as Utah state officials.  The Court found that the UURF Directors had entered into an exclusive licensing agreement authorizing Myriad to market products in New York protected by UURF patents.  "Because the claims in this case are directly related to that license agreement, the Directors have purposefully availed themselves of the privilege of conducting business in New York," satisfying the specific jurisdiction requirement of New York jurisdictional law.  This conclusion was supported, according to the Court, by continued obligations imposed by the license on the Directors, including agreeing (as patent owner) to join any infringement lawsuit brought by Myriad coupled with Myriad's actions seeking to enforce the patents in New York.

Finally, turning to the failure to state a claim basis for Defendants' motion to dismiss, the District Court found that the Plaintiffs allegations of Constitutional violations were sufficient, specifically holding that the complaint satisfied the higher pleadings requirements imposed by the Supreme Court in Ashcroft v. Iqbal.  These allegations go to the heart of the complaint, that the BRCA mutations are not "inventions" but "exist in nature," and that the correlation between the presence of these mutations and an increased risk of cancer are "nothing more than a naturally-occurring phenomenon."  While noting that the standard is a liberal one, and that a complaint should be dismissed on these grounds only if "it appears beyond doubt that the plaintiff can prove no set of facts in support of its claims that would entitle it to the relief it seeks," the Court found that the allegations regarding the First Amendment violations were enough for the Plaintiffs to withstand Defendants' motion to dismiss on these grounds.

This case will not go to trial; summary judgment motions are next on the agenda, with eventual appeal (ultimately to the Supreme Court) no matter what decision the District Court reached in the merits.  While no longer named in the suit, the American Civil Liberties Union (as well as the Public Patent Foundation) is representing the Plaintiffs.  The ACLU has taken up this cause and is unlikely to not see it through.  While the Court's decision today may dash the hopes that the case would just disappear quietly, the decision provides no evidence that either party will prevail, just that the Court believes that the case has the jurisdictional and substantive competence to go forward.  And a possible silver lining in the District Court's decision is that, in keeping the USPTO in the case, the judge left the government with sufficient skin in the game to motivate a spirited defense of gene patenting as appropriate public policy in fulfillment of the Constitutional mandate to "promote the Progress . . . of the Useful Arts."

For additional information regarding this and other related topics, please see:

• "Empirical Research Fails to Support Gene Patenting Ban," October 22, 2009
• "Gene Patenting Debate Continues - Round Two," August 4, 2009
• "The Unwanted Consequences of Banning Gene Patenting," June 16, 2009
• "Falsehoods, Distortions and Outright Lies in the Gene Patenting Debate," June 15, 2009
• "Gene Patenting Debate Continues," June 9, 2009
• "Association for Molecular Pathology v. U.S. Patent and Trademark Office," May 17, 2009
• "Gene Patenting and the Wisdom of Judge Lourie," April 12, 2009
• "Science Article Should Help Allay Gene Patenting Fears," December 17, 2008

Comments

[EG]

Kevin,

I won't address the standing and jurisdictional issues which this judge spent a mind-boggling 80 pages addressing in this opinion. But I remain of the opinion that these constitutional challenges to these gene patents are absolutely unsupportable and frivolous no matter what facts might be presented

And with all due respect to the judge here, he’s turning this case into a farce to continue to allow these constitutional challenges to these gene patents to proceed forward. Since Chakrabarty v. Diamond, SCOTUS has said that life forms may be patentable subject matter. That implies that the genetic material or testing procedures based on that genetic material may also be patentable subject matter. SCOTUS in Chakarabarty saw no “constittuional Issue” in patenting life forms or its genetic material, nor do I. That the judge’s opinion spends a mere 4 pages on the constitutional challenge issue (after spending 80 pages on the standing and jurisdictional issues) just highlights the absurdity of allowing this issue to proceed forward.

Interestingly, there is absolutely no mention of the suffiiciency of this Complaint under 35 USC 101 as to whether these patents cover merely a “product of nature.” That’s the only issue that might have any merit to go forward, at least to a motion for summary judgment. But as I said before this opinion came out, these constitutional challenges have absolutely no merit to go forward.

[Bob Cook-Deegan]

Beautiful summary of a long and detailed (84-page) decision that kept me up until 1 a.m.

Diamond v Chakrabarty does not seem terribly germane here, since the claims are not on a life form, but on DNA sequences and methods of use. Judge Sweet's document tells us nothing of what he thinks about the issues of patent eligibility and patentabiity that will be crucial in this case.

When you said "This case will not go to trial" did you mean "now" or "not yet?" I see Myriad et al. have until Dec 2 to file further motions, ACLU, Pubpat et al. until Dec 9 to respond, and then oral arguments Dec 11. Can you tell us what would typically happen next, and on approx. what time frame? ACLU clearly wants to take this as high as it can in the federal court system, and presumably Myriad will have to do so also. What are the likely steps in that process?

[Kevin E. Noonan]

Dear Bob:

I can see no reason why the parties would go to trial in this case - it will be decided on the briefs by summary judgment. Each party will make their arguments, and there are few material facts that in serious dispute. This is a little like the Rochester case, also decided by summary judgment. In addition, the Federal Circuit encourages summary judgment in appropriate cases, and this one (which is really a policy argument) is ripe for being decided on that basis.

So the parties will file briefs, the court will hear argument (probably by the end of the year) and then decide sometime early next year. No matter what happens, an appeal goes to the CAFC, which will most likely invite amici to file briefs and may even hear the case en banc (why waste time on a panel decision and then go en banc?). Which puts the cert petition sometime by the end of 2010, with the Supreme Court argument coming no earlier than the spring session of the Court (with the fall 2011 session being more likely).

What I think this will do to investment in the biotech sector, just when the US economy is coming out of the recession, should be evident to anyone who reads this blog regularly. The only hope (and it is a faint one) is that the Supreme Court denies cert, which may happen only if the Solicitor General files a strong brief on behalf of gene patenting. The Solicitor's Bilski brief sheds little light on the administration's views in this area; that may become more evident if the Solicitor files a brief regarding the Mayo cert petition. And remember that there only need to be 4 votes on the Court to grant cert, Justices Breyer and Stevens remain on the court, and no one knows the views of the Chief Justice or Justice Sotomayor.

All in all, a fine mess.

Thanks for the comment.

[EG]

"Interestingly, there is absolutely no mention of the suffiiciency of this Complaint under 35 USC 101 as to whether these patents cover merely a “product of nature.” That’s the only issue that might have any merit to go forward, at least to a motion for summary judgment'

Kevin,

Having now reviewed the patents involved, let me correct this statement I made earlier: there is no basis under 35 USC 101 for challenging these patents either. The claims are to isolated genetic material or methods for identifying/screening/detecting. In other words, the patentee isn't simply claiming a "product of nature" (the claimed isolated genetic material doesn't exist in nature).

To put it bluntly, the plaintiff's allegations that these patents cover "products of nature, laws of nature and/or natural phenomena, and abstract ideas or basic human knowledge or thought" are utterly groundless and complete rhetorical nonsense. As far as I'm concerned,this suit is a complete waste of judicial resources. I can only hope that the Federal Cirucit will trounce this opinino when it gets the appeal.