By Kevin E. Noonan --
One of the many questions in the Association for Molecular Pathology v. U.S. Patent and Trademark Office (Myriad) case decided by the panel was whether the plaintiffs had standing to bring a declaratory judgment action in the first place. This is a fundamental question: "Article III of the Constitution limits the judicial power to the adjudication of 'Cases' or 'Controversies.' § 2. We have held that the Declaratory Judgment Act extends 'to controversies which are such in the constitutional sense,'" MedImmune Inc. v. Genentech, Inc., 549 U.S. 764, 777 (2007) (Thomas, J., dissenting), citing Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 240 (1937). The members of the panel agree that there was standing here, but only for one of the named plaintiffs, Dr. Harry Ostrer (and the continuing satisfaction of the standing requirements have been recently called into question; see "Standing in AMP v. USPTO: The Plot Thickens").
The majority opinion by Judge Lourie recited the "history of the conflict" relevant to the standing issue:
Starting in 1996, the University of Pennsylvania's Genetic Diagnostic Laboratory ("GDL"), co-directed by plaintiffs Haig H. Kazazian, Jr., M.D. and Arupa Ganguly, Ph.D., provided BRCA1/2 diagnostic services to women. By 1999, however, accusations by Myriad that GDL's BRCA testing services infringed its patents forced the lab to stop providing such services.
The [cease and desist] letter from Myriad's counsel also indicated that it "has come to Myriad's attention that you are engaged in commercial testing activities that infringe Myriad's patents," and that "[u]nless and until a licensing arrangement is completed . . . you should cease all infringing testing activity." Id. The letter noted, however, that the cease-and-desist notification did not apply to research testing "for the purpose of furthering non-commercial research programs, the results of which are not provided to the patient and for which no money is received from the patient or the patient's insurance." Id.
[Dr.] Kazazian thus informed Dr. Ostrer that GDL would no longer be accepting patient samples for BRCA testing from him or anyone else as a result of the patent infringement assertions made by Myriad. As a result, [Dr.] Ostrer started sending patient samples for BRCA genetic testing to Myriad, who became (and remains today) the only provider of such services in the United States.
During this period, Myriad also initiated several patent infringement suits against entities providing clinical BRCA testing. Myriad filed suit against Oncormed Inc. in 1997 and again in 1998, Myriad Genetics v. Oncormed, Nos. 2:97-cv-922, 2:98-cv-35 (D. Utah), and the University of Pennsylvania in 1998, Myriad Genetics v. Univ. of Pa., No. 2:98-cv-829 (D. Utah). Both lawsuits were later dismissed without prejudice after each defendant agreed to discontinue all allegedly infringing activity.
The Court's opinion also recited several "deficiencies" in the assertion of standing based on other plaintiffs:
None of the plaintiffs besides Drs. Kazazian, Ganguly, and Ostrer, allege that Myriad directed any letters or other communications regarding its patents at them. Rather, the other researchers and medical organization members state simply that knowledge of Myriad's vigorous enforcement of its patent rights against others stopped them from engaging in clinical BRCA genetic testing, although they have the personnel, expertise, and facilities as well as the desire to provide such testing.
The Court then recited controlling precedent regarding declaratory judgment actions from MedImmune:
[T]he dispute must be "definite and concrete, touching the legal relations of parties having adverse legal interests," "real and substantial," and "admi[t] of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts." MedImmune, 549 U.S. at 127 (quoting Aetna Life, 300 U.S. at 240-41).
Moreover, for standing, "the irreducible constitutional minimum of standing contains three elements," citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). "First, the plaintiff must have suffered an injury in fact -- an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical." Id. (internal citations and quotations omitted). "Second, there must be a causal connection between the injury and the conduct complained of–the injury has to be 'fairly . . . trace[able] to the challenged action of the defendant . . . .'" Id. (quoting Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26, 41-42 (1976)). "Third, it must be 'likely,' as opposed to merely 'speculative,' that the injury will be 'redressed by a favorable decision.'" Id. at 561 (quoting Simon, 426 U.S. at 38, 43).
The Federal Circuit applies these standards under Federal Circuit precedent (citing MedImmune, Inc. v. Centocor, Inc., 409 F.3d 1376, 1378 (Fed. Cir. 2005), overruled on other grounds, MedImmune, 549 U.S. at 130-31, to require that, "to establish an injury in fact traceable to the patentee, a declaratory judgment plaintiff must allege both (1) an affirmative act by the patentee related to the enforcement of his patent rights," citing SanDisk Corp. v. STMicroelecs., Inc., 480 F.3d 1372, 1380-81 (Fed. Cir. 2007), and (2) meaningful preparation to conduct potentially infringing activity, citing Cat Tech LLC v. TubeMaster, Inc., 528 F.3d 871, 880 (Fed. Cir. 2008). Applying this standard, the Court ruled that none of the named plaintiffs (except as noted below), had standing to bring the action, including all of the women breast cancer patients and women's groups (Lisbeth Ceriani, Runi Limary, Genae Girard, Patrice Fortune, Vicky Thomason, Kathleen Raker, Breast Cancer Action, and the Boston Women's Health Book Collective) and all of the various medical associations (the Association for Molecular Pathology, the American College of Medical Genetics, the American Society for Clinical Pathology, and the College of American Pathologists), and some of the named physicians and researchers (Wendy Chung, M.D., David Ledbetter, Ph.D., Stephen Warren, Ph.D., Ellen Matloff, M.S., and Elsa Reich, M.S.).
With regard to Drs. Kazazian, Ganguly, and Ostrer, the Court found distinctions between Drs. Kazazian and Ganguly, who the Court decided do not have standing, and Dr. Ostrer, who the Court decided does have standing. These differences all surround whether the physicians have a present intent to practice the claimed methods using the claimed compositions upon their invalidation by the Court. The District Court had based its standing decision on the "totality of the circumstances" including that (all of) the researchers were "ready, willing and able" to practice the claimed invention and would "consider" performing BRCA genetic testing if the patents were invalidated. In its opinion, the Federal Circuit held that Dr. Kazazian does not have the required intent; the record reflects that he needs to "decide[] to resume BRCA testing" (at J.A. 2852), and that Dr. Ganguly similarly states that he "would immediately consider resuming BRCA testing in my laboratory" (at J.A. 2892) if the patents were invalidated. Because "[t]hese ''some day' intentions' are insufficient to support an 'actual or imminent' injury for standing 'without . . . any specification of when the someday will be,'" Lujan, 504 U.S. at 564, the Court held that Drs. Kazazian and Ganguly did not have standing.
The opinion contrasts these equivocal statements with Dr. Ostrer, who states on the record that his laboratory has the personnel, facilities, and expertise necessary to undertake clinical BRCA testing and "emphatically states that his lab 'would immediately begin to perform BRCA1/2-related genetic testing upon invalidation of the Myriad patents'" (at J.A. 2936-38):
Under the facts alleged in this case, we conclude that one Plaintiff, Dr. Ostrer, has established standing to maintain this declaratory judgment suit. All Plaintiffs claim standing under the Declaratory Judgment Act based on the same alleged injury: that they cannot undertake the BRCA-related activities that they desire because of Myriad's enforcement of its patent rights covering BRCA1/2. Only three plaintiffs, however, allege an injury traceable to Myriad; only Drs. Kazazian, Ganguly, and Ostrer allege affirmative patent enforcement actions directed at them by Myriad. Of these three, Dr. Ostrer clearly alleges a sufficiently real and imminent injury because he alleges an intention to actually and immediately engage in allegedly infringing BRCA-related activities.
In rendering this decision, the Court voiced its opinion that "Medimmune did not change the 'bedrock rule that a case or controversy must be based on a real and immediate injury or threat of future injury that is caused by the defendants,'" citing Prasco, LLC v. Medicis Pharm. Corp., 537 F.3d 1329, 1339 (Fed. Cir. 2008) (italics in original). Standing arose when "Myriad demanded a royalty under its patents from Dr. Ostrer based on his clinical BRCA-related activities." This demand constituted 1) a letter proposing a license for Ostrer's testing activities; 2) Dr. Ostrer's awareness of Myriad's infringement activities against others; and 3) Dr. Kazazian refusing to perform testing for him, based on Myriad's objections. This created an adverse legal position between Dr. Ostrer and Myriad with regard to the parties' rights and obligations, according to the Court, thus satisfying this prong of the test.
Also, the opinion recognized a concrete and actual injury traceable to Myriad's assertion of its patent rights. Dr. Oster was seeking to do something specific -- BRCA testing -- for which Myriad has demanded a license; Dr. Ostrer not only appears to have the resources and expertise to perform BRCA genetic testing but he "states unequivocally that he will immediately begin such testing" (in contrast to Drs. Kazazian and Ganguly).
The Court rejected Myriad's argument that there were no "affirmative acts" against these plaintiffs except for 10-year-old cease-and-desist letters and litigation/licensing activities against 3rd parties, and further rejected Myriad's characterization of plaintiffs' position as merely "subjective fear of suit, arising from rumor and innuendo in the research community." Instead, the Court held that, despite the passage of time, "Myriad and Ostrer have not altered their respective positions":
Ostrer, still laboring under Myriad's threat of infringement liability, has not attempted to provide BRCA testing; yet, as a researcher, he remains in the same position with respect to his ability and his desire to provide BRCA testing as in the late 1990s. Furthermore, nothing in the record suggests that any researcher or institution has successfully attempted to compete with Myriad, or that Myriad has in any way changed its position with regard to its patent rights. Just as active enforcement of one's patent rights against others can maintain a real and immediate controversy despite the passage of time, see Micron, 518 F.3d at 901, so too can the successful assertion of such rights when the relevant circumstances remain unchanged.
Similarly, the Court rejected Myriad's argument that the claims were stale, because the effects of Myriad's assertion of its patent rights had not "dissipate[d]" or "changed despite the passage of time." "Thus, consistent with the purpose of the Declaratory Judgment Act, Ostrer need not risk liability and treble damages for patent infringement before seeking a declaration of his contested legal rights. See MedImmune, 549 U.S. at 134."
The Court also rejected Myriad's redressibility argument (made first in Myriad's reply brief but considered due to the importance of subject matter jurisdiction to the Court's institutional competence to hear the case under the Constitution) because standing does not require certainty for jurisdiction to lie. The Court noted that Myriad did not identify any specific claim not challenged by plaintiffs that would continue to subject Dr. Ostrer to patent infringement liability should the Court invalidate Myriad's claims, and plaintiffs' counsel asserted at oral argument that there were ways to perform the testing that would not infringe the unasserted claims.
Dr. Ostrer's standing may become the subject of a dispute that is resolved at rehearing (by the panel or en banc). However, and having an importance far beyond gene patents, the Court's decision to reverse the District Court's broad finding of standing is significant because it closes the possible floodgates of litigation that might have opened had the other plaintiffs been determined to have standing. In doing so, the Court was specific and clear in its view that standing to bring a declaratory judgment action still has limits, even in the face of the Supreme Court's expansion of jurisdiction under MedImmune:
Accordingly, although we affirm the district court's decision to exercise declaratory judgment jurisdiction, we affirm on much narrower grounds. The district court failed to limit its jurisdictional holding to affirmative acts by the patentee directed at specific Plaintiffs, see San-Disk, 480 F.3d at 1380-81, erroneously holding all the Plaintiffs had standing based on "the widespread understanding that one may engage in BRCA1/2 testing at the risk of being sued for infringement liability by Myriad." DJ Op., at 390. We disagree, and thus we reverse the district court's holding that the various plaintiffs other than Dr. Ostrer have standing to maintain this declaratory judgment action. Simply disagreeing with the existence of a patent or even suffering an attenuated, non-proximate, effect from the existence of a patent does not meet the Supreme Court's requirement for an adverse legal controversy of sufficient immediacy and reality to warrant the issuance of a declaratory judgment. See MedImmune, 549 U.S. at 127.
Association for Molecular Pathology v. U.S. Patent and Trademark Office (Fed. Cir. 2011)
Panel: Circuit Judges Lourie, Bryson, and Moore
Opinion for the court by Circuit Judge Lourie; opinion concurring in part by Circuit Judge Moore; opinion concurring in part and dissenting in part by Circuit Judge Bryson
Kevin,
I can live with the view of the entire panel on the standing issue. A huge "kick in the gut" for the ACLU's PR-inflated and disingenuous "broad standing" view.
Posted by: EG | August 05, 2011 at 08:22 AM