The MTTLR Blog

The United States Court of Appeals for the Federal Circuit (CAFC), on October 30, 2008, decided In re Bilski (545 F.3d 943), which had serious implications for the future of business method patents. The eleven members of that court found that a method of hedging risk in the field of commodities trading was ineligible subject matter and soundly rejected the broad “useful, concrete and tangible result” test of State Street Bank and Trust Company v. Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998). Instead, the nine judges of the majority opinion adopted the “machine or transformation test” as the exclusive test to determine if a claimed invention qualifies as a “process” under 35 U.S.C. § 101.  Under this test, a claimed process qualifies only if it: “(1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.” (545 F.3d at 954). Under this test, the vast majority of business patents were in danger of being disqualified.

On June 28, 2010, the Supreme Court of the United States handed down Bilski v. Kappos (08-964), affirming the CAFC’s decision. The Court, however, rejected the CAFC’s assertion that the “machine or transformation” test is the sole test for determining if an invention is an eligible process under § 101. The Court, citing concerns that the “machine or transformation” test causes uncertainty in software and other high-tech patents, determined that although the test is “a useful and important clue, an investigative tool, for determining whether some claimed inventions are processes under §101”, but the CAFC was free to develop “other limiting criteria that further the purposes of the Patent Act and are not inconsistent with its text.” The majority opinion, written by Justice Kennedy, declined to “define further what constitutes a patentable process, beyond pointing to the definition of that term provided in § 100(b) and looking to the guideposts in Benson, Flook, and Diehr. “

Thus, the majority decision in Bilski is remarkably unhelpful in determining the bounds of § 101 eligibility. The court specifically states that business method patents are eligible subject matter, but offers no guidelines beyond referring to thirty year old precedents – precedents decided before business method patents were seriously considered. Kennedy writes that there is a need to protect innovation relating to the “information age”, but only states that the bar for eligibility needs to be high enough to prevent the patent office from being flooded with claims that would chill “creative endeavor and dynamic change.” Yet, while the court endorses the “machine or transformation test”, it very noticeably refrains from commenting on the validity of the State Street Bank “useful, concrete, and tangible” test.

Despite the inscrutable majority opinion, hints as to the future of the State Street Bank “useful, concrete, and tangible” test can be found in the two concurring opinions. Justice Stevens’ concurrence, joined by Breyer, Ginsberg, and Sotomeyer, would have categorically barred all business patents. It is very likely that Stevens could not garner the necessary support from Justice Scalia to make such a broad shift in patent law. Scalia did join in a short, separate concurrence written by Breyer that rejects the “useful, concrete, and tangible” test. Thus, at least five members of the Supreme Court view the State Street Bank test unfavorably.

The failure of the court to make any real distinctions on the eligibility of business method patents may spur congress into action. Kennedy’s opinion relied on 35 U.S.C. § 273, which grants a defense of prior use against business method infringement claims, to come to the conclusion that Congress “left open the possibility of some business method patents.” However, Senator Leahy, chairman of the judiciary committee, recently posted a short note on his website criticizing Bilski for “needlessly [leaving] the door open for business method patents to issue in the future” and stating that it was now “time for Congress to act.”

While the CAFC Bilski decision in 2008 may have temporarily closed the door on business method patents, it would be a fallacy to think that this Supreme Court decision opens the door wide again. A majority of the Justices on the Court, nearly all of the CAFC judges, and important members of congress are highly skeptical of business method patents.  Furthermore, by relying on a quirk of statutory interpretation to preserve the technical validity of business methods instead of making a substantial argument for or against, the Court is making it clear that they lack the will to act decisively on the matter.

Under State Street Bank rule, most business methods were eligible for patentability. After the CAFC Bilski decision, the vast majority of business methods were not eligible. Now, in the wake of Bilski v Kappos, there is only uncertainty. Those seeking to obtain patents on business methods will need to proceed cautiously and with full awareness of all developments in the area.

The D.C. Circuit Court of Appeals recently held that the FCC was not authorized to prohibit Comcast from interfering with P2P networking applications, erecting what appears to be a large roadblock on the FCC’s path to net neutrality. The court held that the FCC’s ancillary authority under Section 4(i) of the Communications Act of 1934 did not extend it sufficient power to regulate broadband services absent explicit statutory goals.

The FCC had largely tied its own hands in the case: its designation of broadband as an ‘information service’ under the Bush administration was granted Chevron deference by the Supreme Court in the 2005 Brand X case, leaving it unregulated in an effort to promote investment. The agency simply adopted four principles of net freedom that they expected broadband companies to abide by and went home for dinner. However, with competition in broadband access arguably dwindling rather than burgeoning, public interest groups like the Open Internet Coalition are seeking increased regulation to protect consumer choice, and the FCC wants to lead the way.

As it turns out, the Comcast ruling may not be the big obstacle it first appears to be. The Brand X majority openly accepted the FCC interpretation over the Ninth Circuit’s version, stating that only judicial precedent holding a statute unambiguous can displace agency construction. In a dissent, Justice Scalia argued that the Court was ceding far too much by allowing the FCC to define ambiguous statutory terms and then flip its definition to suit its fancy in future disputes, a fear the majority seemingly shrugged off.  Here is a hypothetical presented by Justice Scalia in his Brand X dissent:

Imagine the following sequence of events: FCC action is challenged as ultra vires under the governing statute; the litigation reaches all the way to the Supreme Court of the United States. The Solicitor General sets forth the FCC’s official position (approved by the Commission) regarding interpretation of the statute. Applying Mead, however, the Court denies the agency position Chevron deference, finds that the best interpretation of the statute contradicts the agency’s position, and holds the challenged agency action unlawful. The agency promptly conducts a rulemaking, and adopts a rule that comports with its earlier position–in effect disagreeing with the Supreme Court concerning the best interpretation of the statute. According to today’s opinion, the agency is thereupon free to take the action that the Supreme Court found unlawful. 545 U.S. 967, 1016.

The FCC would appear, at least from Justice Scalia’s viewpoint, to have a semantic out. Michigan Law Professor Susan Crawford argues that the agency should simply relabel high-speed internet services as ‘telecommunications services’, which are subject to regulation under Title II of the Communications Act. Simple enough, no? Not according to one blogger, who analyzes the proposed methodology and concludes that it would open a Pandora’s Box. In fact, Crawford herself recognized difficulty with this strategy in a 2006 article for Berkeley Tech Law Journal:

Congress should act to cabin and explicate the scope of the Commission’s authority to regulate the internet. The difficult and important question of how to govern the internet should be answered explicitly rather than through formalistic re-characterization of internet services by an independent agency. 21 Berkeley Tech. L.J. 873, 931.

In contradicting her recent Op-Ed piece, she highlights an alternative route the FCC can take: ask Congress to redevelop FCC authority and provide more logical regulatory boundaries in light of the dramatic advances in communications technology over the past several decades. Congressional action would add legitimacy to the process and allow for the formation of a structural foundation that represents the importance of internet functionality in the modern age. In the meantime, the National Broadband Plan is moving forward and the FCC plans to launch more than 60 proceedings within the year, authorized or otherwise.

In May 2008, Walter Swift was exonerated after serving 26 years in prison for a rape he did not commit.  Mr. Swift’s case, like many where an innocent person is convicted, didn’t have just a single error.  One problem was with the identification that not even the investigating detective believed.  Another problem was that forensic evidence that should have cleared Mr. Swift was withheld.

Before DNA became the standard forensic test for identifying the source of bodily fluids at crime scenes, forensic analysts tested for blood type antigens.  Depending on the antigens detected, the source of the bodily fluid could be identified as type A, B, AB, or O.  If the test failed to show the presence of any antigens, the bodily fluid would be identified as coming from a “non-secretor” to denote an individual who doesn’t secrete enough antigens to be detected by the forensic test.  Approximately 20% of the population is found to be “non-secretors.”  (For more details on this testing procedure, see Kathleen E. Boorman et al, Blood Group Serology (1988); Ivor Dunsford & Christopher Bowley, Techniques in Blood Grouping (1967); David Harley, Medico-Legal Blood Group Determination (1944); Leon N. Sussman, Blood Grouping Tests (1968).)

Although Mr. Swift’s blood type did not match the blood type found in fluids at the scene, he was tested by forensic analysts and found to be a non-secretor.  (It was withheld that prior testing found that Mr. Swift WAS a secretor, and therefore he could not be a match for the bodily fluids found at the scene.)  Mr. Swift’s purported non-secretor status allowed the prosecution to explain the absence of Mr. Swift’s antigens in the bodily fluids found at the crime scene.  Recent retesting of Mr. Swift found that he was in fact a secretor, and because this meant Mr. Swift could not have left the bodily fluids found at the scene, the court vacated his conviction.

I recently had the pleasure of speaking with Mr. Swift about his case.  While in prison Mr. Swift was required to attend group counseling.  During the course of this counseling, the inmates talked about their cases and Mr. Swift was startled to learn that 11 out of 15 (73%) members of the group were convicted as non-secretors!  It is worth noting that while secretor status is genetically controlled, without laboratory testing an individual would have no way of knowing or acting based on their secretor status.  Given this fact, the variation between the percentages of non-secretors in this group (73%) from the population (20%) is startling.  This variation can this be explained by both inadvertent mistakes and intentional malfeasance in the testing,  but regardless of the source of the error, this variation suggests a problem with the forensic science used against accused rapists (among others) in Michigan.

It is worth noting that Mr. Swift is not the only individual where recent retesting has proven that an individual convicted as a non-secretor is in fact a secretor.  After spending 23 years in prison, recent retesting has proven that Karl Vinson is a secretor, contrary to the testing showing him to be a non-secretor that was used to secure his conviction.  A motion to set aside Mr. Vinson’s conviction is currently pending in Wayne County Circuit Court.  Mr. Swift and Mr. Vinson are both notable for never giving up the search for justice.  How many others were not so persistent and remain in prison for crimes they did not commit?

When errors were identified from the Detroit Police Department Firearms Lab, District Attorney Kym Worthy started an immediate audit of trial convictions and guilty pleas that relied upon the crime lab’s findings.  The same must now be done for those convicted as “non-secretors” within the state of Michigan.  The prosecutors fought hard in search of justice for the victims of street crimes, and it is time for them to search for justice for those who have been victimized by the justice system itself.

I posted a few weeks ago about the Supreme Court’s decision to temporarily stay YouTube streaming in the Proposition 8 trial.  As expected, the Supreme Court later extended its temporary stay into a permanent block of the proposed stream.  The Northern District of California had to change its rules to allow for the streamed video, and the Supreme Court held that it did not properly followed the guidelines for changing its rules.

Instead of taking the ruling lying down, filmmaker and journalist John Ireland decided to take the law into his own hands by creating a re-enactment of the trial.  Ireland is filming the project with professional actors who are volunteering their time.  The episodes can be found at MarriageTrial.com or YouTube.  MarriageTrial.com also contains a wealth of other information related to the case, such as a link to the day-by-day trial transcripts.  Currently, the first episode is complete and ready for viewing.

In May 2008, the California Supreme Court held that the Equal Protection Clause of the California Constitution required same-sex marriages be recognized. However, the voters passed Proposition 8 just a few months later, redefining marriage as only between a man and woman. Last May, after a second round in the state courts, the California Supreme Court upheld the state constitutionality of Proposition 8. The court’s ruling eliminated the right of same-sex couples to marry, but the court rejected the nullification of the marriages of couples that had already received marriage licenses.

Today marked the next phase of the battle, a challenge to Proposition 8 under the United States Constitution. The plaintiffs are attempting to show that the sponsors of Proposition 8 unconstitutionally proposed the amendment with discriminatory intent.  The plaintiffs hope to make such a showing by placing the sponsors on the witness stand.

Last Wednesday, Chief U.S. District Judge Vaughn Walker in San Francisco ordered a delayed YouTube stream of the trial. However, the Supreme Court has issued a stay for the YouTube streaming (streaming to other rooms within the courthouse will continue).  According to the stay, it will expire on Wednesday at 4PM unless extended. The stay contained no reasoning as to why it was ordered, however, one would think that the court worried about witness harassment. Justice Breyer, while pleased at the limited duration of the stay, dissented by cursorily arguing that delayed video streaming would not cause irreparable harm.

The topic of music royalties has come up time and again in 2009, from the introduction of the Performance Rights Act, currently making its way through Congress, to various digital performance royalty rate disputes, from Internet broadcasts to satellite radio.

To end the year in music royalties and law, and to help open up 2010, on the week of December 21, 2009 the owners of about 1,200 “local” television stations filed a lawsuit against performing rights organization Broadcast Music, Inc. (BMI) seeking “lower broadcast fees to reflect declining television viewership and advertising revenue,” according to a report from music industry news publication Billboard.  The suit, WPIX v. BMI, was filed in U.S. District Court, Southern District of New York.

The plaintiffs, who have periodically renegotiated the rates with BMI, now state that a federal judge should “set reasonable fees and terms” because of a decline in television viewership and advertising revenue, according to Businessweek.  According to the Businessweek article, the “television industry will end the year with lower-than- expected revenue of $15.6 billion, a 22.4 percent decline from 2008.”

The Supreme Court granted certiorari to City of Ontario v. Quon on December 14, 2009 (No. 08-1332).

Quon was a SWAT member who had sent and received text messages on his work-issued pager. While the city’s written policy was that employees should have no expectation of privacy when using their work network, the supervising lieutenant who had issued the pagers had an informal policy that employees could use them for personal communications and their messages would not be inspected as long as they personally paid for any overage fees. However, when the higher-ups decided to audit the texts to determine if they should increase the texting allotments with the outside service provider, they read transcripts of Quon’s sexually explicit messages to his wife and someone it appeared he was having an affair with.

Quon, his wife, his alleged girlfriend, and another employee sued the city, claiming Fourth Amendment violations. The Ninth Circuit found that the employees had a reasonable expectation of privacy in the content of their text messages because the formal policy was in effect overridden by the supervisor’s informal one. It also determined that the search was unreasonable because there were less intrusive ways to investigate the employees’ personal usage levels.

The main issue is whether Quon, as a public employee operating under this informal policy, is protected by the Fourth Amendment against warrantless searches of the content of his text messages because of a reasonable expectation of privacy. The other issue is whether the sender of a message to a government employee on the employee’s work device (i.e., Quon’s wife) has an a reasonable expectation of privacy from employer review.

In O’Connor v. Ortega, 480 U.S. 709 (1987), the Supreme Court dealt with similar issues of employees’ right to privacy in the workplace. The plurality opinion, written by Justice O’Connor, found that there was a reasonable expectation of privacy in the public workplace, but also that a balancing test of “the employee’s legitimate expectation of privacy again the government’s need for supervision, control, and the efficient operation of the workplace” should be applied to determine whether a search is reasonable. Scalia concurred with a broader take on privacy. While the justices couldn’t all agree on whether the employee had a reasonable expectation of privacy in his office, all of them agreed that he had a reasonable expectation of privacy in his desk and file cabinets.

How to apply O’Connor’s holding to electronic communications is one of many questions courts face with our evolving use of technology in the Internet age. Some courts still try to analogize this to wire-taps on phones; anyone with a BlackBerry would disagree. Laptops, cellphones, pagers, and other digital devices are used so ubiquitously that today the line between personal and non-personal communications is blurred.

Will the Court be as divided as in O’Connor? The Court has changed since then, and of the five for public employee right to privacy, only Scalia remains. It’s expected that Sotomayor will side with the employer in Quon. She previously ruled in a 2001 case that a workplace search of an employee’s computer was reasonable, balancing the “modest intrusion” with the “need to investigate allegations of improper conduct.”

While whatever the Court decides here will only be binding on government employers (who would be subject to Fourth Amendment restrictions), it is very likely that lower courts will be applying this to private employers as well.

[ Washington Post: Supreme Court will decide whether employees' text messages are private ]

[ Wall Street Journal: Supreme Court to Review Employer Access to Text Messages ]

[ Double X: No more Sexting with Sotomayor on the Court ]

[ Oyez case summary of O'Connor v. Ortega ]

When AT&T sued Verizon Wireless for its “There’s A Map for That” advertising campaign,

AT&T could have brought a dilution claim against Verizon’s use of the slogan, “There’s a map for that,” which is very similar to AT&T’s slogan, “There’s an app for that,” featured in its own iPhone commercials.

In bringing a dilution claim, AT&T could have argued that Verizon’s use of “There’s a map for that” weakened the effect of AT&T’s slogan because consumers would no longer think exclusively of AT&T when hearing the phrase. It seems like AT&T would have had a good argument for dilution, but instead, it sued Verizon for false advertisement under the Lanham Act, federal trademark law.

The ads themselves feature two maps comparing AT&T’s 3G network coverage area to Verizon’s superior 3G coverage area. AT&T asked the court to stop Verizon from running the ads because they could mislead customers into thinking AT&T doesn’t offer any coverage in areas where its 3G network isn’t available. (In reality, customers can still make calls and access the Internet using AT&T’s slower EDGE or GPR networks, even where there isn’t 3G network coverage.) Verizon, on the other hand, argued that the ads simply point out that AT&T hasn’t invested enough in upgrading its network to handle new smartphone activity from the popular Apple iPhone.

In its response to AT&T’s complaint, Verizon wrote: “AT&T did not file this lawsuit because Verizon’s ‘There’s a Map for That’ advertisements are untrue; AT&T sued because Verizon’s ads are true and the truth hurts.” Verizon also pointed out that the Lanham Act requires AT&T to show actual proof that the ads are misleading consumers because First Amendment free speech is at stake in the suit. Verizon continues:

As to four of the five challenged ads, AT&T has presented no evidence of consumer deception. This alone is a sufficient basis to deny AT&T’s motion as to these ads. As to the one ad . . . AT&T commissioned a consumer survey . . . . But this survey is riddled with errors.

Apparently the court agreed. Judge Timothy C. Batton, a federal judge in Atlanta, declined to grant AT&T a preliminary inunction that would temporarily stop Verizon from running the ads. He stated that he didn’t believe AT&T would succeed in its claim based on the evidence submitted. The judge said:

I think that a person with a skeptical bent of mind might call Verizon’s ads sneaky . . . . I think a more sanguine view is that they are simply clever. Either way, however, they are literally true. And the Court holds that AT&T has failed to carry its burden of showing that they are nevertheless misleading.

Immediately following the court’s ruling, AT&T indicated that it would continue with the suit despite the initial loss, but it has since decided to drop the claim.

Perhaps AT&T realized that after its own expansive advertising campaign touting its network as the “fastest 3G network” (implicitly comparing it to Verizon’s coverage and other secondary competitors’ — such as Sprint and T-Mobile), it isn’t likely to garner much sympathy in its claims against Verizon. The bottom line is that Verizon’s maps of AT&T’s 3G network are accurate. If AT&T wants to say its 3G network is faster than Verizon’s, why shouldn’t Verizon be able to say its own coverage is more expansive than AT&T’s? Maybe AT&T realized that it should stop sinking its money into law suits and instead use it to fill those gaps in its coverage. Federal trademark law is meant to protect against false advertising, but this should promote fair competition, not hinder it. Therefore, Verizon’s ads, if accurate, should encourage AT&T to improve its service. This type of competition, in a free market, will hopefully produce the best quality products at the lowest prices for consumers.

A three judge panel of the Court of Appeals for the Federal Circuit recently upheld the injunction against Microsoft that goes into effect January 11, 2010.  The panel also upheld the nearly $300 million in damages from the U.S. District Court for the Eastern District of Texas.  The injunction will bar Microsoft from selling versions of Word that contain the ability to open documents with “custom XML.”  The injunction does not affect any versions of Word sold before January 11, 2010, but does prevent Microsoft from “instructing or assisting new customers in the custom XML editor’s use.”  Technical support can still be offered by Microsoft from versions of Word sold before January 11.  Regardless, Microsoft has said that it is ready to remove the infringing feature from copies of Word and Office that will be sold after January 11.  The upcoming 2010 versions of Word and Office should not have the infringing feature, and thus should be unaffected by the injunction.

The only changes to the injunction by the panel were a modification of the effective date of the injunction, from the original 60 days (stayed during appeal) to 5 months from the original issue date of the injunction.  This was because the panel determined that the district court erred in setting a time frame of 60 days, when the only evidence concerning time to remove the infringing XML functions from Word was “at least” 5 months.  As Microsoft has said, it initiated steps in August to remove the infringing feature, so the change in the effective date of the injunction should have little practical impact.

In regard to the damages, most significant is the $200 million damages for royalties.  The panel even admitted that, “Given the opportunity to review the sufficiency of the evidence, we could have considered whether the $ 200 million damages award was “grossly excessive or monstrous” in light of Word’s retail price and the licensing fees Microsoft paid for other patents.”  The opinion makes it sound as if the panel, if able to review sufficiency, would have significantly reduced the royalty damages.  This is because the baseline royalty rate used by i4i’s expert witness to calculate damages was $98, when certain Word products could sell for as low as $97.  On a sufficiency review, it seems entirely possible that the baseline royalty used was grossly excessive and monstrous, since it could be greater than the entire selling price of a single copy of Word.  Further, Microsoft told the court the typical license it paid to use a patent was in the $1 – $5 million range, something completely out of line with the i4i calculations of $200 million.  But the panel stated it was unable to review the sufficiency of the evidence, as Microsoft had failed to file a pre-verdict judgment as a matter of law motion, restraining the panel’s review to the standard of a clear showing of excessiveness.  The panel even seemed to question Microsoft’s failure to file a pre-verdict JMOL motion as to the sufficiency of the evidence for the damages, stating, “Had Microsoft filed a pre-verdict JMOL, it is true that the outcome might have been different” because then the panel could decide “whether there was a sufficient evidentiary basis for the jury’s damages award.”  Given the panel’s statements, Microsoft might have blown its chance to have the damages significantly reduced on appeal by deciding not to file a JMOL motion for sufficiency of the evidence as to damages.

It also seems as if i4i’s decision to file in Texas has paid off, after gaining some measure of approval from the panel of the Court of Appeals for the Federal Circuit.  I don’t know if I would go so far as to call the panel’s opinion “a complete and utter vindication of the judgment,” given the statements of the panel regarding the royalty calculation and the limited level of review available for the findings of the jury, but it does give some credence to the inability of an appeal to alter the jury verdict.  While Microsoft’s loss on appeal may not make the district court’s decision completely right, it may well signal the verdict’s irreversibility.  The Federal Circuit may well refuse a request for a full hearing, as the decision clearly sets out the limits of appellate review in this case.

The size of the verdict against Microsoft makes you wonder why they didn’t just license the patent from i4i back in 2000, when Microsoft was aware of i4i’s presence in the market, or even at the start of litigation in 2007.  At this point, there appear to be very few reasons for i4i to consider talking with Microsoft about licenses or settlement, as i4i looks to have a winning case and a firm hold on nearly $300 million from Microsoft.

On May 12, 2009, the ACLU and the Public Patent Foundation filed a lawsuit on behalf of four scientific organizations – the Association for Medical Pathology, the American College of Medical Genetics, the American Society for Clinical Pathology and the College of American Pathologists challenging the constitutionality of USPTO’s grant of gene patents of the BRCA 1 and BRCA 2 gene sequences. The defendants include the US Patent and Trademark Office, directors of the University of Utah Research  Foundation and Myriad Genetics and Laboratories, a for-profit organization which is a co-owner of one of the patents-in-suit and holds exclusive licenses for the remaining ones.

The lawsuit, Association for Molecular Pathology, et al. v. United States Patent and Trademark Office, et al. reopens the age old debate on patentability of human genetic material, but unlike other federal circuit cases which attacked the breadth and vast scope of rights granted to the holders of these patents, it challenges the very right to even hold such patents.

This ‘frontal attack‘ approach of ACLU is especially daring considering that almost 20% of the human genome is currently patented. But as far as choosing a candidate and the timing of this lawsuit, the raging debate over healthcare costs combined with a high visibility disease such as breast cancer definitely work in the plaintiff’s favor.

The National Cancer Institute reports that women in the general population have about a 12% lifetime risk of developing breast cancer, whereas women carrying the mutated BRCA gene face a five times larger risk – almost 60%. Their chances of developing ovarian cancer is more than ten times that of the average population. The cancers these women develop are also more aggressive and likely to metastisize rapidly. Prevention, therefore, is vital for survival odds and options such as prophylactic surgery or chemoprevention are exercised by patients. Of course, before preventative treatment can begin, a genetic test must be conducted to confirm that the patient is indeed a carrier of the mutation. This is where Myriad comes in – as the holder of the exclusive licenses, it is the sole clinical provider of the full sequencing of the BRCA genes in the US. These tests, which run upwards of $3000 may not be covered by insurance. Perhaps more than this, what has really gotten the medical and scientific communities’ back up has been Myriad’s insistence that ONLY Myriad’s labs have the right to conduct any ‘commercial’ tests but Myriad’s definition of “commercial” has included sending cease-and-desist orders to University laboratories (researchers at UPenn, Yale and Georgetown being a few).

And it is perhaps this denying of information to researchers that could potentially lead to the development of newer, better tests which has lead to ACLU’s bold strategy. The defendants moved to dismiss the case based on three grounds – (1) that the court lacked subject matter jurisdiction over the Plaintiff’s claims; (2) that the court lacked personal jurisdiction over the UURF and (3) that the plaintiff’s failed to sufficiently plead a claim. In his opinion, District Judge Robert Sweet allowed the Plaintiff’s claim against the USPTO to meet the ‘redressability requirement saying that,

Included in this prayer for relief is a request that the Court declare unconstitutional the USPTO’s policies and practices with respect to the challenged claims and similar classes of claims. Granting Plaintiff’s request for relief would serve to render the claims-at-issue definitionally [sic] invalid. As a result, the Plaintiffs would be allowed to engage in conduct currently prohibited by Myriad’s patents, and the alleged injuries would be redressed.

Considering that the USPTO’s policies regarding the grant of patents related to human genes have been upheld in court long enough to generate thousands of patents covering 20% of the human genome, it is hard to decide which is more more surprising: that an unconstitutionality claim against these policies has been filed so late in the day or that it has survived dismissal on grounds of failure to state a claim.

Does the lawsuit’s survival in court despite a long history of patentability of biological material hail the end of theDiamond v. Chakraborty era? Are the public policy concerns and the crushing weight of sky-rocketing healthcare costs making it imperative that the proliferation of commercialization of healthcare related innovation be curbed? If so, what of other such gene patents in existence and the businesses built around them? A sweeping judgment against the policies of the USPTO as applied to gene patents might well prove economically detrimental to the biotechnology industry as investors would scramble to withdraw support from these risky ventures which are entirely reliant on their patent portfolios to provide any measure of economic return. Broad availability of research could well lead to a ‘problem of the commons’ that because everyone has access to the technology, no one would want to invest further to develop clinical applications of the same. On the other hand there are tests which have been commodified (such as X-Rays and MRIs) and still companies continue to build equipment to conduct these tests and seem to make adequate profit to boot. Whether a long due overhaul of inadvisable patent policy or an improper flaunting of precedent, this case raises critical questions which need addressing in order for the biotech industry to stand on solid ground