Wednesday, March 22, 2006
Patentability of Scientific Phenomena [US Supreme Court]
United States Supreme Court justices appeared reluctant Tuesday to decide a key patent law case in a way that would, as one justice put it, establish "monopolies in this country beyond belief" over naturally occurring phenomena.
Justice Stephen Breyer expressed that concern during oral arguments in Laboratory Corp. of America v. Metabolite, a dispute that tests the scope of patentability. Other justices indicated sympathy with the solicitor general's view that the case should be sent back to lower courts for further review.
The case could help resolve a festering debate in patent law over whether a basic scientific phenomenon can be patented -- and, by extension, whether business strategies or other less tangible creations can also be patented.
In another business case on Tuesday, the high court ruled that the federal Securities Litigation Uniform Standards Act of 1998 pre-empts state securities fraud class action litigation.
The 8-0 ruling in Merrill Lynch, Pierce, Fenner & Smith v. Dabit reversed a ruling by the 2nd U.S. Circuit Court of Appeals and was quickly applauded by business advocates. "This ruling shuts the door on clever tactics used by plaintiffs lawyers to circumvent Congress' intent to limit securities class actions," said Robin Conrad, vice president of the National Chamber Litigation Center.
In the Metabolite case, names of inventors, including Samuel F.B. Morse and Alexander Graham Bell, were invoked during a vigorous debate that indicated justices have heard the concerns of commentators who fear that too many ill-defined patents are being granted for inventions better described as discoveries of nature.
"What was made by man here?" Justice Antonin Scalia asked repeatedly, referring to the Metabolite patent at issue in the case. The patent is for a test that signals serious vitamin B deficiencies in patients by measuring levels of homocysteine, an amino acid, in body fluids. But the patent also covers the basic correlation in nature between elevated levels of homocysteine and the vitamin B deficiency that makes the test effective.
"The inventive spark" that made and exploited the correlation was the response of Metabolite's lawyer, Gibson Dunn & Crutcher partner Miguel Estrada.
But Jonathan Franklin, lawyer for LabCorp, which challenged the patent, said that if Metabolite's patent is upheld, then "Einstein could have patented E equals mc squared." By patenting the correlation that makes the vitamin-deficiency test work, Franklin said, Metabolite has "pre-emptive sweep" over all other tests, past and future, that draw conclusions from blood tests. Physicians who draw similar correlations in their work would also be infringers, Franklin suggested.
Franklin is a partner at Hogan & Hartson, the former employer of Chief Justice John Roberts Jr. Because of that connection, apparently, Roberts recused himself in the case and left the courtroom as the argument began.
Scientists patented the test for detecting vitamin B deficiencies in 1986. Metabolite sublicensed the patent to LabCorp, which performed the widely used test. But in 1998, LabCorp began using a different method for measuring homocysteine and stopped paying royalties to Metabolite. Metabolite sued, claiming patent infringement, and a federal district court jury in Colorado agreed. LabCorp was fined and enjoined from using any homocysteine test.
The U.S. Court of Appeals for the Federal Circuit affirmed, finding that the patent was infringed whenever a physician made the association between elevated homocysteine levels and vitamin deficiency.
In its appeal to the high court, LabCorp said that as construed by the Federal Circuit, the patent gave Metabolite exclusive rights over "a basic scientific fact," akin to the laws of gravity. Metabolite counters that the patent is valid and properly drawn.
The case has drawn wide interest, including an opinion piece March 19 in The New York Times by best-selling author Michael Crichton. "We grant patents at a level of abstraction that is unwise and it's gotten us into trouble in the past," Crichton wrote. "Basic truths of nature can't be owned."
The Metabolite dispute is one of two key patent cases the Court is considering this month. On March 29 the justices will hear eBay v. MercExchange, which may have an even broader impact on patent holders. The question in the eBay case is how easy it should be for a patent holder to obtain an injunction against an infringer.
Rodney D. Ryder