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