District Court Rules ACLU Gene Patent Challenge May Proceed

In perhaps the worst opinion I have ever read from any federal court, the United States District Court for the Southern District of New York ruled earlier today that the ACLU challenge against the Myriad Genetics patents and the United States Patent and Trademark Office for issuing patents can proceed. Procedurally the posture was a Motion to Dismiss, which are granted only in rare and extraordinary cases. What makes this decision surprising is that District Court Judge Robert W. Sweet, the 87 year old judge who has been on senior status since 1991 and who was appointed by President Jimmy Carter, recognized that there is no valid basis to bring this lawsuit but allowed it to proceed anyway. Truly amazing!

The United States Patent and Trademark Office correctly argued that the judicial branch should not be engaging in a review of the granting of gene patents or with respect to allowing for an the patent and patent claims to be challenged where there is no redress allowed by law. The United States Congress has created an highly specific regulatory regime relating to patents, and there is simply no basis in law to bring this case. With respect to this argument Judge Sweet wrote:

While the USPTO notes the existence of a comprehensive scheme to redress violations of the Patent Act, it cites to no comparable statutory scheme providing a remedy for persons who complain about the constitutionality of patents issued by the USPTO and/or the policies and practices of the USPTO. See Block v. Cmty. Nutrition Inst., 467 U.S. 340, 349 (1984) (“[Wlhen a statute provides a detailed mechanism for judicial consideration of particular issues at the behest of particular persons, judicial review of those issues at the behest of other persons may be found to be impliedly precluded.” (emphasis added)); see generally Marbury v. Madison, 5 U.S. 137 (1803). In such circumstances, the Supreme Court has held that Congress did not intend to preclude enforcement of federal rights through private actions. See Wright v. Roanoke, 479 U.S. 418, 427-28 (1987) (citing absence of statutorily defined private judicial remedy for alleged violation of federal housing law as evidence that Congress did not intend to foreclose private right of action). Indeed, even when Congress has created a statutory remedy, if that remedy is not coextensive with the remedy provided by the Constitution, plaintiffs may still bring a separate action to enforce the Constitution. See Fitzgerald v. Barnstable Sch. Corn., – U.S. – t 129 S. Ct. 788, 796-97 (2009).

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 Plaintiffs’ claim against the USPTO.’ See, e.g., Reno v. ACLU, 521 U.S. 844 (1997); Mace v. Skinner, 34 F.3d 854, 859-60 (9th Cir. 1994).

[Bio-Pharma]

Then Judge Sweet turned his attention to standing.  The defendants raised the legally correct point that there is simply no standing to sue and challenge the USPTO or these patents.  After accurately pointing out that prudential standing requirements dictate that the judiciary should avoid deciding questions of broad social import where no individual rights would be vindicated, and that prudential standing requirements require a party to assert their own legal interests rather than generalized grievances or grievances of third parties, he then ruled there was standing.  Judge Sweet explained:

The Defendants allege that it is well established that third parties do not have standing to challenge the USPTO’s issuance of a patent. The authorities cited by the USPTO, however, address a party’s standing to bring claims for statutory violations and establish only that the existence of a comprehensive framework within the Patent Act designed to address certain statutory violations may demonstrate Congressional intent to foreclose a judicial remedy for those violations. -See Syntex, 882 F.2d at 1572-74; Hitachi Metals, 776 F. Supp. at 7-8; Godtfredsen v. Banner, 503 F. Supp. 642, 644-45 (D.D.C. 1980) (finding statutory remedies for claims of examiner error during interference proceedings precluded judicial review of the proceedings prior to the exhaustion of administrative remedies).” As discussed supra in Section IV, these cases do not, as the USPTO suggests, establish that the remedial scheme provided by the Patent Act for statutory violations divests the Plaintiffs of standing to assert constitutional claims for which the Patent Act provides no remedy.

The USPTO also argues that the Plaintiffs do not have standing because the injuries alleged are not “fairly traceable” to the USPTO’s allegedly improper conduct. The “fairly traceable” requirement “examines the causal connection between the assertedly unlawful conduct and the alleged injury.” Allen, 468 U.S. at 753 n.19. While the USPTO is correct that Myriad’s refusal to license its patent broadly contributes to Plaintiffs’ alleged injuries, the patents were issued by the USPTO, in accordance with its policies and practices. It is those policies and practices that the Plaintiffs allege are unconstitutional. The injury alleged is therefore “fairly traceable” to the USPTO.

Finally, the USPTO argues that Plaintiffs’ claim against it fails to meet the redressibility requirement, which “examines the causal connection between the alleged injury and the judicial relief requested.” Allen, 468 U.S. at 753 n.9. The Plaintiffs ask the Court to enjoin the Defendants from taking any actions to enforce the challenged claims in Myriad’s patents. Fairly 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 Plaintiffs’ request for relief would serve to render the claims-at-issue definitionally 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.

In short, this is the most embarrassing display of judicial activism I have seen in a long time, perhaps ever.  Despite there being no foundation in the law to bring this action, and despite the grievances being only of a generalized nature, Judge Sweet is allowing the case to continue.  Does it surprise anyone that he was appointed by President Carter?  Probably not, but what should be surprising is that an 87 year old man who elected to take senior status some 18 years ago is being given a case with such enormous consequences for the patent system and the US economy.

Whether Judge Sweet cares to admit it or not, there is simply no basis for this challenge to the Myriad Genetics patents, or to the USPTO issuing gene patents. The testing in question in this case will not help anyone treat cancer, it won’t even tell them if they have the cancer, it will just tell them whether they are genetically likely to develop cancer. This is hardly a life-saving situation, but the fate of an entire industry and the advances it could bring to future generations hangs in the balance. Kill the genetics industry and there will be no funding from private entities to spur the research and development necessary to bring advances to market and to the public.

The plaintiffs argue that federal funding has been provided, and that is correct. But make no mistake about it — federal funding relates to pure science and pure science cannot and never will have any place in the market. It is private industry that builds on the pure science discovered at Universities. Universities cannot and never will bring anything to market, which is why they need private industry partners. Without a partnership between Universities and the private sector advances simply will not mature into commercially viable products, services or diagnostic tests. Kill the incentive for the private sector and you kill the industry, which is recklessly stupid, but even more so now when we have such a fragile economy.

I have every confidence that in the end this frivolous lawsuit will be revealed as such, but at what cost in the meantime?  Perhaps Judge Sweet will come to his senses in time to rule on the inevitable summary judgment motions, but based on the tone of this ruling I fear that as long as he is assigned to this case the Defendants are in for a long road.