Laboratory Corporation of America Holdings v. Metabolite Laboratories, Inc. and Competitive Technologies, Inc. (04-607)
Appealed from: U.S. Court of Appeals for the Federal Circuit
Oral argument: Mar. 21, 2006
Three medical school professors from the University of Colorado and Columbia University developed a method to diagnose low levels of cobalamin and folate, two vitamins found in the blood serum of warm-blooded animals. After patenting this process, the patent was assigned to Competitive Technologies, Inc. and Metabolite Laboratories for distribution. Competitive Technologies, Inc. and Metabolite Laboratories in turn sublicensed the patent to Laboratory Corporation of American Holdings. Competitive Technologies and Metabolite Laboratories filed suit against Laboratory Corporation of American Holdings for induced infringement of the patent and contributory infringement. Judgment was rendered against Laboratory Corporation of American Holdings at trial and was affirmed by the Court of Appeals for the Federal Circuit. Laboratory Corporation of American Holdings in turn appealed to the United States Supreme Court in an effort to seek clarification about the substantive scope of method patents. The Supreme Court's decision in this case has the potential to alter the balance of the patent system.
Whether a method patent setting forth an indefinite, undescribed, and non-enabling step directing a party simply to 'correlat[e]' test results can validly claim a monopoly over a basic scientific relationship used in medical treatment such that any doctor necessarily infringes the patent merely by thinking about the relationship after looking at a test result.
To what extent can an inventor patent a method for detecting vitamin deficiency when the patent seeks to grant the inventor exclusive rights to a natural scientific principle?
Three medical school professors from the University of Colorado and Columbia University developed a method to diagnose low levels of cobalamin and folate, two vitamins found in the blood serum of warm-blooded animals. Brief for Respondents at 1-2, 6. Their research revealed that low levels of these vitamins correlate with high levels of the amino acid homocysteine. Id. at 2. The professors argue that this research is unique because they were the first to study the relationship between these vitamin deficiencies and total homocysteine levels. Id. at 3. The professors emphasize that their technique is innovative because it is the first to measure total homocysteine using all four species of the amino acid. See Id. at 3. Their new method calls for two steps: (1) assaying total homocysteine; and (2) correlating the total homocysteine level with the levels of cobalamin and folate. Id. at 5. An assay is a method used by scientists to determine either the qualitative or quantitative composition of a given substance. The professors in this case conducted a quantitative assay to determine the total levels of homocysteine amino acids in blood.
Eager to get credit for their invention, the professors filed a patent application with the Patent and Trademark Office (PTO) to acquire property rights in their new process. The PTO rejected the initial patent application because it failed to outline the two-step process described above, but rather stated in general terms that the invention detected deficiencies in cobalamin or folate. Brief for Petitioner at 5. The PTO requested that the application “distinctly claim the subject matter which the [Respondent] regards as the invention.” Id. at 5. In turn, the professors amended the application so that it read as a distinct two-step process. Once the patent application was approved, the professors’ patent was assigned to Competitive Technologies, Inc., (CTI), which is a company that licenses colleges and universities’ technological advancements to various industries. Brief for Respondents at 6. CTI in turn licensed the process to Metabolite Laboratories, Inc. (Metabolite). Metabolite then granted the Laboratory Corporation of America Holdings (LabCorp) a sublicense to use the new process in exchange for royalties paid to Metabolite and CTI. Brief for Petitioner at 7. Royalties were paid every time the two-step assay and correlation process were performed.
LabCorp soon learned about a new total homocysteine assay process that was developed by Abbott Laboratories. Brief for Respondents at 7. This new test was faster and less labor-intensive than CTI and Metabolite’s patented process. Brief for Petitioner at 9. Rather than taking eighteen hours for a given result, the new test took only a few minutes. Id. at 9. LabCorp reasoned that if it used Abbott’s total homocysteine assay process, it would no longer be obligated to pay CTI and Metabolite royalties for their process. Thus, LabCorp stopped using CTI and Metabolite’s patented total homocysteine process for blood serum samples and stopped paying those royalties. However, LabCorp continued using CTI and Metabolite’s patented process for other tests on urine samples and continued paying royalties for those tests. Id. at 9.
When CTI and Metabolite learned of what LabCorp had done, they sued LabCorp for infringement of their patent, inducing infringement of their patent, contributory infringement of the patent, and breaching their license agreement. Brief for Respondents at 8. The District Court for the District of Colorado granted summary judgment for LabCorp on the direct infringement claim. Brief for Petitioner at 11. However, the jury rendered a special verdict against LabCorp for contributory and induced infringement. Id. at 12. On appeal, the Court of Appeals for the Federal Circuit affirmed the holding of the District Court. The Court of Appeals agreed with the District Court that every time a physician looks at the homocysteine level test result and makes an association between the homocysteine level and the extent of vitamin deficiencies, that physician infringes CTI and Metabolite’s patented process. Id. at 13. LabCorp appealed this holding to the United States Supreme Court.
CTI and Metabolite’s (Respondents) main complaint is that LabCorp (Petitioner) was using its total homocysteine assays and reporting the results from those assays to physicians. In turn, those physicians would use the measured total homocysteine level to correlate the estimated deficiency of vitamins in the blood serum of a patient. Every time physicians used the homocysteine levels to correlate the vitamin levels without Petitioner having paid the Respondents any royalties, Petitioner was accused of either infringing or inducing the infringement of Respondents’ patent. Brief for Petitioner at 9. Petitioner contends that the Respondents cannot patent the supposed “correlation” step that physicians perform in their minds by determining the vitamin levels from the total homocysteine level. Brief for Petitioner at 10. Petitioner argues that respondents’ patent is invalid and contains an insufficient written description, thus failing to protect a patentable subject matter. Brief for Respondents at 8. Petitioner further argues that Respondents cannot patent a scientific fact because the inverse relationship between homocysteine levels and vitamin deficiency is a well-known fact in the scientific community.
In deciding this case, the United States Supreme Court will be faced with the difficult task of maintaining balance in the United States patent system. The Patent Clause of the United States Constitution guarantees that Congress has the power to grant exclusive rights for limited periods to the respective writings and discoveries of authors and inventors in the interest of promoting the progress of science and the arts. U.S. Const., art. I, s. 8, cl. 8. The challenge that courts and agencies, like the Patent and Trademark Office, face in enforcing the Patent Clause is striking a balance between creating incentives for scientific inventions and advancements through patents, while also protecting other inventors from being excluded from using those innovative ideas and inventions to add to the greater body of knowledge. When a patent is granted, it creates exclusive rights. If a given patent is overly broad, it can undermine the very purpose of the Patent Clause by stifling innovation because individuals will not have access to the net FSW knowledge. Administrators at offices like the Patent and Trademark Office are eager to learn whether the Supreme Court will resolve confusion over the required specifications of patent applications and the scope of patentable subject matter.
Certain members of the medical community are also primarily interested in this case because of its implications for patient healthcare. Brief of Amicus Curiae of the American Heart Association Supporting Petitioner at 18. Elevated homocysteine levels are associated with prevalent illnesses such as cardiovascular disease and stroke, prominent killers amongst elderly Americans. Id. at 21. Homocysteine testing is seen as an important tool to detect the risk for heart attack or stroke. Id. at 21. Many physicians question how Respondents could possess a property right over a correlation that all physicians conduct mentally when analyzing homocysteine levels. Restricting physicians’ use of this correlation or requiring them to pay royalties would considerably hinder their ability to follow health advisories that rely on reading homocysteine levels in treating patients for cognitive impairment or cerebral blood flow. Id. at 23, 25.
This case has broader ramifications for other industries whose vitality centers on innovation and patents. If the Supreme Court agrees that patent claims should be read broadly so as to assert property rights over scientific principles or laws of nature, there is a concern that the Patent and Trademark Office might become inundated with similar broad claims from other industries. If something as basic as a correlation can be patented, entire research fields would be at the mercy of inventors who craftily patent basic principles that are the foundation of new and innovative fields of research. What state would communications technology be in today had courts granted Alexander Graham Bell exclusive rights to use electrical current to transmit voice signals over long distances? Id. at 13. Would the cell phone have ever been invented? Would genetic engineering and forensic science be at the forefront of research and criminal law had Watson and Crick patented the use of DNA’s helical structure?
Analogizing the ramifications of promoting broad patent rights is the only way to understand what is at stake in this case. If the Supreme Court decides that patents can claim property rights over natural phenomenon, it will be faced with a difficult challenge of retroactively amending other patents that have incorporated those phenomena. For example, the Patent and Trademark Office recently received over three hundred patents that include the correlation method allegedly patented by the Respondents. Id. at 28. How should the Supreme Court handle these patents and other patents that are similarly positioned? Allowing patent claims to be broadly construed to include natural laws might stifle innovation if other inventors are not permitted to use information or principles that are the conceptual building blocks of their field. Furthermore, it would subject research institutions and universities to considerable liability for failure to pay royalties if they unknowingly use a patented, basic principle in their research. On the other hand, the Supreme Court must be careful not to impose unduly restrictions on patent claims by prohibiting the mere use or mention of natural laws or principles because that may create a risk of too many patents being rejected by the Patent and Trademark Office.
The US patent application and approval process is governed by federal law codified in Titles 35 and 37 of the United States Code. Not every seemingly novel invention or idea can be patented, however; significantly, the law prohibits the patenting of laws of nature, natural phenomena, and abstract ideas. See Diamond v. Diehr, 450 U.S. 175, 185 (1981); O’Reilly v. Morse, 56 U.S. 62, 116 (1853).The key issue in this case is whether US Patent 4,940,658 (the ’658 Patent), issued to Metabolite Laboratories, Inc. (Metabolite), is too broad and violates this fundamental limitation. Specifically in issue is the ’658 Patent’s Claim 13 which states:
13. A method for detecting a deficiency of cobalamin or folate in warm-blooded animals comprising the steps of: assaying a body fluid for an elevated level of total homocysteine; and correlating an elevated level of total homocysteine in said body fluid with a deficiency of cobalamin or folate.
Metabolite Labs., Inc. v. Lab. Corp. of Am. Holdings, 370 F.3d 1354, 1358-59 (Fed. Cir. 2004).
A threshold matter is whether the Supreme Court will even consider the merits of this case. Metabolite espouses the view that Laboratory Corporation of America Holdings (LabCorp) did not properly raise the objection of non-patentable subject matter at trial or preserve it on appeal. Brief for Respondents at 19-26. Metabolite contends that LabCorp did not even conceive of this non-patentable subject matter argument until the Supreme Court sua sponte requested the Solicitor General to file an amicus brief regarding the issue of whether the ’658 Patent violates the prohibition on patenting natural phenomena. Id. at 9. The Solicitor General’s brief, representing the view of the United States, notes that neither of the lower courts addressed this issue, and that even the petition for writ of certiorari focused on the monopoly concerns resulting from the patent rather than on whether the patent covered valid subject matter. Brief for the United States as Amicus Curiaeat 16. As such, the Solicitor General suggests that if the Court is to allow LabCorp to pursue this argument at all, the proper course would be to remand for full proceedings on this issue. Id. at 17.
LabCorp, however, contends that this issue was raised below and identified in the grant of certiorari. Brief for Petitioner at 17, footnote 9. Regardless, LabCorp argues, the Court always has authority to consider the issue of patentability. Id. at 20, footnote 11. Metabolite rebuts this argument, pointing out that several of LabCorp’s cited cases were decided prior to the 1952 revision of the Patent Act which for the first time required that the non-patentable subject matter defense must be pleaded in order to be used. Brief for Respondents at 21. Metabolite also points to the Federal Rules of Civil Procedure which require the defendant to plead any affirmative defense at trial. Id. at 22.
Assuming the Court finds that it has authority and a sufficient factual record to consider the issue, it will decide the validity of the ’658 Patent and Claim 13 specifically. LabCorp seeks to cast Claim 13 as a mere discovery of a scientific principle, akin to Einstein’s formulation of E=mc2 or Newton’s description of the laws of gravity. Brief for Petitioner at 20. LabCorp compares Claim 13’s correlation between heightened homocysteine levels and cobalamin or folate deficiencies to previous Court cases such as Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948) and Gottschalk v. Benson, 409 U.S. 63 (1972). In Funk Bros., the Court invalidated a patent that was based on the natural qualities of bacteria. Likewise, in Gottschalk the Court rejected a patent for the use of an algorithm to convert numerals from a decimal to a binary representation. Similarly, LabCorp argues that the Claim 13 correlation is a bare scientific principle, part of the storehouse of knowledge of all men. Brief for Petitioner at 20.
LabCorp emphasizes that Claim 13 does not embed the scientific principle within an invented scientific process or device, and, under the Federal Court’s holding, a physician may violate the patent simply “by thinking about the fact that homocysteine levels are associated with deficiencies in two basic vitamins.” Id. at 22. By contrast, the Court has invalidated even process patents where the process steps were insignificant modifications to the results of a formula. Id. at 23-24. The ’658 Patent does not even attempt to include such post-solution steps as part of the patented invention, only specifying the pre-solution activity of conducting a homocysteine test by any method. Id. at 24. LabCorp claims that this pre-solution step is too insignificant to bring the process within the scope of patentable matter, and that allowing the patent to stand will create a loophole in the prohibition on patenting scientific principles by allowing potential patentees to embed the principle within a dummy process. Id. at 25.
Metabolite vigorously disagrees with LabCorp’s characterization of the ’658 Patent, emphasizing the law allows patenting applications of laws of nature, mathematical formulas, and scientific principles. Brief for Respondents at 27. The ’658 Patent, Metabolite argues, involves such an application since Claim 13 “claims a process for treating certain materials to achieve a desired result.” Id.at 29. Metabolite also attacks LabCorp’s “insignificant process steps” argument by pointing to Supreme Court and Federal Circuit case law holding that process steps need not be novel so long as the process yields a more efficient or useful end. Id. at 31-32. Furthermore, Metabolite notes that “[t]ransformation and reduction of an article ‘to a different state or thing’” is an indication of a patentable process. Id. at 33. The assaying step of the patent involves the reduction of certain chemical compounds, and hence qualifies as such a transformative process. Id. at 34. Because the subject matter of the ’658 Patent produces a useful, concrete, and tangible result, Metabolite argues that its process should be distinguished from abstract ideas and scientific principles that are truly non-patentable. Id. at 38.
The Court here faces a complex case which stands to broadly impact the scientific community. In the modern era of lucrative scientific innovation, a valuable patent may make or break a company’s future. The Court must balance an innovator’s right to profit on his fruitful research against the right of other scientists and the general public to freely use basic scientific principles. If the Court decides to consider the merits of this case, rather than to remand for further factual development, it will have to cut through the dense thicket of biochemistry to reach the issue at the heart of this case—should the patent law and public policy deem it appropriate to patent a an invention that is significantly, if not almost completely, based on a scientific principle. In resolving the issue, the Court should settle the current state of law regarding process patents and provide clear guidance to the scientific community as to the proper of scope of patentable subject matter.
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