Monday, March 20, 2006

Justices Reach Out to Consider Patent Case

The New York Times
Justices Reach Out to Consider Patent Case

For the first time in a quarter-century, the Supreme Court will hear on Tuesday a case involving the basic question of what type of discoveries and inventions can be patented.

Both sides say the case, which involves a blood test for a vitamin deficiency, could have a wide-ranging impact on the development of diagnostics, perhaps threatening many of the underlying patents for genetic and other medical tests.

But the array of companies filing supporting briefs — including American Express, Bear Stearns and I.B.M. — indicates that intellectual property in other fields might also be affected.

Some patent specialists say they think the Supreme Court agreed to hear the case, against the advice of the United States solicitor general, to rein in patenting.

"The Supreme Court reached out and grabbed this case," said Edward R. Reines, a patent attorney at Weil, Gotshal & Manges who is not involved in the case. "These circumstances suggest that some members of the court believe there are too many patents in areas where there should be none."

At issue is whether relationships between a substance in the human body and a disease — for example, the familiar association between high cholesterol and a higher risk of heart attacks — can be the basis of a patent, or whether such relationships are unpatentable natural phenomena.

This case, LabCorp v. Metabolite Laboratories, stems from a 1990 patent awarded to scientists at the University of Colorado and Columbia University. They found that a high level in the blood of homocysteine, an amino acid, indicated a deficiency of either vitamin B12 or another B vitamin called folic acid.

Much of the patent describes a specific way to measure homocysteine, and those claims are not at issue. But the 13th claim of the patent is more general: it covers a way of determining vitamin deficiency by first testing blood or urine for homocysteine by any means and then correlating elevated levels with a vitamin deficiency.

The patent is owned by Competitive Technologies, a publicly traded patent management firm in Fairfield, Conn., and licensed to Metabolite Laboratories, a tiny company based at the University of Colorado. LabCorp, one of the biggest clinical testing companies in the nation, with 2005 revenues of $3.3 billion, sublicensed the test from Metabolite.

At first, LabCorp, whose full name is Laboratory Corporation of America Holdings, tested for homocysteine using the specific method described in the patent and paid royalties to Metabolite and Competitive Technologies. But in 1998 it switched to a newer and faster test developed by Abbott Laboratories.

Metabolite and Competitive sued, charging LabCorp with violating Claim 13 of the patent. In 2001 a federal jury in Denver ruled against LabCorp, and the company was eventually ordered to pay $7.8 million in damages and attorneys' fees. The appeals court that handles patent cases affirmed the lower court decision in 2004.

In asking the Supreme Court to overturn the lower court decisions, LabCorp is arguing that Claim 13, because it does not specify how testing is to be done, patents nothing more than the natural relationship between homocysteine and vitamin B deficiencies, blocking other inventors from developing better tests.

"The present-day implications of such a holding are limitless — and dangerous," LabCorp wrote in its brief. "Anyone who discovers a new medical correlation could stifle medical treatment through a 'test plus correlate' claim."

But Metabolite and its allies argue that such correlations are the basis of diagnostics and that not allowing patents would stifle development of new tests. There are tests, for instance, that look at mutations in particular genes to predict a high risk of breast cancer or to predict which AIDS drugs will not work.

"Hundreds, if not thousands, of patents would at once be called into question" if the ruling goes against Metabolite, said a brief jointly submitted by Perlegen Sciences, a company developing genetic tests, and Mohr Davidow Ventures, a venture capital firm that backs diagnostics companies.

Another question in the case is whether doctors could infringe the patent merely by looking at a test result for homocysteine and then thinking about vitamin deficiency. Indeed, the lower courts said LabCorp had not directly infringed but rather had induced doctors to infringe by performing the correlation.

Partly with that in mind, the American Medical Association, the American Heart Association and AARP have submitted briefs in support of LabCorp, arguing, in the words of the heart association, that the patent could have "devastating effects on patient health care."

Millions of homocysteine tests are done each year because high levels of the amino acid are associated with an increased risk of heart attack, stroke, birth defects and other diseases; people often take B vitamins to lower homocysteine and reduce the risk. (Clinical trial results announced last week, however, suggested that taking B vitamins did not prevent heart attacks.)

Court precedents have held that laws of nature, natural phenomena and abstract ideas cannot be patented. "Einstein could not patent his celebrated law that E = mc2; nor could Newton have patented the law of gravity," the Supreme Court wrote in a 1980 decision. '

But in a 1981 decision in Diamond v. Diehr — the last time the Supreme Court considered the issue — the court upheld a patent on a method of curing rubber that made use of a well-known equation governing chemical reactions. The court said that the equation was only part of a broader invention.

Glenn K. Beaton, an attorney for Metabolite, said that as in that 1981 case, "it's not the correlation itself that is patented here," but rather "the use of that correlation to determine B12 and folate deficiencies."

In recent years, controversial patents have been granted on software and on business methods, such as ways of managing investment portfolios or of allowing people to order merchandise on with one click of a mouse.

Bear Stearns, Lehman Brothers and the Computer and Communications Industry Association filed briefs urging the court to use the LabCorp case to restrict such business method patents, or at least not expand them. Other companies, including American Express and I.B.M., say the LabCorp case is not relevant to business method patents.

The solicitor general, in urging the court not to hear the case, said there was not enough of a record from the lower courts on the question of patenting natural phenomena. That is because LabCorp did not raise that argument in the lower courts, instead trying to get the claim invalidated on other grounds. If LabCorp wins the case in a way that weakens patents on diagnostic tests, it could be one of the bigger losers. The company, based in Burlington, N.C., is counting on high-priced, patented genetic tests to fuel its growth.

Bradford T. Smith, executive vice president for corporate affairs at LabCorp, disputed that. "We think this case can be decided very narrowly," without undermining other patents, many of which rely on more than just correlations, he said.