United States District Court, N.D. California, San Francisco Division
March 7, 2014
GENETIC TECHNOLOGIES LIMITED, an Australian corporation, Plaintiff,
AGILENT TECHNOLOGIES, INC., a Delaware corporation, Defendant
[Copyrighted Material Omitted]
For Genetic Technologies Limited, an Australian Corporation, Plaintiff: Benjamin Baughman Lieb, Hiwot Molla Covell, Robert R. Brunelli, Todd P. Blakely, LEAD ATTORNEYS, Sheridan Ross, P.C., Denver, CO; Rodney B. Sorensen, Esq., Payne & Fears LLP, San Francisco, CA.
For Agilent Technologies Inc, a Delaware corporation, Defendant: Christopher John Harnett, LEAD ATTORNEY, Ropes & Gray, LLP-New York, New York, NY; Kevin John Post, LEAD ATTORNEY, Ropes & Gray LLP, New York, NY; Robert J. Goldman, Ropes & Gray LLP, East Palo Alto, CA.
ORDER DENYING DEFENDANT'S MOTION TO DISMISS
RICHARD SEEBORG, United States District Judge.
Plaintiff Genetic Technologies Limited (" GTG" ) brings this action for infringement of U.S. Patent No. 5,612,179 (" the '179 patent" ) against defendant Agilent Technologies, Inc. Agilent moves to dismiss plaintiff's Second Amended Complaint (" SAC" ) under Rule 12(b)(6) of the Federal Rules of Civil Procedure, arguing the '179 patent claims an unpatentable law of nature. Although the '179 patent does embrace a law of nature, defendant's motion to dismiss must be denied, because Agilent has not shown by clear and convincing evidence that the patent does not claim meaningfully limited applications of that natural law.
A. Procedural History
On May 25, 2011, GTG filed a complaint asserting infringement of the '179 patent against multiple defendants, including Agilent, in the District Court of Colorado. Agilent, like many of the other defendants in the case, moved to dismiss the complaint and sever plaintiff's claims against them. Following an initial Rule 16 conference and some preliminary motion practice on discovery matters, the court granted defendants' respective motions to sever plaintiff's claims, and transferred the resulting cases to various venues around the country. The court denied defendants' remaining motions to dismiss as moot.
On March 28, 2012, GTG filed its First Amended Complaint in this district. (ECF No. 2). Agilent moved to dismiss and GTG moved to stay the proceedings pending resolution of a multi-district litigation (MDL) motion to transfer and consolidate the case. (ECF No. 20; ECF No. 21). A previous order granted GTG's motion to stay and denied without prejudice Agilent's motion to dismiss. (ECF No. 37). The MDL panel denied GTG's motion to centralize its various infringement actions, but the case was once again stayed pending an ex parte reexamination of the '179 patent. (ECF No. 41; ECF No. 45).
Following the completion of the reexamination, GTG filed its Second Amended Complaint (SAC) on December 5, 2013. (ECF No. 65). The SAC alleges that Agilent directly infringed or induced infringement of claims 1-13 and 15-18 of the '179 patent. Agilent now moves to dismiss GTG's complaint, arguing the '179 patent
claims non-patentable subject matter under 35 U.S.C. § 101. ( See ECF No. 67). In particular, Agilent contends the claims cover natural phenomena or laws of nature that are not entitled to patent protection. Id. at 1-4.
B. Technology at Issue
This case involves technology related to deoxyribonucleic acid (DNA). (SAC at ¶ 7). The Supreme Court recently provided the following background on DNA:
Genes form the basis for hereditary traits in living organisms. . . . The human genome consists of approximately 22,000 genes packed into 23 pairs of chromosomes. Each gene is encoded as DNA, which takes the shape of the familiar " double helix" that Doctors James Watson and Francis Crick first described in 1953. Each " cross-bar" in the DNA helix consists of two chemically joined nucleotides. . . . Sequences of DNA nucleotides contain the information necessary to create strings of amino acids, which in turn are used in the body to build proteins. Only some DNA nucleotides, however, code for amino acids; these nucleotides are known as " exons." Nucleotides that do not code for amino acids, in contrast, are known as " introns."
Ass'n for Molecular Pathology v. Myriad Genetics, Inc., 133 S.Ct. 2107, 2111, 186 L.Ed.2d 124 (2013). An " allele" is a genetic variation associated with a coding region. ('179 patent, SAC, Ex. A, at 5:17-19). Groups of alleles may be inherited as a unit; these groups are sometimes referred to as haplotypes. Id. at 5:33-39. Because the presence of these variations in the coding region may be associated with particular traits or diseases, it can be useful to detect whether certain alleles or haplotypes are present in an individual. (SAC at ¶ 9).
Prior to the '179 patent, the scientific community largely ignored as irrelevant the non-coding DNA regions, i.e. introns. Id. at ¶ 15. The inventors of the '179 patent, however, discovered that variations in intron regions may be linked or correlated to the presence of alleles in the coding regions. Id. at ¶ 16. Generally speaking, the '179 patent is directed at claimed methods for analyzing variations in non-coding intron sequences to detect linked coding region alleles and haplotypes. (SAC at ¶ 36; '179 patent at 4:27-29). More specifically, the '179 patent claims methods involving " amplifying genomic DNA with a primer pair that spans a non-coding region sequence" and then " analyzing the amplified sequence to detect the allele." (SAC at ¶ 26; '179 patent at 59:59-65).
III. LEGAL STANDARD
A complaint must contain " a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). While " detailed factual allegations are not required," such a complaint must have sufficient factual allegations to " state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). " A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged." Id. (quoting Twombly, 550 U.S. at 556-67). Such a determination is a context-specific task requiring the court " to draw on its judicial experience and common sense." Id. at 1950. A claim may be dismissed under Federal Rule of Civil Procedure 12(b)(6) based on the " lack of a cognizable legal theory" or on " the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). When evaluating such a motion, the court must accept all material allegations in the complaint as true, even if doubtful, and construe them in the light most favorable to the non-moving party. Twombly, 550 U.S. at 570. " Conclusory allegations of law and unwarranted inferences of fact do not suffice to support a claim." Bradley v. Chiron Corp., 136 F.3d 1317, 1322 (Fed. Cir. 1998).
" [I]f Rule 12(b)(6) is used to assert an affirmative defense, dismissal is appropriate only if the well-pleaded factual allegations in the complaint, construed in the light most favorable to the plaintiff, suffice to establish the defense." Ultramercial, Inc. v. Hulu, LLC, 722 F.3d 1335, 1338-39 (Fed. Cir. 2013). The affirmative defense of patent ineligibility due to unpatentable subject matter must be established by clear and convincing evidence, because every patent is presumed to be properly issued. Id. at 1342, 1338-39 (" [T]he only plausible reading of the patent must be that there is clear and convincing evidence of ineligibility." ). The Federal Circuit has cautioned that " Rule 12(b)(6) dismissal for lack of eligible subject matter will be the exception, not the rule." Id.
Section 101 of the Patent Act defines patent eligible subject matter to include " any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof[.]" 35 U.S.C. § 101 (2012); Bilski v. Kappos, 561 U.S. 593, 130 S.Ct. 3218, 3225, 177 L.Ed.2d 792 (2010). Although the statute describes patentable subject matter in expansive terms, " [t]he [Supreme] Court's precedents provide three specific exceptions to § 101's broad patent-eligibility principles: 'laws of nature, physical phenomena, and abstract ideas.'" Bilski, 130 S.Ct. at 3225 (quoting Diamond v. Chakrabarty, 447 U.S. 303, 309, 100 S.Ct. 2204, 65 L.Ed.2d 144 (1980)). " These are the basic tools of scientific and technological work, and therefore, if patented, would stifle the very progress that Congress is authorized to promote." Id. at 3253 (internal quotations and citations omitted).
At the same time, the Court has recognized that " too broad an interpretation of this exclusionary principle could eviscerate patent law. For all inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas." Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S.Ct. 1289, 1293, 182 L.Ed.2d 321 (2012). Thus the Court has stated, " while an abstract idea, law of nature, or mathematical formula [may] not be patented, 'an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection.'" Bilski, 130 S.Ct. at 3230 (quoting Diamond v. Diehr, 450 U.S. 175, 187, 101 S.Ct. 1048, 67 L.Ed.2d 155 (1981)) (emphasis original). " [T]o transform an unpatentable law of nature into a patent-eligible application of such a law, one must do more than simply state the law of nature while adding the words 'apply it.'" Prometheus, 132 S.Ct. at 1294 (emphasis original). Rather, a claimed
" process that focuses upon the use of a natural law [must] also contain other elements or a combination of elements, sometimes referred to as an 'inventive concept,' sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the natural law itself." Id.
Agilent argues the '179 patent claims a law of nature. According to Agilent, the patent contains nothing more than the idea that variations in non-coding regions of DNA may be correlated to variations in coding regions. ( See ECF No. 71 at 17). To the extent the patent claims attempt to limit the invention to specific applications, Agilent maintains the limitations were known and practiced in the art and amount to nothing more than instructions to apply the natural law. Id. at 18-20. GTG concedes that any specific correlation between variations in non-coding and coding DNA regions is " naturally occurring." (ECF No. 75 at 13). GTG argues, however, that these correlations are not laws of nature, because they are not universal, i.e. not " immutable scientific truth[s]." Id. at 13-14. Rather, the correlations are present in only some species or some individuals within a species, and may change over time through evolutionary processes. GTG further argues the '179 patent claims are directed to " specific, limited, and unconventional methods" for exploiting these correlations. Id. at 14. These arguments are addressed in turn.
A. Law of Nature
The correlations between genomic variation in non-coding and coding regions of DNA are unpatentable laws of nature. In Prometheus, the Supreme Court held that relationships between concentrations of certain metabolites in the blood and the likelihood that a dosage of a thiopurine drug would prove ineffective or cause harm were laws of nature. 132 S.Ct. at 1296. The Court stated: " The relation is a consequence of the ways in which thiopurine compounds are metabolized by the body--entirely natural processes. And so a patent that simply describes that relation sets forth a natural law." Id. at 1297. Nothing in the Court's reasoning requires or even suggests that a correlation must be present in all species, all individuals within a species, or be unchanging over time to be a natural law. Rather, all Prometheus requires is the correlation be the product of entirely natural processes. GTG concedes that the correlations between genomic variation in non-coding and coding regions are naturally occurring. (ECF No. 75 at 13). The correlations themselves are therefore natural laws under Prometheus.
B. Inventive Concept
The more difficult question is whether the '179 patent claims contain sufficient " inventive concept" to transform an unpatentable natural law into a patentable application of that law. Because this question requires more factual development and potentially construction of the claims, Agilent's Rule 12(b)(6) motion must be denied. See Ultramercial, 722 F.3d at 1339-40 (noting § 101 analysis is " rife with underlying factual issues" and often requires claim construction, which generally renders
dismissal under Rule 12(b)(6) improper).
Prometheus ' inventive concept analysis requires a claim contain additional limiting steps beyond the natural law itself. While the Supreme Court has not prescribed a specific test to determine what constitutes sufficient inventive concept, it has made clear that the additional steps must be more than " well-understood, routine, conventional activity already engaged in by the scientific community[.]" Prometheus, 132 S.Ct. at 1298. To make this determination, the claims must be considered as a whole. Diehr, 450 U.S. at 188. " This is particularly true in a process claim because a new combination of steps in a process may be patentable even though all the constituents of the combination were well known and in common use before the combination was made." Id.
The parties dispute whether the additional steps described in the '179 patent--namely the use of a primer pair to amplify a non-coding intron sequence-- amount to well-understood, routine, or conventional techniques at the time the patent was filed. Agilent argues the prior art disclosed in the '179 patent specification demonstrates the amplification steps are not novel. (ECF No. 75 at 18--19). It further contends GTG conceded during prosecution that the " [a]pplicant has not invented a new way to analyze genetic loci[,]" but rather applied known prior art techniques to non-coding introns. Id. at 19. Agilent's arguments conflate the analysis of patent eligible subject matter under § 101 with analysis of novelty and non-obviousness under § § 102 and 103. See Diehr,
450 U.S. at 188-89 (" The 'novelty' of any element or steps in a process, or even of the process itself, is of no relevance in determining whether the subject matter of a claim falls within the § 101 categories of possibly patentable subject matter." ); Ultramercial, 722 F.3d at 1347 (noting that although the " routine" and " conventional" inquiries " require an understanding of what existed in the ken of those skilled in the art during the relevant time frame, principles of patent eligibility must not be conflated with those of validity[.]" ).
Rather than novelty or non-obviousness, the Supreme Court's analysis of inventive concept has focused on whether the additional steps limit the claims to a particular application or whether the claims preempt the use of the natural law. See Prometheus, 132 S.Ct. at 1298-1300; Ultramercial, 722 F.3d at 1348 (" [T]he Supreme Court's reference to 'inventiveness' in Prometheus can be read as shorthand for its inquiry into whether implementing the abstract idea in the context of the claimed invention inherently requires the recited steps." ). Although recent case law displays difficulty characterizing the exact contours of the inventive concept analysis, the Federal Circuit has offered some guidance. In Ultramercial, the Federal Circuit described the relevant inquiry as " whether a claim, as a whole, includes meaningful limitations restricting it to an application[.]" 722 F.3d at 1344 (emphasis original).
The Federal Circuit described several considerations which indicate whether a claim is meaningfully limited; specifically, whether the claim (1) preempts all practical applications of a natural law, (2) contains only insignificant pre- or post-solution activity, (3) provides no real direction, i.e. the limitations are overly-generalized, or (4) requires a particular machine implementing a process or a particular transformation of matter. Id. at 1345-47. As noted above, because every patent is assumed to be properly issued, there must be clear and convincing evidence the claims are not meaningfully limited to find a patent covers ineligible subject matter. See id. at 1342, 1338-39.
There is not clear and convincing evidence the asserted claims of the '179 patent preempt all practical application of the natural law. A patent claim is not meaningfully limited where it effectively grants a monopoly over all uses of a natural law. See id. at 1345-46; see also Prometheus, 132 S.Ct. at 1299-300 (noting claim steps that must have been taken to use the law in question simply told doctors to " apply the law" ).
Agilent's preemption arguments focus on GTG's statements during patent prosecution that the naturally occurring correlations have wide applicability. ( See ECF No. 71 at 21-22). These arguments confuse the scope of the natural law with the scope of preemption of the patent's claims. See Ultramercial, 722 F.3d at 1346 (" It is not the breadth or narrowness of the abstract idea that is relevant, but whether the claim covers every practical application of that abstract idea." ). The natural law at issue here--that variations in intron sequence can be correlated to exon sequence variations--may very well have a broad scope, but this misses the point. Rather, the relevant question for preemption purposes is whether the claims of the '179 patent preclude others from making any practical use of these correlations.
All of the asserted claims require a primer pair to amplify an intron sequence. The complaint avers that at the time of the '179 patent's filing, numerous methods were available to analyze intron and exon sequences to detect genomic variations, none of which require primer pair amplification. (SAC at ¶ 28-31). Given the alleged availability of alternative methods of genomic analysis, clear and convincing evidence is lacking that the '179 patent impermissibly ties up the relevant field.
2. Insignificant pre- or post-solution activity
Even if a claim does not preempt all use of the natural law, it is not meaningfully limited if it contains only insignificant " pre- or post-solution activity--such as identifying a relevant audience, a category of use, field of use, or technological environment." Ultramercial, 722 F.3d at 1346. Agilent does not argue that the amplification step is insignificant pre-solution activity, nor does the limitation appear on its face to fall into any of the categories the Federal Circuit described. Consequently, there is not clear and convincing evidence the amplification step is insignificant pre-solution activity.
3. Overly generalized limitations
The steps of the '179 patent claims, as a whole, are not overly generalized. " [S]imply appending conventional steps, specified at a high level of generality, to laws of nature, natural phenomena, and abstract ideas cannot make those laws, phenomena, and ideas patentable." Prometheus, 132 S.Ct. at 1300. For example, in Prometheus, the claimed steps simply told the doctor " to determine the level of the relevant metabolites in the blood, through whatever process the doctor or the laboratory wishe[d] to use." Id. at 1297. Similarly, the " analyzing" step of claim 1 of the '179 patent simply instructs the scientist to analyze the amplified DNA sequence to detect the allele. ('179 patent at 59:65-66). The step does not require any particular method of analysis or explain how the allele is to be detected; such general instructions provide no direction to the relevant audience and do not meaningfully limit the claim.
The " amplifying" step, in contrast, is not overly generalized. Instead of directing the scientist to prepare the DNA for analysis by a method of his or her choosing, the step specifically requires amplification using a primer pair that spans a non-coding sequence. Id. at 59:59-64. On its face, this step provides sufficient direction meaningfully to limit the claim. Because the " amplifying" step provides adequate guidance, and because all the claim steps must be considered as a whole, no clear and convincing evidence reflects that the '179 patent claims are overly generalized.
4. Machine-or-transformation test
The '179 patent claims do not, as a matter of law, fail the machine-or-transformation test. Under that test, a claim may be meaningfully limited if: " (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing." See Bilski, 130 S.Ct. at 3234 (quoting In re Bilski, 545 F.3d 943, 954-955 (Fed. Cir. 2008)). GTG argues the patent claims require " primer pairs," which are " machines" because they are man-made tools used to amplify DNA selectively. (ECF No. 75 at 18-19 & n.15). In addition, GTG maintains the claimed methods transform naturally occurring DNA into man-made amplified DNA.
With respect to the machine prong, Agilent does not dispute a primer pair can constitute a machine. Rather, Agilent maintains the '179 patent defines " primer pair" too broadly to tie the claimed methods to a " particular" machine. (ECF No. 78 at 9). In support, Agilent relies on a case which found the terms " 'a network,' 'devices,' 'a machine-readable medium,' and 'a computerized
system'" failed to identify a specific machine. See OIP Technologies, Inc. v. Amazon.com, Inc., C-12-1233 EMC, 2012 WL 3985118, at *13 (N.D. Cal. Sept. 11, 2012); see also CyberFone Sys., LLC v. Cellco P'ship, 885 F.Supp.2d 710, 716 & n.5 (D. Del. 2012) (finding the term " channel"
failed to identify a specific machine). The term " primer pair" appears significantly more restrictive than any of the rejected " machines" in OIP Technologies. Consequently, Agilent does not offer clear and convincing support that the term " primer pair" insufficiently identifies a specific machine.
Agilent also disputes whether the claimed methods require a transformation, because the amplified DNA is a nucleotide for nucleotide copy of the natural DNA. (ECF No. 78 at 8-9). GTG responds that amplified DNA is chemically distinct and distinguishable from the naturally occurring DNA from which it is derived. (ECF No. 75 at 19; SAC at ¶ 27). In particular, GTG avers that a methylation present in most natural DNA is not copied to amplified DNA. (SAC at ¶ 27). GTG does not provide any explanation why the absence of this methylation is important to their claimed method. However, considering the averment that the amplification step creates a chemically distinguishable molecule, no clear and convincing evidence indicates an absence of transformation.
In sum, none of Ultramercial 's considerations support a finding of clear and convincing evidence that the '179 patent claims are not meaningfully limited. The " amplifying" limitation plausibly provides sufficient inventive concept to transform the unpatentable natural law into a patentable application of that law. Whether the amplification step in fact meaningfully limits the claimed methods is a question better addressed at a later stage of litigation.
For the above reasons, defendant's motion to dismiss is denied. Although the correlations between genomic variations in non-coding and coding DNA sequences are unpatentable laws of nature, Agilent has not shown by clear and convincing evidence that the '179 patent's claims are not meaningfully limited applications of those natural laws.
IT IS SO ORDERED.