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Genetic Veterinary Sciences, Inc. v. LABOKLIN GmbH & Co. KG

Claims to Detecting Genetic Mutation Held Patent-Ineligible

Genetic Veterinary Sciences, Inc. v. LABOKLIN GmbH & Co. KG, __ F.3d __, 2019 WL ___ (Fed. Cir. Aug. 9, 2019) (WALLACH, Hughes, Stoll) (E.D.Va.: Morgan) (3 of 5 stars)

Fed Cir affirms JMOL of § 101 subject-matter ineligibility as to patent owned by the University of Bern (licensor and co-defendant of DJ defendant LABOKLIN). The University’s patent related to in vitro methods for genotyping Labrador Retrievers for the purpose of determining if they are genetic carriers of hereditary nasal parakeratosis (“HNPK”).

Jurisdiction: The district court’s exercise of personal jurisdiction over LABOKLIN (a German company) was lawful. The opinion describes how LABOKLIN’s sending of a cease-and-desist letter and its sublicensing of the patent in the U.S. satisfied the “minimum contacts” prong of the jurisdiction inquiry. It also reasons that the exercise of personal jurisdiction over LABOKLIN is “‘reasonable and fair’ because LABOKLIN has purposefully availed itself of the benefits and protections of U.S. laws through its commercial sublicensing as well as its enforcement of a U.S. patent.” Op. at 10. It also notes that per Burger King, 471 U.S. 476 (1985), jurisdiction is presumptively reasonable due to LABOKLIN’s enforcement activities in the U.S. Red Wing Shoe, 148 F.3d 1355 (Fed. Cir. 1998), and Avocent, 552 F.3d 1324 (Fed. Cir. 2008), are not contradictory because they do not create a bright-line rule requiring in-forum activity beyond a cease-and-desist letter.

The exercise of personal and subject-matter jurisdiction over the University was also lawful. Though the University is an agent/instrumentality of a foreign state (the Swiss Confederation), sovereign immunity does not apply. The opinion describes how the University’s acquisition of a U.S. patent and participation in U.S. licensing and enforcement activities was “commercial activity” sufficient to trigger the immunity exception of 28 U.S.C. § 1605(a)(2). The exercise of personal jurisdiction over the University was also proper due to the University’s waiver of service, which triggered jurisdiction over a foreign state under § 1330(b).

Subject-matter eligibility: The district court’s determination of subject-matter ineligibility for the patent was correct. The opinion describes how the claims are directed to a natural phenomenon at Alice step one, discussing Ariosa Diagnostics, 788 F.3d 1371 (Fed. Cir. 2015), and BRCA1, 774 F.3d 755 (Fed. Cir. 2014), and reasoning that the claims “begin and end with the point discovery of the HNPK mutation in the [relevant] gene.” Op. at 22. It distinguishes CellzDirect, 827 F.3d 1042 (Fed. Cir. 2016), Vanda, 887 F.3d 1117 (Fed. Cir. 2018), and Natural Alternatives, 918 F.3d 1338 (Fed. Cir. 2019), as requiring specific steps that would bring about some physical result. At Alice step two, the claks lack an inventive concept. The opinion describes how they do not “suggest[ ] the invention of a new method of genotyping,” Op. at 24, but only use conventional techniques to observe a newly discovered mutation. It rejects LABOKLIN’s argument that dependent claims should survive because they recite specific techniques because those techniques were themselves well-understood, routine, and conventional.

KEYWORDS: PERSONAL JURISDICTION; SUBJECT-MATTER JURISDICTION; SOVEREIGN IMMUNITY; SUBJECT-MATTER ELIGIBILITY (NO)