Genetic Veterinary Sciences, Inc. v. LABOklin GmbH & Co. KG et al

Filing 145

OPINION & ORDER granting 140 Motion for Judgment as a Matter of Law. Signed by District Judge Henry C. Morgan, Jr on 5/11/2018. (jrin)

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MAY 1 1 2018

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA
Norfolk Division

LED

CLERK, U.S. DISTRICT COUH1
NORFOLK VA

GENETIC VETERINARY SCIENCES, INC.,
d/b/a Paw Prints Genetics,
Plaintiff,
Civil Action No. 2:17cvl08

V.

LABOKLIN GMBH & CO. KG &

THE UNIVERSITY OF BERN,
Defendants.
OPINION & ORDER

This comes on Plaintiff, Genetic Veterinary Sciences, Inc., d/b/a Paw Print Genetics'

("Plaintiff' or "PPG") Motion for Judgment as a Matter of Law under Rule 50 of the Federal
Rules of Civil Procedure ("Plaintiffs Motion for JMOL"). Doc. 140. For the reasons stated
below, the Court GRANTS Plaintiffs Motion for Judgment as a Matter of Law.
I. BACKGROUND

This action concerns U.S. Patent No. 9,157,114 (the "'114 patent"), a patent regarding an
in vitro method for genotyping Labrador Retrievers in order to discover whether the Labrador
Retriever might be a genetic carrier of the disease Hereditary Nasal Parakeratosis ("HNPK").
Doc. 74 at 4; Doc. 75 at 8. HNPK is a disease that causes crusts and fissures to appear on the
nose of dogs, including Labrador Retrievers. HNPK is a recessive condition that passes to a

Labrador Retriever puppy when both of the dog's parents are carriers of the gene that causes
HNPK. A dog's parent is considered a carrier when it only has one copy of the mutation. These

carriers do not have the disease; however, when the two carriers mate, one copy of the mutation
is passed to the puppy from each of them leading to the presence of HNPK. After six years of

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research, one of The University of Bern's professors, Dr. Toso Leeb, discovered that the
presence of HNPK in Labrador Retrievers resulted from a point mutation in the SUV39H2 gene.

Once Dr. Leeb discovered this correlation, he developed a corresponding method for genotyping
Labrador Retrievers, which is the subject of the '114 Patent.

Plaintiff's complaint seeks declaratory judgment that the '114 patent is invalid and
therefore cannot be infiringed by PPG. Doc. 1 at 6. Altogether, the '114 Patent has five (5)
claims relating to the process of genotyping a Labrador Retriever for the presence of HNPK. Ex.
1 at Cols. 15-16. However, for purposes of the instant action. Plaintiff stipulated that its method
is within the scope of claims one (1) through three (3), and Defendants LABOklin GmbH & Co.,
KG, and The University of Bern (collectively, "Defendants") agreed not to assert claims four (4)
and five (5) against Plaintiff. Doc. 74 at 4; Doc. 75 at 9. According to the language of the ' 114
Patent, the invention recited in claims one (1) through three (3) is:
1. An in vitro method for genotyping a Labrador Retriever comprising:
a) Obtaining a biological sample from the Labrador Retriever;
b) Genotyping a SUV39H2 gene encoding the polypeptide of SEQ I NO:
1 and

c) Detecting the presence of a replacement of a nucleotide T with a
nucleotide G at position 972 of SEQ ID N0:2

2. The method according to claim 1, wherein the genotyping is achieved by PGR,
real-time PCR, melting point analysis of double-stranded DNA, mass
spectroscopy, direct DNA sequencing, restriction fragment length
polymorphism (RFLP), single strand conformation polymorphism (SSCP),
high performance liquid chromatography (HPLC), or single base primer
extension.

3. The method of claim I, wherein the genotyping utilizes a primer pair
comprising of a first primer and a second primer, each compromising a
contiguous span of at least 14 nucleotides of the sequence SEQ ID NO: 2 or a
sequence complementary thereto, wherein:
a) Said first primer hybridizes to a first DNA strand of the SUV39H2
gene;

b) Said second primer hybridizes to the strand complementary to said first
DNA strand of the SUV39H2 gene; and

c) The 3' ends of said first and second primers are located on regions
flanking the position 972 of SEQ ID NO: 2, or of nucleotide positions
complementary thereto.
Ex. 1 ("The '114 Patent") Cols. 15,16.
11. PROCEDURAL HISTORY

On February 22, 2017, Plaintiff filed a complaint seeking declaratory judgment that the
'114 patent is invalid and therefore cannot be infringed by PPG. Doc. 1 at 6. On May 8, 2017,

the Court GRANTED Defendants an extension of time to respond to the Complaint. Doc. 21.
Defendants filed a Motion to Dismiss on June 1,2017. Doc. 29. The Court held a hearing on the
Motion to Dismiss on October 10,2017 and DENIED it. Doc. 67; see Doc. 68. Defendants filed

an Answer and Counterclaim for Infringement on October 24, 2017. Doc. 69. By stipulation,
Plaintiff agreed that for purposes of this action, its test is within the scope of claims one (1)

through three (3) of the '114 patent as asserted in the counterclaim. Sw Doc. 63. The Parties
also stipulated that Plaintiff would pay the greater of 25% of the sales price or $16 per test to
Defendants if any of the three (3) claims are found valid. Doc. 78.
Plaintiff filed a Motion for Summary Judgment regarding validity of the '114 patent on

December 22, 2017. Doc. 73. On January 18, 2018, the Parties filed a joint statement that no
claim construction was necessary. Doc. 77.

On January 31, 2018, the Court heard oral argument on Plaintiffs Motion for Summary
Judgment. Doc 80. On March 27, 2018 this Court entered an Order denying Plaintiffs Motion

for Summary Judgment and Granting Defendants' Motion to Strike Plaintiffs Statement of
Undisputed Facts in part. Doc. 93.
On March 29, 2018, Plaintiff filed a Motion for Clarification and Reconsideration of the

Court's Order Denying Plaintiffs Motion for Summary Judgment and Granting Defendants'

Motion to Strike, in Part. Doc. 94. On April 4, 2018, this Court denied Plaintiffs Motion for
Reconsideration. Doc. 99.

The Court held a Final Pretrial Conference and entered a Final

Pretrial Order on April 19, 2018. Docs. 113, 113-1. A jury trial for this matter began on April
30,2018. Doc. 135. Plaintiff rested its case on April 30, 2018. Id At the close of Plaintiffs

evidence. Defendants moved for Judgment as a Matter of Law arguing that no reasonable juror
could find claims one (1) through three (3) of the '114 Patent invalid. The Court DENIED
Defendants' Motion. On May 2, 2018 Defendants rested their case and both parties filed a brief

regarding the patent eligibility of Claim one (1) of the '114 Patent. Docs. 138, 139. After the
close of Defendants' evidence Plaintiff filed a Motion for Judgment as a Matter of Law and

moved this Court to enter judgment in Plaintiffs favor regarding the invalidity of claims one (1)

through three (3) of the ' 114 Patent. Doc. 140. The Court GRANTED Plaintiffs Motion.
III. LEGAL STANDARDS

Under Rule 50 of the Federal Rules of Civil Procedure, before submitting the case to a

jury during a jury trial and after a party is ftilly heard on an issue, the court may grant judgment
as a matter of law if the court finds that a reasonable jury would not have a legally sufficient
evidentiary basis to find for the nonmoving party on that issue. Fed. R. Civ. P 50. In

entertaining a motion for judgment as a matter of law, the court must draw all reasonable
inferences in favor of the nonmoving party. Reeves v. Sanderson Plumbing Products. Inc.. 530
U.S. 133 (2000).
IV. ANALYSIS

Plaintiff seeks judgment as a matter of law that Claims one (1) through three (3) of the

'114 patent are not eligible for patent protection. See eenerallv Doc. 74. Thus, the analysis in
this case follows the fi^mework from Alice Corp. Ptv. Ltd. v. CLS Bank Int'l. 134 S. Ct. 2347

(2014). "Whoever invents or discovers any new and useful process, machine, manufacture, or
composition of matter, or any new and useful improvement thereof, may obtain a patent

therefor

" 35 U.S.C. § 101 (2017). The Supreme Court has "long held that this provision

contains an important implicit exception: Laws of nature, natural phenomena, and abstract ideas
are not oatentable." Ass'n for Molecular Patholoev v. Mvriad Genetics. Inc.. 133 S.Ct. 2107,

2116 (2013) (quoting Mavo Collaborative Servs. v. Prometheus Labs.. Inc.. 566 U.S. 66, 70
(2012)) (alteration and internal quotation marks omitted). The Supreme Court created a two-step

framework for assessing whether patents "in essence[] claim nothing more than abstract ideas."

Svnopsvs. Inc. v. Mentor Graphics Corp.. 839 F.3d 1138, 1146 (Fed. Cir. 2016). Courts first
determine "whether the claims at issue are directed to one of those patent-ineligible concepts."
Alice. 134 S. Ct. at 2355. "If so, the court then considers the elements of each claim both

individually and as an ordered combination to determine whether the additional elements

transform the nature of the claim into a patent-eligible application." Id (quoting Mavo. 132 S.

Ct. at 1297-98) (internal quotation marks omitted). The second step represents a "search for an
"'inventive concept"'—ie., an element or combination of elements that is 'sufficient to ensure
that the patent in practice amounts to significantly more than a patent upon the [ineligible
concept] itself" Id (quoting Mavo. 132 S. Ct. at 1294). In order for that transformation to

occur, the application requires "more than simply stat[ing] the law of nature while adding the
words 'apply it.'" Ariosa Diagnostics. Inc. v. Sequenom. Inc.. 788 F.3d 1371, 1377 (Fed. Cir.
2015¥quoting Mavo. 132 S. Ct. at 1294).

Claim one (1) of the '114 Patent is independent of Claims two (2) and three (3), while

Claims two (2) and three (3) both depend on and recite "the method according to Claim 1."

Under Step 1 of Alice, we review Claim one (1) individually, and then as an ordered
combination with Claims two (2) or three (3),
The Court FINDS that Claim one (1) of the '114 Patent, even in combination with

Claims two (2) and three (3), is directed to patent ineligible subject matter, namely the discovery
of the genetic mutation that is linked to HNPK.
In support of its Motion, Plaintiff directed this Court to the Federal Circuit's decision in

Ariosa Diamostics. Inc. v. Sequenom. Inc.. 788 F.3d 1371 (Fed. Cir. 2015). In Ariosa. the
Federal Circuit reviewed the validity of a patent that claimed methods of using cffDNA after a

researcher discovered that the presence of cffDNA in maternal plasma and serum could lead to

earlier detection of genetic mutations. Ariosa. 788 F.3d at 1373. The method for detecting set
forth in Claim one (1) was comprised of two steps: 1) amplifying the cffDNA contained in a
sample of the plasma or serum from a pregnant female and 2) detecting the paternally inherited
cffDNA. Id Claims two (2) and four (4) of the patent depended on claim one (1), and claimed
particular methods of amplification and detection. Id at 1374.

Looking at the test outlined in Mavo and later adopted in Alice, the Federal Circuit
concluded in Ariosa that under Step 1 of Alice, the methods claimed were directed to matter that

is naturally occurring. Id at 1376. The court reasoned that while the patent claimed a particular
method, that method began and ended with the discovery of the existence of paternally inherited
cffDNA in maternal plasma, which is a natural phenomenon. Id It was undisputed that the
existence of cffDNA in maternal blood is a natural phenomenon, and that the location of the
nucleic acids existed in nature before they were found. Id at 1376.

Similarly here, the methods claimed in the '114 patent begin and end with the discovery
of a natural phenomenon. Claim I recites "an in vitro method for genotyping a Labrador

Retriever" for detection of this mutation. The '114 Patent, Col. 15. Both of the parties' experts
explained that the scientific term "in vitro" simply means, in a glass or in a lab, and the scientific
term "genotyping" simply means to look at or determine the composition of the bases or base

pairs in the DNA. The fact that the research to which the patent refers is conducted in a lab does
not form a basis for transforming the discovery of a law of nature into patent eligible subject
matter.

Parts (a), (b), and (c) of Claim 1, which break down how the mutation is discovered, do
not provide anything apart from the scientific designation of the mutation. Part (a), "obtaining a

biological sample" requires someone to get a sample of DNA from a dog, which both parties'
experts testified usually require obtaining a blood sample or cheek swab from the dog. Part (b),

"Genotyping a SUV39H2 gene encoding the polypeptide of SEQ ID NO: 1," identifies the

location of the genetic mutation; and part (c) "detecting the presence of a replacement of a
nucleotide T with a nucleotide G at position 972 of SEQ ID N0:2," identifies the location of the

equivalent normal gene. This was confirmed in the testimony of Dr. Leeb;
THE COURT: Okay. Now, subparagraph (b) tells you where to find the gene
that's abnormal - what do you call it - mutation. Step 2 ~ in other words,
paragraph (b) tells you where to find the mutation, which gene to go to to find it.
Is that correct?

THE WITNESS: That is correct. And, if I may add, (b) and (c) are very closely
related. So (b) specifies the gene, but (c) specifies a single nucleotide within that
gene.

THE COURT: All right. So paragraph (c) explains that; the fact that some dogs
have a mutation that doesn't cause it, and some dogs ~

THE WITNESS: Yes. Paragraph (c), in my example, would specify the typing
error in the text.

THE COURT: Paragraph (c) what?

THE WITNESS: Paragraph (c) would specify the exact typing error.
THE COURT: Typing error?

THE WITNESS: The sequence change. So, again, the method does not claim the
whole text, the whole information, it just claims the detection of that single error,
the single change, single base replacement within the gene.

THE COURT: All right. So it identifies the mutation as compared with a normal
gene -

THE WITNESS: Yes.

THE COURT: - in paragraph (c).
THE WITNESS: Yes.

Dr. Leeb, also testified that the mutation of the SUV39H2 gene at position 972 in a Labrador
Retriever arises through a natural process.

And, Defendants' expert also testified that he

believed "the mutation does occur naturally."
In response to Plaintiffs Motion for Judgement as a Matter of Law, Defendants argued
that its case is analogous to those of Vanda Pharmals.. Inc. v. West-Ward Pharmals. Int'l Ltd..
2018 WL 1770273 (Fed. Cir. 2018), and Rapid Litig. Memt.. Ltd. v. CellzDirect. Inc.. 827 F.3d

1042 (Fed. Cir. 2016). In each of those cases, the Federal Circuit held that the patent claims at

issue satisfied Step 1 of Alice, and that they were not aimed at patent ineligible subject matter.
In Vanda a researcher discovered a link between persons who possessed a poor

metabolizer genotype at CYP2D6 (a particular gene) and the effect of administering a particular

dosage of iloperidone. See Vanda. 2018 WL 1770273 at *1. The patent claimed "a method for
treating a patient" based on that discovery. Id. If the patient had a poor metabolizer genotype at

CYP2D6, then the claim recited a particular dosage of treatment to be administered, and if the
patient did not have a poor metabolizer genotype at CYP2D6, then it recited a different dosage.
The Federal Circuit reasoned that this patent claim was distinguishable from a patent claim that
was aimed at a natural phenomenon because the claim did more than simply recite how to
discover the correlation between CYP2D6 and iloperidone, it additionally applied that discovery
to a particular regimen of treatment.

Vanda is distinguishable from this case because the '114 Patent does not claim a method
of applying the discovery—^the presence a point mutation in the SUV39H2 gene—to a new

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method of treating LabradorRetrievers. After many amendments of the patent, and the resuhing
re-drafting of its language, the patent utilizes a number of scientific terms which at first review

appear difficult to understand and make the patent appear impressive on its face. However,
when the language is explained, the patent simply states that the search for the mutation involves
the laboratory examination of Labrador Retriever DNA, which resulted in the discovery of the
mutation, which in combination with similar mutations of Labrador Retrievers who mates with a

carrier results in offspring having a higher probability of inheriting the mutation. The mutation

itself and the fact that it is inherited through male and female dog carriers mating are both natural
phenomena.

Defendants' reliance on CellzDirect is also misplaced. In CellzDirect the Federal Circuit
held that a claim was not directed to natural law when it claimed a "new and useful laboratory

technique for preserving hepatocytes." CellzDirect. 827 F.3d at 1048, The Federal Circuit was

careful to distinguish its ruling from other cases where claims amounted to nothing more than
"observing or identifying the ineligible concept itself." Id(citing Genetic Techs.. Ltd. v. Merial

L.L.C.. 818 F.3d 1369, 1373-74 (Fed. Cir. 2016)(rejecting claim where it recited methods for

detecting a coding region of DNA based on its relationship to non-coding regions) and Ariosa.
788 F.3d at I373-74(rejecting claims that recited methods for detecting patemally inherited
cflfDNA in the blood or serum of a pregnant female)). Unlike CellzDirect. Claim 1 of the '114
Patent is not a new and useful laboratory technique. To the contrary. Claim 1 amounts to

nothing more than "observing or identifying" the natural phenomenon of a mutation in the
SUV39H2 gene, which has been rejected by the Federal Circuit as a basis for satisfying Step 1 of
Alice.

Plaintiffs expert. Dr. Shaffer, and Defendants' expert. Dr. Friedenberg, agreed on the

key issues. Although Dr. Friedenberg's testimony was sometimes inconsistent and his demeanor
was quite defensive, Dr. Friedenberg agreed with Dr. Shaffer that the mutation itself was a
natural phenomenon. The Court FINDS based on this undisputed evidence that the mutation is a
natural phenomenon. Dr. Friedenberg described Claim 1 as being a method and stated that it was
the method of discovery claimed to be patentable. However, the evidence does not support Dr.
Friedenberg's opinion that paragraphs (a), (b), and (c) of Claim 1 constitutes a method. As

referenced earlier, in the Court's questions to Dr. Leeb, the inventor, he indicated that paragraph
(b) simply identifies the location of the mutation, and paragraph (c) identifies the mutation as
compared to a normal gene.
The Court FINDS that paragraphs (a) through (c) merely provide the supplying of
Labrador DNA in part (a), point to the location of the mutation in dog's DNA in (b), and in (c)
describe and locate the point mutation. These three paragraphs constimte a discovery of a
natural phenomenon, not a method.

Under Step 2 of Alice, the Ariosa court examined the remaining elements of the claim to
determine whether the claim contained any inventive concept sufficient to transform the claimed
naturally occurring phenomenon into a patent-eligible application. Ariosa. 788 F.3d at 1376.
The Federal Circuit concluded that nothing in the remaining claims so transformed the claim. Id.
at 1377. Instead, the evidence showed that the remaining methods claimed were already wellknown in the art, well-understood, routine, and conventional at the time the patent was issued.
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Claims 2 and 3 of the '114 Patent only contain a number of alternative methods to locate
the mutation, all of the methods are well known and have been around for decades. Defendants'

expert, Dr. Friedenberg, testified:

"What we're talking about in claim 2...we're talking about techniques. These are
techniques, many of which I've done, many of which—all of which some
researcher has done and has been around for years. What's new here is the
method of genotyping that particular gene and that particular change in a
Labrador Retriever dog, because no one had done it before..
Claim 3 simply recites one of several means of locating the mutation. Again, this is a technique

that has been well-known in the scientific community for decades. In regard to Claim three (3),
Defendants' expert, Dr. Friedenberg, testified on cross-examination:
Q. And then claim 3, that talks about using a primer pair, correct?
A. Uh-huh.

Q. Have you ever used primer pairs in PCR?
A. Sure, but never to genotype base pair position 972 in the SUV39H2 gene.
Q. But would you agree with me that the primer pair technique that's being used
to genotype this particular gene is a technique that's been around for a while?
A. It's just like boiling or baking, a technique.
Q. And it's decades old before this patent, correct?
A. Decades old.

Accordingly, after translating the complex scientificjargon used in the patent, the result
is that it contains a valuable scientific discovery of a natural phenomenon without any inventive

concept which transforms it from patent ineligible subject matter to patent eligible subject
matter.

V. CONCLUSION

The discovery of the mutation required years and many hours of well conducted research.
However, the utility of and expertise utilized in the discovery do not transform it into patentable
subject matter, nor do Claims 2 and 3 add any inventive concept to the natural phenomenon.

II

Accordingly, and for the reasons stated, this Court GRANTS Plaintiffs Motion for a Judgment
of invalidity as a Matter of Law.
The Clerk is REQUESTED to send a copy of this Opinion & Order to all counsel of
record.

It is so ORDERED.

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bL

Henry Coke Morgan, Jr.
Senior United Slates District Judge (7, j
HENRY COKE MORGAN, JR.

SENIOR UNITED STATES DISTRICT JUDGE

Norfolk, Virginia
May "I i. 2018

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