IP Law Daily Fees denied in dispute over patent for detecting canine genetic mutation
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Monday, February 24, 2020

Fees denied in dispute over patent for detecting canine genetic mutation

By Thomas Long, J.D.

Although the patent-in-suit was held invalid as directed to a patent-ineligible natural phenomenon, the patent owners’ case for its validity was not baseless.

A provider of veterinary laboratory services was not entitled to an award of attorney fees for prevailing on its contention that a patent directed to in vitro methods for genotyping Labrador retrievers was invalid under 35 U.S.C. § 101, the federal district court in Norfolk has decided. The patented invention was used to discover whether dogs might be genetic carriers of the disease Hereditary Nasal Parakeratosis. Although the defending provider succeeded in obtaining a declaratory judgment that the claims at issue were directed to a patent ineligible natural phenomenon and involved commonly known scientific methods, the case was not "exceptional" for purposes of awarding fees under the Patent Act, in the court’s view. Although the provider’s case was "strong," the patent owners’ position was not objectively baseless or frivolous. There also was insufficient evidence of litigation misconduct to warrant a fee award (Genetic Veterinary Sciences, Inc. v. LABOKLIN Gmbh & Co. Kg, February 20, 2020, Morgan, H.).

The University of Bern, an instrumentality of the Swiss Confederation, owns U.S. Patent No. 9,157,114 ("the ’114 patent"), entitled, "Method of Determining the Genotype Relating to Hereditary Nasal Parakeratosis and Nucleic Acids Usable in Said Method." The University granted an exclusive license for use of its ’114 patent to Germany-based LABOKLIN GmbH & Co. Washington-based Genetic Veterinary Sciences, Inc., d/b/a Paw Prints Genetics ("PPG"), which offers laboratory services for testing for genetic variations and mutations known to cause certain diseases in dogs, including a test for "detect[ing] the presence of a mutation in the SUV39H2 gene."

After receiving a cease-and-desist letter from LABOKLIN, PPG brought suit against both LABOKLIN and the University, requesting declaratory judgment that the asserted claims of the ’114 patent are ineligible under 35 U.S.C. § 101 for failing to claim patent-eligible subject matter. LABOKLIN and the University moved to dismiss the complaint for lack of subject-matter jurisdiction and lack of personal jurisdiction. The district court determined that it had subject matter jurisdiction and personal jurisdiction over both defendants. Following the close of both parties’ evidence at trial but, before submitting the case to the jury, the district court granted PPG’s motion for judgment for invalidity as a matter of law and held the asserted claims patent-ineligible under Section 101.

LABOKLIN and the university appealed. The Federal Circuit affirmed, agreeing with the district court that the asserted claims are "not directed to a new and useful method for discovery because they begin and end with the point discovery of the HNPK mutation in the SUV39H2 gene." The appellate court also held that the claims did not recite an inventive concept rendering them patent-eligible. "Nothing in claim 1’s language suggests the invention of a new method for genotyping," the Federal Circuit said. For example, claim 2 limits the method of claim 1 to specific techniques, including "genotyping achieved by PCR, [and] real-time PCR."

Back at the district court, PPG moved for an award of its attorney fees, contending that the case was "exceptional" for purposes of the Patent Act’s fee-shifting provision, 35 U.S.C. § 285. PPG argued that it was entitled to a fee award because (1) its case was much stronger than the defendants’ case and (2) the defendants unreasonably litigated the matter. However, in the court’s opinion, the position of LABOKLIN and the University was not "objectively baseless" or frivolous. The court noted that the technology and law in the case were complicated, and the defendants survived PPG’s motion for summary judgment. There was insufficient evidence that the defendants’ attorney acted misleadingly at the summary judgment hearing to allow the court to reach a conclusion that the attorney acted with an improper motivation. Furthermore, it was reasonable for LABOKLIN and the University to defend the validity of their lawfully issued patent after PPG filed this declaratory judgment action seeking to invalidate it. The court also noted that PPG itself contributed to the protraction of the litigation because it failed to comply with procedural rules. Therefore, the court decided that the case was not so "exceptional" as to warrant an award of attorney fees.

This case is No. 2:17-cv-00108-HCM-DEM.

Attorneys: Joshua Counts Cumby (Venable LLP) for Genetic Veterinary Sciences, Inc. d/b/a Paw Prints Genetics. Nikia Lee Gray (Quarles & Brady LLP) for LABOKLIN Gmbh & Co. KG and The University of Bern.

Companies: Genetic Veterinary Sciences, Inc. d/b/a Paw Prints Genetics; LABOKLIN Gmbh & Co. KG; The University of Bern

MainStory: TopStory Patent VirginiaNews

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