Lab. Corp. of America Holdings v. Metabolite Labs., Inc.
| Decision Date | 22 June 2006 |
| Docket Number | No. 04-607.,04-607. |
| Citation | 126 S. Ct. 2921,165 L. Ed. 2d 399,548 U.S. 124 |
| Parties | LABORATORY CORPORATION OF AMERICA HOLDINGS, DBA LABCORP <I>v.</I> METABOLITE LABORATORIES, INC., ET AL. |
| Court | U.S. Supreme Court |
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT
Jonathan S. Franklin argued the cause for petitioner. With him on the briefs were Catherine E. Stetson and Jessica L. Ellsworth.
Deputy Solicitor General Hungar argued the cause for the United States as amicus curiae. With him on the brief were Solicitor General Clement, Assistant Attorney General Keisler, Daryl Joseffer, Anthony J. Steinmeyer, Jeffrey Clair, John M. Whealan, and Stephen Walsh.
Miguel A. Estrada argued the cause for respondents. With him on the brief were Glenn K. Beaton, Mark A. Perry, Jeffrey A. Wadsworth, and Mark A. Lemley.*
The writ of certiorari is dismissed as improvidently granted.
THE CHIEF JUSTICE took no part in the consideration or decision of this case.
* Briefs of amici curiae urging reversal were filed for Affymetrix, Inc., et al. by Kathleen M. Sullivan and Barbara A. Caulfield; for the American Clinical Laboratory Association by Roy T. Englert, Jr.; for the American Heart Association by Gregory A. Castanias; for the American Medical Association et al. by Jack R. Bierig; for the Computer & Communications Industry Association by Jonathan Band; for the Financial Services Industry by Donald M. Falk and Jeremy Gaston; and for the People's Medical Society by Lori B. Andrews and Francis C. J. Pizzulli.
Briefs of amici curiae urging affirmance were filed for the Franklin Pierce Law Center by Craig Steven Jepson; and for Perlegen Sciences, Inc., et al. by Gideon A. Schor and Meredith E. Kotler.
Briefs of amici curiae were filed for the AARP by Joshua D. Sarnoff, Sarah Lock, Bruce Vignery, and Michael Schuster; for the American Express Co. by Abbe David Lowell, Joseph A. Calvaruso, Walter G. Hanchuk, Richard Martinelli, and Raymond Millien; for the American Intellectual Property Law Association by Denise M. Kettelberger and Melvin C. Garner; for the Association of the Bar of the City of New York by Peter A. Sullivan and Catriona M. Collins; for the Boston Patent Law Association by Mark B. Solomon and Doreen M. Hogle; for the Federal Circuit Bar Association by Mark P. Walters, Martha B. Schneider, Peter B. Ellis, and Claire Laporte; for the Intellectual Property Owners Association by Paul H. Berghoff and Douglas K. Norman; for International Business Machines Corp. by Christopher A. Hughes; for Patients not Patents, Inc., by Edward J. Elder; and for the Public Patent Foundation by Justin Hughes.
JUSTICE BREYER, with whom JUSTICE STEVENS and JUSTICE SOUTER join, dissenting.
This case involves a patent that claims a process for helping to diagnose deficiencies of two vitamins, folate and cobalamin. The process consists of using any test (whether patented or unpatented) to measure the level in a body fluid of an amino acid called homocysteine and then noticing whether its level is elevated above the norm; if so, a vitamin deficiency is likely.
The lower courts held that the patent claim is valid. They also found the petitioner, Laboratory Corporation of America Holdings (LabCorp), liable for inducing infringement of the claim when it encouraged doctors to order diagnostic tests for measuring homocysteine. The courts assessed damages. And they enjoined LabCorp from using any tests that would lead the doctors it serves to find a vitamin deficiency by taking account of elevated homocysteine levels.
We granted certiorari in this case to determine whether the patent claim is invalid on the ground that it improperly seeks to "claim a monopoly over a basic scientific relationship," Pet. for Cert. i, namely, the relationship between homocysteine and vitamin deficiency. The Court has dismissed the writ as improvidently granted. In my view, we should not dismiss the writ. The question presented is not unusually difficult. We have the authority to decide it. We said that we would do so. The parties and amici have fully briefed the question. And those who engage in medical research, who practice medicine, and who as patients depend upon proper health care might well benefit from this Court's authoritative answer.
I
A
The relevant principle of law "[e]xclude[s] from . . . patent protection . . . laws of nature, natural phenomena, and abstract ideas." Diamond v. Diehr, 450 U. S. 175, 185 (1981). This principle finds its roots in both English and American law. See, e. g., Neilson v. Harford, Webster's Patent Cases 295, 371 (1841); Le Roy v. Tatham, 14 How. 156, 175 (1853); O'Reilly v. Morse, 15 How. 62 (1854); The Telephone Cases, 126 U. S. 1 (1888). The principle means that Einstein could not have "patent[ed] his celebrated law that E=mc2; nor could Newton have patented the law of gravity." Diamond v. Chakrabarty, 447 U. S. 303, 309 (1980). Neither can one patent "a novel and useful mathematical formula," Parker v. Flook, 437 U. S. 584, 585 (1978), the motive power of electromagnetism or steam, Morse, supra, at 116, "the heat of the sun, electricity, or the qualities of metals," Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U. S. 127, 130 (1948).
The justification for the principle does not lie in any claim that "laws of nature" are obvious, or that their discovery is easy, or that they are not useful. To the contrary, research into such matters may be costly and time consuming; monetary incentives may matter; and the fruits of those incentives and that research may prove of great benefit to the human race. Rather, the reason for the exclusion is that sometimes too much patent protection can impede rather than "promote the Progress of Science and useful Arts," the constitutional objective of patent and copyright protection. U. S. Const., Art. I, § 8, cl. 8.
The problem arises from the fact that patents do not only encourage research by providing monetary incentives for invention. Sometimes their presence can discourage research by impeding the free exchange of information, for example by forcing researchers to avoid the use of potentially patented ideas, by leading them to conduct costly and time-consuming searches of existing or pending patents, by requiring complex licensing arrangements, and by raising the costs of using the patented information, sometimes prohibitively so.
Patent law seeks to avoid the dangers of overprotection just as surely as it seeks to avoid the diminished incentive to invent that underprotection can threaten. One way in which patent law seeks to sail between these opposing and risky shoals is through rules that bring certain types of invention and discovery within the scope of patentability while excluding others. And scholars have noted that "patent law['s] exclu[sion of] fundamental scientific (including mathematical) and technological principles" (like copyright's exclusion of "ideas") is a rule of the latter variety. W. Landes & R. Posner, The Economic Structure of Intellectual Property Law 305 (2003). That rule reflects "both . . . the enormous potential for rent seeking that would be created if property rights could be obtained in [those basic principles] and . . . the enormous transaction costs that would be imposed on would-be users." Id., at 305-306; cf. Nichols v. Universal Pictures Corp., 45 F. 2d 119, 122 (CA2 1930) (L. Hand, J.).
Thus, the Court has recognized that "[p]henomena of nature, though just discovered, mental processes, and abstract intellectual concepts are . . . the basic tools of scientific and technological work." Gottschalk v. Benson, 409 U. S. 63, 67 (1972). It has treated fundamental scientific principles as "part of the storehouse of knowledge" and manifestations of laws of nature as "free to all men and reserved exclusively to none." Funk Bros., supra, at 130. And its doing so reflects a basic judgment that protection in such cases, despite its potentially positive incentive effects, would too often severely interfere with, or discourage, development and the further spread of useful knowledge itself.
B
In the 1980's three university doctors, after conducting research into vitamin deficiencies, found a correlation between high levels of homocysteine in the blood and deficiencies of two essential vitamins, folate (folic acid) and cobalamin (vitamin B12). They also developed more accurate methods for testing body fluids for homocysteine, using gas chromatography and mass spectrometry. They published their findings in 1985. They obtained a patent. And that patent eventually found its commercial way into the hands of Competitive Technologies, Inc. (CTI), and its licensee Metabolite Laboratories, Inc. (Metabolite), the respondents here.
The patent contains several claims that cover the researchers' new methods for testing homocysteine levels using gas chromatography and mass spectrometry. Supp. App. 30. In 1991, LabCorp (in fact, a corporate predecessor) took a license from Metabolite permitting it to use the tests described in the patent in return for 27.5% of related revenues. Their agreement permitted LabCorp to terminate the arrangement if "a more cost effective commercial alternative is available that does not infringe a valid and enforceable claim of" the patent. App. 305 (emphasis added).
Until 1998, LabCorp used the patented tests and paid royalties. By that time, however, growing recognition that elevated homocysteine levels might predict risk of heart disease led to increased testing demand. Other companies began to produce alternative testing procedures. And LabCorp decided to use one of these other procedures—a test devised by Abbott Laboratories that LabCorp concluded was "far superior." Id., at 167 (testimony of Peter Wentz).
LabCorp continued to pay royalties to respondents whenever it used the patented tests. But it concluded that...
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Lab. Corp. v. Metabolite Labs., Inc.
... 548 U.S. 124 126 S.Ct. 2921 165 L.Ed.2d 399 74 USLW 4431 LABORATORY CORPORATION OF AMERICA HOLDINGS, dba LabCorp, Petitioner, v. METABOLITE LABORATORIES, INC., et al. No. 04-607. Supreme Court of the United States June 22, 2006 ... ...