As I wrote yesterday, the ACLU filed a Petition for Panel Rehearing in Association for Molecular Pathology v. USPTO, also known as the ACLU/Myriad “gene patenting” case, alleging factual and legal errors in the court’s July 29, 2011 decision on both the standing issue and the patent-eligibility issue. I was not impressed by the ACLU’s standing arguments, and now Myriad has filed its own Petition for Panel Rehearing challenging the standing of the ACLU plaintiffs. Because standing is a threshold issue, and because the factual basis of standing has changed, it is possible that the Federal Circuit will grant Myriad’s motion and rehear the case, at least on the standing issue.

The Federal Circuit’s Standing Decision

In a unanimous part of its decision, the Federal Circuit found that one and only one of the ACLU plaintiffs had standing. In particular, Dr. Ostrer was found to have standing because he had received (in 1988) a letter from Myriad demanding royalty payments for his BRCA1 diagnostic testing services, and because he had alleged “an intention to actually and immediately engage in allegedly infringing BRCA-related activities.”

Dr. Ostrer Changes Jobs

At the time Dr. Ostrer received the letter, and until this August (2011), Dr. Ostrer was employed by New York University’s Langone Medical Center (“NYU”). Coincidentally coincident with the issuance of the Federal Circuit decision, Myriad informed the court that Dr. Ostrer was changing jobs, to become Professor of Pathology and Genetics at Albert Einstein College of Medicine and Montefiore Medical Center. In separate letters to the court, the ACLU alleged that Dr. Ostrer still had standing while Myriad alleged that he did not.

The ACLU’s Arguments

In its July 29, 2011 letter to the Federal Circuit, the ACLU alleged that Dr. Ostrer still had standing because

the Montefiore laboratories have the same immediate capability to do BRCA1/2 gene sequencing and Dr. Ostrer continues to wish to engage in the sequencing but cannot do so as a direct result of the actions of defendant Myriad.

The ACLU took a different approach in its August 25, 2011 Petition for Panel Rehearing. There, the ACLU alleged that Dr. Ostrer has standing because he “is a member of the organizational plaintiff American College of Medical Genetics (ACMG),” and “gene patenting is germane to ACMG’s purpose.”

The ACLU Petition also asserts that plaintiff Ellen Matloff has standing based on “conversations with Myriad” in which she was told that “she and geneticists at Yale would violate Myriad’s patents if they performed the tests that she wanted to perform.”

Myriad’s Arguments

Myriad’s entire Petition for Rehearing focuses on the standing issue.  Myriad’s arguments against Dr. Ostrer’s continued standing are based on the premise that Dr. Ostrer’s standing was inextricably tied to his position at NYU, and does not carry over to his new position.

For example, Myriad argues:

  • the communication by Myriad in the late 1990s was directed at NYU, involved the testing that was being performed at NYU, and offered to grant a license to NYU.
  • the panel decision that Dr. Ostrer “has the resources and expertise to immediately undertake clinical BRCA testing” was based on evidence relating to his laboratory at NYU.
  • Myriad has not directed any action towards Dr. Ostrer’s new employer.

The Myriad Petition also raises legal issues, such as the principal that standing cannot be based on “attorney argument” by the ACLU (e.g., the statements made in the ACLU letter to the court regarding Dr. Ostrer’s continued interest in BRCA1 screening and the capabilities of his new laboratory).

Myriad’s Request For Relief

Myriad asks that the appeal be dismissed without vacating the panel decision. In particular, Myriad argues that because the loss of standing “was caused by plaintiff Ostrer’s unilateral action,” the opinion upholding Myriad’s patent claims should not be vacated.” Accordingly, Myriad ask the panel to

grant a rehearing and hold that Dr. Ostrer’s departure from NYU renders this dispute moot.

Will The Federal Circuit Take A Second Look At Standing?

The Federal Circuit only rarely grants petitions for rehearing. Thus, the first question here is whether the panel will agree to rehear the case based on Dr. Ostrer’s change of employment. One factor that may weigh against rehearing is that Dr. Ostrer’s employment had not changed when the panel decision was issued. On the other hand, it appears that his employment will have changed by the time the court decides the petitions for rehearing.

Standing is a threshold issue that a court cannot side-step. If the panel wants to avoid or delay Supreme Court review of its decision on the merits, it may decide to rehear the case on the standing issue. If it concludes that Dr. Ostrer no longer has standing, it will be interesting to see if it vacates the panel decision or leaves it intact as Myriad has urged.