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Major ruling for doctors due

Six years after stepping into a major legal controversy over doctors’ medical diagnoses of how their patients react to varying drug doses, but then finding itself unable to decide, the Supreme Court agreed on Monday to try again.  It granted review, with the decision to come in its next Term, on the scope of patent rights for a system of analyzing such patient reactions.  The famous Mayo Clinic and its affiliated organizations brought the issue back to the Court, a year after the Justices ordered a lower court to take a new look at the issue.

At the center of the Mayo appeal is its claim that no patent should be issued on observations of how varying a dosage of a medicine alters the way a patient reacts.  Those kinds of observations are what doctors do routinely, the Mayo group has contended, and bottling up that process in someone’s exclusive patent rights would stifle normal medical practice, and force doctors to spend time looking in legal files to see if they are infringing.

The Circuit Court for the Federal Circuit — the nation’s leading tribunal on patent rights — has twice upheld diagnostic method patents owned by Prometheus Laboratories, Inc., a company that makes medicines and devises diagnostic techniques.  It has patents covering a process for analyzing blood tests to determine whether certain biological measures rise or fall, depending upon the amount of a drug the patient has been given.  The claimed invention involves measuring the effects of synthetic drugs that are used to treat so-called autoimmune diseases – that is, disorders in which the body’s self-protective capacity reacts to something occurring naturally in the body, as if it were an adversary that had to be attacked.  The drugs suppress that immune response.

Doctors are said to have difficulty determining just how much of such a synthetic drug to give a patient, because patients’ metabolism varies.  So the doctor will prescribe varying dosages of a drug for suppressing an immune response, and then analyze blood tests to determine whether the dosage is too strong, or not strong enough.  Prometheus’s patents involve a method that aids doctors in performing this kind of treatment analysis.  It has prepared test kits for doctors who use the method.

Prometheus sued the Mayo Clinic and its affiliates, contending that they were using the kits in violation of Prometheus’s patent rights.  Mayo at one point had a plan to produce its own kits, but, after being sued for infringement, it held off.   Prometheus ultimately won in the Circuit Court, in a finding that the company’s invention had satisfied that court’s “machine-or-transformation” test for patent eligibility.  The Mayo group failed in that court on its argument that the test was nothing more than observing a natural phenomenon — something that, ordinarily, is not patentable.

The legal fight between Prometheus and the Mayo group was an echo of an earlier fight that had reached the Supreme Court, between Laboratory Corp. of America and Metabolite Laboratories, involving a similar dispute over a method patent involving analysis of patient reactions.   The Supreme Court agreed to hear that case in 2005, but the case ultimately was turned aside without a decision, because of a question of whether the legal issue had been kept alive.   Three Justices (Justice Stephen G. Breyer and two Justices no longer on the Court) dissented, arguing that the case raised a major issue over whether eligibility for patents on such diagnostic methods might inhibit doctors’ use of their own medical judgment in treating patients.

After Mayo had lost to Prometheus in a closely similar dispute in the Federal Circuit in 2009, it took its case to the Supreme Court.  After the Court had ruled in Bilski v. Kappos in June last year, overturning the Circuit Court’s singular reliance on the machine-or-transformation test of patent eligibility, the Justices sent the Mayo case back to that tribunal for a second look.    That resulted in a new decision, once again upholding Prometheus’s patents.   The Circuit Court said that the patents were valid as a form of transformation, since the test measured the change in the body chemistry of a patient after being given varying dosages of immune-suppressing drugs.

The Court’s agreement to hear that case was one of four new grants on Monday — all in cases to be heard next Term.  In two of the four new cases, the Court had asked for the views of the U.S. Solicitor General, who advised the Court to deny review in both.   The Court did not take that advice.

The Court agreed to hear one government appeal, to clarify when a federal agency must pay money damages for intentionally disclosing personal information from its files, in violation of the federal Privacy Act.   The case involves a lawsuit by a former California pilot, who lost his private flying license after government officials — using private information from official files — disclosed that he had obtained a medical certificate to fly without telling the government that he was HIV-positive — a disqualifying condition at the time.   The case is Federal Aviation Administration v. Cooper (10-1024).  Justice Elena Kagan took no part in the order granting review.

In one of the two cases granted review despite the Solicitor General’s advice, the Court will spell out the constitutional test for determining who owns the bed of a river.  That issue figures centrally in a dispute over states’ authority to claim ownership of riverbeds, and then collect back rents from users of the riverbeds.  The case was taken to the Court by a private company, PPL Montana, which operates electricity-generating plants along three rivers in Montana, and is facing a $40 million assessment — plus $9 million in interest — in back rents for using the riverbeds.  The case is PPL Montana v. Montana (10-218).   The Court limited its review to the constitutional test, the first question posed.

In the second case granted review without the Solicitor General’s endorsement, the Court will be deciding whether a home-buyer has a right to sue a title insurance company after buying title insurance in a process that allegedly violated a federal law against fees for referrals for such insurance, the Real Estate Settlement Procedures Act.  The question in the case of First American Financial Corp., et al., v. Edwards (10-708) is whether such a lawsuit may be filed if the home-buyer has not suffered any economic injury in the transaction.   The Court limited its grant of review to the “standing” issue under the Constitution’s Article III.

The scope of the Real Estate Settlement Procedures Act also was at stake in another order the Court issued Monday, asking the U.S. Solicitor General for the federal government’s views.  At issue in the case of Countrywide Home Loans, Inc., v. Rodriguez (10-1285) is whether federal bankruptcy law bars a mortgage lender’s right, under that Settlement Act, to require a borrower to put up added escrow funds during a Chapter 13 proceeding, when the funds are needed to cover taxes, insurance and other obligations while the debtor is proceeding in bankruptcy court.  The Justices will decide whether to hear the case after getting the government’s response, probably next Term.

Recommended Citation: Lyle Denniston, Major ruling for doctors due, SCOTUSblog (Jun. 20, 2011, 5:49 PM),