Panel on Multidistrict Litigation Consolidates Myriad Cases in Utah District Court

by McDonnell Boehnen Hulbert & Berghoff LLP
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MyriadThe old adage "Be careful what you wish for" comes to mind regarding Myriad Genetics' motion to the Judicial Panel on Multidistrict Litigation under 28 U.S.C. § 1407, that cases relating to the company's BRCA gene patents be consolidated in the District of Utah.  By year-end 2013, the litigation scorecard stood at six patent infringement lawsuits pending in the District of Utah, against Ambry Genetics, Gene-by-Gene, Quest, GeneDx, Invitae, and LabCorp, and three declaratory judgment actions by Quest, Invitae, and Counsyl, pending in various California district courts.  Last month, the MDL Panel granted Myriad's motion, joining five of these cases under the caption In Re: BRCA1- and BRCA2-Based Hereditary Cancer Test Patent Litigation.  These cases include the ones pending against Ambry Genetics (C.A. No. 2:13-00640); GeneDx (C.A. No. 2:13-00954); and Quest Diagnostics (C.A. No. 2:13-00967), already pending in the District of Utah, and the declaratory judgment litigations by Quest (C.A. No. 8:13-01587, in the Central District of California) and Counsyl (C.A. No. 5:13-04391, in the Northern District of California).  (The Panel decision notes that another infringement lawsuit, originally filed by Myriad in Utah, against Gene-by-Gene Ltd. had settled.)  The Panel also noted other cases, such as the ones involving Invitae Corp. and Labcorp., could be consolidated as "potential tag-along actions."

The Judicial panel rejected Respondents arguments that the factual differences between the different companies' genetic testing, the differences in claims Myriad has asserted against each, the lack of extensive discovery on defendants' invalidity contentions in view of the Supreme Court's decision in Association for Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107 (2013) (which defendants argued "ha[d] already addressed the validity of certain claims of the BRCA patents") and "alternatives" made consolidation of the cases unnecessary.  The panel opined that the Supreme Court's AMP decision, which held that "genes and the information they encode are not patent eligible under [35 U.S.C.] § 101 simply because they have been isolated from the surrounding genetic material," primarily addressed claims of the BRCA patents that are not asserted in the motion.  Accordingly, the Panel recognized that "[d]etermining whether the claims (and the patents) not at issue in AMP are likewise invalid as pertaining to non-patentable subject-matter may require a substantial amount of pretrial motion practice and parsing of the language of the patents."  The resulting complexity of these tasks favored consolidation as a way to conserve judicial resources (as well as the parties' resources, which may have been of lesser concerns to defendants).  Among the advantages perceived by the Judicial Panel was that "as only a single judge will have to become familiar with the patented technology."

Moreover, the Panel opined that, although there were some differences in different defendant's products and in the patents and claims Myriad had asserted against the various defendants (and differences in the claims challenged by the declaratory judgment plaintiffs), "the core factual and legal inquiries in each action will be similar, if not identical," so that consolidation would again conserve judicial resources by "allow[ing] a single judge to preside over the discovery relating to these patents and to consistently rule on challenges to the validity thereof."

Whatever ruefulness Myriad may now be experiencing will be due to the choice of Judge Robert J. Shelby to hear the consolidated cases.  Judge Shelby was the logical choice, seeing as he was already presiding over the Utah cases and had "invested considerable time and effort to familiarize himself with the complex technology and the complicated patent issues at the heart of this litigation," including "a technology 'tutorial.'"  The Panel also considered that Judge Shelby also had presided over the preliminary injunction hearing in the Ambry case, where he heard fact and expert testimony and attorney argument on issues "likely to be common to all the actions."

This is the rub, of course, in view of Judge Shelby's 106-page opinion denying Myriad's preliminary injunction motion.  The Judge had heard testimony and argument and seems to have come to the preliminary conclusion that Myriad's asserted claims are invalid under the Supreme Court's Myriad opinion as well as from its Mayo v. Prometheus Labs. opinion.  While Myriad will have its "day in court" to persuade the Judge otherwise, what the company has gained in economy it may have lost in being before a judge who believes their patents are invalid (and could be further persuaded that all or some of the defendants' genetic testing does not infringe any of the asserted claims).

The District Court has set a preliminary hearing with the parties for Friday, April 25, 2014.  This date is within the time period for Myriad to appeal the District Court's denial of its preliminary injunction motion, but it is unlikely that the Court will grant a stay on those grounds (which directly involve only one of the parties to the consolidated action).  Unless, of course, Myriad quits its Quixotic quest for vindication, moves to dismiss the pending actions and decides to rely on its market leadership, efficiency, reliability, reputation in the ob/gyn and genetic diagnostic communities and, of course, its proprietary database of BRCA gene mutations instead of its patents of now-questionable validity.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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