Lemley’s Firm Files Declaratory Judgment Action Against Myriad


Gene QuinnOn September 20, 2013, Counsyl, Inc. filed a declaratory judgment complaint in the United States District Court for the Northern District of California against Myriad Genetics, Inc. Counsyl is represented by Daralyn Durie and Mark Lemley of Durie Tangri. Lemley is also a Professor of Law at Stanford University.

Counsyl seeks a declaration that claims from eight Myriad patents are invalid and not infringed. Further, Counsyl seeks their attorneys’ fees because they assert that this is an exceptional case because Myriad is enforcing its patent portfolio despite losing on “certain claims” in these patents in the Supreme Court decision in Association for Molecular Pathology v. Myriad Genetics.

The problem with Counsyl’s declaratory judgment action is that they do not seem to have any contact with Myriad, but they claim that “[t]here is a definite, concrete, real and substantial controversy between Counsyl and Myriad of sufficient immediacy to warrant the issuance of a declaratory judgment.…” However, there are no facts in the filing that show anything other than suspicion that Myriad may at some time sue Counsyl because Myriad has stated that they aggressively intend to assert rights to the patents they own. This type of nebulous, generalized fear is not usually sufficient to support declaratory judgment jurisdiction.

Paragraph 9 of the complaint is may reveal the real motives:

9. Myriad itself claims that, by offering its allegedly patented testing services to breast and/or ovarian cancer patients and their family members, and by excluding any potential competitors from being able to offer women any alternatives to the Myriad test, Myriad has created an extensive database of generic variants of BRCA1 and BRCA2. Since 2005, however, Myriad has kept the vital public health information in this database a secret, and has refused to share it with healthcare workers and the public. Thus, Myriad has effectively hindered the medical community from being able to use patient data to further medical research and impeded the ability of clinicians to interpret genomic data.

First, it is not accurate to call Myriad’s innovations “allegedly patented.” Myriad HAS a patent. Whether the claims remain valid in the patent is a legitimate question, but a patent without any claims is still a patent. A rather useless patent, but still a patent.

Second, how exactly is it relevant that Myriad has maintained trade secrets? Is Counsyl going to actually argue that in order to forward the greater good, Myriad has to release their trade secrets in the name of public health and safety? Was Myriad expected to pay to innovate, generate decades worth of valuable and proprietary information, and then, in a benevolent gesture, release the information to the public? I wonder if Counsyl, or Lemley for that matter, willingly fund innovation only to release it for free. That’s a legitimate question to ask Lemley, given that he is the Founder of Lex Machina, which offers a commercial version for a fee. I’m not going to suggest that anyone should give something away; I am an entrepreneur at heart and in my own life.

Truthfully, I don’t understand the vilification of Myriad. They created a test that is extremely reliable in determining whether a woman is likely to get breast cancer. Would the critics prefer that women not know and either be stricken with the disease or proactively take action to ward off a disease they may not have? No. The critics simply think that the test Myriad created was no big deal and, now that others can do the same test, Myriad should not have a patent on it. This completely ignores the fact that when Myriad came up with the innovation, it was novel and non-obvious. Now they not only seem to want to take the patents from Myriad, but they would like to see Myriad’s trade secrets forfeited as well.

While I don’t understand the Myriad vilification, they are not without blame. Myriad was advised to live with the district court decision. No one would have followed that decision; it would have been a non-event. But they appealed to the Federal Circuit. The Federal Circuit did the right thing, twice, following Supreme Court precedent and the Patent Statute. But the Supreme Court couldn’t leave well enough alone, and Myriad did their best to hide the winning argument. Did you know that Myriad never denied the test to anyone, even if the patient had no insurance? I doubt you did, because that never appeared in any filings or articles other than ones I wrote. I heard it from high-ranking officials of Myriad in a public forum once, and then never again. So the dispute wasn’t, as the ACLU and others claimed, about denying the test. It was about whether a patent could be used to deny a second opinion. Of course, that was never how Myriad framed the issue. Why, I don’t know, because I think it would have been a very different battle. In any event, without the truth in front of them, the Supreme Court did what we all feared they would, which is throw out decades of settled patent law in the name of stripping Myriad of its patents.

Faced with a terrible Supreme Court decision that effectively overruled Diamond v. Chakrabarty, Myriad doubled down, and started suing people again on its patents. Why not just rely on the trade secrets that everyone knows Myriad has, which makes the Myriad test far more accurate then the other newbie entrants who would prefer to pretend that the Myriad test is nothing special. If it isn’t special, then why can’t they predict with the same accuracy? Oh right, because of the trade secrets that some now claim should be laid open for public inspection.


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