Blawgletter®

You Can't Patent Genes Unless You Change Them, Supreme Court Holds

Last week, a 9-0 Supreme Court ruled that human genes do not count as patent-eligible subject matter but that fake genes with some DNA missing may. Ass'n for Molecular Pathology v. Myriad Genetics, Inc., No. 12-398, slip op. 12 (U.S. June 13, 2013) ("Groundbreaking, innovative, or even brilliant discovery does not by itself satisfy the §101 inquiry" on patentability. The Court warned that it might give a pass to "method" claims that relate to genes 

[Blawgletter's patent trial will likely end this week. So will the waiting for the gay marriage, affirmative action, and Voting Rights Act cases.]

High Court Confirms Class, Nine to Zip; the Dangers of Stipulating

Justice Elena Kagan capped her 9-0 outing in Bowman v. Monsanto Co., No. 11-796 (U.S. May 12, 2013) (post here), with another unanimous ruling in Oxford Health Plans LLC v. Sutter, No. 12-135 (U.S. June 10, 2013). She sure can write.

The Court held that the federal Arbitration Act required it to respect an arbitrator's decision to handle Dr. Sutter's claims against Oxford Health Plans as representative claims on behalf of all Garden State doctors whom Oxford Health shorted on their fee-for-service pay. Because the arbitrator tied his ruling to the parties' contract, the Court reasoned, the FAA barred second-guessing him on whether or not the parties agreed to permit class arbitration.

Justice Kagan wrote that Stolt-Nielsen S. A. v. AnimalFeeds Int'l Corp., 559 U.S. 662 (2010), didn't compel a different outcome. She noted that the parties there stipulated that nothing in their contract shed light on whether or not they agreed to allow arbitration on a non-individual (class) basis. And that meant the arbitrators couldn't possibly have based their ruling (in favor of class treatment) on the parties' contracting intent.

[By the way note: Blawgletter reached the fourth day of trial in a patent case today. Expect spotty posting over the next week or two.]

Constitution State Union Workers Win First Amendment Case

Public unions claimed that the Governor of Connecticut ran roughshod over their members' first amendment right to . . . join a union. They alleged that the Constitution State's chief executive used budget cuts and state-wide layoffs in 2003 as cover for firing 2,800 workers solely because they belonged to unions that refused to accept contract terms the state had offered.

The district court accepted the state's argument that it did not impinge on the employees' first amendment right of free association.

Today, the Second Circuit reversed. Citing "the well-established principle that union activity is protected by the First Amendment" and comparing the case to ones involving "political patronage", the panel ordered the district court to grant summary judgment in favor of the plaintiffs. State Employees Bargaining Agent Coalition v. Rowland, No. 11-3061-cv, slip op. at 13 (2d Cir. May 31, 2013).

The Republican party affiliation of the governor who presided over the layoffs, John Grosvenor Rowland, likely did not help the defendants. Not to mention his guilty plea in 2004 to charges of mail and tax fraud.

Good Faith Would Not Defeat False Opinion Claim Under Securities Act, Sixth Circuit Holds

The Sixth Circuit split with the Second and Ninth Circuits today on what a plaintiff must plead under section 11 of the Securities Act of 1933 in cases that involve opinions, views, and other "soft" info.

The panel looked at a claim that Omnicare violated Section 11 by publicly stating its judgment that its drug-care services for people who live in long-term care complied with the law when in fact the services didn't comply. Omnicare argued on appeal that the district court rightly kicked the case on the ground that the complaint failed to allege that Omnicare knew it hadn't met its legal duties. But the panel held that plaintiffs met their pleading burden simply by calling the opinion false. Section 11 does not require proof of scienter (intent to defraud), it pointed out, although it does allow a good faith defense (which didn't matter because the court needed to assess only whether plaintiffs had stated a valid claim).

The threesome also noted their own opinion that colleagues in New York and San Francisco had gotten the law on the point wrong. Indiana State District Council of Laborers and Hod Carriers Pension and Welfare Fund v Omnicare, Inc., No. 12-5287 (6th Cir. May 23, 2013) (declining to follow Fait v. Regions Financial Corp., 655 F.3d 105 (2d Cir. 2011), and Rubke v. Capitol Bancorp Ltd., 551 F.3d 1156, 1162 (9th Cir. 2009)).

Irony lives.

Using Amateur Athlete's Avatar in Video Game Could Violate Right of Publicity, Third Circuit Rules

Electronic Arts, Inc., makes video games, including the NCAA Football series. EA put an avatar of Ryan Hart, an ex-quarterback at Rutgers, in the series. Hart sued EA for "violating his right of publicity as recognized under New Jersey law." Hart v. Electronic Arts, Inc., No. 11-2750, slip op. 5 (3d CIr. May 21, 2013). The district court granted EA summary judgment, holding that EA had a free speech right to use the likeness and biographical information -- the "identity" -- of Hart.

The Third Circuit, by a 2-1 vote, reversed. It balanced EA's first amendment rights against Hart's interest in not having others exploit his image for commercial gain. The panel settled on the "transformative use" test of copyright law and concluded that NCAA Football used too much of Hart's identity to obtain summary judgment on Hart's right of publicity claim.

The dissenting judge believed "that the creative components of NCAA Football contain sufficient expressive transformation to merit First Amendment protection."