356 F. Supp. 3d 889
N.D. Cal.2018Background
- Plaintiff 23andMe sued Ancestry (three affiliated entities) asserting patent infringement (U.S. Patent '554), Lanham Act false advertising, California Business & Professions §§ 17500 and 17200 claims, and declaratory relief on trademark noninfringement and invalidity.
- The '554 patent claims methods/systems using recombinable (autosomal/X) DNA and Identical-by-Descent (IBD) regions to predict degrees of relatedness by comparing shared DNA lengths/percentages and notifying users; 23andMe asserted several dependent claims (e.g., claim 7).
- Ancestry moved to dismiss under Fed. R. Civ. P. 12(b)(6) and 12(b)(1), contending the patent is directed to ineligible subject matter (law of nature/abstract idea), and challenging the pleading and standing for the advertising and UCL/false-advertising claims; it also sought dismissal of declaratory trademark claims for lack of a justiciable controversy.
- The complaint identifies specific website statements by Ancestry (e.g., "5X MORE REGIONS than other DNA tests" with varying footnotes) and alleges those statements and perpetual-sales pricing were misleading; 23andMe alleges the representations harmed competition and seeks injunctive and monetary relief.
- Parties exchanged negotiations about use of the term "Ancestry" prior to suit; 23andMe filed for declaratory relief after negotiations stalled.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Patent eligibility under 35 U.S.C. § 101 for the '554 patent | '554 claims a new, useful technique to identify relatives using specific selection/characterization of recombinable DNA and IBD-region metrics | Claims are directed to a law of nature/abstract idea (correlation that more shared recombinable DNA → closer relation); no inventive concept beyond routine comparison | Court: Patent claims are directed to a law of nature/abstract idea and lack an inventive concept; patent-ineligible (dismissed) |
| Lanham Act false advertising (15 U.S.C. §1125) — pleading particularity under Rule 9(b) | Allegations identify discrete statements, dates, and how disclaimers were presented; meets particularity | Argues fraud-based Lanham claims must meet Rule 9(b) and 23andMe didn't plead why some statements were false | Court: Most Lanham claims plead with sufficient particularity except March 29, 2018 statement (dismissed as to that item with leave to amend) |
| California §§ 17500 and 17200 claims — standing/reliance and remedy | 23andMe contends competitor may proceed without pleading its own direct reliance and seeks restitution/disgorgement and injunctive relief | Ancestry contends these claims are fraud-based requiring 23andMe's actual reliance; disgorgement/restitution improper on pleadings | Court: §17500 and §17200 (unlawful/fraud-based) dismissed for failure to plead 23andMe's own reliance; §17200 (unfair) survives (competition-focused) but disgorgement/restitution implausible; injunctive relief remains possible; leave to amend limited defects |
| Declaratory judgment re: trademark validity/noninfringement — justiciability and discretionary dismissal | 23andMe says negotiations broke down and there is a real, ongoing dispute about its use of "Ancestry," warranting declaratory relief | Ancestry says negotiations largely agreed terms and no actual controversy exists; alternatively asks court to decline jurisdiction | Court: Article III/DJA controversy exists (negotiations stalled and adverse positions remain); court declines to dismiss on discretionary grounds and retains declaratory claims |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading plausibility standard under Rule 8)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility and pleading standards)
- Mayo Collab. Servs. v. Prometheus Labs., Inc., 566 U.S. 66 (laws of nature exclusion; Alice step analysis context)
- Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 573 U.S. 208 (two-step §101 framework)
- Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371 (Fed. Cir.) (claims directed to naturally occurring material/methods)
- Genetic Techs. Ltd. v. Merial L.L.C., 818 F.3d 1369 (Fed. Cir.) (claims directed to law of nature: linkage disequilibrium correlation)
- Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir.) (factual issues may attend whether elements are well-understood, routine, conventional)
- Rapid Litig. Mgmt. Ltd. v. CellzDirect, Inc., 827 F.3d 1042 (Fed. Cir.) (claims to a new lab technique not directed to natural law)
- Thales Visionix, Inc. v. United States, 850 F.3d 1343 (Fed. Cir.) (claims applying physics via unconventional sensor configuration held directed to patent-eligible application)
- Ass'n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576 (naturally occurring DNA is not patent-eligible)
- BRCA1- & BRCA2-Based Hereditary Cancer Test Patent Litig. v. Ambry Genetics Corp., 774 F.3d 755 (Fed. Cir.) (comparison-based claims treated as abstract)
- Cleveland Clinic Found. v. True Health Diagnostics LLC, 859 F.3d 1352 (Fed. Cir.) (claims directed to natural correlations found in bodily samples)
- Diamond v. Diehr, 450 U.S. 175 (adding conventional post-solution activity cannot salvage an ineligible principle)
- MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (declaratory judgment standing analysis)