Laboratory Corp. of America Holdings v. Metabolite Laboratories, Inc.

MARCUS, Before EDMONDSON and candidates obtaining and on the of signa BARBOUR,* Judges, Circuit District tures for nominating petitions); Cart Barnes, Judge. wright v. 1140-42 (11th Cir.2002); see also Swanson v. Wor (11th Cir.2007) ley, 490 F.3d (up PER CURIAM: holding requirement Alabama’s 3% where Appellant-Plaintiff sought Coffield ac- independent no party or minor candidate general cess the 2008 election ballot as had obtained ballot access when nothing an independent candidate to represent indicated that similar potential candidates Georgia’s Congressional Fourth District access). had sought ballot The pertinent the United States House of Representa- laws of Georgia have not changed materi tives. Briefly She was not on the ballot. ally since the decisions in Jenness and stated, she was unable to collect a suffi- Cartwright were made. cient signatures satisfy number of Geor- AFFIRMED.

gia’s requirement independent that an can- petition didate submit a nomination signed

by at least 5% of the total number of

registered eligible voters to vote in the last position

election for the the candidate seeks. Ga. 21-2-170. This LABORATORY CORPORATION OF Ann. Code appeal presents one issue: whether the (doing AMERICA HOLDINGS busi district court erred when it dismissed Cof- LabCorp), Plaintiff-Appellee, ness as field’s challenge constitutional for failure 12(b)(6). to state a claim under Rule We LABORATORIES, METABOLITE conclude it did not. INC., Defendant-Appellant. Coffield that Georgia’s claims 5% rule is No. 2008-1597. burdensome; alleges too she indepen- no United States Appeals, Court of dent candidate for Represen- the House of Federal Circuit. in Georgia tations require- has met March ment since 1964 and that party no minor candidate has ever met it. But she does allege many how candidates have tried.

* Barbour, Jr., Henry Honorable William Mississippi, sitting by designation. Unit- trict of Judge ed States District for the Southern Dis- Castanias, Day, of Jones A.

Gregory DC, plaintiff-ap- Washington, argued him on the was Leon F. a state law contract pellee. dispute With brief over know- DeJulius, Jr., Pittsburgh, royalties brought PA. Of coun- how pursuant to the dis- diversity jurisdiction. on the were Natalie Hanlon-Leh trict court’s sel brief There- fore, Wang, Faegre and Nina Y. & Benson we transfer the to the appeal United LLP, Denver, Appeals of CO. States Court of for the Tenth Circuit. Gibson,

Mark A. Dunn & Crutch- Perry, LLP, DC, Washington, argued

er of for BACKGROUND him on the defendant-appellant. With Kourtney K. Beaton brief were Glenn and (“CTI”) Competitive Technologies, Inc. Mueller, Denver, M. of CO. (the 4,940,658 owns U.S. Patent No. “'658 patent”). patent The '658 claims a method GAJARSA, DYK, MOORE, Before and detecting for of deficiencies vitamin B12 Judges. Circuit by and folate assaying homocysteine total levels and correlating an elevated level of by court Opinion for the filed Circuit homocysteine deficiency total awith in ei Judge Dissenting Opinion GAJARSA. ther cobalamin or folate. Metabolite is a by Judge filed DYK. Circuit nonexclusive licensee of the '658 right with the It sublicense. also devel GAJARSA, Judge. Circuit oped know-how technology, including soft ware, automate testing process. In Metabolite from United appeals granted Metabolite LabCorp a li States District Court for the of District cense to the know-how and sublicense to grant summary judgment. Colorado’s (“License Agreement”). See Lab. Am. Meta Corp. Holdings v. Agreement The License Labs., Inc., covered four as bolite F.Supp.2d (D.Colo.2008). says, including homocysteine assay total granted The district court referred to as the “homocysteine-only as LabCorp’s summary judgment motion for say.” began In LabCorp using on its an declaratory judgment homocysteine-only assay that it alternative did not a license se agreement breach samples rum using immunoassay for failure on an pay royalties kit (the homocysteine assays performed developed by judg after Abbott Laboratories Test”) ment had been entered in a prior stopped paying “Abbott both infringement breach of action patent royalties just and know-how brought, in part, Metabolite. Because homocysteine-only assays.1 serum-based present of action brought cause does arise Metabolite and an CTI action against LabCorp under federal law nor does Meta for breach of contract right depend bolite’s to relief necessarily infringement. Labs., on resolution Corp. substantial Inc. Lab. Am. Holdings, law, (D.Colo. 3, 2001) this court does not have 2001 WL 34778749 Dec. (“Metabolite ”) trial) appeal. aff'd, over this The action is I (jury LabCorp assays for total tests licensed that tested for deficiencies in plasma. LabCorp both urine and continued using roy- vitamin B12 folate also and/or pay royalties for its uti- urine-based alty-bearing Only GCMS method. serum- gas lizing chromatography/mass Metabolite's homocysteine-only assay based was the sub- spectrometry know-how. also con- ject of the lawsuits below. pay tinued to on the three other (“Metabolite (Fed.Cir.2004) ”), agreement terminating cense it with II cert. respect performance to its Abbott

granted, 546 as im ceH. dismissed [T]est? L.Ed.2d 501 124, 126 providently granted, jury found affir- J.A. 21072-73. (2006). 2921, 165 L.Ed.2d It infringement damages mative. awarded and breach to CTI million of con- $1.02 A. damages tract to Metabolite of mil- $3.65 lion. case, Metabolite claimed first respect to the ho- breach with of contract Upon post-ver- and Metabolite’s CTI’s assay for mocysteine-only failing pay to I, the dict motions Metabolite district sought and contract injunction granted permanent court a to patent infringe- claimed damages, CTI enjoin LabCorp performing any from ho- infringement damages. sought ment and assay, including mocysteine-only any ho- (Metabol- a jury before was tried case mocysteine-only assay performed the using I). that LabCorp ite contended because Abbott moved for LabCorp stay Test. a infringe the Test did not Abbott pending the court the appeal, and entered Assay not a Licensed as it was stay subject a LabCorp paying roy- to 6% Agreement. The by the License defined alty homocysteine-only to CTI for all as- of the License provision termination says performed entry of judgment. after part: in relevant Agreement states LabCorp required to provide was further have ... [LabCorp] right 4.02 shall the accounting an with the 21.5% Agreement with re- this terminate the to the homocy- sales attributable if spect Assay a Licensed particular steine-only assays per- that LabCorp (i) Licensed Assays case of the entry judgment. formed after homocysteine, a more cost effective com- jury’s finding This court affirmed the is available that does mercial alternative that License Agree- breached the LabCorp infringe not a enforceable valid LabCorp’s holding ment refusal Patents;.... claim the Licensed pay royalties a material was breach that Thus, LabCorp argued, J.A. 8999. it did constitutes if the termination even obligations not violate its contractual for II, requires written notice. See Metabolite homocysteine-only assay the as to either stay F.3d at 1370. Once of the or the know-how license subli- lifted, injunction LabCorp stopped was cense. performing homocysteine-only assays A Form Special Verdict was submitted assay by entering itself but outsourced jury. to the It was asked the threshold agreement Specialty into an with Labora- Agree- of whether License tories, Inc. that was (“Specialty”) indepen- ment respect had been terminated with dently perform by licensed CTI to homocysteine-only assay. homocysteine-only by referred Lab- a you find, Corp. response, Metabolite filed preponderance Do a of the evidence, LabCorp post-judgment its li- motion Metabolite I as- breached above, Agree- provide LabCorp selectively 4.02 of the how could Pursuant License ment, LabCorp sever and remaining could terminate the terminate three Licensed As- Agreement as to individual Licensed License says. (ii)(iv), Assays. quoted Subsections referral of the serting LabCorp’s as- B. says party injunc- to a third violated the above, III, As noted in Metabolite Lab- post-judgment

tion. also filed Corp brought declaratory judgment ac- seeking in Metabolite I clarification motion tion, premised upon diversity jurisdiction, injunction. under seeking 28 U.S.C. a judg- Simultaneously, LabCorp filed a new ac- ment on “whether Metabolite can recover seeking tion in the court same district damages activity occurring after the declaratory judgment that had not vio- period time covered the Amended Agreement. lated the License Lab. Corp. Judgment with respect part to a of an Labs., Inc., Holdings Am. v. Metabolite Agreement terminated,” that has been (D.Colo.2008) (‘Meta- F.Supp.2d “whether LabCorp’s outsourcing activity III”) (instant below). bolite matter On any violates existing contract between September the district court LabCorp and Metabolite.” In response to motions, ruled on the post-judgment filed declaratory action, judgment Metabol- I, in Metabolite and stated in relevant ite counterclaimed for contract, breach of part: among claims, other state-law including legal has never been a determi- [TJhere breach of obligation good of faith and fair LabCorp actually nation that committed dealing, unjust enrichment, promissory es- any breach the date the Amend- fraud, toppel, equitable after and estoppel. The Jtidgment, any ed or the amount breach of contract claim premised was on resulting damages. Because there are LabCorp’s continued referral of homocy- case, remaining no claims in this steine-only assays to a party third without issue of whether actions taken Lab- paying royalties entry after Corp subsequent to the Amended Judg- jury’s parties verdict. The filed cross contract, ment constitute breach of and summary motions for judgment. LabCorp damages any the amount of for such judgment moved for on its contract claim breach, cannot be resolved herein as a counterclaims, and on each of Metabolite’s result, of procedure. matter As a judgment Metabolite moved for on case, Court is not able to state this at LabCorp’s declaratory judgment claim and juncture, this that the amount stated on its breach of contract counterclaim. The the letter of credit is now “due and III district court held that no owing to Metabolite Laboratories.” further were due under the Li- However, LabCorp a separate has filed Agreement. cense The court further stat- III], action seeking [Metabolite “a de- ed that plain reading of the “[a] verdict claratory judgment has form, coupled language with the Agreement violated the with various Agreement, License leads to the conclu- occurring period conduct since the time sion that the License Agreement was both covered the Amended Judgment and terminated,” breached and and resulted in occurring into the future.” Whether (both rights the loss of all patent and LabCorp committed a contract breach know-how) contract, under the albeit limit- Judgment after the date of the Amended homocysteine-only assay. ed to the Meta- appropriately in [Metabolite resolved appeals. bolite III]. added). (emphasis appeal, LabCorp

J.A. 21124-25 On filed a motion The '658 9, or, patent expired July alternative, dismiss in the transfer the 1282 Circuit, equated statutory § analysis lack of 1338 Tenth for

appeal 2, § 2009, “arising under February a mo- under” standard 1338 jurisdiction. On that established for court denied the motion cases with tion this panel of question invoking general allow to claims parties prejudice without Christianson, § issues in their mer- under U.S. at jurisdictional raise the Vornado, 2166; juris- this U.S. The issue of court’s S.Ct. its briefs. Accordingly, appeal at is now S.Ct. 1889. Metabolite’s diction over Supreme decision Grable & Court’s us. squarely before Products, Inc., Engi Metal v. Darue Sons neering Manufacturing., & DISCUSSION 162 L.Ed.2d case, addressing general federal the merits this reaching Before jurisdiction refined the Christianson two- however, must, first whether we address jurisdiction by § part requir test for jurisdiction under 28 appellate we have “a 1295(a)(1). ing a determination of whether state- § U.S.C. necessarily law claim a stated fed raise[s] 1295(a)(1), this cir Under 28 U.S.C. issue, actually disputed eral and substan ap an cuit over has exclusive tial, may which a federal forum entertain of a final decision district court peal from a disturbing any congressionally ap without based, “if that court jurisdiction of was judicial proved balance of federal state on 1338.” Bd. part, whole or Grable, responsibilities.” Regents, Nippon Tex. v. Tel. & Univ. of 2363; Empire 125 S.Ct. see also Health 1358, (Fed.Cir. 414 1361 Corp., Tel. F.3d Assurance, McVeigh, v. choice Inc. 547 1338(a) 2005). confers the district Section 677, 2121, 689-90, U.S. 126 S.Ct. 165 jurisdiction “any original with over courts (2006). L.Ed.2d 131 any civil under Act of arising action Con gress relating patents.” Supreme to The well-pleaded Under com Court in v. Colt Christianson Industries rule, plaint “arising under” is 800, U.S. Operating Corp., 486 108 S.Ct. plaintiffs determined from the statement (1988) 2166, a 100 L.Ed.2d 811 outlined or any of his her own claim “unaided jurisdiction. two-part test for 1338 Un thing alleged in or anticipation avoidance Christianson, “arising jurisdic der under” thought of defenses it is which defen only tion to those in cases which “extend[s] Christianson, may interpose.” dant 486 a well-pleaded complaint establishes either (internal 809, at quota 108 2166 S.Ct. creates patent federal law the cause of omitted). tion marks and citation In an plaintiffs action that the relief right or to declaratory judgment, action for we look necessarily depends on resolution of a sub declaratory judgment “not to the com law, patent federal question stantial of plaint, but to action that the declarato necessary law is a of element ry have brought.” defendant would one well-pleaded of the claims.” Chris Estes, 909, Speedco Inc. v. 912 tianson, 808-09, at 486 U.S. 108 S.Ct. (Fed.Cir.1988); Med. v. Cedars-Sinai Ctr. Supreme 2166. The Court Christianson (Fed.Cir. Watkins, 1573, 11 1578 F.3d Group, and also in Holmes Inc. v. Vornado 1993). Inc., Systems, Air Circulation 535 U.S. Metabolite, appellant, as the bears the S.Ct. L.Ed.2d 13 hypothet- of that its precedent demonstrating onto its burden grafted ability sufficiently of a sub depends present on resolution substantial ical claim law. federal question questions support of federal of law to stantial 808-09, 108 Christianson, 1338(a).” at S.Ct. under 486 U.S. section Bd. of is, Metabolite’s question Regents, hypo does 414 F.3d at 1363. In 2166. its claim, necessarily claim raise stat hypothetical thetical Metabolite would be re actually disput law issue quired prove ed to elements of a of breach Grable, 545 U.S. substantial. See Jersey ed and contract cause of action under New does at Metabolite contract, breach, of a law—existence valid See, this burden. Co., Inc., not meet damages. e.g., Grow Chokshi, N.J.Super. 959 A.2d (2008). Metabolite contends that its A. royalties to requires entitlement to hypothetical claim Metabolite’s infringement as a prove necessary compo claim been a breach of contract would have element, i.e., nent breach of the “whether referral LabCorp’s on continued premised homocysteine[-only] assays performed homocysteine-only assays par a third fell by LabCorp within the claims royalties paying ty without Licensed Patents and Li therefore were “Net of Licensed post-judgment its Sales Assays.” Rep. censed Petr.’s Br. Be Agreement, Under the License Assays.” infringement cause '658 was was payment I, determined Metabolite here Metabol referral of performance LabCorp or hypothetical require ite’s action does not Assay by to Metabol a Licensed resolution of ite. disposition law central of the breach Grable, claim. 2.02 consideration Section (conferring grants [LabCorp] made Article jurisdiction where plaintiffs com state-law pay royalty agrees [Metabolite] sought plaint, quiet prop which title to in respect [LabCorp’s] of 21.5% Net erty that the IRS seized and sold at auc of than Assays Licensed other Re- Sales tion, depended solely on a dispute about Assays. ferral of adequacy compliance the IRS’s with added). Li- (emphasis J.A. 20784 procedures seizure notification set forth Assays of types assays: censed cover four law). tax clear, the federal To we be are forth setting not a new that a rule of law (i) assays homocysteine using meth- after filing concession of a and materials falling ods within operates jurisdiction. defeat Such (ii) Patents; ... of the Licensed claims contrary rule prec would be to established (iii) [methylmalonic [2-methyl- ... acid] States, Corp. edent. Keene See v. United (iv) ... [cystathionine].... acid] critic 200, 207, 2035, 124 U.S. 113 S.Ct. added). (emphasis J.A. 20782-83 “Li- (1993)(citing L.Ed.2d 118 Tor Mollan v. censed Patents” is defined as rance, 9 Wheat. any any from patents issuing and (1824)(“It clear, quite L.Ed. 154 is that the continuations, continuations-in-part, divi- jurisdiction depends the Court upon sions, reissues therefrom. and/or things state of at the time action that brought, vesting, have held “that issues of inventor- and after it cannot We events.”)). ship, infringement, validity by subsequent enforce- be and ousted juris- that the exercise of (holding Empire Healthchoiee Grable First, proper court is when jurisdiction diction a district for analysis. guide our court, ques on a breach of plaintiff, the substantial in order to succeed exist in our action, prove that required law must be is contract tion of infringe). the merits. Chris products defendant’s require resolution certain of 808-09, 108 S.Ct. tianson, at 486 U.S. distinguishable are because Such cases Healthchoiee, at 547 U.S. 2166; Empire not a “case present instant matter does Here, jury Here, 126 S.Ct. it that undisputed a case.” is within judgment Meta subsequent verdict and scope conduct falls within the post-trial homocysteine I determined bolite finding of patent. While the of the '658 it Assay because a Licensed only assay is finding infringe- breach is on a based patent, the 658 infringes ment, court would not have to the district Agree the License materially breached infringement analysis an because conduct paying without by performing ment infringement and I established Metabolite Special Verdict royalties. decision. party neither contests affirmed. See 21072-74. We Form at J.A. Moreover, Regents, we clari- Board of II, at 1370. The issue 370 F.3d and made clear scope fied the of Valves therefore, re has been infringement, contract actions that not “all breach of longer disputed. Accord and is no solved a determination involving patents require” breach of hypothetical ingly, Metabolite’s Regents, infringement. Bd. of with no presents claim this court F.3d Speedco, law. See disputed issue (citing Franchise Tax at 912-13 Second, presence the mere of a Trust Laborers Vacation Bd. v. Constr. evidence to a claim does patent as relevant Cal., S. present a substantial issue of itself proposition for the L.Ed.2d 420 Tech., Inc. v. law. See ExcelStor un “original KG, Licensing & Co. Papst GMBH appears that some sub unless available (Fed.Cir.2008) (affirm F.3d 1376-77 stantial, of federal law is disputed question ing for lack of 1338 dismissal of one of the well- necessary element claim declaratory judgment when raised claims”). pleaded state challenge royalties exhaustion to agreement). due under a license Like the contract This is not a case which declaratory Speedco, defendant Meta ques- a resolution of related requires claim only claim would concern state law bolite’s law. Air Measurement patent tion of Cf. Speedco, 853 F.2d at 912- contract claims. Tech., Gump Hauer Inc. v. Akin Strauss declaratory judgment (dismissing 13 (Fed. Feld, LLP, 1262, 1272 504 F.3d & jurisdiction for lack of 1338 complaint Cir.2007) substantial (finding disputed, a claim hypothetical because defendant’s party a patent law exists when issue damages under a con would be to recover infringement required prove patent to its ownership and patent tract to transfer satisfy the for” causation re- suit to “but only plaintiffs patent claims related legal malpractice a quirement state defenses). law This case is possible state claim); Immunocept, Fulbright LLC v. & (Fed. Speedco than be even more attenuated Jaworski, LLP, 1285 Cir.2007) subject of the contractual (same); Valves, cause here the Inc. v. U.S. (Fed.Cir.2000) a but rather know- dispute patent, is not 212 1372 Dray, F.3d patent. to a cause rights LabCorp began how that refer Id. at outsource the ho- mocysteine-only assays after this court is- finding sued its infringement, decision this the “meaning Unlike Grable where court could not have resolved the issue of ... provision federal tax an im [was] whether LabCorp’s assays outsourced in- law that portant sensibly issue of federal fringe the patent. Op. '658 Dissent at court,” belongs in federal breach of con filing 1288-89. But at the time of application a specific tract is fact of state complaint, neither contended party Healthchoice, Empire law. homocysteine-only assays outsourced Though significant S.Ct. 2121. were infringing different from the in-house claim, a breach of Metabolite’s Abbott Minneapolis Test. See & St. Louis analysis require would not “resort to the Co., R.R. Co. v. Peoria Pekin Ry. & Union solicitude, experience, hope and of unifor 70 L.Ed. mity Grable, that a federal forum offers.” (1926) (Jurisdiction depends upon “the 312, 125 Hearing U.S. at a things existing state of at the time the suit context-driven, state law contract issue in was brought.”). dissent cites to Lab- provides “hope this court no of uniformity” Corp’s in the statement second case’s Fi- adjudication patent in the laws. And Order, nal Pretrial where stated law issues in the decisions of patent homocysteine-only assays that “the at is- regional circuit court would not defeat sue this case are ‘Licensed As- uniformity in Congress’s goal ” says,’ as a concession See F.2d at Speedco, laws. 913-14 would have to establish that the out- (“[T]he juris on statutory limitations sourced were in fact of this court the federal district diction covered '658 order to courts, in conjunction well-plead with the prevail However, on its claim. pretrial rule, ed can do result order is not relevant because issues.”); resolving state courts a declaratory judgment over action must Publishers, Inc., v. Hendrickson Green be hypothetical derived from Metabolite’s (Ind.2002) (relying 770 N.E.2d on complaint request- claims. The one-count in dicta that Vornado conclude state dispute ed resolution of a contract dec-—a can hear law courts claims included regarding judgment laration whether the in the answer counterclaims be and/or in Metabolite I terminated the know-how post law cause -Vornado counter license, agreement and if the was still valid claim does not under” within “arise contractually whether it obligated was 1338). meaning §of Because the issue of pay a royalty homocysteine-only assays substantial, law is not Thus, performed party. by a third Meta- we do not have over this ap bolite’s claims hypothetical could not in- Grable, 545 U.S. at peal. volve resolution of substantial S.Ct. 2363. undisputed law because it was that The dissent’s is based the is the argument on a outsourced conduct same as the misunderstanding in-house of the performance fundamental that be- Abbott Test.3 tion, argument, position, At oral for Metabolite and still take the that the counsel fact acknowledged assays that the outsourced are by assays covered these are infringing, assays. the same as the in-house judgment can't be because of the (“We Arg. posi- Oral at 10:12-11:00 took the law, recognized, can be re- we have state Therefore, is not whether the issue ‘arising one under’ federal characterized as claims of fall within the assays outsourced is governing if the law law whether patent but at 1273. exclusively federal.” 129 S.Ct. Agree- the License the terms breached approved this so-called The Court then outsourcing activity. by ment its in approach the context through” “look judi- that the res Also, agree we do may federal court explaining § “[a] judgment under prior effect of a cata petition §a to determine through’ ‘look approach provides through” “look on an action that predicated it is whether under jurisdictional predicate missing pres- law.” Id. The ‘arises under’ federal Relying on Op. § at 1288. 1338. Dissent § case, contrast, not invoke by does ent Int’l, Martin Lockheed Inc. v. Semtek Act and cannot the Federal Arbitration 121 S.Ct. Corp., 531 U.S. arising as one under be recharacterized (2001), and v. Discover L.Ed.2d 32 Vaden Thus the “look law. — Bank, U.S.-, approach support does not through” claims that the dissent L.Ed.2d 206 position. dissent’s a suit to enforce bringing “if claimant is lim All federal courts are courts of judicata of a res effect or determine the juris take jurisdiction, ited and we do not ‘arising pat- under’ federal prior judgment simply they because re diction over cases laws, that is a suit that itself arises ent judicata prior effect of our late to the res Dissent the federal laws.” under the re judgment. We have considered Semtek, However, in the Su- Op. at 1288. arguments of Metabolite’s mainder that “fed- simply recognized preme Court unpersuasive. them find claim-preclu- governs eral common law a dismissal a federal court sive effect of announced as

sitting diversity” and then CONCLUSION common law that such a matter of federal Metabolite has thus failed show by “the law that governed an effect is we have under U.S.C. in the applied by state courts would be on the merits. 1338 to resolve this case diversity the federal court State which Accordingly, pursuant 28 U.S.C. sits.” 531 U.S. justice it in the interest of we consider here the Me- inapposite because Semtek Tenth present appeal transfer the to the jurisdiction was not based tabolite I court’s Circuit. Vaden, Furthermore, diversity. TENTH CIR- TRANSFERRED TO § 4 interpreted Supreme Court CUIT. Act, which authorizes Federal Arbitration petition court “to entertain a district if the court would have

compel arbitration COSTS jurisdiction, arbitration] ‘save for [the Appellee. Costs out of the agreement,’ arising over ‘a suit ” controversy parties.’ between the DYK, Judge, dissenting. Circuit (alteration original); S.Ct. at 1267-68 heart, ques- this case involves the According § 4. to the Vaden At its see 9 U.S.C. Court, judicata effect of our on tion whether the res complaint purporting “a to rest patent.”).

first case is that these are covered

1287 Laboratories, period decision in Metabolite ter the time covered the Amend earlier I, Laboratory Corp. Judgment America Hold ed in Metabolite because the Inc. (“Meta (Fed.Cir.2004) ings, 370 F.3d 1354 in jury Metabolite I had found that ”), requires pro II that the contract bolite Agreement License had been terminated here be treated as terminated. The vision assay. homocysteine-only as to the Meta jurisdiction lack majority finds that we III, F.Supp.2d bolite 571 at 1204. Meta question over that and transfers relief, opposed declaratory bolite contend Circuit, so that the 10th Circuit must 10th ing jury had not terminated the judicata effect of our determine the res Agreement License as to as view, my jurisdiction In prior judgment. says, that LabCorp breached the still- in this court for at least over this case lies valid license through post-judgment its First, two reasons. we have performance homocysteine-only of the test because a suit to enforce or determine the pay royalties. and refusal to Id. judicata prior judgment effect of a res Thus, scope prior judgment “arising under” the federal laws is part Metabolite II is hypo Metabolite’s under the federal itself suit arises case,1 thetical claim in this because the Second, patent laws. the determination of existence of a valid obligation contractual contract rests on a substantial entitlement a necessary predicate to recovery of law. damages for breach of such contractual

obligation.2 I adjudicate In order to Metabolite’s claim case, on the merits in this we would be present case arises from a declara required to scope determine the of our 2005, tory judgment action filed Labora II, prior judgment Metabolite as tory Corp. Holdings America v. Meta sess whether would be entitled to res Laboratories, Inc., bolite 571 F.Supp.2d judicata judi effect. The issue of the res (D.Colo.2008)(“Metabolite ”), 1199 III sub cata prior judgment effect of the suffices II, sequent to our decision Metabolite “arising jurisdic for the exercise of under” Laboratories, affirming Metabolite Inc. v. judicata tion. The prior res effect of a Laboratory Corp. Holdings, America court judgment is itself determined 99-CV-870, No. WL See, Gottlieb, (D.Colo. 2001) (“Metabolite e.g., federal law. Stoll v. I”). 3, Dec. 165, 171-72, 305 U.S. Laboratory Corporation of America Hold (1938); Deposit L.Ed. 104 Bank v. Frank ings (“LabCorp”) sought a declaration that (“Metabol 499, 514-15, Laboratories, fort, Inc. ite”) (1903); L.Ed. 276 was not entitled to recover breach of see also Semtek Int’l damages activity occurring af- Inc. v. Corp., Lockheed Martin action, (1) declaratory judgment allege the court breach of contract must hypothetical contract; must look to the action that the binding the existence of a valid and declaratory brought, defendant would have (2) plaintiff complied with the has con- complaint, rather than the in order to deter- performed obligations tract and his own un- mine whether attaches. it; (3) causing der breach of the contract Estes, (Fed. Speedco,Inc. v. 853 F.2d damages.”); Wright see abo 5 Charles Alan & Cir.1988). Miller, R. Arthur Federal Practice and Proce- (3d ed.2004). dure at 388-91 See, Cruises, e.g., Persson v. Scotia Prince Ltd., (1st Cir.2003) ("A “arising juris- 1021, 149 under” L.Ed.2d 32 ous construction

497, 507-08, 121 S.Ct. 1338(a) § as to the under 28 U.S.C. diction (2001). judica the res A suit to determine filed, claim. underlying contract When under thus arises judgment a ta effect of a presented this case substantial it is whether question The federal law.3 patent law that had not been issue of patent law. under” federal also “arises in in our earlier decision Meta- determined 1338(a). See 28 U.S.C. undisputed that the contract bolite II. It is we depends on whether question That LabCorp and Metabolite does between through” prior judgment the “look should a patent make an issue of law determina- on predicated whether it is to determine in this case. The under tive issue the federal “arises under” an action that Agreement are tied to net the License Supreme Court’s deci- laws. Assays,” of “Licensed and licensed sales (which looked International sion Semtek are defined as judgment “assays using to deter- ... methods and materials through original the falling within the claims of the Licensed diversity) supports on mine that rested Thus, royalties 20782. are Patents.” J.A. judgment to de- looking through prior if only agreement under the the as- due jurisdiction original termine the source scope fall says LabCorp sold within the judgment for to characterize the order i.e., only if unau- patents, licensed judicata purposes. 531 U.S. res infringing. would be thorized sales Similarly, under v. Vaden S.Ct. —Bank, -, Discover U.S. Valves, very Under similar facts U.S. Supreme L.Ed.2d 206 (Fed.Cir.2000), Dray, Inc. v. F.3d 1368 through” ap- “look approved the Court that the case raised a sub- we concluded jurisdiction in “arising under” proach to law, of federal question stantial of the Federal Arbitration Act. the context at 1372. existed. See id. (“A may ‘look at 1273 federal court (an Id. Valves, plaintiff In exclusive through’ petition a to determine licensee) li- brought against an action predicated censor, it is on an action that whether alleging breach of based law....”). allegedly equiva- under’ federal Under sale of ‘arises on the licensor’s in contravention of the exclu- origi- since the lent valves through approach, the look agreement. We held that in sive license depended part judgment nal here order to show the licensor sold valves jurisdiction, we have agreement, the li- in contravention of the words, In other if a appeal. over the that the li- required censee was to show to enforce or bringing claimant is suit valves that were covered censor sold judicata prior effect of a determine the res patents. Consequently, “a the licensed judgment “arising under” interpret patents must and then court laws, that is a suit that itself arises under in- the ... valve[s] determine whether patent laws. the federal patents. Thus law is fringe[ these ] necessary element of U.S. Valves’ breach II contract action.” Id. Valves, judicata case, putting to one side the res as in Even In this agreement issue, whether breached the majority adopted has an errone- Watertown, contrast, law a suit to collect on federal Metcalf (1888). judgment present question. 32 L.Ed. 543 does not a federal royalties necessarily pay forming homocysteine-only “know-how” tests itself and question infringement on the instead agreement turns entered into an with Laboratories, patent, implicates Specialty the '658 and this a sub- Inc. (“Speciality”), patent law. The ma- question by Competitive stantial which is licensed Technolo jority appear dispute gies, does not this Inc. patent, under the '658 for Spe Instead, majority cialty point. points perform the Su- homocysteine-only tests Labs., preme stating cases that the federal for LabCorp. Court Metabolite Inc. v. “actually disputed” issue must be and con- Lab. Corp. Holdings, Am. No. 99-cv- (D.Colo. 870-ZLW-CBS, cludes that there is no substantial slip op. at 8-9 2006). patent infringe- Sept. issue of law here because in This court Metabolite patent ment of the '658 was determined in II did not address question the of whether assays our earlier decision and is now not contest- the outsourced were licensed as Majority atOp. majori- says. ed. 1283-84. The At the complaint time the was filed case, in ty’s reasoning substantial, is flawed two critical re- in this there was a dis (1) law, spects: puted patent our decision Metabolite II issue of because the not in fact did determine whether the out- issue of whether the homocy outsourced assays by patent assays sourced were covered steine were fact covered (2) claims, the fact that the federal '658 claims was contested Lab- undisputed becomes Corp. issue case after deprive juris-

was filed does not a court of (as theory The in Metabolite I was not diction. assumes) majority that the Abbott as original says Metabolite case involved standing assays” alone were “licensed question LabCorp protected by of whether induced patent, '658 but that the infringement patent. of claim 13 of the assays assays” '658 Abbott were “licensed be II, Metabolite 370 F.3d at See 1358-59. cause had induced infringement Claim 13 claims the total of claim 13 of the patent using those as says; test: method for “[a] detect- claim 13 of the did not in fact ing deficiency specify of cobalamin or folate in a patented assay. use of See 658 comprising warm-blooded animals col.41 11.58-65.The inducement is steps assaying body of: an respect assays fluid for sue with to the outsourced homocysteine; elevated level of and corre- could well have been different than the an lating homocy- original elevated level of total inducement resolved in body deficiency steine said fluid with a I. of cobalamin or folate.” '658 col.41 its initial in this case in the theory 11.58-65. Metabolite’s at the first court, LabCorp sought district a declarato- trial apparently was the Abbott as- ry judgment that it any was not liable for says were licensed because Lab- respect with the newly out- Corp had induced of claim infringement homocysteine-only assays. sourced First respect with to the Abbott Complaint Amended for Declaratory Judg- assays. Appellee’s Br. Metabolite III, F.Supp.2d ment at Metabolite

II, (No. 03-1120). 370 F.3d 1354 (No. 04-cv-1662). As referenced in

Once we our signed by issued mandate Metabol- the Final Pretrial Order both August injunc- ite II on parties, LabCorp asserted that the homo- lifted, stay LabCorp stopped per- cysteine assays tion was were not “Licensed As- state of depends upon of the Court they not fall within the did says” because Corp. patent. brought, '658 Lab. at the time of the action things claims of the Labs., Inc., Holdings v. Metabolite Am. cannot ousted vesting, ... after be (D.Colo. 04-cv-1662, op. at 3 Feb. slip events.”). No. by subsequent order). 2008) (final At 7, oral pretrial Thus, I think that the district court had conceded argument, counsel jurisdiction over this case under 28 U.S.C. could possible “it the court 1338(a), accordingly can and and we question of wheth- [the have had to decide respectfully merits. I must address the homocysteine assays fell outsourced er the majority’s contrary hold- dissent from patent] of the '658 this the claims within ing. at 22:58-23:01. In order Arg. case.” Oral prevail hypotheti- on its for Metabolite to royalties, claim for would have had

cal that the outsourced

establish in fact covered

assays were

patent. majority is

The fundamental error of the otherwise,

that, it claims it fails to while controversy prevailing at the look at Etch-It, Michael MARRIN and that the was filed. Under time Inc., Plaintiffs-Appellees, Supreme authority, Court later established (such ultimately those made concessions as v. in this case that the outsourced Jeffrey Griffin, assays) operate do not were licensed GRIFFIN and Claudia rightfully attached Defendants-Appellants. defeat See, e.g., at the outset of the case. Dole Patrickson, 468, 478,

Food Co. v. 538 U.S. Griffin, Jeffrey Griffin Claudia 1655, (2003); 123 S.Ct. 155 L.Ed.2d 643 St. Plaintiffs-Appellants, Indemnity Mercury Paul Co. v. Red Cab v.

Co., 283, 289-90, 586, 58 S.Ct. 303 U.S. (1938) (“Events occurring L.Ed. 845 subse Marrin, Marrin, Heidi Michael of suit ... do not quent to the institution Etch-It, Inc., Defendants- jurisdiction.”); Minneapolis oust & St. Appellees. Louis R.R. Co. v. Peoria & Pekin Union Co., 402, 70 Ry. 270 U.S. No. 2009-1031. (1926) (“The jurisdiction of the L.Ed. 743 depends upon Appeals, lower court the state of United States Court of things existing at the time the suit was Federal Circuit. Watt,

brought.”); Anderson March 694, 702-03, 34 L.Ed. 1078 (1891) (“And [jurisdictional] inquiry is En Rehearing Banc Denied parties determined the condition of the May 2010.* suit.”); Mol the commencement (9 Wheat.) Torrance, lan v. (1824) (“[T]he 6 L.Ed. 154

* peal. Judge ap- Circuit Newman would rehear

Case Details

Case Name: Laboratory Corp. of America Holdings v. Metabolite Laboratories, Inc.

Court Name: Court of Appeals for the Federal Circuit

Date Published: Mar 11, 2010

Citation: 599 F.3d 1277

Docket Number: 2008-1597

Court Abbreviation: Fed. Cir.