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

In the 1980s, three university doctors discovered that some individuals with high levels of the amino acid homocysteine also had deficiencies of folic acid and vitamin B12. The doctors obtained a patent for the correlative process which was eventually licensed to Metabolite Laboratories, Inc. (“Metabolite”) (plaintiff). In 1991, Laboratory Corporation of America Holdings (“LabCorp”) (defendant) obtained a license from Metabolite, allowing the company to use the process described in the patent in exchange for a percentage of revenues. Under the terms of the agreement, LabCorp could terminate its agreement with Metabolite if “a more cost effective commercial alternative” to determine the homocysteine-vitamin deficiency correlation arose. Subsequently, other companies successfully developed a correlative process similar to the one invented by the doctors, including one method created by Abbott Laboratories. Metabolite brought suit against LabCorp for breach of the license agreement and patent infringement, claiming that the patent claims protected any “correlating” test ordered by a doctor to determine whether there was an elevated level of homocysteine and a resulting vitamin deficiency in an individual. The U.S. District Court found LabCorp liable for patent infringement, assessed damages, and enjoined it from performing “any homocysteine-only test, including without limitation homocysteine-only tests via the Abbott method.” LabCorp appealed and the court of appeals affirmed. LabCorp filed a petition for certiorari to the U.S. Supreme Court which was granted. The Supreme Court then dismissed the action as improvidently granted and Justice Stephen Breyer dissented in the dismissal.