An apportionment of performances to be exchanged under a contract into corresponding pairs of part performances so that the parts of each pair are properly regarded as agreed equivalents.
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3
Construction Contract Divisible
Builder Alex Rivera and owner Dana Holt entered a contract for phased renovations. The price was apportioned into pairs of corresponding parts for foundation work and framing. Rivera completed the first pair. The court treated that performance as discharging Holt's duty to pay the agreed equivalent for those stages.
Software Development Agreement
Developer Mia Chen contracted with retailer BetaMart to build an online platform in staged modules. The agreement treated coding and testing of each module as a pair of agreed equivalents. Chen finished the first module pair. BetaMart became obligated to pay the stated amount for that pair alone.
In the early 1990s, Vernon Minton developed a computer program and telecommunications network known as the Texas Computer Exchange Network, or TEXCEN, designed to facilitate securities trading. In March 1995, he leased the system to R. M. Stark & Co., a securities brokerage. A little over a year later, Minton applied for a patent for an interactive securities trading system based substantially on TEXCEN, and the U.S. Patent and Trademark Office issued the patent in January 2000.
Minton, represented by Jerry Gunn and the other petitioners, filed a patent infringement suit in Federal District Court against the National Association of Securities Dealers, Inc. and the NASDAQ Stock Market, Inc. NASD and NASDAQ moved for summary judgment on the ground that the patent was invalid under the on-sale bar because Minton had leased TEXCEN more than one year prior to filing his application. The District Court granted the motion and declared the patent invalid in 2002.
Minton then filed a motion for reconsideration arguing for the first time that the lease fell within the experimental-use exception, but the District Court denied the motion. Minton appealed to the U.S. Court of Appeals for the Federal Circuit, which affirmed on the ground that the experimental-use argument had been waived.
Minton then brought this legal malpractice action in Texas state court against Gunn and the other lawyers. The defendants defended on the ground that the lease to Stark was not for an experimental use, and the trial court granted summary judgment after finding less than a scintilla of proof on that point.
On appeal, Minton argued for the first time that the Texas court lacked subject matter jurisdiction because the malpractice claim arose under federal patent law. A divided panel of the Court of Appeals of Texas rejected the jurisdictional argument and affirmed on the merits. The Supreme Court of Texas reversed. The U.S. Supreme Court granted certiorari.
Manufacturer NorthCo and supplier SouthParts agreed to deliver matched lots of parts and assemblies. Each matched lot constituted a pair of agreed equivalents under the price schedule. When NorthCo accepted the first pair, SouthParts earned the right to the corresponding payment regardless of later lots.
Association for Molecular Pathology v. U.S. Patent and Trademark Office569 U.S. 576 (133 S. Ct. 2107 (2013))
Respondent Myriad Genetics, Inc. discovered the precise location and sequence of the BRCA1 and BRCA2 genes. Mutations in these genes can dramatically increase an individual's risk of developing breast and ovarian cancer. Myriad obtained several patents after its discovery. These included U.S. Patent 5,747,282, U.S. Patent 5,693,473, and U.S. Patent 5,837,492.
The average American woman has a 12- to 13-percent risk of developing breast cancer. For women with BRCA mutations the risk can range between 50 and 80 percent for breast cancer and between 20 and 50 percent for ovarian cancer. Myriad identified the exact location of the BRCA1 and BRCA2 genes on chromosomes 17 and 13. Chromosome 17 has approximately 80 million nucleotides and chromosome 13 has approximately 114 million nucleotides. Within those chromosomes the BRCA1 and BRCA2 genes are each about 80,000 nucleotides long. If just exons are counted the BRCA1 gene is only about 5,500 nucleotides long and the BRCA2 gene is about 10,200 nucleotides long.
Claims 1, 2, 5, and 6 from the '282 patent are representative. Claim 1 asserts a patent on an isolated DNA coding for a BRCA1 polypeptide with the amino acid sequence set forth in SEQ ID NO:2. Claim 2 asserts a patent on the isolated DNA with the nucleotide sequence set forth in SEQ ID NO:1. SEQ ID NO:1 lists only the cDNA exons in the BRCA1 gene. Claims 5 and 6 assert patents on any isolated DNA having at least 15 nucleotides of the sequences in claims 1 and 2 respectively.
After obtaining the patents Myriad sent letters asserting infringement to the University of Pennsylvania's Genetic Diagnostic Laboratory and to petitioner Dr. Harry Ostrer. Ostrer had been sending patient DNA samples to the laboratory for testing. The laboratory agreed to stop testing. Myriad filed patent infringement suits against other entities performing BRCA testing. Those suits resulted in settlements requiring the defendants to cease the allegedly infringing activity.
Petitioner Ostrer along with medical patients advocacy groups and other doctors filed suit in the Southern District of New York. They sought a declaration that Myriad's patents are invalid under 35 U.S.C. §101. The district court denied Myriad's motion to dismiss for lack of standing. It granted summary judgment to petitioners on the composition claims concluding they covered products of nature. The Federal Circuit initially reversed. After this Court decided Mayo Collaborative Services v. Prometheus Laboratories Inc. the case was remanded. On remand the Federal Circuit affirmed in part and reversed in part holding both isolated DNA and cDNA patent eligible under §101 with each panel member writing separately on the rationale for isolated DNA. The Supreme Court granted certiorari.
When does partial performance of paired obligations bind the other party?
If performances can be apportioned into corresponding pairs regarded as agreed equivalents, a party's completion of one part of the pair binds the other party to render the agreed equivalent for that pair. Failure on other parts does not affect this right.
133 S. Ct. 1059 (2013)
…on that ground therefore would not have saved his infringement suit. The Supreme Court of Texas reversed, relying heavily on a pair of cases from the U. S. Court of Appeals for the Federal Circuit. 355 S. W. 3d 634, 641-642 (2011) (discussing Air Measurement Technologies, Inc. v. Akin Gump Strauss Hauer & Feld, L. L.…