By Tony Dutra
• Summary: Two patent sessions at ABA-IPL annual meeting reveal fears about impact of Supreme Court's Mayo decision in multiple technology areas.
Concerns about the U.S. Supreme Court's March 20 Mayo decision dominated patent sessions at the annual meeting of the Intellectual Property Law section of the American Bar Association in Arlington, Va.
The high court ruled that steps of the method claims at issue in Mayo failed to “add enough” to the “inventive concept” of the asserted patents--the correlations between metabolite levels and effectiveness of the drug. Mayo Collaborative Services v. Prometheus Laboratories Inc., No. 10-1150 (U.S. March 20, 2012) (54 PTD, 3/21/12).
Stakeholders expressed skepticism about the patent eligibility of many method claims in the computer, genetics, and personalized medicine fields during sessions dedicated to reviewing Section 101 on March 28 and March 30, respectively.
Panelists focused on computer-related patents seemed doubly distressed as they tried to provide guidance on how to resolve conflicting rulings in cases recently decided by the U.S. Court of Appeals for the Federal Circuit.
The direct effect of Mayo was most evident during the March 30 panel discussion titled “Diagnostics and Gene Patents: What is the Future for Personalized Medicine Patents?”
The panel was moderated by Paula K. Davis of Eli Lilly & Co., Indianapolis, Ind., who dubbed the post-Mayo world for stakeholders the “Land of Confusion,” referring to a 1986 song by the rock band Genesis.
Eli Lilly's James J. Kelley more ominously cited the 1987 REM hit, “It's the End of the World as We Know It,” and he did not mention the rest of that song title, “(And I Feel Fine).”
Kelley said that diagnostic tests influence 60-70 percent of all medical treatment decisions. Diagnostic correlations will be patent-ineligible “inventive concepts” in many applications for patents in the field of personalized medicine, he predicted.
PTO Associate Solicitor Thomas W. Krause identified in Mayo “three changes to fundamental assumptions” among PTO examiners:
• It is no longer true that a step of administering a drug confers patent eligibility under Section 101.
• Even though a “determining” step involves a transformation, that step alone can no longer provide patent eligibility, either.
• The “law of nature” exception to patent eligibility is now “several steps beyond what we thought a law of nature was before Mayo.”
Krause saw a couple of “bright sides” to the Mayoopinion. He noted, for example, that the Mayocourt reaffirmed the finding in Diamond v. Diehr, 450 U.S. 175, 209 USPQ 1 (1981), that the “overall process” at issue there was patent eligible “because of the way the additional steps of the process integrated the equation into the process,” even though the claim “didn't use much” other than a law of nature.
Nevertheless, he ended his presentation with the warning, “Right now, we're living in uncertain times.”
Ned A. Israelsen of Knobbe Martens Olson & Bear, San Diego, contrasted the Mayo decision with the Federal Circuit's ruling in Classen Immunotherapies Inc. v. Biogen IDEC, 659 F.3d 1057, 100 USPQ2d 1492 (Fed. Cir. 2011) (171 PTD, 9/2/11).
The Federal Circuit in Classenassessed method claims involving a correlation between childhood immunizations and medical disorders later in life. It distinguished the patent-eligible claim wherein the last step was “immunizing” from the ineligible claim with a last step of “comparing,” Israelson noted. The latter is a “thought police claim,” he said, because merely thinking about the correlation may be considered an infringement.
However, more important, he said, was that the Federal Circuit defined Section 101 as a “coarse eligibility filter” and said that novelty and obviousness under Sections 102 and 103 are more appropriate grounds for challenges, including even those claims in this case that passed the Section 101 hurdle.
“The Supreme Court took the opposite approach” in the Mayo case, Israelsen said. The high court effectively concluded, he said, “We can't rely on 102 and 103 to catch the bad cases; we have to rely on 101.”
He said that he is looking forward to the high court granting certiorari in the Classen case--GlaxoSmithKline v. Classen Immunotherapies Inc., No. (U.S., review sought Feb. 28, 2012)--and that he hopes the court will remand that case to the Federal Circuit to see whether the “immunizing” claim still passes muster.
Kevin Noonan of McDonnell Boehnen, Hulbert & Berghoff, Chicago, Ill., author of the popular PatentDocs blog, focused on the high court's remand of the Myriad case. Association for Molecular Pathology v. Myriad Genetics Inc., No. 11-725 (U.S., remanded March 26, 2012) (58 PTD, 3/27/12).
He seemed most concerned that, although the controversial claims at issue in Myriad are on isolated DNA--compositions of matter and not methods--the court may find the “inventive concept” of the claims drawn to the information in the DNA, and treat that information as a law of nature. “The isolation process was well known” at the time the patent was filed, Noonan said, suggesting a parallel between that process and the well known steps included in but not conferring patent eligibility to the method claims in Mayo.
The March 28 panel was titled “Abstract Reasoning--Recent Developments in the Law of Patentable Subject Matter Under 35 U.S.C. §101,” and expanded the Mayo discussion to include the Federal Circuit's computer-related patent decisions since Bilski v. Kappos, 130 S. Ct. 3218, 95 USPQ2d 1001 (2010).
C. Erik Hawes of Morgan Lewis & Bockius, Houston, cited the Bilski court's comparison between “Information Age” technologies--software, advanced diagnostic medicine techniques, and inventions based on linear programming, data compression, and the manipulation of digital signals--and “Industrial Age” inventions.
While the Federal Circuit's machine-or-transformation test may have been “a sufficient basis for evaluating processes” in Industrial Age technologies, the court said, “in deciding whether previously unforeseen inventions qualify as patentable 'process[es],' it may not make sense to require courts to confine themselves to asking the questions posed by the machine-or-transformation test. Section 101's terms suggest that new technologies may call for new inquiries.”
Research Corporation Technologies Inc. v. Microsoft Corp., 627 F.3d 859, 97 USPQ2d 1274 (Fed. Cir. 2010), was the first Federal Circuit case on software patent eligibility after Bilski. Tina M. Chappell, senior litigation counsel for Intel Corp. in Chandler, Ariz., identified three key phrases from the RCT opinion:
• Section 101 is a “coarse eligibility filter.”
• The claims at issue in the RCTcase presented “functional and palpable applications in field of computer technology.”
• A method claim is not subject to the exception for abstract ideas unless the invention is “so manifestly abstract as to override the statutory language of section 101.”
Hawes, Chappell, Paul A. Roberts of Foley & Lardner, Washington, D.C., and Charles Everingham, a former magistrate judge for the U.S. District Court for the Eastern District of Texas and now with Akin Gump Strauss Hauer & Feld, Dallas, evaluated five Federal Circuit cases since RCT:
• The Aug. 16 decision in CyberSource Corp. v. Retail Decisions Inc., 654 F.3d 1366, 99 USPQ2d 1690 (Fed. Cir. 2011) (159 PTD, 8/17/11), “took Bilski to heart,” Everingham said, finding both software and Beauregard claims--on a computer readable medium containing the software--patent ineligible.
• The court emphasized an invention's ability to “remedy problems” and provide “a practical application,” Roberts said, in its Sept. 15 ruling of patent eligibility in Ultramercial LLC v. Hulu LLC, 657 F.3d 1323, 100 USPQ2d 1140 (Fed. Cir. 2011) (182 PTD, 9/20/11).
• The court contrasted its Jan. 20 patent ineligibility decision in Dealertrack Inc. v. Huber, No. 2009-1566, 101 USPQ2d 1325 (Fed. Cir. 2012) (15 PTD, 1/25/12), with Ultramercial, Hawes said. The Ultramercial court found “concrete steps requiring an extensive computer interface,” he said, while the Dealertrack court ruled that “the claims here recite only that the method is 'computer aided' without specifying any level of involvement or detail.”
• Chappell likened the business method--an investment tool designed to enable property owners to buy and sell properties without incurring tax liability--at issue in the court's Feb. 27 ruling in Fort Properties Inc. v. American Master Lease LLC, No. 2009-1242, 101 USPQ2d 1785 (Fed. Cir. 2012) (38 PTD, 2/28/12), to the patent ineligible claims in Bilski. She reminded the audience, though, that the Supreme Court was one vote shy of killing business method patents altogether in Bilski.
• Finally, Everingham described the March 2 decision in MySpace Inc. v. GraphOn Corp., No. 2011-1149, 101 USPQ2d 1873 (Fed. Cir. 2012) (50 PTD, 3/15/12), which addressed Section 101 only because Senior Judge Haldane Robert Mayer raised it sua sponte in a dissent.
Everingham thus highlighted the disagreement among Federal Circuit judges in the wake of the MySpace decision as to whether Section 101 is a threshold issue or--as another senior judge, S. Jay Plager, argued in that case, in Dealertrack and the denial of en banc rehearing in RCT--a “murky morass” that should be considered only after analysis under all other statutory provisions is exhausted.
However, whenever the Section 101 analysis is conducted, the panelists agreed that it clearly matters which Federal Circuit judges form the panel that will hear a challenge to a computer-related patent. “Opinions on the court range from one end of the spectrum to the other,” Hawes said.
He nevertheless saw some differences between those claims found patent eligible and those found ineligible in “the level of detail in how you describe the involvement of the computer.” Chappell added that it appeared to matter “whether the invention is useful and has value.”
Roberts characterized the March 20 Supreme Court decision in Mayo as “making a big deal that Section 101 is a boundary.”
Chappell predicted that the court would view the algorithms that are typically cited in software patents in the same way that it analyzed the law of nature in medical diagnostics in Mayo. The Mayodecision thus would require a court to identify the algorithm and “take it out” before deciding the patent eligibility of a software claim, she suggested.
Chappell claimed that there is tension between Mayo and Diehr on how conduct the patentability analysis, even though the Mayo court cited Diehr favorably.
Specifically, she said, taking out the law of nature and looking at the remaining steps to confer patent eligibility conflicts with the Diehr court's statement, “It is inappropriate to dissect the claims into old and new elements and then to ignore the presence of the old elements in the analysis.”
Hawes said that there is also a conflict between Mayo and Parker v. Flook, 437 U.S. 584, 198 USPQ 193 (1978), even though the Mayo court held out Diehr and Flook as “two cases in which the Court reached opposite conclusions about the patent eligibility of processes that embodied the equivalent of natural laws.”
Hawes described the Mayo decision as acknowledging the “confluence of Sections 101, 102, and 103”--incorporating novelty and obviousness analysis into the Section 101 decision. Conversely, he said, the Flook court explained that its Section 101 analysis “does not involve the familiar issues of novelty and obviousness that routinely arise under §§102 and 103.”
In any case, Chappell feared that the Mayo holding would threaten future technologies. She called for the Federal Circuit, as well as the Patent and Trademark Office through new guidelines, to “make sure that the breadth in Mayo is not taken to the extreme.”