Federal Circuit Determines Isolated DNA Claims Patent Eligible Under Section 101

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• Case Summary: The biotechnology industry will at least temporarily be relieved—the case will undoubtedly be appealed to the U.S. Supreme Court—as the Federal Circuit holds that thousands of patent claims issued by the Patent and Trademark Office on isolated DNA are not ineligible under Section 101 of the Patent Act.

• Key Takeaway: Isolated DNA has markedly different chemical characteristics compared to native DNA, and so is patent eligible as a composition of matter and not a product of nature.

Overturning a controversial district court decision, the U.S. Court of Appeals for the Federal Circuit ruled July 29 that patents claiming isolated DNA are statutory subject matter under Section 101 of the Patent Act, 35 U.S.C. §101 (Association for Molecular Pathology v. U.S. Patent and Trademark Office, Fed. Cir., No. 2010-1406, 7/29/11).

All three members of the panel that presided over the case filed opinions. The 55-page majority opinion by Judge Alan D. Lourie is accompanied by a 31-page concurrence by Judge Kimberly A. Moore and a 19-page partial dissent by Judge William C. Bryson.

The panel distinguished different forms of isolated DNA represented in the patent claims at issue, and the judges disagreed on which were patent eligible.

Lourie said that all composition claims to isolated DNA molecules are patent eligible. Based on the U.S. Supreme Court's “markedly different characteristics” standard stated in Diamond v. Chakrabarty, he asserted that isolated DNA has “markedly different chemical characteristics” compared to corresponding native DNA in the human body.

All three judges rejected a standing challenge by the defendant in this declaratory judgment action, Myriad Genetics Inc., a company that had been chosen by the plaintiffs because of egregious patent enforcement behavior in the late 1990s and early 2000s, but had not threatened suit against any plaintiff for at least six years.

The panel was also unanimous as to the differences in the patent eligibility of diagnostic method claims in Myriad's patents. The court held only one method claim patent eligible and denied patent eligibility for claims directed to “comparing” or “analyzing” DNA sequences.

ACLU Challenges Patent Eligibility

In 2009, the American Civil Liberties Union and the Public Patent Foundation at Benjamin N. Cardozo School of Law filed a declaratory judgment complaint against Myriad. The ACLU and PUBPAT acted on behalf of the Association of Molecular Pathology and other medical associations, medical researchers, breast cancer counselors, and women diagnosed with or seeking diagnosis.

The complaint challenged patent eligibility, under Section 101, of nine composition of matter and six method claims of patents (5,747,282; 5,837,492; 5,693,473; 5,709,999; 5,170,001, 5,753,441; and 6,033,857) on the BRCA1 and BRCA2 genes associated with hereditary breast and ovarian cancer. The patents are owned or part-owned by the University of Utah Research Foundation. Myriad is the exclusive licensee of the patents and the sole clinical provider of full sequencing of the BRCA1/2 genes in the United States.

The complaint also alleged that the Patent and Trademark Office's policy that allows naturally-recurring genes to be patented if they are “isolated from their natural state and purified” is unconstitutional, in violation of the First Amendment and the intellectual property clause of the Constitution, Art. 1, Sec. 8, Cl. 8.

In November 2009, Judge Robert W. Sweet of the U.S. District Court for the Southern District of New York denied Myriad's motions to dismiss for lack of standing, finding that all plaintiffs had sufficient grounds for a declaratory judgment lawsuit.

In March 2010, the court ruled in favor of the plaintiffs on the merits, finding both the composition of matter and method claims unpatentable. No. 09 Civ. 4515, 94 USPQ2d 1683 (S.D.N.Y. March 29, 2010). However, the court dismissed the plaintiffs' constitutional claims against the PTO.

Myriad appealed to the Federal Circuit.

Passionate Briefing, Argument

Briefing in the case was extensive. The appellant's brief submitted by Myriad in October contested both the standing and merits decisions. Sixteen briefs were submitted by friends of the court within a week of Myriad's brief, with 12 briefs specifically supporting reversal.

Most notably, one of the four briefs supporting neither party was submitted by the U.S. Department of Justice, without PTO support. The DOJ addressed only the isolated DNA claims, supporting affirmance on some and reversal on others by proposing a new distinction for patent eligibility purposes. The government requested and was granted the opportunity to split argument time with Myriad.

The plaintiffs-appellees' brief was filed at the end of November. Eleven briefs filed by friends of the court supported the plaintiffs or affirmance. Myriad's reply brief addressed only arguments made by the parties and the DOJ.

In April 4 oral arguments, the judges and counsel addressed both standing and patent eligibility issues. Debate on the latter centered on analogies that might distinguish exactly how different a composition of matter must be, compared to its counterpart “product of nature,” so as to pass muster under Section 101.

Perhaps most interesting, the government introduced for the first time a “magic microscope” test, whereby a composition would not be patent eligible if the microscope could focus in vivo and find the same DNA sequence claimed. Accordingly, the government argued, only Myriad's claims to cDNA, in which non-contiguous sequences are spliced together, are patent eligible.

Only One Medical Researcher has Standing

Judge Alan D. Lourie addressed the standing decision first. The court agreed with the district court as to only one of the plaintiffs—sufficient to allow the court to proceed to the merits—and reversed the lower court as to all other plaintiffs.

Harry Ostrer, a researcher at New York University School of Medicine, the court held, met the requirements for declaratory judgment standing under the Supreme Court's decision in MedImmune Inc. v. Genentech Inc., 549 U.S. 118, 81 USPQ2d 1225 (2007)—“a substantial controversy … of sufficient immediacy and reality” and “meaningful preparation” to conduct potentially infringing activity.

The court first distinguished only three of the plaintiffs, all medical researchers and including Ostrer, as subject to Myriad's “affirmative patent enforcement actions,” which occurred in 1998-99. In dismissing the standing arguments as to all other plaintiffs, the court faulted the district court for finding injury in fact on too broad grounds, such that it “failed to limit its jurisdictional holding to affirmative acts by the patentee directed at specific Plaintiffs.”

As to the other three, the court rejected Myriad's argument based on the staleness of its 13-year-old cease-and-desist letters and a lawsuit it ultimately dropped. “In many cases a controversy made manifest by a patentee's affirmative assertion of its patent rights will dissipate as market players and products change,” the court said. “In this case, however, the relevant circumstances surrounding Myriad's assertion of its patent rights have not changed despite the passage of time.”

Of the three, though, only Ostrer “state[d] unequivocally that he will immediately begin [BRCA] testing” if the court ruled the patent claims nonstatutory. The other two said only that they would “consider” resuming BRCA testing, the court noted, defeating their standing claim. Quoting from Lujan v. Defenders of Wildlife, 504 U.S. 555, 564 (1992), the court said that “‘some day' intentions” are insufficient to support an “actual or imminent” injury for standing “without … any specification of when the some day will be.”

Finally, the court rejected Myriad's argument that standing should still be denied because the injury asserted could not be redressed by the court's decision. The plaintiffs' complaint challenged only 15 of many claims in the two patents, Myriad said, and specifically did not challenge certain probe and primer claims that Ostrer would still infringe even with a decision in his favor.

However, the court said, “Myriad has failed to direct us to any specific unchallenged claim that will have that effect. And Plaintiffs' counsel stated at oral argument that his clients can sequence the BRCA genes without using BRCA probes and primers.”

With one plaintiff thus found to have standing to maintain a declaratory judgment action, then, the court turned to the merits of the case.

Isolated DNA Statutory Subject Matter

As to the patent eligibility of the isolated DNA claims under Section 101, Lourie relied almost exclusively on the Supreme Court's decision in Diamond v. Chakrabarty, 447 U.S. 303, 206 USPQ 193 (1980).

The high court, in distinguishing its prior ruling in Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 76 USPQ 280 (1948), according to Lourie, concluded that the claimed bacterium in Chakrabarty had “markedly different characteristics” from any found in nature.

“The distinction, therefore, between a product of nature and a human-made invention for purposes of §101 turns on a change in the claimed composition's identity compared with what exists in nature,” he said.

Lourie devoted over six pages, including four figures and about 1,000 words, to describing the science of human genetics and DNA isolation technology. Applying the description to the claims at issue in the instant case, he noted specifically that isolated DNA “has been cleaved (i.e., had covalent bonds in its backbone chemically severed) or synthesized to consist of just a fraction of a naturally occurring DNA molecule.”

As he did at oral argument, Lourie distinguished products of nature that are isolated from those that are “purified.” He concluded that purification of a substance alone is inadequate to confer patent eligibility, but the DNA isolated in the instant case “has also been manipulated chemically.”

He rejected the plaintiffs' and lower court's argument that isolated DNA is not markedly different as improperly focused on the information content of the DNA—the sequences of adenine (A), thymine (T), cytosine (C), and guanine (G) nucleotide bases—related to DNA's genetic function. “[I]t is the distinctive nature of DNA molecules as isolated compositions of matter that determines their patent eligibility rather than their physiological use or benefit,” Lourie said. “Uses of chemical substances may be relevant to the non-obviousness of these substances or to method claims embodying those uses, but the patent eligibility of an isolated DNA is not negated because it has similar informational properties to a different, more complex natural material that embodies it.”

Finally, he acknowledged many “thought-provoking” analogies provided in amicus briefs, but determined they are not at issue in the case:


It is suggested that holding isolated DNAs patent eligible opens the door to claims covering isolated chemical elements, like lithium; minerals found in the earth, like diamonds; atomic particles, like electrons; and even organs, like a kidney, and a leaf from a tree. None of these examples, however, as far as we can discern, presents the case of a claim to a composition having a distinctive chemical identity from that of the native element, molecule, or structure. Elemental lithium is the same element whether it is in the earth or isolated; the diamond is the same lattice of carbon molecules, just with the earth removed; the kidney is the same kidney, the leaf the same leaf. Some may have a changed form, quality, or use when prepared in isolated or purified form, but we cannot tell on this record whether the changes are sufficiently distinctive to make the composition markedly different from the one that exists in nature. In contrast, a portion of a native DNA molecule—an isolated DNA—has a markedly different chemical nature from the native DNA. It is, therefore, patentable subject matter.

Concurrence, Dissent on DNA Claim Issues Only

Moore concurred with that viewpoint as to claims to isolated cDNA sequences, but distinguished as a different category claims “directed to isolated sequences that are identical to naturally occurring gene sequences.” For that category, she further distinguished short and long strands of isolated DNA and focused on the utility of fragments for such purposes as specific diagnostic genetic testing. The longer strands might lack new utility and “simply serve the same ends devised by nature, namely to act as a gene encoding a protein sequence,” and as such would not satisfy Section 101, she said.

“If I were deciding this case on a blank canvas, I might conclude that an isolated DNA sequence that includes most or all of a gene is not patentable subject matter,” she said. However, as the PTO has issued thousands of claims on these sequences, she acknowledged, “I believe we must be particularly wary of expanding the judicial exception to patentable subject matter where both settled expectations and extensive property rights are involved.”

Though Moore's opinion distinguished cDNA claims, she specifically rejected the government's “magic microscope” test, as did Lourie. “While the magic microscope creates a bright line rule, it presents a poorly defined question: can we ‘see' the claimed molecule, or something fairly similar, in nature?,” she explained. “Even if the scientific imprecision of the test were excusable, the government also asks us to do away with Chakrabarty‘s flexible inquiry as to whether the invention, as claimed, has ‘markedly different characteristics from any found in nature’ which result in ‘the potential for significant utility.'”

Bryson also agreed with his colleagues that cDNA claims are eligible for patenting but he rejected his colleagues' approaches to the isolated DNA claims generally.

Indeed, Bryson disagreed with Lourie's view as to their differences in characteristics compared to native DNA. “The only material change made to those genes from their natural state is the change that is necessarily incidental to the extraction of the genes from the environment in which they are found in nature,” he said. “[M]erely isolating the products of nature by extracting them from their natural location and making those alterations attendant to their extraction does not give the extractor the right to patent the products themselves.”

Bryson argued that the lithium analogy was apt and that lithium is isolated by breaking ionic bonds in the lithium compounds found in nature. He questioned why breaking the chemical bonds in DNA would change the analysis. Further, he said, “if we are to apply the conventional nomenclature of any field to determine whether Myriad's isolated DNA claims are ‘new,' it would seem to make more sense to look to genetics, which provides the language of the claims, than to chemistry.” And he pointed out that Myriad's claims, other than those directed to cDNA, “are not defined by any particular chemical formula.”

Finally, he disagreed with Moore's unwillingness to find patent ineligibility in light of the “purported expectations of the inventing community” due to the PTO's prior patent grants. “[T]hat is in effect to give the PTO lawmaking authority that Congress has not accorded it,” Bryson said in conclusion.

Only One Method Claim Survives

Moore and Bryson, however, both agreed with the majority opinion's analysis of the method claims at issue in the case.

Myriad's method claims are of three types:

• Claim 1 of Myriad's ‘999 patent is representative of “analyzing” claims, as it is directed to detection of BRCA1 gene alteration by analyzing a sequence of the gene from a human sample.

• Claim 1 of the ‘001 patent is representative of “comparing” claims. It describes a method of screening for the alteration by comparing the human sample to a sample known not to contain the alteration.

• Finally, only one claim challenged by the plaintiffs, Claim 20 of the ‘282 patent, covers a “method of screening potential cancer therapeutics” with a step of growing host cells under certain conditions before “determining” whether the rate of growth is indicative of a cancer therapeutic.

The court found only Claim 20 patent eligible, as it distinguished the comparing and analyzing claims from claims using those terms and held to be patent eligible in Prometheus Laboratories Inc. v. Mayo Collaborative Services, 628 F.3d 1347, 97 USPQ2d 1097 (Fed. Cir. 2010); Mayo Collaborative Services v. Prometheus Laboratories Inc., No. 10-1150 (U.S., review grantedJune 21, 2011) .

In so deciding, the court engaged in a claim construction exercise, as Myriad argued that the claims should be read to include steps of extracting DNA from the human sample and sequencing the BRCA DNA molecule. The court rejected that construction, concluding that the related portions of the patent specification refer to the Gs, As, Ts, and Cs corresponding to the nucleotide sequence of BRCA1 and not to the physical DNA molecule.

In contrast, the court said, the claims at issue in Prometheus included “administering” and “determining” steps, and those steps “necessarily required a transformation,” first as the body metabolized the drug administered and second in the test used for determining the metabolite level, something that could not be done by mere inspection.

Since Myriad's comparing and analyzing steps could be accomplished by mere inspection, they “fail to satisfy the machine-or-transformation test, and are instead directed to the abstract mental process of comparing two nucleotide sequences,” the court said, referring to the Federal Circuit's MoT test that the Supreme Court ruled to be “a useful and important clue, an investigative tool,” for determining patent eligibility, in Bilski v. Kappos, 129 S. Ct. 2735, 95 USPQ2d 1001 (2010).

On the other hand, Lourie said, Claim 20 of the ‘282 patent passed the MoT test because of the transformation in manipulating cells and their growth medium and in the physical manipulation of the cells in the determining step.

Since passing the MoT test still leaves room for a finding of patent ineligibility under Bilski, he continued the analysis to counter other bases for a nonstatutory subject matter finding: “these steps are central to the purpose of the claimed process”; “the claim is not so ‘manifestly abstract' as to claim only a scientific principle”; and the claim “presents ‘functional and palpable applications' in the field of biotechnology.” The last two quote the Federal Circuit's first and so far only decision on method claim patent eligibility since the Supreme Court's Bilskiruling, Research Corporation Technologies Inc. v. Microsoft Corp., 627 F.3d 859, 97 USPQ2d 1274 (Fed. Cir. 2010).

Therefore, the court reversed the district court's finding of method claim ineligibility as to Claim 20 only.

Gregory A. Castanias of Jones Day, Washington, D.C., represented Myriad. The ACLU's Christopher A. Hansen, New York, represented the plaintiffs. Neal Kumar Katyal, acting solicitor general at the time oral arguments were presented, represented the government.

By Tony Dutra

Opinion at http://pub.bna.com/ptcj/101406Jul29.pdf