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By Tony Dutra
Stakeholders on both sides of the Section 101 patent eligibility question expressed surprise at the unanimous U.S. Supreme Court's decision March 20 that certain medical diagnostic claims are not patent eligible subject matter. Mayo Collaborative Services v. Prometheus Laboratories Inc., No. 10-1150 (U.S. March 20, 2012).
The primary impact of the decision was clear to all: method patent claims have a new hurdle to overcome.
BNA asked the stakeholders to comment by email on specific areas of patent law jurisprudence affected by the ruling. While many viewed the result as a “sea change” from current law, others saw clarity in the result.
High Court Reverses Federal Circuit
In short, Prometheus Laboratories Inc. is the exclusive licensee of two patents (6,355,623 and 6,680,302) which involve measuring the level of certain metabolites in the blood of patients taking thiopurine drugs for treatment of autoimmune diseases.
The challenged claims are drawn to methods comprising three steps: “administering” a drug to a subject, “determining” the metabolite levels, and what the high court described as a “wherein” step—noting that metabolite levels outside certain threshold levels of either one indicate toxicity or inefficacy. The claims at issue do not include a step for further action by the physician.
Mayo Collaborative Services, a subsidiary of the Mayo Clinic, fought an infringement lawsuit by convincing the high court that the asserted patent claims failed under 35 U.S.C. §101. The decision reversed a ruling by the U.S. Court of Appeals for the Federal Circuit. Prometheus Laboratories Inc. v. Mayo Collaborative Services, 628 F.3d 1347, 97 USPQ2d 1097 (Fed. Cir. 2010).
The Federal Circuit's decision was rendered in light of the high court's Section 101 holding in Bilski v. Kappos, 129 S.Ct. 2735, 95 USPQ2d 1001 (2010).
However, the patent community's general reaction to Bilski was critical, with most observers ruing the lack of further guidance on determining Section 101 statutory subject matter.
In the Supreme Court's March 20 Mayo decision, the court said that “to transform an unpatentable law of nature into a patent-eligible application of such a law, one must do more than simply state the law of nature while adding the words ‘apply it.' ”
The court concluded that the steps of the claims at issue in this case failed to “add enough” to the “inventive concept” of Prometheus's patents—the correlations between metabolite levels and effectiveness of the drug.
While the court provided no standards for determining when steps provide “enough,” it indicated that the inventive concept must be embedded in the application rather than in the law of nature. In contrast, in this case, the court said, “any additional steps consist of well-understood, routine, conventional activity already engaged in by the scientific community; and those steps, when viewed as a whole, add nothing significant beyond the sum of their parts taken separately.”
The court was equally concerned about “how much future innovation is foreclosed” by a patent claim, but again, the opinion lacked specifics on how much foreclosure would be too much.
“We are surprised and disappointed in the court's decision,” said Hans Sauer, deputy general counsel for intellectual property at the Biotechnology Industry Organization, Washington, D.C. “While we are still analyzing the opinion, we are concerned that it introduces new and confusing concepts into the traditional body of patent law, which patent examiners and lower courts will struggle to consistently and rationally implement.”
Sauer was particularly concerned about “the unintended consequences of attempting to use patent eligibility as a basis to strike down these patents for biomarker-based diagnostic methods.”
Joshua D. Sarnoff, professor at the DePaul University College of Law, Chicago, who submitted a brief on behalf of nine law professors supporting Mayo's position, was on the other hand “surprised and delighted” by the decision. Nevertheless, he too had a concern about the breadth of the decision, one that he expressed more generally.
“Although the court clearly understood the need for more than mere application of a new discovery, it continued to justify the requirement in terms of too much restriction on sequential invention, rather than on inadequate creativity of the claimed application,” Sarnoff said. “And as the court also recognized that claim drafting to limit scope does not avoid the problem of a lack of an ‘inventive concept,' it will be hard to develop principled lines between eligible claims and those that foreclose too much,” he added.
Bruce M. Wexler of Paul Hastings, New York, though, was less troubled about both the general impact and the impact on diagnostic method patents.
“The court repeatedly expressly emphasized that it was focusing on the particular patent claims and what the text of that patent explained to be the invention of the patent,” he said. “It will be very important for district courts and appeal courts, applying Mayo, not to interpret it as making broad generalizations about patent eligibility of fields of technology or science.”
Sauer disagreed. “If the court could be criticized in Bilski for writing a tentative, split opinion without much guidance, the court has certainly made up for that now,” he said sarcastically. “It has written a forceful, unanimous opinion with even less guidance.”
Ching-Lee Fukuda of Ropes & Gray, New York, however, noted that the Mayo court answered at least one question that the Bilski court left unresolved.
“Post-Bilski but pre-Mayo, patentees were aware that a patent could fail the machine or transformation test and still be valid, as long as it did not cover an ‘abstract idea,' ” she said. “Patentees, however, were able to derive some security from the fact that there had not existed a case in which a patent that passed the machine or transformation test was held invalid.”
“Mayo removed that last bit of certainty from Section 101 analysis, by holding that a patent could pass the machine or transformation test and still be invalid,” she concluded. “We may be well on the road to the demise of the machine or transformation test.”
The court used the words “enough” and “sufficient” to determine when an application can be determined to “transform the nature of the claim” from an unpatentable law of nature. BNA asked the stakeholders what might constitute “enough.”
“Apparently, this falls in the same category as obscenity,” Michael R. Samardzija of Bracewell & Giuliani, Houston, told BNA. “The justices will know it when they see it. All we know is that they did not see it in Mayo.”
“The most we can glean is a general idea that more claim limitations are better, ‘unconventional' claim limitations are better, claim limitations that are nowhere to be found in the prior art are better, and narrower claim scope is better,” BIO's Sauer said.
“Unfortunately, I think this framework will not help clarify the Section 101 analysis,” according to Erika Arner of Finnegan, Henderson, Farabow, Garrett & Dunner, Reston, Va. “I think lower courts and the patent office will struggle with the subjective inquiry of what is ‘enough' to render a claim patentable.”
Paul M. Rivard of Banner & Witcoff, Washington, D.C., saw some guidance in the court's use of the term “less conventional.” “I thought this was an interesting choice of words, one that seems to imply the steps need not necessarily be novel,” he said. “But beyond this, the court didn't seem to provide any guidance on this point and subsequent decisions will need to create some sort of test.”
On the other hand, Lisa A. Haile of DLA Piper, San Diego, argued that the court was clear. “When taken in context, the court is asking for further active steps,” she said. “In this case, the court believes that the claim merely stated a law of nature (e.g., the natural breakdown process for a drug in the body) rather than claiming how to apply this law of nature.”
Jeremy A. Cubert and Megan Sunkel Woodworth of Dickstein Shapiro, Washington, D.C., first contended that, indeed, the court gave three hints as to what would be enough: (1) the additional steps must not be “well-understood, routine, and conventional activity already engaged in by the scientific community”; (2) multiple, additional known steps must add something “significant” as a whole, beyond the sum of their parts; and (3) the claim should not preempt the use of the law of nature.
Nevertheless, they added: “Despite these hints, courts and practitioners will continue to struggle with this boundary, just as we have in the three decades since the cases that the court found to be most on-point to the dispute in this case.”
“We recognize that, in evaluating the significance of additional steps, the §101 patent-eligibility inquiry and, say, the §102 novelty inquiry might sometimes overlap,” the court said. To many patent stakeholders, such a “peek” into the storehouse of public knowledge violates the statutory scheme of the Patent Act.
“The Mayo decision now invites parties to import their 102/103 arguments into any 101 analysis,” Fukuda said. “In effect, the new 101 analysis has acquired even more complexity, and in at least some cases 101 findings will rise or fall with 102/103 findings.”
“I think this makes the 101 analysis more difficult, because it implies that you need to understand the state of the art before you can decide patent-eligibility,” according to Courtenay C. Brinckerhoff of Foley & Lardner in Washington, D.C. “While we now see combined enablement/utility rejections, I can envision combined 101/102-103 rejections focusing on whether or not a given step or steps are conventional.”
Rivard agreed. “I think this is an unwelcome step backward in the court's jurisprudence, as it has created a subsidiary issue in the 101 analysis as to whether individual method steps are ‘routine' on one hand or ‘less conventional' on the other.”
Haile again saw more clarity in the opinion, however. “I think the court drew a line between analysis under 101 and the 102/103 inquiries,” she said.
“I believe the ‘well known in the art' and ‘well understood, routine, conventional' phrases went more toward asking ‘What have the applicants added to the ‘law of nature' or natural phenomenon to take it beyond just an observation?' ”
She added, “I think Section 101 requires this type of thought process during the analysis anyway—it is hard to look at 101 in a vacuum.”
Wexler agreed with Haile. “The question of novelty and nonobviousness in the context of the 101 query tends to focus on understanding what the patent itself purports to say is the invention,” he told BNA. “In contrast, the 102/103 inquiry typically focuses on what prior art in fact may exist external to the patent, often prior art unknown to the inventors, and how that prior art ultimately impacts the patentability claimed invention.”
But Sauer was again critical, describing his concern in the context of examination at the Patent and Trademark Office:
First, the examiner would have to look for the “law of nature” in the claim, and the examiner would have to take that piece and give it no patentable weight. Effectively, the examiner would have to treat the “natural law” limitation as if it were in the prior art even if it does not in fact fit any of the statutory categories of prior art under Section 102. Then the examiner has to look at the other claim steps and decide how conventional, known, or obvious they are. The examiner may also have to ask whether these steps, taken together, add something significant beyond the sum of their separate parts (a “synergy” kind of idea). Finally, the preemptive scope of the claim must not be such that it forecloses others unduly from using the natural law.
Roberte M. D. Makowski of Connolly Bove Lodge & Hutz, Wilmington, Del., made a similar but generalized point. “The court appeared to indicate that novelty must be integrated into a Section 101 analysis for the steps dealing with the use or application of the laws of nature, but not for the steps relating to the laws of nature themselves,” she said. “Application of Section 102 to certain steps of the method but not to others in a Section 101 analysis will likely cause further confusion and uncertainty on whether method claims are patent eligible or not.”
“All this represents a big departure from the status quo and will make a difference in the way claims are examined, evaluated, and litigated,” Sauer concluded.
“This is a sea change from prior precedent,” Samardzija said in agreement.
The court appeared to rephrase its preemption doctrine by asking “how much future innovation is foreclosed” by a patent claim.
“I don't believe the court was ready to decide how much was too much so they focused more on the ‘application' of a law of nature discussion than on preemption,” DLA Piper's Haile said. “The one aspect the court was clear on was that they didn't agree with Prometheus's argument that the claims were so narrow and specific that there was not preemption and therefore the patent claims should be upheld.”
Wexler contended that the court was adhering to its prior jurisprudence by avoiding “quantifying scientifically the amount of preemption” that would change the patent eligibility decision. “The point is that as a patent trends towards seeking a patent for an invention residing in an idea, rather than the application of an idea, its breadth of exclusivity will encompass the idea rather than a more limited field of application of an idea,” he said.
Arner, however, saw “a shift in the court's thinking.” She said, “Rather than emphasizing, as it usually does, that Congress intended the scope of patent protection to be as broad as possible, the Mayo court focuses on the judge-made exclusions from patentable subject matter, reasoning that narrower patent protection may better promote innovation. This apparent shift by the full court may signal the need for clarification by Congress.”
To test the guidance—or lack thereof—in the high court's opinion, BNA asked whether specific steps might be added to Prometheus's claims that would have allowed them to pass the Section 101 threshold.
“They do leave the door open for claims to ‘a new way of using an existing drug,' ” Brinckerhoff noted. “If you could somehow cast these claims in that light—including a final administering step—maybe that would work.”
Haile agreed, reiterating her belief that “active” steps would have saved the claims. However, she also noted that in practice, once a determination of the metabolite level is made, doctors make decisions based on the patient, “so you cannot claim it one way specifically.” She thus proposed a claim structure that would have alternative administering steps, depending on the result of the “determining” step.
She also reasoned, though, that Prometheus's goal was to avoid the follow-on steps because a claim with those steps would invoke joint liability issues. That is, the determining step is likely to be performed by a medical laboratory, while the added administering step is performed by the patient's physician, she explained.
As it currently stands under Federal Circuit jurisprudence, such a situation makes it difficult to enforce the patent claim, Haile explained. She was therefore looking forward to the appeals court's upcoming en banc decisions in two cases that might further expand the conditions under which two parties might be jointly liable. Akamai Technologies Inc. v. Limelight Networks Inc., No. 2009-1372 (Fed. Cir., argued Nov. 18, 2011); McKesson Technologies Inc. v. Epic Systems Corp., No. 2010-1291 (Fed. Cir., argued Nov. 18, 2011).
Rivard offered some practical advice for future patent applications. “Going forward patent drafters will need to include more specifics in claims for items such as quantification techniques, treatment protocols, etc., to avoid a finding that the law of nature is unduly preempted,” he said.
The high court recognizes three exceptions to patent eligibility under Section 101—laws of nature, natural phenomena, and abstract ideas—often referred to together as “fundamental principles.” Method claims tend to invoke the abstract idea exception, but in the instant case, a law of nature was at issue.
BIO's Sauer questioned that basic characterization by the court, actually. “Really, there is nothing ‘natural' about the effect of a man-made, unnatural drug on the human body,” he said. “That's like saying ‘the fact that aspirin alleviates headaches is also a natural law,' or ‘the fact that paclitaxel makes lung, but not prostate, cancers shrink is also a natural law.' ”
Nevertheless, BNA asked the stakeholders whether the court's views on laws of nature were equally applicable to abstract ideas.
“The court has traditionally treated the judicial exceptions as a group, asking whether a patent claim recites a ‘practical application' or the fundamental principle itself,” Arner of Finnegan Henderson said. “I think this ‘practical application' framework generally works for both the ‘law of nature' exception and the ‘abstract idea' exception, though I think both inquiries will be more difficult after the Mayo decision.”
Foley & Lardner's Brinckerhoff disagreed in part. “I think they raise different questions, but maybe that's because my practice runs into ‘laws of nature' more than ‘abstract ideas,' ” she said.
“In Myriad, the Federal Circuit invalidated some of the method claims under the abstract ideas doctrine, and I do think that was a different analysis, although the result could be the same,” according to Brinckerhoff, referring to Association for Molecular Pathology v. U.S. Patent and Trademark Office, 653 F.3d 1329, 99 USPQ2d 1398 (Fed. Cir. 2011).
“For example, Myriad argued that the claims inherently embodied transformative steps, but that might not matter (now) under a law of nature analysis if those steps were ‘conventional.' ”
The Myriad case did, in fact, involve some method claims, but those are not the subject of the petition for writ of certiorari now in front of the Supreme Court. Association for Molecular Pathology v. Myriad Genetics Inc., No. 11-725 (U.S., review sought Dec. 7, 2012).
Rather, the case's composition of matter claims on isolated DNA would invoke the “natural phenomena” exception, so BNA asked the practitioners how the Mayo opinion might affect the cert petition in Myriad.
Counsel representing the challengers in the Myriad case were, of course, quick to embrace the court's ruling. “Today's decision bodes well for the ultimate outcome of the Myriad litigation,” according to Sandra Park, staff attorney for the American Civil Liberties Union's Women Rights Project.
Co-counsel Daniel B. Ravicher of the Public Patent Foundation was more certain of the impact: “It seems clear that both [Justices Alan D.] Lourie's and [Kimberly A.] Moore's basis for their separate AMP decisions are expressly reversed by Mayo,” he said. “A unanimous Supreme Court has now undeniably declared that a trivial non-inventive transformation (relied on by Lourie to say isolated genes are patentable even though the process of isolating genes was well known in the art) isn't sufficient, and any potentially negative industry impact of denying such claims (relied on by Moore as the outcome determinative factor for allowing patents on isolated genes) is not only wrong, but irrelevant.”
“So the question is no longer whether the Supreme Court will reverse the Lourie-Moore opinion in AMP,” Ravicher reasoned, “but when.”
Arner expected the high court to grant certiorari in Myriad, vacate the Federal Circuit's opinion, and remand for reconsideration in light of Mayo, but said, “It is hard to say what guidance may be helpful to the Federal Circuit if it is asked to reconsider the isolated genes at issue in Myriad.”
“The lesson that can be gleaned from this opinion is that the ‘human intervention' that was the focus of the Federal Circuit's Myriad decision may not be sufficient if that intervention represents well known techniques for altering naturally occurring RNA or DNA molecules,” Woodworth and Cubert of Dickstein Shapiro said.
“Much the way that the court found the ‘transformation' insufficient to make the methods patent eligible in this case, the same may apply for the ‘human intervention' in Myriad to distinguish that case from the bacteria in Chakrabarty,” they said, referring to Diamond v. Chakrabarty, 447 U.S. 303, 206 USPQ 193 (1980).
Samardzija, however, said that the Mayo decision does not provide guidance as to how to determine patent eligibility of composition claims. He said there was at least a possibility the high court would deal directly with the DNA-related claims, rather than send it back to the Federal Circuit.
Ravicher gladly agreed. “The Supreme Court might very well decide it's best to just go ahead and rule on AMP rather than give the Federal Circuit another opportunity to get it wrong like they did in Mayo,” he said.
For More Information
Opinion at http://pub.bna.com/ptcj/101150Mar20.pdf
Brinckerhoff and Sarnoff are members of this journal's advisory board.
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