Proposals Stress Need to Change Patent Eligibility Law

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By John T. Aquino

Proposals to amend the patent law to address perceived roadblocks to biopharma innovation may not succeed as written but emphasize the need to change the law, attorneys told Bloomberg BNA.

Three intellectual property groups issued the proposals to amend 35 U.S.C. §101, the eligibility section of patent law, in light of Supreme Court decisions that found claims for isolated DNA and diagnostic methods patent ineligible because they recited products and laws of nature, respectively. They were publicly issued for comment as proposed legislation by the American Intellectual Property Law Association on May 12, the American Bar Association on March 28, and the Intellectual Property Owners Association (IPO) on Feb. 7.

The issue’s importance to biopharmaceutical companies was illustrated March 15 by an unlikely source—an executive from the software industry--which often has been at odds with the biopharma sector on Section 101. Speaking on the topic, Microsoft Corp.'s David Jones said, “The people having the hardest time, as much as we complain about software, are the ones with gene patents.”

“We have a lot of workarounds on the software side, but not them. I think they’re really hurting,” Jones, assistant general counsel for intellectual property policy at Microsoft, said at the 2017 Symposium on Intellectual Property at George Washington University School of Law.

Attorneys interviewed by Bloomberg BNA agreed changes are needed, but indicated the process could be complicated.

Robert Armitage, retired general counsel at Eli Lilly & Co., told Bloomberg BNA in a May 18 email, “While I find it difficult to see how these initial and quite well-intentioned efforts can be transformed into politically viable proposals, I believe they emphasize the categorical need for a change in the law and may ultimately lead to viable legislative initiatives that can effectively address the entirely unsatisfactory state of the current law.”

Kevin E. Noonan, a partner at McDonnell Boehnen Hulbert & Berghoff LLP, and Hans Sauer, the deputy general counsel for intellectual property for the Biotechnology Innovation Organization, suggested to Bloomberg BNA that any amendment to the law also address the concerns of the Supreme Court that led to the court’s decisions in the first place.

IPO Proposal

Section 101 says, “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.” The courts created three exceptions to patent eligibility: abstract ideas, natural phenomena, and products or laws of nature.

The IPO proposed three new parts of Section 101. Section 101(a) would read: “Whoever invents or discovers and claims as an invention any useful process, machine, manufacture, composition of matter, or any useful improvement thereto, shall be entitled to a patent for a claimed invention thereof, subject only to the exceptions, conditions and requirements set forth in this Title.”

The IPO’s changes include deleting “new” from the current “new and useful”; inserting “claims as an invention”; and acknowledging the existence of exceptions to patent eligibility.

The IPO’s Section 101(b) would describe the sole exception to eligibility: a claimed invention is ineligible only if it, as a whole and as understood by a person having ordinary skill in the art to which the claimed invention pertains, exists in nature independently of and prior to any human activity, or “exists solely in the human mind.” Section 101(c) would say that patent eligibility under Sections 101(a) and (b) shall be determined without regard to the requirements of Sections 102 (novelty), 103 (obviousness) and 112 (written description and enablement).

ABA, AIPLA Proposals

Like the IPO, the AIPLA proposal would replace the three judicial exceptions to eligibility with a narrower one: “if the claimed invention as a whole exists in nature independent of and prior to any human activity, or can be performed solely in the human mind.”

The Intellectual Property Law Section of the American Bar Association also recommended legislation to amend Section 101, but within the context of the Supreme Court’s three exceptions. The group said those exceptions could apply if a patent claim “would preempt the use by others of all practical applications of laws of nature, natural phenomena or abstract ideas.”

There have been other contributions to the discussion. On Nov. 9 to 11, 2016, a group of 22 IP professionals met at the Banbury Center at the Cold Spring Harbor Laboratory in New York and outlined a proposed path forward to amend patent eligibility laws. The Patent and Trademark Office held roundtables on patent eligibility in November and in December, at which Armitage was a presenter. The PTO also solicited comments on the issue, of which the ABA’s was one.

Remove ‘Burr’ Under Saddle

The attorneys told Bloomberg BNA that having three proposals submitted over a four-month period highlighted the biopharma industry’s sense of need to amend the law.

The proposals have generated discussion. At the BIO IP Counsels Committee Conference in March, Noonan and Sauer separately suggested that an amendment to the law address the reasons the Supreme Court invalidated the gene and diagnostic method patents.

Noonan proposed giving exceptions for physicians who are worrying about being sued for infringing a diagnostic method patent in the course of their practice and to medical researchers who are also afraid of infringement suits as they try to find new drugs.

He readdressed the issue in a May 18 email to Bloomberg BNA: “While I think modifying the statute to incorporate the ‘judicial exception’ for eligibility is good as a general principle—patent law as an exercise of congressional power and prerogative should be defined affirmatively by Congress and not unnecessarily encumbered by judicial proscriptions--the court is properly exercising its role. It is doing this by identifying areas where overzealous patenting could—although I don’t think it has—interfere with other important societal interests.”

Medically-related inventions figure prominently in the court’s decision making, Noonan noted. “Therefore, I think it important to remove the source of the concern—the ‘burr under the judicial saddle'—and in doing so, in concert with changes advocated by the three IP groups, perhaps blunt any impetus the court may have in reviewing the revised statute as well as removing one of the cudgels used by anti-patenting people to make their point with the public.”

Sauer told Bloomberg BNA in a May 18 email, “These legislative proposals should be accompanied by an explanation how the Supreme Court’s underlying concerns can be accommodated and addressed by the patent system. The Supreme Court clearly thinks that a correction was needed. So in the context of these proposals it needs to be explained that the Supreme Court’s test causes too much collateral damage, and how that correction can be made using existing law.”

With assistance from Tony Dutra.

To contact the reporter on this story: John T. Aquino in Washington at jaquino@bna.com

To contact the editor responsible for this story: Randy Kubetin at RKubetin@bna.com

For More Information

The AIPLA proposal is at http://src.bna.com/o0z; ABA's at http://src.bna.com/o0B; and the IPO's at http://src.bna.com/o0C

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