MedCity Influencers, BioPharma

What SCOTUS’s refusal to review cases on patent-eligible subject means

A patent lawyer takes a closer look at the guidance on how to meet patent-eligibility standards using conclusions from recent court cases, including those denied by the Supreme Court.

 

Supreme Court

On Oct. 3, 2016, the Supreme Court declined to review the Federal Circuit’s holdings in a number of patent cases concerning patent-eligible subject matter, including Genetic Techs. v. Merial, Jericho Systems v. Axiomatics, and Essociate v. Clickbooth.com. This decision was made about three months after the Supreme Court declined to review the Federal Circuit’s holding in Ariosa Diagnostics v. Sequenom that a method claim for detecting fetal DNA in maternal blood is not patent-eligible.

The Supreme Court’s denial to review a lower court’s decision is not unusual because the court reviews only about 100 to 150 cases out of more than 7,000 cases asked for review each year. However, the denial of review in these cases attracted particular attention from the biotech industry because these cases came out after the Mayo and Alice decisions in which the Supreme Court narrowed the scope of patent-eligible subject matter with respect to diagnostic methods and software-based inventions. Many patentees hoped that the Supreme Court would revisit the issue of patent-eligibility and rein in the progressive narrowing of the scope of patent-eligible subject matter. In addition, many patentees and patent practitioners opined that the framework to determine patent-eligible subject matter set forth in Mayo and Alice was not sufficiently clear and hoped that the Supreme Court would provide more concrete guidance on the issue.

As the Supreme Court refused to review multiple cases on patent-eligible subject matter, patentees need to continue to analogize and/or distinguish their inventions based on recent Federal Circuit cases interpreting the Mayo and Alice guidelines and recent examples published by the United States Patent and Trademark Office (USPTO). The meaning of the Mayo/Alice framework will become clearer with more case law on patent-eligible subject matter.

Patent-eligible Subject Matter under the Patent Act
The U.S. Constitution provides for an exclusive right granted to an inventor for his or her discoveries. However, not every discovery is patent-eligible. The patent-eligible subject matter is defined in Section 101 of the Patent Act as follows:

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. 35 U.S.C. § 101 (Emphasis added).

Even if claimed inventions fall within these categories, courts have held that laws of nature, natural phenomena, and abstract ideas are not patent-eligible subject matter. However, methods and products employing laws of nature, natural phenomena, and/or abstract ideas to perform a real-world function may be patent-eligible. Because these exceptions are not stipulated in the Patent Act but were created by judges, they are also called judicially recognized exceptions to patent eligibility.

Recent Framework on Patent-eligible Subject Matter
Three Supreme Court decisions set forth a framework to determine whether patent claims are directed to the judicially recognized exceptions. First, the court determines whether the claims at issue are directed to patent-ineligible concepts (e.g., laws of nature, natural phenomena, and abstract ideas). If so, the court then determines whether additional elements in each claim result in an inventive concept that transforms the nature of the claim into a patent-eligible application, i.e., whether the claim recites significantly more than the judicial exception itself.

In March 2012, the Supreme Court in Mayo Collaborative Services v. Prometheus Laboratories held that method claims of administering a medication to a patient and determining a metabolite level of the medication in order to determine an appropriate dosage of the medication for the patient were not patent-eligible. The court found that the claims did not do significantly more than simply describe the natural relationship between a dosage of the medication and its metabolism in the patient’s body.

About a year later, the Supreme Court in Association for Molecular Pathology v. Myriad Genetics held that a naturally occurring DNA segment was a product of nature and not patent-eligible merely because it had been isolated. In contrast, the court held that complementary DNA (cDNA), or double-stranded DNA synthesized from a single stranded RNA, was patent-eligible if it was not naturally occurring.

In 2014, the Supreme Court in Alice Corp. v. CLS Bank Int’l applied the framework created in Mayo and Myriad cases to patents related to a computerized scheme for mitigating settlement risk. The court held that the claims at issue were directed to the abstract idea of intermediated settlement, and implementation of the method on a generic computer failed to transform the abstract idea into a patent-eligible invention.

Federal Circuit’s Application of Mayo/Alice Framework
The Federal Circuit applied the Mayo/Alice framework in a series of cases, which underscored concerns that the Mayo and Alice decisions had narrowed the scope of patent-eligible subject matter too much.

In December 2014, the Federal Circuit in University of Utah Research Foundation v. Ambry Genetics held that synthetic DNA primers that bind to chromosomal gene segments were not distinguishable from the isolated DNA found to be not patent-eligible in Myriad. The Federal Circuit further held that method claims for screening for gene alterations were directed to an abstract idea of comparing gene sequences and determining the existence of alterations. Additional features in the claims such as the use of specific known techniques for comparing gene sequences were found to be routine and insufficient to transform the nature of the claims into a patent-eligible application.

In June 2015, the Federal Circuit in Ariosa further limited the scope of patent-eligible subject matter. The court invalidated claims to methods of detecting cell-free fetal DNA (cffDNA) in maternal plasma and serum as directed to natural phenomena, and amplification and detection of cffDNA was found to be conventional and insufficient to transform the natural phenomenon into a patentable invention. While agreeing that the inventors created an alternative, non-invasive method for prenatal diagnosis of fetal DNA and “combined and utilized man-made tools of biotechnology in a new way that revolutionized prenatal care,” the court noted the Supreme Court’s instruction in Myriad that groundbreaking, innovative or even brilliant discovery does not by itself satisfy the patent eligibility inquiry.

Supreme Court’s Denial to Review Cases on Patent-eligible Subject Matter

Many legal scholars, patent practitioners, and pharmaceutical and biotechnology companies expressed concerns about the Ariosa decision and filed friend-of-the-court briefs in support of the patentee Sequenom after the patentee asked the Supreme Court to review the Federal Circuit decision. Over 20 friend-of-the-court briefs were filed in support of Sequenom, but none were filed in support of Ariosa. Many criticized Ariosa’s rigid application of the Mayo/Alice framework for patent eligibility. Some asked for reconsideration of the Mayo/Alice framework, and others asked for abrogation of the judicially recognized exceptions in deference to the explicit statutory framework of patentability.

The parties submitting these briefs generally agreed that the uncertain standard for patent-eligible subject matter may harm incentives to innovate and discourage licensing and partnership activities, which can translate scientific discoveries into innovations that benefit the public. Unfortunately, despite a significant number of the friend-of-the-court briefs filed, the Supreme Court declined to review the case in June 2016.

The Supreme Court then declined to review another three cases on patent-eligible subject matter, all of which invalidated patent claims as being directed to patent-ineligible subject matter. In Genetic Tech, the Federal Circuit upheld the invalidity of claims to amplifying a DNA sequence in a non-coding region and analyzing the amplified DNA sequence to determine the identity of an allele in a coding region of a gene linked with the amplified non-coding region. In Jericho, the District Court for the Northern District of Texas found that method claims for processing authenticated user requests to access resources were directed to an abstract idea, and the Federal Circuit affirmed without opinion. In Essociate, the District Court for the Central District of California invalidated method claims for receiving and tracking referrals from referral source websites outside an existing referral system, which the Federal Circuit affirmed without opinion.

Aftermath
Since the Supreme Court has failed to provide additional guidance for assessing patent eligibility after the Mayo, Myriad and Alice decisions, patentees should continue to analogize and/or distinguish their inventions to/from Federal Circuit cases on subject matter eligibility. Courts have taken a similar approach in their opinions on the issue, and more case law will shed light on the interpretation of the Mayo/Alice standard.

A recent Federal Circuit ruling in Rapid Litigation Management v. Cellzdirect provides a rare example of claims directed to patent-eligible subject matter in the biological sciences. The claims at issue recited a method of preserving hepatocytes, comprising separating viable hepatocytes among previously frozen and thawed cells, recovering the viable hepatocytes, and cryopreserving the recovered viable hepatocytes. Despite the belief in the field that hepatocytes were incapable of surviving more than one round of freezing and thawing, the district court had invalidated these claims as being directed to the natural law that hepatocytes could survive two rounds of freezing and thawing. The Federal Circuit distinguished this case from Myriad, Ariosa, and Genetic Tech and held that the claims were not directed to a natural law but were instead directed to a new and useful method of preserving hepatocyte cells. The court also found that even if each step of freezing and thawing cells was routine and conventional, a process of preserving hepatocytes by repeating these steps was not. The Cellzdirect case provides a useful insight on what makes patent claims patent-eligible. The Federal Circuit’s recent BASCOM  Global Internet Services v. AT&T Mobility LLC decision found that patent eligibility may be conferred by the non-conventional arrangement of conventional steps. While BASCOM involved a software-based invention, its holding is also relevant to those in the biotechnology field. Finally, the Federal Circuit’s decision in McRO, Inc. v. Bandai Namco Games America found that claims reciting a specific approach to addressing a technological problem were patent-eligible because they were not directed to an abstract idea but rather to a specific solution.

Recent guidelines provided by the USPTO also provide helpful guidance in meeting the patent eligibility standards in the biological sciences. Example 29 of the Updated Guidance on Subject Matter Eligibility in May 2016 included claims related to diagnosing and treating a hypothetical autoimmune disease called Julitis. The USPTO applied the Mayo/Alice framework to determine whether these claims are directed to patent-eligible subject matter. The USPTO first determined that a method of diagnosing a patient with Julitis when the presence of a “Julitis protein” (JUL-1) is detected in the patient’s plasma sample is directed to a law of nature and/or an abstract idea and thus is not patent-eligible. However, the USPTO guidance further indicated that if the presence of JUL-1 protein is detected using nonconventional, non-naturally occurring anti-JUL-1 antibodies, then such use amounts to significantly more than the law of nature and/or the abstract idea, and therefore renders the method claim eligible.

Early this month, the USPTO issued a memorandum regarding recent subject matter eligibility decisions including McRO and BASCOM. The memorandum summarized the Federal Circuit holdings of the two cases and analyzed notable points from them. For McRo, the USPTO recommended that patent examiners should consider a claim as a whole and should not overgeneralize the claim or simplify it into its gist or core principles, when identifying a concept as a judicial exception. For BASCOM, the USPTO recommended that the examiners should consider additional claim elements in combination, as well as individually, when determining whether a claim as a whole amounts to significantly more, as this may be found in the nonconventional and non-generic arrangement of known, conventional elements.

The Supreme Court’s denial to review a number of cases on subject matter eligibility was disappointing news for patentees. However, recent Federal Circuit decisions and guidelines from the USPTO have offered much-needed guidance on how to meet the patent eligibility standards. Further guidance may be provided as more Federal Circuit cases on patent-eligible subject matter refine the Mayo/Alice framework and the USPTO strives to clarify the prosecution standard on the issue.

Photo: Flickr user Matt Wade

 

 

 

 

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