U.S. Update: Are the Storms of Change Swirling?
CIPA Journal
In the United States, patent eligibility remains in flux, particularly in the life sciences. And the unrest is primarily a direct result from the Supreme Court’s Mayo1 and Alice2 decisions and how the lower courts, especially the Federal Circuit, apply that test. Those cases were decided more than five years ago, and momentum for change may be building. Recently, Congress, the Courts, and the USPTO are all active. Congress held hearings on the subject of patent eligibility and released a proposal for legislation that would change statutory interpretation and curtail the scope of limits imposed (and interpreted) by Mayo and Alice.3 The USPTO again issued updated patent eligibility guidance to help guide examiners and practitioners during prosecution. The Federal Circuit denied rehearing in Athena4 in a decision that repeatedly requested guidance from the Supreme Court on the proper interpretation of Mayo and Alice. And the Supreme Court has two petitions for certiorari in Vanda5 and Athena currently awaiting decision, which, if reviewed, could clarify the scope of Mayo and Alice. While all of this activity shows the relative uncertainty and difficulty in addressing patent eligibility, it also suggests momentum for change.
Congress
The statutory definition of patent eligible inventions in the US provides broad classes of eligible inventions and has generally remained the same since it was first passed in 1897.6 All of the limits on the types of inventions that can be patented have come from Supreme Court decisions. However, Congress has the power to change the law and has signaled an interest in doing so in the relatively near future.7 In April and May 2019, a bipartisan group of representatives and senators released draft proposals that would abrogate the Alice/Mayo framework and transform the current statutory scheme. The House held hearings in June 2019 on patent eligibility and innovation, and many expected a bill to reform section 101 would be introduced in the Fall of 2019.8 In September 2019, the Congressional Research Service released a report on the impact that new legislation might have, which emphasized:
“These proposed changes could have significant effects as to the types of technologies that are patentable. The availability of patent rights, in turn, affects incentives to invest and innovate in particular fields, as well as consumer costs and public access to technological innovation.”9
Since then, however, Congress has not introduced a bill, and the legislation appears to be stalled for the time being and may be slow to gain traction over the next year, given the current political climate and approaching 2020 presidential election. Nonetheless, the current patent eligibility debate has caught Congress’s attention and may gain additional momentum if the Supreme Court does provide clarification and certainty soon.
Supreme Court
In the near term, it is more likely that the Supreme Court will grant one of the two petitions for certiorari – in Vanda and Athena – that are currently pending. The Vanda petition arises out of the Federal Circuit’s decision in Vanda Pharmaceuticals v West-Ward Pharmaceuticals International,10 which was the first case to address patent eligibility of methods of treatment using the Mayo/Alice framework. When that case was before the Federal Circuit, a split panel found claims directed to a method for treating schizophrenia were not directed to a natural law or phenomenon and were, therefore, patent eligible. The petition, filed by Hikma Pharmaceuticals USA Inc in December 2018, asks the Supreme Court to consider “whether patents that claim a method of medically treating a patient automatically satisfy section 101 of the Patent Act, even if they apply a natural law using only routine and conventional steps.”11 In March 2019, the Supreme Court invited the US Solicitor General to comment on the petition, which is generally a sign that the Court has an interest in hearing the case. The Solicitor’s paper is expected to be filed by the end of the year, and the Supreme Court may make its decision in early 2020.
The Athena petition arises out of the Federal Circuit’s fractured decision in Athena Diagnostics, Inc. v Mayo Collaborative Services denying en banc review12 of a split panel decision that held methods of diagnosing a neurological disorder were not patent eligible.13 The panel determined that the claimed diagnostic methods, which detect antibodies to the protein muscular-specific tyrosine kinase (MuSK), were unpatentable because they involve the discovery of a natural law and “conventional” concrete steps to observe its operation.14 As discussed in more detail below, the full court denied rehearing in a 7-5 decision, but eight of the 12 judges wrote separate opinions and expressed their interest in guidance from the Supreme Court or Congress. The question presented by Athena’s petition is:
“[w]hether a new and specific method of diagnosing a medical condition is patent-eligible subject matter, where the method detects a molecule never previously linked to the condition using novel man-made molecules and a series of specific chemical steps never previously performed.”15
Although the en banc petition was denied (and the full Federal Circuit will not revisit the question itself), the separate opinions in Athena may encourage review by the Supreme Court. A fractured decision like this one shows a disagreement among the judges on Federal Circuit addressing a patent law issue and is often viewed similarly to a disagreement between regional US Appellate Courts, and the Supreme Court may be more likely to grant review. In addition, 11 amicus briefs were filed in support of granting certiorari, including a brief by retired Federal Circuit Chief Judge Michel, who highlighted the inconsistency in cases and judicial discord regarding patent eligibility.16 CIPA also filed a brief in support of granting certiorari discussing differences in standards for patent eligibility and treatment of applications during examination between the US, on the one hand, and the standards applicable at the EPC and for the PCT, on the other hand.17 The patent eligibility issues involved in Vanda and Athena are positioned differently, but they both essentially ask the Supreme Court to decide the same question: whether, as a rule, diagnostic methods are not patent eligible and methods of treatment are patent eligible. Both petitions present an opportunity for the Court to provide additional guidance on the application of its Mayo/Alice framework. And there is near universal support in the patent law community for granting certiorari. If the Court does grant certiorari, any decision will be a major case to watch.
Federal Circuit
Despite overall uncertainty in the law and anticipation for new Congressional or Supreme Court action, there appears to be some stability (even if not completely desirable) in Federal Circuit law regarding patent eligibility in the life sciences. Several recent cases have suggested a distinction between method of treatment claims and diagnostic methods – while the later are likely to be found (at least temporarily) patent ineligible, the former may be likely to be found patent eligible. Although a majority of judges agreed that the diagnostic claims at issue in Athena were not patent eligible, they generally noted that outcome was mandated by the Supreme Court’s Mayo/Alice framework. And the majority indicated that they will continue to follow the post-Mayo/Alice decisions from the Federal Circuit that found diagnostic methods to be patent ineligible (as the panel did in Athena) unless or until the Supreme Court (or Congress) says otherwise.18
Each of the 12 judges that heard argument in Athena, except for Judge Chen (who joined the majority) previously sat on a panel that decided a diagnostics case. The majority19 ;indicated that they agreed with the panel’s decision that the claims covering methods of diagnosing neurological disorders were not patentable under the Supreme Court’s precedent. Perhaps most prominent, Judge Dyk wrote that “Mayo left no room for us to find typical diagnostic claims patent eligible.”20 The minority disagreed, concluding that the diagnostic method claims in Athena were distinguishable from Mayo and suggesting the Federal Circuit’s prior decisions have incorrectly “turned Mayo into a per se rule that diagnostic kits and techniques are ineligible.”21 Notably, however, Judge Lourie, writing for the majority, explained that the Federal Circuit’s post-Mayo decisions have “distinguished between new method of treatment claims and unconventional laboratory techniques, on the one hand, and, on the other hand, diagnostic methods.”22
The Athena en banc decision seems to signal agreement among the judges that methods of treatment can be patent eligible. As previously noted, the Federal Circuit’s decision in Vanda was the first time, post-Mayo, that it found methods of treatment involving natural laws or phenomenon patent eligible. The Federal Circuit’s reasoning in Vanda was adopted and applied in Endo Pharmaceuticals, Inc v Teva Pharmaceuticals USA Inc, which involved claims covering a method of treating pain in renally impaired patients. The panel in Endo concluded that the claims at issue there were “legally indistinguishable” from those in Vanda, because both “recite a method for treating a patient,” include “a dosage regimen,” and “require specific treatment steps.”23 Around the same time, the Federal Circuit decided Natural Alternatives International v Creative Compounds LLC,24 which involved methods of using a natural substance to increase anaerobic capacity in a human. The Natural Alternatives panel explained that “[t]hese are treatment claims and as such they are patent eligible.”25 Taking the decisions together, these statements could be interpreted as a bright-line rule that claims directed to methods of treatment are, or should be, patent eligible. The Endo and Natural Alternatives decisions reinforce the Vanda holding that method of treatment patents are patent eligible. However, some uncertainty about how bright the line was and how broadly it would apply may exist. The panel in Endo, tempered its holding by expressly stating that because the claims in Endo were so similar to those in Vanda that “precedent leaves no room for a different outcome.”26 But the Athena en banc decision suggests broader agreement with these earlier holdings. And the Athena majority reiterated the distinction between treatment and diagnostic methods with five judges27 who did not sit on the Vanda, Endo, and Natural Alternatives panels indicating endorsement of those decisions.28
The USPTO
Like the Federal Circuit, the USPTO must apply the Alice/Mayo framework. To assist the examining corps and the public, the USPTO again issued guidance on subject matter eligibility in October 2019.29 This latest update was published in response to public comments after the USPTO published guidance in January 2019.30 The January 2019 Guidance updated the ;analysis that the USPTO follows when evaluating claims under Step 2A of the Alice/Mayo test – whether the claim is directed to one of the judicial exceptions to patent eligibility. Specifically, the January Guidance created two substeps: Prong One, which ;is used to analyze abstract ideas, and Prong Two, which is used to analyze natural laws or phenomena. The January Guidance also provided six new examples (Examples 37-42) illustrating exemplary subject matter eligibility analyses of claims. Overall, the January Guidance indicated a preference for finding eligibility and created more pathways for examiners to find claims patent eligible.
The USPTO’s October Guidance is intended to provide additional advice and clarify the January Guidance in response to public comments. The October Guidance is organized into five sections.31 The first three sections provide additional information related to the interpretation of Step 2A and Prongs One and Two first introduced in the January Guidance. The fourth section outlines the necessary requirements for establishing a prima facie rejection for ineligible subject matter. And the last section delineates the application of the USPTO’s guidance in the patent examining corps. The October Guidance also provides four new examples (Examples 43-46) to illustrate the application of the subject matter eligibility analysis.
Generally, the January and October Guidance address all technical areas including life sciences and computer implemented inventions. Section III.C. of the October Guidance is specifically relevant to the subject matter eligibility of treatment and diagnostic methods. For example, it explains the USPTO’s application of judicial exceptions to effect a particular method of treatment or prophylaxis.32 It describes three discrete issues that examiners should consider when evaluating the patentability of an application of a natural law or phenomenon in a method of treatment – the particularity or generality of the treatment or prophylaxis; whether the recited limitations have more than a nominal (or insignificant) relationship to the exception; and whether the recited limitations are merely extra-solution activity field of use.33
First, to be patent eligible, claims that implicate a natural law or phenomenon must be directed to a “particular” application of the law or phenomenon.34 This principle is derived from the Supreme Court’s criticism in Mayo that the claims at issue there were:
“[u]nlike, say, a typical patent on a new drug or a new way of using an existing drug, the patent claims do not confine their reach to particular applications of those laws.”35
As the USPTO has done in the past (including the January Guidance), the October Guidance emphasizes that specificity and concrete steps are more likely to be found patent eligible. To illustrate this approach, the USPTO identifies a claim that recites “determining if a patient has a genotype associated with poor metabolism of beta blockers,” which could involve mental analysis and a natural phenomenon. If the claim also recites a step of “a lower than normal dosage of a beta blocker medication to a patient identified as having the poor metabolizer genotype,” that would be sufficiently particular and patent eligible.36 For a comparative example, the October Guidance explains that a claim that simply recites “administering a suitable medication” would not be patent eligible.37 This example mirrors the claims at issue in Vanda and the panel’s holding where the majority highlighted that the patent-eligible treatment claims covered “using iloperidone to treat schizophrenia.”38 Paraphrasing the Federal Circuit in Vanda, claims that recite a specific method for specific circumstances using a specific tool in a specific way to achieve a specific outcome are more likely patent eligible.
Second, the October Guidance explains that a limitation “must have more than a nominal or insignificant relationship” to the natural law or phenomenon. For example, if a claim recites the relationship between blood glucose levels over 250 mg/dl and the risk of developing ketoacidosis in patients with diabetes, the October Guidance indicates that a claim merely reciting a treatment step of “administering aspirin” is insufficient because aspirin does not prevent or treat ketoacidosis. On the other hand, including a limitation of “administering insulin” would be a patent eligible application of the natural law because insulin treats ketoacidosis. Notably, this example does not directly track a corresponding Federal Circuit decision,39 and patent applicants and practitioners should be cautious where the recited “application” of a natural law or phenomenon is to adjust the dose of a drug that is administered to a patient and take into account potentially contrary Federal Circuit holdings.40
Third, the October Guidance specifically warns that claims cannot be made patent eligible simply by adding specific steps to a claimed method or using other drafting tricks, like extrasolution activity and field of use limitations.41 The October Guidance uses the example of a patent covering a method of vaccinating cats that recites steps of administering a specific vaccine to a first group of cats and analyzing the information about the vaccination schedules and whether the cats later developed chronic immune-mediated disorders to determine the lowest risk vaccination schedule. According to the USPTO, the first step of administering the vaccines (to cats) is extrasolution activity, and the claimed method would not be a patent eligible application of a judicial exception.42 However, if the patent claimed an additional step of administering a specific vaccine to a second group of cats according to the lowest risk vaccination schedule, that method would be patentable, as it was in Classen Immunotherapies, Inc. v Biogen IDEC.43
Conclusion
Overall, patent eligibility for inventions and discoveries in the life sciences remains uncertain with a growing focus and desire, even from the Federal Circuit, for guidance from both the Supreme Court and Congress. The most likely (and quickest) path to a clearer approach will be from the Supreme Court – it has the opportunity to review two cases directly asking the question about the patent eligibility of treatment and diagnostic methods. While Congress can also act and has indicated a desire to do so, it is likely to take more time to reach a consensus and affect a statutory change. Much of the attention in the debate about life sciences patent eligibility is focused on broad subject matter categories: diagnostics and methods of treatment. However, in practice, drafting claims that are specific and concrete may be even more important, especially if the Supreme Court ultimately rejects the Federal Circuit’s apparent bright line distinction. In the absence of additional direction from the Supreme Court, both the Federal Circuit and the USPTO have tried to provide guideposts for patentees and patent applicants, emphasizing the importance of reciting specific and concrete applications and steps. Practitioners in the US and abroad anxiously await more definitive guidance. Until then, patent owners and practitioners should follow the general direction of the Federal Circuit and the USPTO – claim narrow methods that recite clear, detailed steps – to help ensure claims are patent eligible. Stay tuned as we continue to monitor this area of US patent law and, in particular, wait to see if the Supreme Court will grant certiorari in Vanda or Athena
Endnotes
1 Mayo Collaborative Servs. v Prometheus Labs., Inc., 566 U.S. 66 (2012) (“Mayo”).
2 Alice Corp v CLS Bank Int’l, 573 U.S. 208 (2014) (“Alice”).
3 Congressional Research Service Rep. No. 45918, at Summary (2019), available at https://fas.org/sgp/crs/misc/R45918.pdf.
4 Athena Diagnostics, Inc. v Mayo Collaborative Servs., 927 F.3d 1333 (Fed. Cir. 2019) (“Athena”).
5 Vanda Pharm. Inc. v West-Ward Pharm. International, Ltd, 887 F.3d 1117 (Fed. Cir. 2018) (“Vanda”).
6 See, e.g., 35 U.S.C. §101 (generally providing that “… any new and useful process, machine, manufacture, or composition of matter” and any new and useful improvement thereof…” is patent eligible).
7 See Sen. Chris Coons & Sen. Thom Tillis, What Coons and Tillis Learned at Patent Reform Hearings, Law360, June 21, 2019, https:// www.law360.com/articles/1171672/. Video of the hearings and the written testimony are available online. See The State of Patent Eligibility in America: Part I: Hearing Before the S. Judiciary Comm., Subcomm. on Intellectual Property, 116th Cong. (2019), www.judiciary.senate.gov/meetings/the-state-of-patent-eligibility-inamerica-part-i; The State of Patent Eligibility in America: Part II: Hearing Before the S. Judiciary Comm., Subcomm. on Intellectual Property, 116th Cong. (2019), www.judiciary.senate.gov/meetings/the-state-of-patent-eligibilityin-america-part-ii; The State of Patent Eligibility in America: Part III: Hearing Before the S. Judiciary Comm., Subcomm. on Intellectual Property, 116th Cong. (2019), www.judiciary.senate.gov/meetings/the-state-of-patenteligibility-in-america-part-iii.
8 Jennifer Giordano-Coltart et al., Patent Eligibility in Flux: Tracking the Tillis-Coons Bill, Kilpatrick Townsend, 9 August 2019, https://www.kilpatricktownsend.com/Insights/Alert/2019/8/Patent-Eligibility-in-Flux (stating that a formal section 101 bill is expected to be introduced in “early to mid-September”).
9 Congressional Research Service Rep. No. 45918, at Summary (2019), available at https://fas.org/sgp/crs/misc/R45918.pdf.
10 887 F.3d 1117 (Fed. Cir. 2018)
11 Petition for a Writ of Certiorari at i, Hikma Pharm. USA Inc. v Vanda Pharm. Inc., No. 18-817 (U.S. 27 December 2018).
12 Athena, F.3d at 1333.
13 Id., 915 F.3d at 743.
14 Id. at 751.
15 Petition for a Writ of Certiorari, Athena Diagnostics Inc. v Mayo Collaborative Services, LLC, No. 19-340 (U.S. Oct. 1, 2019).
16 Brief of the Honorable Paul R. Michel (Ret.) as Amicus Curiae in Support of Petitioners, Athena Diagnostics Inc. v Mayo Collaborative Services, LLC, No. 19-430 (U.S. Nov. 1, 2019).
17 Brief of the Chartered Institute of Patent Attorneys as Amicus Curiae in Support of Petitioners, Athena Diagnostics Inc. v Mayo Collaborative Services, LLC, No. 19-430 (U.S. 31 October 2019).
18 Athena, 927 F.3d at 1334-1353.
19 Judge Stoll dissented and wrote separately but stated that “I stand by the panel decision in this case” Id. at 1370.
20 Id. at 1339.
21 Id. at 1354.
22 Id. at 1336.
23 Endo, 919 F.3d at 1354.
24 918 F.3d 1338 (Fed. Cir. 2019) (“Natural Alternatives”)
25 Id. at 1344.
26 Endo, 919 F.3d at 1353, 1355.
27 Judges Dyk, Newman, Moore, O’Malley, and Chen.
28 For example, Judge Chen joined Judge Lourie’s majority opinion that specifically contrasted diagnostic methods with “new method of treatment patents [which] do not fall prey to Mayo’s prohibition.” Athena en banc at 1336.
29 October 2019 Update: Subject Matter Eligibility 84 Fed. Reg. 55942 (Oct. 17, 2019), available at www.uspto.gov/sites/default/files/documents/peg_oct_2019_update.pdf (“October 2019 PEG Update”).
30 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 54 (Jan. 7, 2019), available at https://www.govinfo.gov/content/pkg/FR-2019-01-07/pdf/2018-28282.pdf.
31 October 2019 PEG Update, Appendix 1 (October 17, 2019), available at https://www.uspto.gov/sites/default/fi les/documents/peg_oct_2019_app1.pdf
32 October 2019 PEG Update at 13-14.
33 Id. at 14.
34 Id.
35 Mayo, 566 U.S. at 87.
36 See October 2019 PEG Update at 14.
37 Id.
38 Vanda, 887 F.3d at 1135, 1136.
39 In both Vanda and Endo, the natural phenomenon recited in the patent is the relationship between a biological indicator (the CYP2D6 genotype in Vanda; creatinine clearance rate in Endo), a patient’s reduced ability to metabolize the particular drug being administered (iloperidone in Vanda; oxymorphone in Endo), and downstream effects associated with the buildup of that drug in the patient’s body (QTc prolongation, a dangerous side-effect, in Vanda; increased bioavailability of oxymorphone and potential toxicity in Endo). In both cases, the “application” of the natural phenomenon is to adjust the dose of the drug being administered.
40 Generally speaking, it may be more difficult to get claims allowed if the methods are factually similar to those held unpatentable in Mayo. And the Federal Circuit has already disagreed with USPTO guidance when it believes the guidance is not aligned with case law. See, e.g., Cleveland Clinic Foundation v True Health Diagnostics LLC, 760 Fed.Appx. 1013, *6 (Fed. Cir. 2019).
41 October 2019 PEG Update at 14-15.
42 Id. at 14.
43 659 F.3d 1057 (Fed. Cir. 2011).
