Broad Construction of Process in Product-by-Process Claim Dooms Petitioner’s Inherency Argument for Resulting Product

In Restem, LLC v. Jadi Cell, LLC, IPR2021-01535, Paper 42 (P.T.A.B. April 18, 2023), the Patent Trial and Appeal Board (“Board”) issued a final written decision finding no challenged claims were shown to be unpatentable because the petitioner failed to demonstrate anticipation or obviousness by inherency.

Background

Jadi’s U.S. Patent No. 9,803,176 (“the ’176 patent”) relates to an allogenic cell or stem cell population, including methods of “isolating, culturing, developing, or otherwise producing these cells.” Restem, Paper 42 at *3. Restem challenged claims 1-15 of the patent, which recite product-by-process claims. In relevant part, independent claim 1 recites:  

An isolated cell prepared by a process comprising:

placing a subepithelial layer of a mammalian umbilical cord tissue in direct contact with a growth substrate; and

culturing the subepithelial layer such that the isolated cell from the subepithelial layer is capable of self-renewal and culture expansion,

wherein the isolated cell expresses at least three cell markers selected from [a]  group . . ., and

wherein the isolated cell does not express NANOG and at least five cell markers selected from [another] group . . . .

Restem asserted eight grounds of unpatentability, including anticipation and obviousness. These grounds all relied on prior art processes that Restem alleged inherently resulted in an isolated cell with the required cell markers.

Board Decision

During the proceeding, the parties disputed the meaning of the claimed phrases:  “placing a sub-epithelial layer . . . in direct contact with a growth substrate” and “expresses/does not express.”

Restem asserted that “placing a sub-epithelial layer . . . in direct contact with a growth substrate” means “direct contact with any material capable of being used to obtain explants.” Id. at *18. Jadi argued for a narrower construction requiring “placing the exposed subepithelial layer of an umbilical cord interior side down such that the exposed subepithelial layer is in direct contact with the growth substrate.” Id. (emphasis added). The Board found this construction supported by an embodiment in the specification but declined to adopt it. Id. at *21-23. The Board found that the narrower construction would have excluded other disclosed embodiments without clear disavowal of claim scope. Id. Instead, the Board held that “placing a sub-epithelial layer . . . in direct contact with a growth substrate” means “orienting umbilical cord tissue comprising the subepithelial layer such that the subepithelial layer touches a growth substrate to permit culturing,” consistent with Restem’s proposal. Id. at *24.

With respect to “expresses/does not express,” the Board relied on extrinsic expert testimony and disclosure in “the asserted prior art” to understand how a skilled artisan would confirm whether an isolated cell expresses or does not express the required markers. Id. at *26‑29. The Board determined that, generally consistent with Restem’s proposed interpretation, “expresses” means that “the marker is confirmed present relative to a control sample,” and “does not express” means that “the marker is confirmed absent relative to a control sample.” Id. at *28.

Turning to the asserted grounds of unpatentability, the Board first acknowledged that claim 1 recites a product-by-process claim, therefore the “determination of patentability is based on the product itself and does not depend on its method of production.” Id. at *31 (emphasis added) (citing In re Thorpe, 777 F.2d 695, 697 (Fed. Cir. 1985)).

Restem argued, based on inherency, that the prior art disclosed a method that met the limitations of claim 1 and “necessarily includes the subepithelial layer of the umbilical cord recited by the ‘176 patent claims.” Id. at *30-31 (emphasis added). The Board disagreed and found that, although the prior art disclosed the “identical process,” it did not inherently disclose the same result (i.e., cells that do not produce NANOG as required by claim 1). Id. at *37-43. The Board found that “placing a subepithelial layer of a mammalian umbilical cord tissue in direct contact with a growth substrate,” as construed, was broad enough to encompass different processes that could result in different cells. Id. The Board therefore held that, “although Majore’s disclosed process may satisfy the process limitations under our claim construction, we find that does not establish that cells produced using Majore’s process would necessarily have the same marker profile required by the claim.” Id. at *40.

The Board made a similar finding for Restem’s obviousness grounds, finding that “Petitioner’s reliance on Phan’s process to prove the identity of Phan’s cells to the claimed cell does not necessarily establish production of the [required] marker profile.” Id. at *61-62 (emphases added).

Take-aways

The Board’s decision is interesting for its discussion of inherency and product-by-process claims. It also highlights the importance of claim construction in the ultimate determination of unpatentability in an IPR proceeding. Although the Board resolved the claim construction issues consistent with Restem’s position, those constructions ultimately cut against Restem’s inherency arguments. The product-by-process claims require analyzing the prior art’s resulting product, not its process. The Board determined that, although the prior art taught the same process, that process was broad enough to result in different cells. Inherency, on the other hand, “may not be established by probabilities or possibilities.” Scaltech Inc. v. Retec/Tetra L.L.C., 178 F.3d 1378, 1384 (Fed. Cir. 1999). The standard is “necessary and inevitable.” In re Montgomery, 677 F.3d 1375, 1379-80 (Fed. Cir. 2012). Practitioners should carefully consider  the particularities of construing product-by-process claims and also be wary of the dangers of a proposed construction negatively impacting patentability arguments.

For patent drafters, while the product-by-process claim format can provide patent protection to new products that are otherwise incapable of structural characterization, this has to be balanced against the need for a strong, enforceable claim in the future. Product-by-process claims are construed broadly for determining patentability over the prior art and narrowly for determining infringement. Any reference in the prior art directed to the same, or a similar compound—no matter how made—may render the claim anticipated or obvious. But a competitor’s compound will only infringe if it is made by the same process. Whether use of the product-by-process format is warranted in any particular case will depend upon the balance between the benefits and the practical disadvantages of the format, in light of the unique circumstances of each case.