Bottle of Ooze

Biotech companies have increasingly found themselves the target of IPRs, and we have discussed this in some of our past posts.  Meanwhile, in the District Courts, biotech companies are defending against a new wave of challenges to the patent-eligibility of their inventions under 35 U.S.C. § 101.  While challenges under § 101 cannot be raised as grounds in an IPR, the PTAB has required proof of eligibility where patent owners have sought to amend their claims during IPRs.  In at least two final written decisions in IPRs, the PTAB denied motions to amend claims because the PTAB concluded the amended claims recited subject matter ineligible for a patent under § 101 and in view of previous rulings in related district court proceedings that claims of similar scope were ineligible subject matter.  See Ariosa Diagnostics v. ISIS Innovation Ltd., IPR2012-00022 (Paper 166) and, Inc. v. Personalized Media Comm’ns, LLC, IPR2014-01531 (Paper 50).  The otherwise restricted battleground of an IPR proceeding that has heretofore shielded biotech companies’ patent claims from patent-eligibility challenges has now grown to encompass the law under § 101 developing in the federal courts.   As explained below, the recent decision in Genetics Tech. Ltd. v. Bristol Myers Squibb Co., Appeal Nos. 2015-1202, -1203 (Fed. Cir., April 8, 2016), adds to that growing body of § 101 law and should be considered with caution when presenting amended claims in an IPR involving biotechnology.

In 2011, GTG (now known as Genetics Technology) sued Bristol Myers Squibb (“BMS”), alleging infringement of its U.S. Patent No. 5,612,179.  Claim 1 of the patent recites a method for detecting at least one coding region allele of a multi allelic genetic locus. The method included amplifying DNA with a primer pair that spans a non-coding region, and analyzing the amplified DNA to detect the allele.  GTG asserted that the claimed method advantageously provides more information of non-coding DNA than prior methods, such as RFLP analysis.  BMS successfully moved to dismiss the suit, arguing that the patent claims recited nothing more than a law of nature, ineligible for a patent under § 101.  Despite the asserted advantage, the district court held that claim 1 merely informs a relevant audience about certain laws of nature, and any additional steps collectively consist only of well-understood, routine, conventional activity already practiced by the scientific community, and cited Supreme Court’s 2012 decision in Mayo Collaborative Services v. Prometheus Labs for support.  The district court’s decision was affirmed on appeal to the Federal Circuit.

a claim directed to a newly discovered law of nature cannot rely on the novelty of that discovery for the inventive concept necessary for patent eligibility; instead the application must provide something inventive, beyond mere ‘well-understood, routine, conventional activity.’

The Federal Circuit employed the two-part eligibility test developed from the Supreme Court’s decisions in Mayo and Alice Corporation Pty. Ltd. v. CLS Bank International.  Under step one, the Federal Circuit concluded that claim 1 was directed to a law of nature because it covered any comparison, for any purpose, of any non-coding region sequence known to be linked with a coding region allele and, therefore, broadly covered all applications of the law of linkage disequilibrium.  In support, the court relied on its recent decision in Ariosa Diagnostics  v Sequenom Inc., 788 F.3d. 1371 (Fed. Cir. 2016), which similarly applied the two-part test to conclude that claims reciting a genetic testing methods were patent ineligible because the claims were limited to detecting genetic information and did not purport to create or alter any of the genetic information.

Under step two, the Federal Circuit analyzed whether the elements of the claim contain an inventive concept sufficient to transform the claimed natural law or phenomenon into a patent eligible application.  Stating that a claim directed to a newly discovered law of nature cannot rely for its inventive concept on the mere novelty of that discovery, the Federal Circuit stated that the claim must recite something inventive, beyond mere “well-understood, routine, conventional activity.”  The court concluded that the additional elements of claim 1 were insufficient to provide the inventive concept necessary to render the claims patent-eligible.  The court again considered these claims to fall directly within the decision in Ariosa.  To no avail, GTG argued that no one had ever before analyzed man-made, non-coding DNA in order to detect a coding region allele, and that this additional “analyzing” feature provides the inventive concept to satisfy step two of the test.  The Court held that the term “to detect the allele” is a mental process step, merely setting forth a routine comparison that can be performed by the human mind, and that methods that can be performed entirely within the human mind are unpatentable.

What seems striking about the Genetics Technology decision is that the Federal Circuit is integrating more and more of the requirements for novelty and inventive concept, or non-obviousness, into the requirements for patent eligibility under § 101.  Novelty and obviousness were usually left to analysis under 35 USC §102 and §103, but as decisions under § 101 keep pouring out, the connection between § 101 and novelty and non-obviousness keep getting stronger.  Many practitioners question why the requirement for a “new, useful process, machine, manufacture or composition of matter” under § 101 has now become inextricably linked to novelty and non-obviousness and wonder what can be done about it.

In a recent speech at a Federal Circuit Judicial Conference, David Kappos, former Under Secretary of Commerce and Director of the United States Patent and Trademark Office, suggested § 101 should be abolished because recent case law in this area has resulted in “a real mess.”  Like many practitioners, Mr. Kappos reiterated that courts can ensure basic concepts are not patented while protecting innovation by applying other areas of patent law to make sure patents are novel and non-obvious.  Consistent with Mr. Kappos’s criticisms of the developing case law on § 101, Sequenom recently has sought the Supreme Court’s review of the Federal Circuit’s application of § 101 in the Ariosa decision, and many companies and industry organizations have filed amicus briefs supporting Sequenom.  What will happen remains to be seen, but there is a growing and significant consensus (among practitioners at least) that something needs to be done at a higher level to clean up this “real mess.”  Until such time, this blog will keep a close watch on the developments of decisions relating to §101 in IPRs and how patent eligibility is being viewed at the PTAB and the courts.