On 20th September 2013, as part of a CIPA series of webinars, Seth D. Levy (Nixon Peabody) gave a very clear presentation on the state of play with respect to patentable subject matter cases in the US.
Before we get into the review of the presentation it is worth pointing out that although the focus of the talk was on medical diagnostic claims (“a challenging area these days in the US”), there is uncertainty whether there may be wider implications for the software and business method fields in the US.
As such, and speaking as a “software” patent attorney, the subject matter of this presentation should be of interest to all patent attorneys and other interested individuals regardless of their technical field.
The talk covered the following general areas: background to the current state of case law in the US (essentially the Supreme Court prior to Myriad Genetics); Myriad and its aftermath; USPTO Guidance; and prosecution tips.
Before reviewing specific case law, Seth took us on a brief tour of the relevant parts of the US patent system and the court structure in the US.
There are four basic requirements to patentability in the US: patentable subject matter (35 USC §101, the focus of Seth’s talk); novelty; inventive step; and the “mixed bag” of enablement, written description, best mode etc.
Seth noted that 35 USC §101 has been preserved through the America Invents Act changes and so the relevance of recent case law is unchanged. It was also noted that there is often a conflation within the relevant case law of §101 issues with prior art issues and this tends to obscure matters somewhat.
The US court system comprises the Federal District Courts located around the US, the Court of Appeals for the Federal Circuit (CAFC) and the Supreme Court.
The CAFC is a single court of appeal with 15 judges sitting on the circuit. These judges are very experienced in patent cases and, as there is only one appeal court, the outcomes from the CAFC tend to be largely predictable. The Supreme Court may, under its own discretion, hear appeals from the CAFC and recently has been taking on more cases.
Until around 2006, the law in the US with regard to (diagnosis/treatment) method claims had been settled since the 1960s and the law on compositions of matter settled since the 1980s. Laws of Nature, Abstract ideas, Natural phenomena and Natural living organisms were all excluded from patentability, but applications of those areas were not excluded subject matter.
Cases prior to Myriad Genetics
The first case discussed was LabCorp v. Metabolite Labs. This case concerned a “run of the mill” diagnostic claim but was not taken on by the Supreme Court. However, Justice Breyer (who is to make another appearance later on down this article) challenged in his dismissal of the case whether diagnostic methods should be patentable subject matter.
Next up was Bilski v. Kappos in which the “machine-or-transformation test” was discussed (which effectively states that if it happens on a machine or transforms one article into something else then a process is patentable). Bilski decided that the machine-or-transformation test is not the only test to determine if subject matter falls within §101.
Mayo v. Prometheus was reviewed next and this case saw the return of Justice Breyer to the issue of patentable subject matter. The Prometheus case related to optimising the use of a drug. The diagnostic claim in question comprised two active steps, but lacked a third active step where a clinician would provide a diagnosis. As Seth noted, it is unclear whether the presence of such a third step (which would normally be expected in the US to be present in claims of this type) would have changed the outcome of the case.
In a unanimous decision the court held that a discovery of a law of nature as a method cannot be claimed if the method does not apply the discovery but pre-empts the field. The machine-or-transformation test was also named checked again and was held to be a test that might be used, but not necessarily the test. Justice Breyer wrote the opinion and stated that where laws of nature are concerned the claim needs to contain additional features that assure that the processes claimed are “genuine applications of those laws rather than drafting efforts designed to monopolise the correlations”.
This Supreme Court decision is regarded as a challenging one, as it is not very clear what it means and it conflates the issues of prior art with patentable subject matter.
The cases above leave a significant amount of uncertainty over the patentability of medical diagnostics, what the appropriate test for determining subject matter eligibility is and whether other areas such as software and business methods are affected.
Myriad Genetics and its Aftermath
At the start of his review of Myriad, Seth provided a very brief “here comes the science” section. From a physics graduate’s perspective, the level of science knowledge required during the talk was admirably kept at a minimum, but a few terms of interest were explained at this point. Seth explained how, starting with a strand of DNA, the process of transcription leads to a complementary single strand of RNA. This strand may then be spliced to remove the introns and leave a mature transcript (mRNA) [introns being any nucleotide sequence within a gene that is removed by RNA splicing]. Protein synthesis then takes you from mRNA to a protein. cDNA (or complementary DNA) represents a complementary sequence of DNA synthesised from an mRNA template.
A question asked in Myriad was which elements of the above material compositions are patentable.
The decision in Myriad went to great pains to limit its discussion to composition claims. As a result, Mayo v. Prometheus (a difficult decision remember) remains the current touchstone case for diagnostic method claims and remains unclarified in light of Myriad.
Myriad found that DNA isolated from its natural state is not patentable because it is a product of nature. By contrast, cDNA involves changing DNA and so is within Section 101. However, where very small sequences of cDNA are indistinguishable from genomic DNA they are not patentable.
After Myriad the patentability of other biological materials such as proteins remains an area of uncertainty.
So, what of other cases?
Seth touched on CLS Bank v. Alice Corp (a CAFC case which is now going to be heard by the US Supreme Court). Although this case relates to banking technology, it highlights that the area of subject matter eligibility is still in a state of flux. Ten members of the court returned seven different decisions, none of which have precedential weight.
The judges all recognised that the test for patent eligibility should be consistent, cohesive and accessible. However, with a decision on eligibility that was only a few sentences long this case has not helped to resolve this challenging issue.
Another case mentioned was Ultramercial v. Hulu, an Internet related case which referenced Prometheus in saying that a claim as a whole requires meaningful limitations restricting it to an application rather than an abstract idea.
So, with the case law being so uncertain, how are the USPTO approaching matters in this area? The current guidance issued in July 2012 (i.e. after Prometheus but before Myriad) proposes a three-step analysis of subject matter when determining eligibility. It was noted that the three steps are linear and so sidestepping any of them stops the test and results in an eligible claim. In summary, the test is:
- Is the claimed invention directed to a process? Seth noted that if the claim captures a system or a physical item then this sidesteps the test.
- Does the claim focus on a law of nature? A subjective question.
- Finally, the USPTO considers whether any additional elements are included in the claim. In the language of Prometheus, is the claim more than just a law of nature and the general instruction to simply “apply it”?
Seth provided a walk-through of a theoretical claim to a method of treating a behavioural disorder by exposure to sunlight to highlight what needed to change to an initial claim formulation to bring the subject matter into a patent-eligible area.
Despite the guidance from the USPTO, Seth noted that this area of law is a struggle with the USPTO and that there is a lack of consistency amongst Examiners in applying the rules. Bizarre rejections are apparently fairly common!
Other USPTO guidance mentioned was a May 2013 Memo on CLS Bank (“no change in policy”) and a June 2013 Memo on Myriad Genetics (“significant changes in policy specific to nucleic acid related technology”).
Tips for Prosecution
The position for patent eligibility as it relates to compositions of matter and methods of treatment/diagnosis was then summarised.
Following Myriad, the position with regard to compositions of matter is relatively clear: isolated nucleic acid/“products of nature”/small cDNA fragments sit at the ineligible end of the spectrum and cDNA & fully synthetic sequences at the other, eligible end. Sitting in between the two extremes, but on the ineligible side of the eligibility boundary line, are compositions such as cell lines, vectors, specific PCR primer sequences and chemically modified sequences.
Although the eligibility of compositions is clear under Myriad (even if you don’t agree with the reasoning), the situation with regard to methods is less clear and falls under the reasoning of Prometheus. The boundary line for patent eligibility of methods of treatment/diagnosis centres on a system or process with action steps but the extent of the boundary is less definite than for compositions and appears to be somewhat fuzzy. “Natural laws” are ineligible under Prometheus but issues such as semantic changes to a claim formulation, classification systems (method to system claims) are less clear.
Seth discussed some approaches for presenting method claims in light of Prometheus, namely an expanded assay approach and a system approach in which the claim is recast to spell out computationally how the method is performed within a system.
Other tips included varying the claim language across a claim set to try and reduce the impact of any unreasonable interpretations from the USPTO and to permit different arguments for patentability. A further suggestion included drafting claims that address the machine-or-transformation test since this test is still a valid one that the USPTO/courts might apply.
In conclusion, Seth observed that the future of both prosecution and litigation in the area of patentable subject matter is somewhat murky but hopefully future cases will clarify the boundaries of eligible subject matter. It is currently unclear the extent to which semantics are important, but patent applicants should not give up hope for patent protection and should consider strategies for preserving their ability to pursue claims that may be patentable in the future based on the evolving case law.
Mark Richardson 17 December 2013
This article first appeared in the October 2013 edition of the CIPA Journal (October 2013 – Volume 42 – Number 10 – page 613).