Patent Prospector: Fear & Loathing

The Association For Molecular Pathology et al v. USPTO and Myriad Genetics (CAFC 2010-1406) precedential; Judges Lourie (author), Bryson (concurring-in-part and dissenting-in-part), and Moore (concurring-in-part)

The district court got it right on both counts: standing and ? 101 subject matter patentability.

After Plaintiffs filed suit, Myriad moved to have the case dismissed, alleging that the Plaintiffs lacked standing to bring a declaratory judgment suit challenging the validity of its patents. The district court disagreed, however, holding that the Plaintiffs had established Article III standing under the "all the circumstances" test articulated by the Supreme Court in MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007). DJ Op., at 385- 92. The court first found that Myriad had engaged in sufficient "affirmative acts" based on the company's assertion of its "right to preclude others...".

Then the death stroke -

The parties then moved for summary judgment on the merits of Plaintiffs' ? 101 challenge to Myriad's patent claims. The district court held for Plaintiffs, concluding that the fifteen challenged claims were drawn to non-patentable subject matter and thus invalid under ? 101. SJ Op., at 220-37. Regarding the composition claims, the court held that isolated DNA molecules fall within the judicially created "products of nature" exception to ? 101 because such isolated DNAs are not "markedly different" from native DNAs. Id. at 222, 232 (quoting Diamond v. Chakrabarty, 447 U.S. 303 (1980)). The court relied on the fact that, unlike other biological molecules, DNAs are the "physical embodiment of information," and that this information is not only preserved in the claimed isolated DNA molecules, but also essential to their utility as molecular tools. Id. at 228-32.

Turning to the method claims, the court held them patent ineligible under this court's then definitive machine-or-transformation test. Id. at 233 (citing In re Bilski, 545 F.3d 943 (Fed. Cir. 2008), affirmed on other grounds by Bilski v. Kappos, 130 S. Ct. 3218, 3225 (2010)).

Declaratory Judgment

On appeal, the The Court of Errors, as always, is careful to avoid bright-line rules that would preclude exercising bias in cases it subjectively deemed odious. Discretionary leeway is the springboard to the corruption by bias that the courts in this country regularly exercise. The Supreme Court has been particularly adept at the requisite vagueness of guidelines required for "the law" to be bent to a court's immediate needs.

The Declaratory Judgment Act provides that, "In a case of actual controversy within its jurisdiction . . . any court of the United States . . . may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought." 28 U.S.C. ? 2201(a). The phrase "a case of actual controversy" in the Act refers to the types of "cases" and "controversies" that are justiciable under Article III of the U.S. Constitution. Aetna Life Ins. v. Haworth, 300 U.S. 227, 239-40 (1937).

Although no bright-line rule exists for determining whether a declaratory judgment action satisfies Article III's case-or-controversy requirement, the Supreme Court has held that the dispute must be "definite and concrete, touching the legal relations of parties having adverse legal interests," "real and substantial," and "admi[t] of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts." MedImmune, 549 U.S. at 127 (quoting Aetna Life, 300 U.S. at 240-41). "Basically, the question in each case is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment." Id. (quoting Md. Cas. Co. v. P. Coal & Oil Co., 312 U.S. 270, 273 (1941)).

The worth of a DJ is adjudged by "standing, ripeness, and mootness," standards as firm as shifting sand.

In applying MedImmune's all-the-circumstances test to a declaratory judgment action, we are guided by the Supreme Court's three-part framework for determining whether an action presents a justiciable Article III controversy: standing, ripeness, and mootness. See Caraco Pharm. Labs., Ltd. v. Forest Labs., Inc., 527 F.3d 1278, 1291 (Fed. Cir. 2008). In this case, the parties have framed the jurisdictional issue as one of standing. See MedImmune, 549 U.S. at 128 n.8. ("The justiciability problem that arises, when the party seeking declaratory relief is himself preventing the complained-of injury from occurring, can be described in terms of standing . . . or . . . ripeness." (internal citations omitted)).

"[T]he irreducible constitutional minimum of standing contains three elements." Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). "First, the plaintiff must have suffered an injury in fact--an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical." Id. (internal citations and quotations omitted). "Second, there must be a causal connection between the injury and the conduct complained of-the injury has to be 'fairly . . . trace[able] to the challenged action of the defendant . . . .'" Id. (quoting Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26, 41-42 (1976)). "Third, it must be 'likely,' as opposed to merely 'speculative,' that the injury will be 'redressed by a favorable decision.'" Id. at 561 (quoting Simon, 426 U.S. at 38, 43).

"Whether an actual case or controversy exists so that a district court may entertain an action for a declaratory judgment of non-infringement and/or invalidity is governed by Federal Circuit law." MedImmune, Inc. v. Centocor, Inc., 409 F.3d 1376, 1378 (Fed. Cir. 2005), overruled on other grounds, MedImmune, 549 U.S. at 130-31. Following MedImmune, this court has held that, to establish an injury in fact traceable to the patentee, a declaratory judgment plaintiff must allege both (1) an affirmative act by the patentee related to the enforcement of his patent rights, SanDisk Corp. v. STMicroelecs., Inc., 480 F.3d 1372, 1380-81 (Fed. Cir. 2007), and (2) meaningful preparation to conduct potentially infringing activity, Cat Tech LLC v. TubeMaster, Inc., 528 F.3d 871, 880 (Fed. Cir. 2008). We review the exercise of declaratory judgment jurisdiction upon a particular set of facts de novo. SanDisk Corp., 480 F.3d at 1377.

Myriad argued that its threats were now "stale communications," so there was no standing.

Plaintiffs respond that they have standing under MedImmune's all-the-circumstances test because, not only are they undisputedly prepared to immediately undertake potentially infringing activities, but also Myriad took sufficient affirmative acts with respect to the patents in suit. Regarding the latter, Plaintiffs assert that Myriad sued, threatened to sue, or demanded license agreements from every known institution offering BRCA clinical testing, including university labs....

The CAFC agreed that nothing had changed, but found only one plaintiff researcher, Dr. Oster, as being under the gun. Myriad had sent a royalty demand to Oster, thus establishing standing for Oster. The others were merely fearful.

Although MedImmune relaxed this court's more restrictive "reasonable apprehension of suit" test for declaratory judgment jurisdiction, SanDisk, 480 F.3d at 1380, it did not alter "the bedrock rule that a case or controversy must be based on a real and immediate injury or threat of future injury that is caused by the defendants," Prasco, LLC v. Medicis Pharm. Corp., 537 F.3d 1329, 1339 (Fed. Cir. 2008). Accordingly, following MedImmune, this court has continued to hold that declaratory judgment jurisdiction will not arise merely on the basis that a party learns of the existence of an adversely held patent, or even perceives that such a patent poses a risk of infringement, in the absence of some affirmative act by the patentee. SanDisk, 480 F.3d at 1380-81. Thus, without defining the outer boundaries of declaratory judgment jurisdiction, we have held that "where a patentee asserts rights under a patent based on certain identified ongoing or planned activity of another party, and where that party contends that it has the right to engage in the accused activity without license, an Article III case or controversy will arise . . . ." Id. at 1381; see also Prasco, 537 F.3d at 1338 ("A patentee can cause . . . an injury [sufficient to create an actual controversy] in a variety of ways, for example, by creating a reasonable apprehension of an infringement suit, [or] demanding the right to royalty payments." (internal citations omitted)).

Basically, the CAFC perverts the Supreme Court's MedImmune ruling. There is no way to reconcile with logical consistency the CAFC opinion with its own admission of Myriad's aggressive posturing.

At the same time, as Ostrer was aware, Myriad was asserting its patent rights against other similarly situated parties, a fact to be considered in assessing the existence of an actual controversy under the totality of circumstances. See Micron Tech., Inc. v. Mosaid Techs., Inc., 518 F.3d 897, 901 (Fed. Cir. 2008).

Patentable Subject Matter

Under the Patent Act, "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. The Supreme Court has consistently construed ? 101 broadly, explaining that "[i]n choosing such expansive terms . . . modified by the comprehensive 'any,' Congress plainly contemplated that the patent laws would be given wide scope." Bilski v. Kappos, 130 S. Ct. 3218, 3225 (2010) (quoting Chakrabarty, 447 U.S. at 308).

The Supreme Court, however, has also consistently held that ? 101, although broad, is not unlimited. Id. The Court's precedents provide three judicially created exceptions to ? 101's broad patent-eligibility principles: "laws of nature, physical phenomena, and abstract ideas." Id. (quoting Chakrabarty, 447 U.S. at 309). The Court has also referred to these exceptions as precluding the patenting of phenomena of nature, mental processes, Gottschalk v. Benson, 409 U.S. 63, 67 (1972), and products of nature, Chakrabarty, 447 U.S. at 313 ("[T]he relevant distinction for purposes of ? 101 is . . . between products of nature . . . and human-made inventions."). The Court has explained that, although not required by the statutory text, "[t]he concepts covered by these exceptions are 'part of the storehouse of knowledge of all men . . . free to all men and reserved exclusively to none.'" Bilski, 130 S. Ct. at 3225 (quoting Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130 (1948)).

Plaintiffs challenge under ? 101 Myriad's composition claims directed to "isolated" DNA molecules and method claims directed to "analyzing" or "comparing" DNA sequences.

We conclude that the challenged claims to isolated DNAs... are directed to patent-eligible subject matter under ? 101.

The Supreme Court's decisions in Chakrabarty and Funk Brothers set out the framework for deciding the patent eligibility of isolated DNA molecules.

The Supreme Court found useful genetically-engineered bacteria patent-eligible in Chakrabarty.

In Chakrabarty, the Court addressed the question whether a man-made, living microorganism is a patentable manufacture or composition of matter within the meaning of ? 101. 447 U.S. at 305, 307. The microorganisms were bacteria genetically engineered with four naturally occurring DNA plasmids, each of which enabled the breakdown of a different component of crude oil. Id. at 305, 305 n.1. The bacteria, as a result, could break down multiple components of crude oil, a trait possessed by no single naturally occurring bacterium and of significant use in more efficiently treating oil spills. Id. at 305, 305 n.2. The Court held that the bacteria qualified as patentable subject matter because the "claim is not to a hitherto unknown natural phenomenon, but to a non-naturally occurring manufacture or composition of matter--a product of human ingenuity 'having a distinctive name, character [and] use.'" Id. at 309-10 (quoting Hartranft v. Wiegmann, 121 U.S. 609, 615 (1887)).

In Funk Brothers, mixed cultures of naturally occurring nitrogen-fixing species were not patentable. The difference was invention (Chakrabarty) versus discovery (Funk Brothers).

To underscore the point, the Court compared Chakrabarty's engineered bacteria with bacteria inoculants found unpatentable in Funk Brothers, again casting this case decided on obviousness in terms of ? 101. See Parker v. Flook, 437 U.S. 584, 591 (1978); Benson, 409 U.S. at 67. In Funk Brothers, the patentee discovered that certain strains of nitrogen-fixing bacteria associated with leguminous plants do not mutually inhibit each other. 333 U.S. at 129-30. Based on this discovery, the patentee produced (and claimed) mixed cultures of nitrogen-fixing species capable of inoculating a broader range of leguminous plants than single-species cultures. Id. The Court held that the bacteria's qualities of non-inhibition were, "like the heat of the sun, electricity, or the qualities of metals," the "work of nature," and thus not patentable. Id. at 130. The Court also held that application of the newly discovered bacterial trait of non-inhibition to create a mixed bacterial culture was not a patentable advance because no species acquired a different property or use. Id. at 131. The Chakrabarty Court thus concluded that what distinguished Chakrabarty's bacteria from those claimed in Funk Brothers, and made the former patent eligible, was that Chakrabarty's bacteria had "markedly different characteristics from any [bacterium] found in nature" based on the efforts of the patentee. Chakrabarty, 447 U.S. at 310.

The CAFC finds isolated DNA chemically "distinctive," and so patentable. There is no reasonable basis in case law for this; the CAFC is just making the law up.

The distinction, therefore, between a product of nature and a human-made invention for purposes of ? 101 turns on a change in the claimed composition's identity compared with what exists in nature. Specifically, the Supreme Court has drawn a line between compositions that, even if combined or altered in a manner not found in nature, have similar characteristics as in nature, and compositions that human intervention has given "markedly different," or "distinctive," characteristics. Id. Hartranft, 121 U.S. at 615; see also Am. Fruit Growers v. Brogdex Co., 283 U.S. 1, 11 (1931). Applying this test to the isolated DNAs in this case, we conclude that the challenged claims are drawn to patentable subject matter because the claims cover molecules that are markedly different--have a distinctive chemical identity and nature--from molecules that exist in nature.

It is undisputed that Myriad's claimed isolated DNAs exist in a distinctive chemical form--as distinctive chemical molecules--from DNAs in the human body, i.e., native DNA... When cleaved, an isolated DNA molecule is not a purified form of a natural material, but a distinct chemical entity.

Contrary to Chakrabarty rationale, the CAFC panel instructs to forget utility as requisite to patentable subject matter. Chemical morphology dazzles the panel enough to drop precedent.

It is the distinctive nature of DNA molecules as isolated compositions of matter that determines their patent eligibility rather than their physiological use or benefit. Uses of chemical substances may be relevant to the non-obviousness of these substances or to method claims embodying those uses, but the patent eligibility of an isolated DNA is not negated because it has similar informational properties to a different, more complex natural material that embodies it. The claimed isolated DNA molecules are distinct from their natural existence as portions of larger entities, and their informational content is irrelevant to that fact. We recognize that biologists may think of molecules in terms of their uses, but genes are in fact materials having a chemical nature and, as such, are best described in patents by their structures rather than their functions.

Judge Bryson, in dissent, plies utility as a reason to damn isolated genes as unpatentable.

In its simplest form, the question in this case is whether an individual can obtain patent rights to a human gene. From a common-sense point of view, most observers would answer, "Of course not. Patents are for inventions. A human gene is not an invention." The essence of Myriad's argument in this case is to say that it has not patented a human gene, but something quite different--an isolated human gene, which differs from a native gene because the process of extracting it results in changes in its molecular structure (although not in its genetic code). We are therefore required to decide whether the process of isolating genetic material from a human DNA molecule makes the isolated genetic material a patentable invention. The court concludes that it does; I conclude that it does not.

The majority defers to the PTO and stare decisis.

Finally, our decision that isolated DNA molecules are patent eligible comports with the longstanding practice of the PTO. The Supreme Court has repeatedly stated that changes to longstanding practice should come from Congress, not the courts. In J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred International, Inc., the Court rejected the argument that plants did not fall within the scope of ? 101, relying in part on the fact that "the PTO has assigned utility patents for plants for at least 16 years and there has been no indication from either Congress or agencies with expertise that such coverage is inconsistent with [federal law]." 534 U.S. 124, 144-45 (2001); see also Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722, 739 (2002) ("[C]ourts must be cautious before adopting changes that disrupt the settled expectations of the inventing community." (citing Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 28 (1997))); Ariad Pharm., Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1347 (Fed. Cir. 2010) (upholding a written description requirement separate from enablement based in part on stare decisis).

In this case, the PTO has issued patents directed to DNA molecules for almost thirty years.

In sum, the test employed by the Supreme Court in Chakrabarty requires us to focus on two things: (1) the similarity in structure between what is claimed and what is found in nature and (2) the similarity in utility between what is claimed and what is found in nature. What is claimed in the BRCA genes is the genetic coding material, and that material is the same, structurally and functionally, in both the native gene and the isolated form of the gene.

Giving deference to the PTO as a reason strikes Bryson as weightless.

First, as we have recognized, the PTO lacks substantive rulemaking authority as to issues such as patentability. Animal Legal Def. Fund v. Quigg, 932 F.2d 920, 930 (Fed. Cir. 1991). In areas of patent scope, we owe deference only commensurate with the "the thoroughness of its consideration and the validity of its reasoning." Merck & Co. v. Kessler, 80 F.3d 1543, 1550 (Fed. Cir. 1996).

Second, whatever force the PTO's views on the issue of patent eligibility may have had in the past has, at the very least, been substantially undermined by the position the government has taken in this case. The Department of Justice filed a brief on behalf of the United States in this court taking the position that Myriad's gene claims (other than the cDNA claims) are not patent-eligible.

Finally, prior to the Supreme Court's decision in Chakrabarty, the PTO had determined that microorganisms were not subject to patenting, but the Supreme Court gave no indication that it regarded that view as entitled to deference. Moreover, the Court gave short shrift to the Commissioner's contention (which was made the lead argument in its brief) that the patentability of life-forms was an issue that should be left to Congress. Citing Marbury v. Madison, 5 U.S. (1 Cranch) 137 (1803), the Court explained that "Congress has performed its constitutional role in defining patentable subject matter in ? 101; we perform ours in construing the language Congress has employed." Chakrabarty, 477 U.S. at 315. We have the same responsibility and should not shy away from deciding the issues of law that the parties have brought to us.

Stare decisis got tossed out the window for the method claims of comparing or analyzing gene sequences. Ultimately, the problem is clearly claiming a useful diagnostic; in other words, for patentable subject matter, those method claims were incomplete.

We conclude that Myriad's claims to "comparing" or "analyzing" two gene sequences fall outside the scope of ? 101 because they claim only abstract mental processes. See Benson, 409 U.S. at 67 ("Phenomena of nature, . . . mental processes, and abstract intellectual concepts are not patentable, as they are the basic tools of scientific and technological work."). The claims recite, for example, a "method for screening a tumor sample"....

As the Supreme Court has held, "the prohibition against patenting abstract ideas 'cannot be circumvented by attempting to limit the use of the formula to a particular technological environment.'" Bilski, 130 S. Ct. at 3230 (quoting Diehr, 450 U.S. at 191- 92); see also id. at 3231 ("Flook established that limiting an abstract idea to one field of use . . . did not make the concept patentable."). Although the application of a formula or abstract idea in a process may describe patentable subject matter, id. at 3230, Myriad's claims do not apply the step of comparing two nucleotide sequences in a process. Rather, the step of comparing two DNA sequences is the entire process claimed.

By contrast, "Myriad's method claim directed to a method for screening potential cancer therapeutics via changes in cell growth rates" passes ? 101 muster.

Starting with the machine-or-transformation test, we conclude that the claim includes transformative steps, an "important clue" that it is drawn to a patent-eligible process. Bilski, 130 S. Ct. at 3227... The claim thus includes more than the abstract mental step of looking at two numbers and "comparing" two host cells' growth rates. The claim includes the steps of "growing" transformed cells in the presence or absence of a potential cancer therapeutic, an inherently transformative step involving the manipulation of the cells and their growth medium. The claim also includes the step of "determining" the cells' growth rates, a step that also necessarily involves physical manipulation of the cells. Furthermore, these steps are central to the purpose of the claimed process. See Prometheus, 628 F.3d at 1356-57, 1358 (quoting In re Bilski, 545 F.3d at 962). The goal of the claim is to assess a compound's potential as a cancer therapeutic, and growing the cells and determining their growth rate is what achieves that goal.

Furthermore, the claim is not so "manifestly abstract" as to claim only a scientific principle, and not a patent-eligible process. See Research Corp. Techs., Inc. v. Microsoft Corp., 627 F.3d 859, 869 (Fed. Cir. 2010). The claim does not cover all cells, all compounds, or all methods of determining the therapeutic effect of a compound. Rather, it is tied to specific host cells transformed with specific genes and grown in the presence or absence of a specific type of therapeutic. Moreover, the claim is tied to measuring a therapeutic effect on the cells solely by changes in the cells' growth rate. The claim thus presents "functional and palpable applications" in the field of biotechnology. Id. at 868; see also Prometheus, 628 F.3d at 1355 ("[T]he claims do not preempt all uses of the natural correlations; they utilize them in a series of specific steps.").

Source: http://www.patenthawk.com/blog/2011/07/fear_loathing.html

dave ramsey bush stumble upon bulldog otis redding frank sinatra amanda knox