In Case Challenging Myriad Gene Patents, ACLU and Public Patent Foundation Prevail in District Court

Yesterday, the ACLU and Public Patent Foundation scored a victory in their lawsuit challenging the validity of certain gene patents relating to genetic testing for susceptibility to breast cancer, with a district court judge deciding on summary judgment that product claims reciting isolated polynucleotides comprising naturally occurring genetic sequences, and process claims reciting methods of testing for genetic mutations, are patent ineligible under Section 101 of the patent statute. (The decision is here, courtesy of Public Patent Foundation) The court declined to address the constitutional issues raised by the plaintiffs in the case. This is an important case for biotechnology, discussed in an earlier post, but the implications are hard to assess until the Federal Circuit reviews the case on appeal.

Although the lawsuit was brought to address perceived impediments to innovation and access to genetic diagnostic testing, the decision could potentially implicate the validity of a host of other biotechnology patents, including patents used to protect biologic drugs. The scope of the decision is hard to assess; it could be interpreted as invalidating a host of issued patents claims relating to genetic inventions. Hopefully the Federal Circuit will intervene, and either reverse the decision, or at least limit its reach. But for the time being, it opens a fairly wide door for challenges to biotechnology patents based on allegations of patent ineligibility.

Some of the invalidated patent claims are directed towards isolated polynucleotides encoding BRCA proteins. The court cited to a number of relatively old judicial decisions, all pre-dating Diamond v. Chakrabarty and the Federal Circuit, which held that, at least in some circumstances, the mere isolation of a naturally occurring product does not render it patentable. Although the patent office, the courts and most of the biotechnology community have assumed for years that isolation of a polynucleotide from its native environment renders it patentable, to my knowledge there is no case directly on point to support that position.

Affymetrix, for one, has for years argued that the isolation of naturally occurring DNA does not render it patent eligible. Affymetrix sells DNA hybridization arrays, under the trade name gene chips, and not surprisingly a company whose products can include many thousands of DNA sequences representing naturally occurring genes would prefer the sequences to be unpatentable. The company filed an amicus brief several years ago in In re Fisher (a Federal Circuit case that found EST sequences unpatentable for lack of utility) arguing that isolated naturally occurring DNA sequences are patent ineligible, based in large part on the same rationale and caselaw relied upon by the court in the ACLU lawsuit.

There have been a number of cases upholding the validity of patents claiming isolated naturally occurring molecules, but the issue in those cases has been the novelty and/or nonobviousness of the molecule, not patent eligibility per se, which is a distinct doctrine. The Supreme Court's decision in Diamond v. Chakrabarty in 1980, which upheld the patent eligibility of a recombinantly modified microorganism, arguably supports the patent eligibility of isolated DNA sequences, but the district court did not read Chakrabarty so broadly.

The district court further held that even non-naturally occurring DNA molecules, such as cDNA, is patent ineligible because cDNA corresponds directly to naturally occurring mRNA, and conveys the same information as genomic DNA. The informational attributes of DNA was apparently critical to the court's decision. The court held that DNA is fundamentally different from all other biomolecules because of its primarily informational attributes, and explicitly stated that its decision did not extend to other molecules occurring naturally in the body and capable of conveying information, such as adrenaline. In other words, the decision apparently does not implicate the patent eligibility of isolated naturally occurring proteins and other biomolecules.

Even if the district court's decision were to be affirmed, the question remains as to the extent to which a DNA molecule corresponding sequence to a naturally occurring gene would have to be modified in order to render it patentable. The modification will presumably need to be sufficient such that the claimed invention has "markedly different characteristics" from the naturally occurring sequence, which is the test articulated by the court. Would a labeled probe, designed to recognize a naturally occurring mutation, be patent eligible? What about a recombinant construct comprising a DNA sequence encoding a naturally occurring protein coupled with a non-naturally occurring regulator of transcription like a promoter? How about genetically engineered cells, or chimeric sequences formed by combining two or more naturally occurring protein coding sequences? A DNA-based vaccine? The impact on biotechnology patenting could potentially be quite significant, although I predict that ultimately the Federal Circuit would not uphold the rule in a form that would so dramatically impact the ability of innovators to protect their inventions.

The district court also found that process claims reciting methods of analyzing a BRCA1 sequence for mutations, or comparing to gene sequences to see if a difference exists, are patent ineligible for failing the Bilski machine-or-transformation test. Myriad argued that the claims implicitly included physically transformative steps of isolating and sequencing DNA, but I think the court correctly rejected these arguments because no such limitation appears in the claims. One could compare two gene sequences without physically isolating or sequencing DNA, for example, if the DNA had already been sequenced by someone else and the reported sequence was being analyzed.

Essentially, Myriad obtained very broad method claims from the patent office, unlimited by any physical analysis step, but this very breadth resulted in their patent in eligibility, even though Myriad unsuccessfully argued for a narrower interpretation of its claims in order to preserve their validity.

Whether or not this is the right outcome, I think it is consistent with current Federal Circuit case law, particularly Prometheus and Bilski, although perhaps this will change after the Supreme Court decides Bilski. In Prometheus, the Federal Circuit stated that the “mental step" of observing a level of drug metabolites indicating a need to adjust the amount of drug subsequently administered is patent ineligible, which I think implies that a claim that would be infringed by merely "comparing” two DNA sequences would likewise be patent ineligible.

Interestingly, the district court went further and posited that even if the claims had specifically recited isolation and sequencing of DNA, these physical steps "would constitute no more than data-gathering steps that are not central to the purpose of the claim process,” and thus would have been insufficient to provide the necessary transformation to render the claims patentable. This is only dicta, because the challenged claims do not include this limitation, but I think the district court is clearly wrong on this one. In Prometheus, the Federal Circuit held that the physical transformation involved in performing analytical procedures to determine the level of drug metabolite in a patient was sufficient to confer patent eligibility, and I don't see how the physical transformation involved in analyzing DNA should be treated any differently.

The district court also found a claim directed to a process for cell-based drug screening, involving using a recombinant cell engineered to express BRCA1 to screen for potential cancer therapeutics, to be patent ineligible. The district court's explanation for this decision was particularly unconvincing. For example, the judge states that the claimed process is "in fact, the scientific method itself, and Claim 20 seeks to patent a basic scientific principle: that a slower rate of cell growth in the presence of a compound indicates that the compound may be a cancer therapeutics.” But the claim is limited to the use of cells recombinantly engineered to express BRCA1, and does not purport to preclude others from using the "scientific method,” or from screening for cancer therapeutics in general. I think the Federal Circuit will have to reverse this decision, because if in fact a method of screening for cancer therapeutics using a recombinantly engineered cell is patent ineligible, the implication might well be that a large percentage of patent claims relating to biotechnology are invalid.

Although clearly the ACLU/Public Patent Foundation lawsuit was motivated by a concern that gene patents impede innovation and impair access to genetic diagnostic testing, ancillary effects might extend to other aspects of biotechnology, including biopharma. In my study on human gene patent litigation, available here, I showed that gene patents have most often been used by biologic innovators to block market access by competitors, functioning as the biotechnology analog of drug patents. Although gene patents have often been the subject of criticism, very few people would argue that gene patents are unjustified when used to protect biologic drugs, thereby providing the necessary incentive for investment in the expensive and risky development of biologics.

Gene patents have played a critical role in providing intellectual property protection for biologic drugs, in part because adequate patent protection for the biologic drug itself has often not been available. For example, the first human gene patent litigation I was able to identify was Amgen v. Chugai, in which Amgen successfully asserted its patent on the erythropoietin gene to block market entry by a competing recombinant erythropoietin product (U.S. Patent No. 4,703,008). The primary claim found to be valid and infringed by the Amgen court was Claim 2, which recites: “A purified and isolated DNA sequence consisting essentially of a DNA sequence encoding human erythropoietin.” Under the district court's ruling in the ACLU case, this claim would clearly be invalid, and thus unavailable to protect Amgen's recombinant erythropoietin drug product, which has been one of the most successful biotechnology drugs and widely acknowledged as a groundbreaking tour de force of applied science.

Of course, there are other types of gene patent claims that might have been available to Amgen to block competition in the market for recombinant erythropoietin. In Amgen v. Chugai, for example, two other patent claims, claims 4 and 6, were also found to be valid and infringed.

Claim 4 recites: “A procaryotic or eucaryotic host cell transformed or transfected with a DNA sequence [consisting essentially of a DNA sequence encoding human erythropoietin] in a manner allowing the host cell to express erythropoietin.”

Claim 6 recites: A procaryotic or eucaryotic host cell stably transformed or transfected with a DNA vector [consisting essentially of a DNA sequence encoding human erythropoietin].”

The question would be whether or not the introduction of the patent ineligible erythropoietin-encoding DNA sequence into a host cell would be sufficient to render the resulting recombinant host cell patent eligible. The question is important, because without the availability of these sorts of patent claims Amgen might have been severely hobbled in its ability to achieve the patent protection warranted by its groundbreaking research. But when I read the district court's decision in the ACLU lawsuit, it seems to suggest that even these claims would be unpatentable.

For example, the decision states that even a synthetic DNA molecule (such as cDNA) is patent ineligible unless it has “markedly different characteristics” from its native counterpart. Similarly, the court found a claim reciting a method of using recombinant cells engineered to include the BRCA1 gene to screen for drug candidates was patent ineligible. If the method is patent ineligible, then one might infer that the recombinant cell itself is patent ineligible, in which case Amgen’s claims 4 and 6 would likely also be invalid.

In previous posts, I have argued that a 12 year data exclusivity period for biologics is warranted, in part because of the uncertainty of whether adequate protection is available for biologic drugs. Even with the passage of the healthcare reform legislation, which includes 12 years of data exclusivity, the issue is far from moot: the generic drug industry is already actively lobbying for new legislation to shorten the period of data exclusivity for biologics. Yesterday's decision illustrates my point, at the very least raising serious questions with respect to the availability of adequate patent protection for biologic drugs, and potentially invalidating many of the patents that biotechnology companies have relied upon to justify their investment in innovation.

Ariad v. Eli Lilly: Pragmatism Prevails over Coherent Patent Doctrine

Yesterday in Ariad v. Eli Lilly, a majority of the en banc Federal Circuit decided to retain both traditional and Lilly written description as distinct requirements of patentability. I filed an amicus brief in the case arguing against the Lilly written description requirement (LWD), the brief and some of my objections to LWD are available in earlier posts to this blog. Essentially, I have argued that any positive policy aspects of LWD can be better accomplished using the enablement requirement, and that the courts have failed to articulate any coherent standard for compliance with LWD beyond the requirements of enablement. Federal Circuit judges Linn and Rader recognize this problem in their dissents to Ariad.

Still, I was not at all surprised that the majority decided to retain LWD, because it has developed into a useful tool for invalidating clearly objectionable patent claims precisely because it lacks any coherent standard. When faced with a patent such as Ariad's, which I think most people would consider overreaching, instead of having to find by clear and convincing evidence that the claim fails to satisfy one of the more rigorously articulated standards such as nonobviousness or enablement, the court need merely conclude that the application fails to adequately demonstrate the patentee had “possession” of the claimed invention, or, in the alternative, that the application fails to show that the patentee "invented" the invention, and the claim is invalid. No need to go through the more rigorous proofs necessary to show lack of enablement or obviousness.

As noted perceptively by Judge Rader in his dissent, "the courts inadequate description of its written description requirement acts as a wildcard on which the court may rely when it faces a patent that it feels as unworthy of protection.”In other words, the main value of LWD is its lack of any articulated standards for compliance - it provides a pragmatically useful tool for a company like Eli Lilly to dispose of an "unworthy" patent by merely convincing a court of its unworthiness. In the view of many, including myself, Ariad's claim should be found invalid for lack of enablement, but because the criteria for establishing lack of enablement, such as assessment of the Wands factors, are more well defined they can also be more difficult to establish, hence the appeal of an essentially standardless patentability requirement such as LWD.

When the Federal Circuit created LWD in 1997 in Regents of the University of California v. Eli Lilly, it was initially thought of as a serious blow to biotechnology. Typical of the tone of the time, one commentator lambasted Lilly as "an unmitigated disaster that if followed, has the potential for causing untold havoc in the biotechnology field." An article was published in Science predicting that Lilly would have a broad impact on biotechnology, and many feared that LWD would prevent biotechnology inventors from obtaining adequate protection for their inventions. For more discussion of the Lilly decision and response to it, see my 2007 article "Is Lilly Written Description a Paper Tiger?"

In view of the widely held perception that LWD was bad for biotechnology, it might come as surprise to find that major biotechnology companies Amgen, Glaxo Smith Kline, and Abbott all filed amicus briefs in Araid supporting Lilly and retention of LWD. Note that the support comes from major biopharmaceutical companies selling blockbuster drugs, who like Eli Lilly see the pragmatic usefulness of LWD as a tool for invalidating unwarranted and irksome patents such as Ariad’s. Other biotechnology companies, presumably more concerned about the negative impact of LWD on their ability to obtain adequate patent protection for their biotechnology inventions than the threat of being sued for infringing and "unworthy" patent, joined me in arguing against LWD. Universities also filed an amicus brief arguing for elimination of LWD. The Biotechnology Industry Organization (BIO) did not weigh in with an amicus brief, I would guess because their membership, which includes universities, small biotechnology companies, as well as large biopharmaceutical companies like Eli Lilly, was too divided on the issue to take a unified stand.

As a practical matter, I don't think that retaining LWD will have a major impact on biotechnology or patent law in general. As shown in empirical studies conducted independently by me and Dennis Crouch of Patently-O fame, it appears to be very rare for a patent claim to be rejected or invalidated solely based on failure to comply with LWD (both studies are cited in Judge Rader's dissent). In most cases, enablement would be sufficient to handle the job. As shown in my Paper Tiger article, contrary to earlier predictions, LWD has for the most part not prevented biotechnology inventors from obtaining relatively broad scope of protection for their inventions. Its main function is to police claim scope, and in practice patent applicants are routinely granted broad scope of coverage for biomolecule inventions based on a relatively modest disclosure of some relationship between structure and function, or by describing a few representative molecular species falling within the claimed genus. LWD is being used to limit claim scope for some biomolecule inventions, but I would assert that the patent office could achieve the same policy objective using the enablement requirement if it did not have LWD, and in fact my experience looking at many Board of Patent Appeal and Interference decisions involving LWD usually enablement and LWD rejections are raised in tandem.

I also think that “unworthy” claims, such as Ariad's claims asserted against Eli Lilly (and Amgen in a separate case), or the University of Rochester's COX-2 claims asserted against drug companies selling COX-2 inhibitor drugs (and invalidated under LWD in University of Rochester v. G.D. Searle & Co.), could have been invalidated more properly using the enablement requirement. In Rochester, in fact, the district court did find a claims invalid for lack of enablement, but the Federal Circuit did not address the issue as moot. The main problem, as I see it, is that by using LWD instead of enablement to invalidate questionable claims such as Ariad's, the Federal Circuit fails to develop case law articulating the contours of the enablement requirement, which is the appropriate doctrine for addressing these sorts of overly broad claims. In his dissent to the panel decision in Ariad v. Eli Lilly, Judge Linn raised this exact concern.

In the future, I think it will be interesting to watch how the Federal Circuit applies to LWD to antibodies claims. As pointed out in my brief, the Federal Circuit and patent office apply to LWD to antibodies in a manner entirely consistent with how it is applied to other biomolecules. The current practice is to allow extremely broad patent scope covering any antibody recognizing any epitope on an antigen, based on a mere disclosure of the antigen. This is an important issue, because so many of the new biologic drugs, and biologic drugs in the pipeline, are based on antibodies. Recently, Abbott Laboratories was found liable for infringing a broad antibody claim based on its marketing of the biologic drug Humira, with the jury awarding the plaintiff $1.67 billion, reportedly the largest patent verdict in history. Abbott has appealed the decision, and absent a settlement will undoubtedly attempt to convince the Federal Circuit that broad antibody claims of this sort are invalid under LWD, more in line with the way LWD is applied outside the context of antibodies. In fact, Abbott made this very point in the amicus brief it filed in Ariad, available here courtesy of Patent Docs.

A Rare Event for Biotechnology: Two Anjimoto Patents Struck for Violation of the Best Mode Requirement

In Ajinomoto v. ITC, decided March 8, 2010, the Federal Circuit affirmed the International Trade Commission's determination that two patents claiming methods for producing the amino acid L-Lysine in E. coli are invalid for failure to adequately disclose the best mode of practicing the invention. One of the patents was also found to be unenforceable due to inequitable conduct, based on the Commission’s finding that omission of the best mode was material and made with deceptive intent.

The claimed methods are used to prepare lysine to be sold as a dietary supplement, primarily for animals such as livestock, in what is described in the opinion as a billion-dollar, worldwide market. Both claimed methods recite the use of E. coli strains that have been genetically engineered to produce very high concentrations of lysine, by mutating genes involved in lysine metabolism in order to impair feedback inhibition and lysine degradation, respectively.

The best mode requirement is an anomaly of US patent law, and is not found in other major patent jurisdictions such as Europe and Japan. It essentially requires a patent applicant to adequately disclose what the inventor considers to be the best mode of practicing the claimed invention. In this case, the court found that at the time the original patent applications were filed, the inventors considered certain strains of E. coli to be the best for practicing the invention. These preferred strains included additional genetic alterations besides those recited in the patent claims, including another modified gene involved in lysine metabolism, and genes that allowed the bacterium to utilize sucrose as a carbon source. The patent specifications accompanying the invalidated claims do not disclose these additional genetic alterations, nor the inventor’s preference for use of sucrose as the carbon source, but do include data associated with "fictitious host strains."

This was not the first challenge to an Ajinomoto patent based on an alleged violation of the best mode requirement. In Ajinomoto v. Archer-Daniels-Midland, 228 F.3d 1338 (Fed. Cir. 2000), the Federal Circuit affirmed a district court's determination that a patent owned by Ajinomoto claiming methods of modifying bacteria to increase the production of amino acids was not invalid for failure to disclose the best mode. In that case, the alleged violation was based on the failure of the patent specification to disclose a particular bacterial gene that the inventor considered necessary to practice the best mode of the invention. The court rejected the allegation, and held that even though the patent did not explicitly identify the preferred gene, it disclosed the use of a strain of bacteria that includes the preferred gene, and one of skill in the art would have been aware that the disclosed bacterium included the preferred gene.

Although violation of the best mode requirement is often invoked as a defense in patent litigation, courts rarely invalidate claims for failure to disclose the best mode. In a 2002 Federal Circuit decision, the majority noted that the Federal Circuit and its predecessor courts had only held claims invalid for failure to satisfy the best mode requirement on seven occasions. Bayer AG v. Schein Pharms, 301 F.3d 1306 (Fed. Cir. 2002). To my knowledge, Ajinomoto is the first reported decision wherein a biotechnology patent has been invalidated under the best mode requirement - I have not done an exhaustive search, but I'm sure it has rarely if ever happened before.

The last best mode challenge to a biotechnology patent to make it to the Federal Circuit that I am aware of was in the case of Invitrogen Corp. v. BioCrestMfg., in which the appeal was filed in 2007. The District Court had refused to even submit the issue to the jury. The parties settled prior to the Federal Circuit deciding the issue. In that case, the alleged violation of the best mode requirement also involved the failure to disclose a preferred strain of E. coli for use with the invention. Clearly, patent practitioners should be vigilant to ensure that preferred E. coli strains are disclosed in the specification in order to ward off this common basis for attacking biotechnology patents.

Notably, the best mode violation was the only basis for invalidating either Ajinomoto patent, since the inequitable conduct finding was based solely on the failure to disclose the best mode. The inventors might very well have fully enabled a useful and nonobvious invention, which outside the US would be sufficient to secure a valid patent.

It is perhaps relevant that the best mode violation was based on the failure of the original Japanese patent applications, which were the priority documents for the US patents, to disclose the preferred bacterial hosts and carbon source. Similarly, the Ajinomoto patent which survived the earlier best mode challenge by Archer-Daniels-Midland was based on an application for an Inventor’s Certificate filed in the former Soviet Union. The Inventor’s Certificate was essentially the Soviet analog to a patent under the communist regime. The best mode requirement can be a trap for non-US inventors and patent practitioners unfamiliar with US law, and maybe this played a role in these cases.

There is currently relatively strong support for eliminating the best mode requirement in the US, at least as a basis for invalidating patent claims or rendering patents unenforceable, and some of the recent legislative proposals for patent reform have included provisions to that effect, including the most recent Senate draft that was made publicly available last week (available here).

I am personally of the opinion that the best mode requirement should be eliminated from US law; it seems to me that the rest of the world is doing fine without it, and whatever benefits flow from the doctrine in the form of enhanced disclosure are outweighed by the cost of litigating the issue, the potential for invalidating an objectively valid patent based on the outcome of a litigation-driven inquiry into the inventor’s subjective state of mind many years prior to the litigation, and the potential unfairness to foreign inventors unfamiliar with the best mode requirement.