Wednesday, March 21, 2012

Mayo v. Prometheus: Analysis and Implications of an Important Supreme Court Decision

When I first read the Supreme Court's decision in Prometheus, I must admit I was somewhat taken aback. To my mind, the Federal Circuit had already drawn a reasonable and relatively well-defined line between patent eligible molecular diagnostic methods that entail a physical step of analyzing for the presence of molecular marker and/or treating a patient (Prometheus) and patent ineligible diagnostic methods that could potentially be infringed by the mere analysis of genetic information (Myriad). Prior to yesterday, I had been hopeful that a majority of the Justices on the Supreme Court would agree and that the Federals Circuit's decision in Prometheus would be affirmed.

Instead, as most of my readers are no doubt already aware, the Supreme Court unanimously reversed the Federal Circuit’ decision, declaring all of Prometheus’ claims at issue in the case patent ineligible. With the benefit of 20/20 hindsight, the Supreme Court's decision does not strike me as surprising at all. In his dissent from the Court's decision in 2006 to dismiss LabCorp v. Metabolite, Justice Breyer set forth in great detail his concern that "too much patent protection,” for methods of molecular diagnosis can, in his words, "impede rather than ‘promote the Progress of Science and useful Arts,’ [i.e.,] the constitutional objective of patent and copyright protection.” In his view, patents broadly claiming this sort of innovation "can discourage research by impeding the free exchange of information, for example by forcing researchers to avoid the use of potentially patented ideas, by leading them to conduct costly and time-consuming searches of existing or pending patents, by requiring complex licensing arrangements [].”

Justice Breyer's LabCorp dissent held up the patent eligibility doctrine as an important tool for avoiding the "danger of overprotection." He described claims of the type at issue in LabCorp as merely a "natural law" cast by a clever patent attorney "in the abstract patent language of a 'process’.” He went on to conclude that a process "embodying" a natural phenomenon is not rendered patent eligible by the recitation of steps of physically analyzing for the presence of molecular markers or using the resulting information in the treatment of the patient. With respect to the particular claim under review in LabCorp, he stated that:

“One might, of course, reduce the ‘process’ to a series of steps, e.g., Step 1: gather data; Step 2: read a number; Step 3: compare the number with the norm; Step 4: act accordingly. But one can reduce any process to a series of steps. The question is what those steps embody.”

Thus, Justice Breyer's opinion in Prometheus represents nothing more than fruition of seeds he sowed in his LabCorp dissent. But why did all the other Justices join him in a unanimous decision? I'm not sure the reason, but it seems to be the case that the Supreme Court decides patent decisions unanimously, perhaps because many of the Justices do not find patent cases particularly compelling, although Justice Breyer clearly does. In Prometheus the Supreme Court handed Justice Breyer the pen, and he decided the case in precisely the manner he set forth six years ago in his LabCorp dissent.

This blog article analyzes certain aspects of the Prometheus decision, and considers potential implications for the patentability of molecular diagnostics, personalized medicine and biotechnology in general.

The Court’s expansive definition of "natural phenomena"
The Supreme Court has repeatedly stated that certain fundamental principles, including "natural phenomena," are ineligible for patent protection. At the same time, it has stressed that a useful application of a natural phenomenon can be patent eligible. To my mind, however, the Court has never clearly articulated a useful definition of "natural phenomenon," nor adequately explained how to discern the boundary between a method claim that impermissibly embodies a natural phenomenon, as opposed to a patent eligible claim reciting the specific application of a natural phenomenon. Prometheus has not remedied the situtation.

More than three years ago, when the Federal Circuit first took up the Prometheus appeal, I submitted an amicus brief on behalf of myself and a few other law professors arguing that the correlation between drug metabolite level and optimal drug dosage at the heart of Prometheus’ claims does not constitute a "natural" phenomenon. Unlike the LabCorp claim, which relates to a correlation between vitamin B and homocysteine that occurs naturally in human body, the Prometheus claims involve a correlation between a non-naturally occurring drug metabolite and the optimal dosage of the drug. The drug metabolite does not occur naturally, but is created as a byproduct when the human body breaks down the precursor drug. Hence the correlation between metabolite level and optimal dosage does not occur naturally, but only as the result of human intervention, i.e., the synthesis of the drug and administration of the drug to a patient. In my view, the correlation at the heart of the Prometheus claims is not a natural phenomenon, and hence it is erroneous to conclude that the claim is patent ineligible for claiming a natural phenomenon.

In its initial decision, the district court that decided Prometheus acknowledged that the drugs and their metabolites (breakdown products) do not occur absent human intervention, but nonetheless characterized the correlation between the breakdown products and optimal drug dosage as an unpatentable “work of nature” because the drugs “are converted naturally by enzymes within the patient’s body to form an agent that is therapeutically active, [and thus] the correlation results from a natural body process.” In essence, the district court concluded that the mere involvement of a natural process in the interaction between a man-made drug and the human body renders the interaction a “natural phenomenon.”
In my amicus brief, I pointed out what I saw as the flaw in the district court's logic:

“Surely the lower court’s expansive definition of “natural phenomena” cannot be correct, for virtually every patented invention is based on some discovery involving the interaction of human ingenuity with the natural environment and natural processes. For example, an airplane operates by interacting with the air in a particular manner that results in flight. The air and its properties are natural phenomena, but surely that does not render the interaction of an airplane with the air a natural phenomenon. More to the point, what biological or pharmaceutical invention is not based on an interaction with natural biological processes? In particular, drugs operate by means of chemical interactions with naturally occurring proteins and other biomolecules in the body, according to the fundamentals laws of chemistry and biology. Simply interacting with natural processes does not render a man-made biological phenomenon a natural phenomenon, but that would seem to be the result if the rationale of the lower court were applied generally to other scenarios beyond the facts of this case.”
On appeal, the Federal Circuit assumed that the correlations between drug metabolite level and optimal dosage are natural phenomena, without seeming to appreciate the implications of this broad definition of "natural phenomena." Justice Breyer took the same tack, concluding that:

“While it takes a human action (the administration of a thiopurine drug) to trigger a manifestation of this relation in a particular person, the relation itself exists in principle apart from any human action. The relation is a consequence of the ways in which thiopurine compounds are metabolized by the body—entirely natural processes.”
Under this broad interpretation of natural phenomena, it is hard to imagine any invention in biotechnology or the life sciences that is not based on the discovery of a natural phenomenon. All inventions in this realm of technology are the consequence of the way in which physical matter interacts with natural processes. PCR, recombinant DNA and monoclonal antibodies are some of the most important inventions of biotechnology, but all are based on harnessing natural biological and chemical processes, and hence seem to be "natural phenomena" under the Court's broad interpretation of the term.

What constitutes a patentable "application" of a biological natural phenomenon?
Of course, Justice Breyer acknowledged that a claim limited to a patentable "application" of a natural phenomenon remains patent eligible, but his decision does not seem to provide any coherent guidance with respect to what constitutes a patentable application of the phenomenon, as opposed to a patent ineligible claim that merely "describes" the phenomenon. Consider the rationales he set forth to justify his conclusion that the claimed steps of "administering" drug to a patient and "determining" the level of drug metabolite in a patient's body were insufficient.

With respect to the “administering” step, he found that the step:

"simply refers to the relevant audience, namely doctors who treat patients with certain diseases with thiopurine drugs. That audience is a pre-existing audience; doctors used thiopurine drugs to treat patients suffering from autoimmune disorders long before anyone asserted these claims. In any event, the “prohibition against patenting abstract ideas ‘cannot be circumvented by attempting to limit the use of the formula to a particular technological environment.’ [cite to Bilski].”
Consider the implications if a lower court were to apply the same reasoning to a drug method of treatment claim. Method of treatment claims are extremely important for the pharmaceutical industry, and typically recite a method of treating a particular ailment by administering a drug to a patient. Applying the rationale of Justice Breyer, it would seem that doctors constitute a "pre-existing audience” for method of treatment claims, no less so than with respect to the molecular diagnostic claims at issue in Prometheus. I don't see how one could make a principled distinction between the two scenarios, although, as discussed below, I suspect lower courts will find a way, rather than eliminate this important class of patents.

Regarding the step of determining the level of relevant metabolites in the blood, Justice Breyer concluded that determining the level of drug metabolites in the body is "well-understood, routine and conventional." But again, think of the implications if this rationale were to be extended to method of treatment claims. In general, I think it can be safely said that the administration of a known drug to a patient is "well understood, routine and conventional." But until now it has been generally understood and accepted that someone who discovers a new, nonobvious and useful method of using a known drug to treat a disease can patent her invention as a method of treatment. Justice Breyer does not provide any guidance as to how one would distinguish between "well understood and routine" administration of a known drug in the context of a method of treatment claim and administration of the drug as it appears in Prometheus’ claims.

Justice Breyer acknowledges the possibility that a combination of conventional steps might lead to a patent eligible invention, but concluded that in this case the claims "add nothing to the laws of nature that is not already present when the steps are considered separately." In particular, he concludes that "anyone who wants to make use of these laws must first administer a thiopurine drug and measure the resulting metabolite concentrations, and so the combination amounts to nothing significantly more than an instruction to doctors to apply the applicable laws when treating their patients.”

But once again, what would be the implications for method of treatment claims? According to Justice Breyer's interpretation of the term "natural phenomenon," the ability of Drug X to treat Disease Y seems clearly to fall within the realm of "natural phenomena." After all, the drug interacts with the body according to "entirely natural processes." But anyone who wants to make use of this "natural phenomenon" would of course need to administer Drug X to a patient requiring treatment, so how could the claim amount to anything more than, in the words of Justice Breyer, "an instruction to doctors to apply the applicable [natural phenomenon] when treating their patients”?

No clear demarcation between Diehr and Flook/Prometheus
Justice Breyer asserts that the Court's decision in Prometheus is reinforced by a “detailed consideration” of earlier Supreme Court precedent, particularly Diehr and Flook. But his opinion provides no convincing rationale as to why the process steps recited in the Diehr claims were sufficient to establish patent eligibility, but not so in the case of Flook or Prometheus.

Justice Breyer suggests that the Supreme Court upheld the patent eligibility of the Diehr claims because they include steps of “installing rubber in a press, closing the mold, constantly determining the temperature of the mold, constantly re- calculating the appropriate cure time through the use of the formula and a digital computer, and automatically opening the press at the proper time.” According to Justice Breyer, the Diehr decision

"nowhere suggested that all these steps, or at least the combination of those steps, were in context obvious, already in use, or purely conventional. And so the patentees did not seek to pre-empt the use of [the] equation, but sought only to foreclose from others the use of that equation in conjunction with all of the other steps in their claimed process. These other steps apparently added to the formula something that in terms of patent law’s objectives had significance—they transformed the process into an inventive application of the formula.”
Note that Justice Breyer never identifies which step or steps in the Diehr process transformed the patent ineligible equation into a patent eligible process, beyond the conclusory statement that one or more of the steps "apparently added . . . something that in terms of patent laws objectives had significance." Will the lower courts, not to mention patent examiners, actually be required to assess the significance to the overall objectives of patent law of the individual steps in any method claim that applies a natural phenomenon? It seems unworkable, precisely the sort of vague standard that the Federal Circuit sought to address by means of the machine or transformation test when it initially decided Bilski.

Patent eligibility as a doctrine to address obvious and/or overbroad patent claims
I am of the opinion (and I believe this opinion is shared by at least some judges on the Federal Circuit) that patent eligibility should not function as a primary doctrinal gatekeeper of patentability, but that instead the more conventional doctrines of nonobviousness, enablement and written description are better doctrinal tools for addressing the concerns that have been expressed with respect to claims of the type at issue in Prometheus, LabCorp and Myriad. However, Justice Breyer is adamant that patent eligibility performs an important function distinct from the requirements of 102, 103 and 112, and constitutes a fundamental and dynamic doctrine for addressing the problem of "too much patent protection,"

Nonetheless, it is clear from reading Prometheus that he views patent eligibility as inseparable from questions of obviousness and overbreadth, concerns more conventionally (and appropriate) addressed under Sections 103 and 112. For example, he repeatedly faults the Prometheus claims for including steps that are "well known, routine and conventional,” and indicates that the Diehr claims were patent eligible because they included a combination of steps that were not "in context obvious, already in use or purely conventional.” In other words, the patent eligibility of the Diehr claims seems to be inextricably linked with novelty and nonobviousness, at least in the mind of Justice Breyer.

In a similar manner, the Prometheus opinion states that patent eligibility is the appropriate mechanism for guarding against patent claims that "foreclose more future invention than the underlying discovery could reasonably justify." It goes on to complain about the breadth of the Prometheus claims, pointing out, for example that the "’determining’ step is set forth in highly general language covering all processes that make use of the correlations after measuring metabolites, including later discovered processes that measure metabolite levels in new ways.” Again, these are concerns more conventionally and appropriately addressed using the enablement requirement of section 112, not the blunt instrument of patent eligibility.

The US government, in fact, argued that the requirements of Sections 102, 103 and 112 are the more appropriate vehicles for addressing the concerns expressed with the Prometheus claims. However, Justice Breyer rejected this argument, asserting that to follow the government's advice in this regard would be to render the doctrine of patent eligibility a "dead letter." He also voiced concern that shifting the patentability inquiry entirely to Sections 102, 103 and 112 would "risk creating significantly greater legal uncertainty, while assuming that those sections can do work that they are not equipped to do."

I would disagree with both of these assertions. The doctrines of novelty, nonobviousness and enablement are all more firmly established and predictable than the recently reinvigorated patent eligibility doctrine. Shifting the focus from these better established doctrines to section 101 and patent eligibility increases rather diminishes legal certainty.

And I don't think there is any justification for thinking that the other doctrines of patentability are not flexible enough to address all of the concerns that have been express with respect to the Prometheus claims, and similar claims such as those at issue in the Myriad case. In fact, in Prometheus and Myriad the courts have never addressed the issue of whether the claims satisfy these other requirements of patentability, so how can one conclude that nonobviousness and enablement are not equipped to deal with any asserted problems with the claims? Ariad v. Eli Lilly provides an example of this - Eli Lilly initially sought to invalidate the Ariad claims using the doctrine of patent eligibility, but ultimately prevailed using the more established Section 112 doctrine of written description.

The machine or transformation test
The Federal Circuit relied heavily on the Bilski machine or transformation test in upholding the patent eligibility of the Prometheus claims. In particular, the court found that administering a drug to a patient is a method of treatment and always transformative (because it transforms the patient's body). The court also found that the step of determining metabolite levels in the patient is inherently transformative, because it necessarily relies on laboratory processes that entail physical transformations of matter.

Justice Breyer, however, rejected the Federal Circuit's machine or transformation analysis. He found the "administering" step irrelevant because it "simply helps pick out the group of individuals that are likely interested in applying the law of nature." I have a hard time getting my head around that one, it makes no sense to me to analyze the patent eligibility of a claim in terms of the intended audience for specific method steps recited in the claim. But in any event, if the administering step is irrelevant because it simply targets doctors as the relevant audience for the claim, the same rationale would seem to apply to any method of treatment claim that involves administering a drug to the patient.

He went on to find the "determining" step irrelevant because "science [might] develop a totally different system for determining metabolite levels that [does not inherently involve a] transformation.” I guess in principle one cannot exclude the possibility that a method might be developed for determining metabolite levels that does not involve any transformation, but I'm fairly certain that even if the claim had explicitly recited that the determining step must involves a physical transformation Justice Breyer would have still declared the claim to be patent ineligible.

Ever since the Supreme Court decided Bilski, Federal Circuit judges have continued to rely heavily on the machine or transformation test, pointing out that the Supreme Court had identified it as an "important and useful clue" to determining patent eligibility. But in Prometheus Justice Breyer points out that while it might be a useful clue, the machine or transformation test does not trump the fundamental test for patent eligibility, i.e., whether the claim impermissibly embodies a natural phenomenon.

Implications for diagnostics, personalized medicine pharmaceutical method of treatment claims
Prometheus and some amici argued that were the court to declare the Prometheus claims patent ineligible, it would have a chilling effect on future innovation in medical diagnostics. However, Justice Breyer swept aside this concern, stating that it was irrelevant to the question of patent eligibility of the claims, and suggesting that it was for Congress to intervene if it turns out that it is necessary to “more finely tailor” the rules of patent eligibility in order to protect innovations in diagnostics.

On its face, Prometheus appears to severely limit the ability of some innovators in diagnostics and personalized medicine to obtain effective patent protection. Indeed, if implemented literally, the standard of patent eligibility set forth in Prometheus would seem to deny patent protection to much of biotechnology, including drug method of treatment claims. However, I think in practice the lower courts will attempt to limit the impact of the decision, and find ways to maintain patent eligibility for drug methods of treatment, and at least to some extent for diagnostics and personalized medicine. It might require clever claim drafting in the area diagnostics and personalized medicine, and Prometheus clearly creates much uncertainty in this increasingly important sector of healthcare.

At one point in his opinion Justice Breyer states that "unlike, say, a typical patent on a new drug or a new way of using an existing drug, the patent claims do not confine their reach to particular applications of those laws.” I'm guessing that this sentence was intended to assuage fears that the decision had negative implications for the patenting of pharmaceuticals. Unfortunately, I don't see anything in the Prometheus decision that provides a basis for making a principled distinction between drug method of treatment claims and the Prometheus claims. Nonetheles, I think that the pharmaceutical industry will latch onto this sentence and successfully argue that claims of this type remained patent eligible.

In particular, I predict that if a court were faced with a patent eligibility challenge to a drug method of treatment claim, it would take advantage of the ambiguities in the Supreme Court's precedent in this area to find the claim patent eligible. The court would most likely perform some hand waving, and ultimately conclude that the method of treatment claims at issue in the case are more closely analogous to the Diehr claims than to the claims in Prometheus, and declare the claim patent eligible. I don't think the Federal Circuit or Supreme Court would want to overturn such decision, because I think the importance of these sort of claims for the pharmaceutical industry is widely understood and accepted.

5 comments:

Anonymous said...

Taken aback? Really? This was slam dunk stuff. The CAFC has created more problems than it has solved in its short history of existence. You can still obtain patents in this space -- it's just that you're going to have a Muniauction/Akamai problem in terms of proving infringement. But it's not impossible. Mayo is a perfect example: it employs doctors and has its own reference laboratory. The problem with Prometheus' patents (and others like it) is that, at the end of the day, they seek to prevent others from practicing the prior art. Hogwash, you say? What affirmative step in the Prometheus claims was new? And by the way, while the opinion was authored by Breyer, the decision is that of the Court. You are clearly characterizing him as somehow out of touch, and yet it was 9-0. This decision does not doom personalized medicine, it promotes it. I like the idea of patents. They are the great equalizer. Small guy can move up to big guy status pretty quickly. But the focus on them tends to ignore all those other things that make a successful enterprise, such as quality, efficiency, integrity, etc.

drkoepsell said...

The court is doing as it should, clarifying the blurred distinction patent lawyers have promoted between nature and artifice. Any "discovery" about nature and her workings, her assemblies, etc., is per se not "new" nor inventive, and ought not to be monopolized. It will be a great vindication when the same reasoning is applied to "isolated" genes.

Drs. Cynthia and David said...

Thanks for your analysis. I always cringe when the SC takes a patent case since I know they are going to muck it up. This one seems like no exception to me. I just hope you are right in predicting a minimal effect. I suspect Examiners will gleefully issue more 101 rejections and less research and investment will occur in diagnostics.

Cynthia

Dale B. Halling said...

The opinion is complete nonsense if read literally. Why were you so timid in your statement “or virtually every patented invention is based on some discovery involving the interaction of human ingenuity with the natural environment and natural processes.” Every invention (patented or not) is based on human ingenuity and a natural process – unless we are patenting magic. It is a direct result of conservation of energy and matter – you cannot create something from nothing and you cannot violate nature laws.

Here is an easy 101 test that even the Supreme Court could understand. If it does not exists separate from man in nature and it is useful (solves an objective problem) then it is an invention of man. That does not mean it is patentable, but it clearly is an invention under 101. Here the drug does not exist separate from man, taking the drug is only performed by man, testing is only done by man. Justice Breyer’s goal is not to clarify but to eliminate patents and all property rights one small step at a time.

drkoepsell said...

11-725
ASSN. FOR MOLECULAR PATHOLOGY V. MYRIAD GENETICS, ET AL.
The petition for a writ of certiorari is granted. The
judgment is vacated, and the case is remanded to the United
States Court of Appeals for the Federal Circuit for further
consideration in light of Mayo Collaborative Services v.
Prometheus Laboratories, Inc., 566 U.S. ___ (2012).

I'd love to see the CAFC shoot themselves in the foot like they did in Mayo, and send it back up to the Supremes for another woodshedding. But they probably will do the right thing this time. the sequences claimed are even more clearly natural phenomena or products than the method claims in Mayo.