District Court Denies Novozymes Motion for Preliminary Injunction in Battle for Control of the Alpha-Amylase Market

On September 24, 2010, a federal district court in the Western District of Wisconsin denied a motion for preliminary injunction in a patent lawsuit between two of the leading companies in the field of genetically engineered industrial enzymes, Novozymes and Genencor (a division of Danisco). The two companies are essentially the only competitors in the market for alpha-amylases, used to convert corn into fuel ethanol. According to the order (available here) denying preliminary injunction, Genencor dominated the alpha-amylase market until 1999, when Novozymes entered the market with Liquozyme, a genetically engineered thermostable alpha-amylase. At one point, Liquozyme accounted for more than 80% of the alpha-amylase sold in the fuel ethanol market. In 2008, Genencor responded by introducing its own genetically engineered thermostable alpha-amylases (called GC358). Since then, Novozymes market share has dropped approximately 60%.

The patent being asserted by Novozymes, US patent number 7,713,723 (the ‘723 patent) claims priority to a patent application originally filed in 2000. The original patent application was broadly directed toward alpha-amylase mutants having increased stability at “high temperature and/or low pH conditions, in particular at low calcium concentrations.” However, the claims that ultimately issued in the ‘723 patent, which recite thermostable alpha-amylase variants comprising "a substitution of serine at position 239 relative to the parent alpha-amylase," were not added until 2009, apparently in response to Genencor's marketing of GC358, which presumably includes this mutation. Prior to the introduction of these claims in 2009, the patent application contained no disclosure specifically directed towards substitution of serine at position 239.

Importantly, the '723 patent does not cover Liquozyme, over for that matter any Novozymes product. Liquozyme presumably possesses improved thermostability over the wild type enzyme as a result of a different mutation or set of mutations.

In deciding a motion for preliminary injunction, courts essentially consider four factors: (1) the likelihood the patent owner will ultimately prevail on the merits in the case (i.e., the patent will be found infringed and not invalid); (2) the extent to which the patent owner will experience "irreparable harm" if the infringement is not stopped immediately; (3) the balance of the interests of patent owner an accused infringer; (4) and the public interest. In this case, the district court found that all these factors weighed in favor of Genencor, and denied Novozymes’ motion for preliminary injunction.

Irreparable Harm
The district court decision began by addressing the issue of irreparable harm, the factor which the court found likely to be dispositive by itself. Novozymes argued that it would suffer irreparable harm in the form of diminished reputation, loss of market share and price erosion if Genencor's product were allowed to remain on the market during the course of the litigation. However, the court pointed out that Genencor had entered the market with GC358 in 2008, but that the patent did not issue until May 2010, so that most of Novozymes’ loss in market share occurred when it was perfectly legal for Genencor's product to be on the market. The court surmised that most of the customers who would be inclined to switch from Liquozyme to GC358 had probably already done so, and thus most of the alleged harm identified by Novozymes had already occurred prior to issuance of the patent.

In assessing irreparable harm, the district court found the fact that the patent does not cover any product marketed by Novozymes to be quite significant, pointing out that while Novozymes’ argument that sale of GC358 would harm its reputation "could be persuasive if plaintiffs actually sold a product that practiced the ‘723 patent[,] it is difficult for plaintiffs to argue that their good reputation is contingent on their ability ‘to uniquely make and sell [their] patented alpha-amylase’ when they are not even using the claim technology themselves and identify no plans to do so."

The district court went on to speculate that if "plaintiffs are not trying to protect their own right to provide consumers a product that embodies the patent, then it may be that the patent is nothing more than weapon to prevent defendants from competing with them." In other words, the court seems put off by the fact that Novozymes is not practicing the technology claimed in their patent, treating them as something akin to a non-practicing entity (sometimes referred to as a patent troll).

Likelihood of Success on the Merits
The court also expressed doubt with respect to the likelihood that Novozymes would succeed on the merits of the case, based on the court's determination that there was a substantial likelihood that the asserted patent claims are invalid for lack of enablement and lack of sufficient written description. Both the enablement and written description issues arise out of the failure of the originally filed patent application to sufficiently point out and identify the later claimed substitution of serine at position 239. The patent application identified 33 amino acid positions (including position 239) in alpha-amylase which allegedly can be modified by amino acid substitution, deletion or insertion to result in some increased stability under high temperature and/or low pH conditions. It does not, however, particularly point out position 239, nor does it particularly point out substitution with serine (one of 20 amino acids commonly found in proteins), and it does not correlate the specific mutation particularly with thermostability. Genencor pointed out that the patent specification identified 8.589 x 1042 possible amino acid substitutions, deletions and insertions, and now Novozymes was attempting to claim one of those possibilities that had subsequently been shown by Genencor to provide thermostability.

This case illustrates the difficulty the inventors of genetically engineered proteins face when attempting to obtain adequate patent protection for their inventions. Protein sequence space is vast, and in most cases in which a sequence variant of a protein has been found to have some desirable functional characteristic, there are an astronomical number of alternate sequence modifications that will result in the same functional outcome. I have described this problem in a law review article (available here), and more recently in my amicus brief filed in Ariad v. Lilly (available here). Essentially, the written description and enablement requirements limit the ability of protein engineers to claim protein variants in functional terms, resulting in claims limited to enzyme sharing some degree of structural similarity to variants explicitly disclosed in the patent application. This allows competitors to design around the patent by screening for alternate structural modifications to the amino acid sequence that result in the desired function, as exemplified Genencor’s product that apparently shares the desirable functional characteristics of Novozyme’s product but employs a different structural modification to the amino acid sequence.

Balance of Harms
The court found that the balance of harms in this case favored Genencor, finding that if Genencor were forced off the market the company might "very will be crippled and unable to recover even if the injunction is lifted after the trial." On the other hand, the court found that Novozymes was essentially "asking for assistance in maintaining a monopoly at least until the end of trial."

Public Interest
The fact that Novozymes is not marketing a product covered by the asserted patent also counted against them in the court’s analysis of the effect of an injunction on the public interest. The court found that if Genencor's GC358 were taken off the market customers would be deprived of the patented invention entirely for the course of the litigation proceedings, since Novozymes is not marketing any product covered by the patent. The court found it "somewhat inconsistent for plaintiffs to be arguing on one hand that the ‘723 patent represents an important new invention and then argue on the other hand it should make no difference if no one is allowed to actually use it.”

BIO Files Amicus Brief Supporting Eli Lilly Petition for En Banc Rehearing of Sun . Lilly

Yesterday the Biotechnology Industry Organization filed an amicus brief supporting Eli Lilly in its petition for en banc rehearing of Sun v. Lilly, a recent Federal Circuit decision pertaining to the doctrine of obviousness-type double patenting, and discussed in a previous post. I participated in the drafting of the BIO amicus brief, a copy of which can be found here.

Sun Pharmaceuticals v. Eli Lilly: The Creeping Expansion of the Doctrine of Obviousness-Type Double Patenting

In Sun v. Eli Lilly, a panel of the Federal Circuit held a Lilly patent claiming use of the drug gemcitabine (GEMZAR) for the treatment of cancer invalid for obviousness-type double patenting, in view of an earlier Lilly patent claiming the drug per se and its originally discovered use as an antiviral agent. The invalidated patent was set to expire on November 7, 2012, 2.5 years after the expiration of the patent claiming the drug active ingredient (May 15, 2010), so this could result in a substantial reduction in Lilly’s period of marketing exclusivity. Lilly is currently seeking en banc reconsideration by the Federal Circuit.

Sun represents the most recent in a series of Federal Circuit decisions expanding the scope of the judge made doctrine of obviousness type double patenting. In this article, I briefly summarize the history of the expansion, and outline why I think the court should take this opportunity to reconsider the implications of these cases en banc.

Eli Lilly's patent prosecution decisions that resulted in a finding of obviousness type double patenting

It is informative to review the facts of the case. In the early 1980s, a Lilly scientist invented a method for synthesizing a genus of chemical compounds including gemcitabine, something others had previously attempted but failed to accomplish. He also showed that the compound had antiviral activity. Lilly filed a patent application disclosing the genus of chemical compounds and their use as antiviral agents.

The original inventor of the compound, along with a second Lilly inventor, then discovered that gemcitabine has anticancer activities, so these inventors filed a second application claiming methods of using the drug to treat cancer. This application did not claim priority to the first application.

On the same day Lilly filed the second application, it also filed a CIP of the first application. In retrospect, this was a critical mistake. The CIP was apparently filed to expand upon the definition of the disclosed genus of compounds, basically by adding to it species wherein certain R groups could be hydrogens. Significantly, this added disclosure was not necessary in order to patent gemcitabine, since gemcitabine was disclosed in the originally filed patent application.

At that time, there was some uncertainty with respect to the extent to which it was necessary to update the best mode when filing a CIP application (this uncertainty was ultimately addressed in 1994 in Transco). In any event, presumably in an attempt to ensure compliance with the best mode requirement, Lilly also added disclosure of the anticancer properties of the chemical compounds in the CIP.

Ultimately, the CIP application resulted in a patent claiming the drug active ingredient as a composition of matter, and also methods of using it as an antiviral agent. Later, the second patent application issued with claims to methods of using the drug to treat cancer. In Sun v. Lilly, it was the disclosure of anticancer activity added to the first patent by means of the CIP application which was used as the basis for invalidating the second patent claiming that use. In the next section, I explain why this represents a significant expansion of the doctrine of obviousness type double patenting.

The creeping expansion of obviousness type double patenting

The Federal Circuit has established a two-step process for analyzing obviousness type double patenting. First, the court construe the claims in the earlier patent and the claims in the later patent, and determines the differences. Second, it determines whether those differences render the claims patentably distinct.

One fundamental distinction between analysis for obviousness under section 103 and obviousness type double patenting is that when analyzing for double patenting only the claims of the two patents are to be considered. As the Federal Circuit stated in 1992 in General Foods v. Studiengesellschaft Kohle, its "precedent makes clear that the disclosure of a patent cited in support of a double patenting rejection cannot be used as though it were prior art.”

However, in the 2002 decision of Geneva v. GSK, the Federal Circuit began chipping away at this prohibition against using the written description of the earlier patent to invalidate the second patent, and embarked upon what has become a creeping expansion of the doctrine. In that case, the earlier patent claimed a drug active ingredient. The written description portion of the earlier patent also describes a method of using the drug to treat a disease, but significantly, this use of the drug is never mentioned in the patent claims. Nonetheless, the panel used this disclosure in the written description of the first patent to invalidate a second patent claiming that method of use.

This seems to fly in the face of General Foods and the controlling case law. However, the Geneva panel justified its decision to go outside the claims of the first patent in its analysis by reasoning that the claim in the earlier patent "is drawn to a compound having a certain physical property," and thus, "[s[tanding alone, that claim does not adequately disclose the patentable bounds of the invention. Therefore, this court examines the specifications of those patents to ascertain any overlap in the claim scope for the double patenting comparison."

Although the Geneva panel states that it needed to refer to the written description of the first patent to determine the extent of overlap between the claims in the two patents, this explanation does not appear to survive close scrutiny. The claims in the first patent broadly recite chemical compound, with absolutely no limitation respecting the use of the compound. It is black letter law that a patent claiming a chemical compound dominates all uses of the compound as defined by the claims, including methods of using the compound that are not disclosed in the patent specification, and methods that were nonobvious and not even contemplated at the time the patent was filed. While it is undoubtedly appropriate to consult the entire specification in construing the scope of a patent claim, it is unnecessary to consult the specification for methods of using a compound when ascertaining the scope of a patent claim directed to the compound as a composition of matter.

Although the Geneva panel’s use of disclosure in the written description as a basis for invalidating the second patent is questionable, at least the panel provided a policy justification for his decision. The panel correctly noted that in order for chemical compound to be patentable, the patent applicant must disclose a utility for the compound. Since the earlier patent only identified a single utility for the claimed drug, the disclosure of that use was necessary for the patentability of the chemical compound. Thus, while it was incorrect for the panel to suggest that the disclosure of the method of use in the written description was relevant to the question of claim scope, it was clearly relevant to the question of patentability.

The Geneva panel stressed that since the earlier patent disclosed only a single utility of the compound, the claims of the second patent reciting nothing more than that disclosed utility as a method was not patentably distinct. In essence, the panel's decision can be rationalized as a policy of not allowing a second patent on a method of use if that method of use was critical to the patentability of the first patent claiming the molecule per se.

Five years later, the Federal Circuit again was faced with an allegation of double patenting involving a first patent claiming a drug active ingredient and a second patent claiming methods of using the drug active ingredient. In Pfizer v. Teva, the panel once again went beyond the language of the patent claims, and invalidated the second patent because the method of use claimed was disclosed in the written description section of the earlier patent.

Significantly, in Pfizer the first patent disclosed multiple uses of the composition, and the invalidated claims encompassed only some subset of those uses. Thus, the facts of Pfizer are distinguishable from those in Geneva, where the method of use claim was directed to the sole utility disclosed in the earlier patent, and thus presumably necessary takedown to the validity of the first patent. Thus the rationale to justify the Geneva decision, i.e., that the claimed method of use was critical to the patentability of the first patent, does not appear to exist in Pfizer. In effect, Pfizer expanded the rule set forth in Geneva, by holding that the disclosure of multiple uses of a molecule in the first patent renders unpatentable later claims directed towards any of those methods.
The Pfizer decision provides no policy justification for this expansion of the Geneva doctrine, and fails to even acknowledge the expansion. Nonetheless, one might justify it on policy grounds by pointing out that by disclosing multiple methods of use in the original patent application, the inventor was able to stake a claim of priority to these multiple uses by securing an early effective filing date. By choosing to avail itself to this earlier effective filing date, the patent applicant (arguably) should be limited to a single term for all of the patents issuing out of this single priority document.

We then come to the Sun v. Lilly decision, in which the panel further expands the holdings in Geneva and Pfizer by interpreting those decisions as creating a bright line rule that any use disclosed in a patent claiming a drug active ingredient precludes the owner of the patent from obtaining any second patent on one of the disclosed method of use, regardless of whether the claimed method of use was disclosed in the original patent application which provides the effective filing date for the first patent. Unlike the earlier cases, the method of use claimed in the second patent was not disclosed in the originally filed application to which the first patent claims priority.

Note that putative policy justifications for the Geneva and Pfizer decisions do not appear to be present in Sun. Unlike Geneva, the second patent does not claim a method of use that was critical to the patentability of the first patent. The first patent disclosed use of the compound as an antiviral agent, and the patent office issued patent claims directed towards use of the compound as an antiviral, raising a presumption that this is a valid practical utility which would confer patentability on the compound, regardless of the later disclosure of the anticancer activity. Furthermore, unlike the case in Pfizer, the later claimed method of use (anticancer) was not disclosed in the originally filed patent application that led to the first patent, so this first patent application was not available to Lilly to provide an effective priority date for the method of treating anticancer.

In fact, Lilly only ran afoul of obviousness type double patenting because it voluntarily chose to update and supplement the disclosure of the first filed patent application with the disclosure of anticancer activity. They could have avoided the problem by simply prosecuting the originally filed patent application to obtain patent claims covering the drug active ingredient, which it seems clear did not require disclosure of the additional material added by amendment to the CIP. If they wanted to expand the genus of chemical compounds, they could have filed the CIP as a divisional, thereby avoiding the need to add disclosure of the anticancer activity to the gemcitabine composition of matter patent.

In short, if Lilly had a crystal ball and could have foreseen the recent expansion of obviousness type patenting, it could have easily avoided obviousness type double patenting by simply altering its patent filing procedure. But this illustrates how the holding in Sun elevates form over substance.

The decision seems to conflict with 35 USC 103(c)

Congress amended the patent statute by introducing 35 USC 103(c), which basically shields companies from having the inventions of a company’s inventors rendered obvious by prior art created by other inventors at the same company. Congress’s intent was to encourage follow-on innovation and intra-company collaboration.

Originally, 103(c) only included 102(f) and 102(g) prior art, but it was subsequently amended to also include 102(e). In effect, Congress explicitly decided that commonly owned inventions should not be subject to invalidation for obviousness based on subject matter disclosed in a commonly assigned earlier filed patent application. Sun stands congressional intent on its head. By ignoring General Foods, it effectively allows the court to invalidate a patent based on a finding that it claims subject matter that is obvious in view of subject matter disclosed in the specification of an earlier filed commonly assigned patent application. But it goes even farther than that, for in Sun invalidity was based on subject matter added after the effective filing date, and thus not available as 102(e) prior art.

The biotech industry would benefit from en banc review of this issue

A number of issues raised by this and decision that would seem to warrant en banc review. There is clearly a tension between General Foods and Sun and its predecessors. While General Foods states that only the patent claims are to be compared, Geneva opened up the door to using the written description of the earlier patent to invalidate a later patent. In Pfizer and Sun, the door has opened wider and wider. The Federal Circuit should acknowledge this expansion of judge made law and consider whether it is justified by public policy considerations. If the court chooses to go down this route, it should delineate the boundaries of the expanded doctrine.

For one thing, it is unfair to patent owners to change the laws of patentability in a manner that invalidates a valuable patent for patent prosecution decisions made based on the case law at the time. In Festo, the Supreme Court stressed the importance of not altering the law in a way that undercuts the investment backed expectations of the inventive community.

Moving forward, some clarity on the issue would be very helpful. Today's inventors should understand the consequences of adding disclosure to a patent application, in order to rationally decide when to file a patent application, what to include in the disclosure, and when to invest in follow-on research.

For example, based on the Sun decision the wisest course for drug companies would be to file their original composition of matter patent application with a minimal disclosure of methods of using the compound sufficient to satisfy the utility requirement. There is an incentive to prioritize follow-on research on uses not disclosed in the original application, because presumably those uses will not be precluded from being patented separately. Companies might be less inclined to pursue research and development of methods of use disclosed in the earlier patent application, but perhaps that is a reason for the court to rethink the course it has embarked upon.

But who is to say for sure that the doctrine will not be expanded in subsequent decisions to cover methods of use that are not even disclosed in the earlier specification? It would certainly be consistent with the progressive expansion we have seen in going from Geneva to Pfizer to Sun. Uncertainty with respect to the availability of patent protection is a disincentive to future investment in innovation, and it would be nice if the en banc Federal Circuit would clarify the boundaries of the obviousness type double patenting doctrine sooner rather than later.

Intervet v. Merial Limited: Judge Dyk Offers His Views on Patent Eligibilty of Isolated DNA Sequences

A dissenting opinion by Judge Dyk in Intervet v. Merial Limited, decided by the Federal Circuit on August 4, contains interesting ruminations on the patent eligibility of patent claims broadly reciting an isolated, naturally occurring genetic sequence, indicating that at least this Federal Circuit judge is not at all convinced that isolation of a naturally occurring DNA sequence is sufficient to render it patent eligible. The patent eligibility of isolated naturally occurring DNA sequences is one of the key issues at stake in AMP v. USPTO, the ACLU/PubPat challenge to Myriad’s BRCA gene patents, discussed in earlier posts. In AMP, the district court agreed with the ACLU that a product of nature, such as a gene, can only be patent eligible if it has been transformed by human intervention to an extent that confers upon the product "markedly different characteristics from any found in nature,” and that the mere isolation of a gene does not result in the requisite qualitative difference in characteristics. Based on this determination, the court ruled that Myriad’s claims to isolated DNA corresponding in sequence to naturally occurring BRCA sequences were patent ineligible and thus invalid.

Significantly, the question of patent eligibility was not before the court in Intervet. The only issues on appeal to the Federal Circuit related to the district court's interpretation of the claim language and judgment of noninfringement. Judge Dyk, however, in his opinion concurring-in-part and dissenting-in-part with the majority, goes out of his way to point out that the validity of the claims was not before the court on appeal, and to make clear that the court’s decision to construe the claims should not be inferred as implying that the claims are patent eligible.

Judge Dyk acknowledges that the Federal Circuit has upheld the validity of gene patents on a number of occasions, but correctly points out that none of these cases directly address the question of whether the claims satisfy the patent eligibility requirements of section 101. Implicitly, he is suggesting that if the issue of patent eligibility had been raised with respect to gene patent, the Federal Circuit might have ruled that isolation of a naturally occurring DNA sequence does not render it patent eligible.

He goes on to note that "it appears that in order for a product of nature to satisfy section 101, it must be qualitatively different from the product occurring in nature, with "markedly different characteristics from any found in nature," based on his reading of relevant Supreme Court precedent such as Chakrabarty and Funk Brothers. He then concludes that

It is far from clear that an ‘isolated’ DNA sequence is qualitatively different from the product occurring in nature such that it would pass the test laid out in Funk Brothers and Chakrabarty. The mere fact that such a DNA molecule does not occur in isolated form in nature does not, by itself, answer the question. It would be difficult to argue, for instance, that one could patent the leaves of the plant merely because the leaves do not occur in nature in the isolated form.

Clearly the Judge's discussion of the patent eligibility of isolated DNA was prompted by the ACLU gene patent challenge. The validity of the claims at issue in Intervet was never addressed by the district court, and was not at issue in the appeal, let alone patent eligibility. The Federal Circuit has decided numerous cases involving isolated DNA sequences, and to my knowledge has never directly addressed the issue of patent eligibility for isolated, naturally occurring DNA sequences.

However, in 1991 a panel of the Federal Circuit did address the highly pertinent question of whether an isolated naturally occurring protein is patent eligible, and seemed to acquiesce. The case, Scripp’s Clinic v. Genentech, involved the alleged infringement of a Scripps patent claiming isolated Factor VIII:C protein. The defendant, Genentech, never challenged the patent eligibility of isolated naturally occurring protein, not surprising since this position would be entirely inconsistent with its own patenting of isolated proteins and DNA sequences. However, the district court decision included a footnote 6 explicitly concluding that a purified protein is patent eligible under section 101, citing Funk Brothers and In re Bergstrom:

There is no dispute over the patentability of a Factor VIII:C preparation. Although Factor VIII:C molecules occur in nature, a purified and concentrated preparation of Factor VIII:C as claimed in the patent constitutes a new form or combination not existing in nature, and hence is patentable under 35 U.S.C. § 101. See Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 68 S.Ct. 440, 92 L.Ed. 588 (1948); In re Bergstrom, 427 F.2d 1394, 1401 (C.C.P.A.1970).” Scripp’s Clinic v. Genentech, 666 F.Supp. 1379 (1987).

On appeal, the Federal Circuit in Scripp's did not affirmatively state that a purified protein is patent eligible, but merely noted that "judicial attention has on occasion focused on the patentability of claims in this context, see, e.g., In re Bergstrom, 427 F.2d 1394, 166 USPQ 256 (CCPA 1970)," and that Genentech had conceded that the claims were patent eligible. Scripp’s Clinic v. Genentech, 927 F.2d 1565, 1580-81 (Fed. Cir. 1991).

Significantly, the pre-Federal Circuit cases cited in support of the proposition that an isolated naturally occurring biomolecule is patent eligible do not specifically address the issue of patent eligibility under section 101, but are instead based on arguments based on alleged lack of novelty or obviousness, as discussed in a previous post.

In essence, the district court in Scripp’s inferred that because earlier decisions had upheld the patentability of claims to isolated biological molecules, they must be patent eligible. On appeal, the Federal Circuit in Scripp’s simply accepted the patent eligibility of the isolated protein, arguably implicitly accepting the patent eligibility of this sort of invention. I think Judge Dyk raise the issue in Intervet in order to go on record that the Federal Circuit addressed questions of claim construction and infringement should not be taken as tacit endorsement of patent eligibility for isolated biomolecules, an issue that the court will likely address head-on in the appeal of the ACLU lawsuit.

With so many gene patents, and patents claiming naturally occurring proteins and other biomolecules, and so much litigation involving these patents, why has the issue of patent eligibility never been directly addressed before? One explanation is that until the ACLU got involved, the parties to patent litigation have never had an interest in having these sorts of claims found to be patent eligible. Normally, the party arguing that a gene or protein patent claim is invalid is either a biotechnology company, like Genentech, or the patent office in cases like Bell or Deuel , where in a patent applicant is appealing the rejection of a gene patent claim. Biotechnology companies rely heavily on these patents themselves, and the patent office has concluded that isolated DNA and other molecules is patent eligible.

Gene chip company Affymetrix has argued in amicus briefs that isolated genes are patent ineligible, but they have never been sued for infringement of a gene patent, so have never had the opportunity to raise the issue as a party to litigation. The ACLU case is unique in that you have plaintiffs who do not own gene patents, but to the contrary would like to eliminate them.

The fact that Judge Dyk chose to express his thoughts in this manner is somewhat ironic in view of the recent controversy over statements made by Judge Rader at conferences relating to gene patents. The ACLU has moved to have Judge Rader recuse himself from sitting on a panel to decide the ACLU case, based on the ACLU’s assertion that Judge Rader's statements indicate that he believes that isolated DNA sequences appear to be patentable. (Discussed here, for example) Arguably, Judge Dyk has expressed the opposite view, albeit in the form of a formal opinion rather than as a conference speaker.

Judge Dyk speculates that "it is far from clear" that isolated DNA is qualitatively different from the corresponding DNA as it occurs in nature, i.e., having markedly different characteristics from naturally occurring DNA. However, I would point out that the biotechnology revolution has been based in large part on the ability to isolate and manipulate DNA. Biologic drugs such as recombinant human erythropoietin, for example, were only made possible because scientists succeeded in isolating the erythropoietin gene.

Biotechnology is fundamentally based on the ability to do amazing things with isolated genes that cannot be accomplished with the corresponding gene as it exists in the human body. In my view, even if the Federal Circuit decides that an isolated biomolecule is only patent eligible if it has markedly different characteristics from naturally occurring counterpart, isolated DNA sequences (along with isolated forms of proteins and other biomolecules) should clearly satisfy the test.

Monsanto v. Cefetra: EU Court of Justice Limits Scope of Patent Protection Available to Gene Sequences

A couple of years ago I posted an article (available here) discussing the case of Monsanto v. Cefetra. Essentially, in that case a European court held that Monsanto patents claiming the gene responsible for its Roundup Ready trait were not infringed by the importation of soy meal containing the gene, because the grinding of the soybeans to make the meal rendered the DNA incapable of expressing the encoded protein, and thus unprotectable pursuant to the 1998 European Union Directive on biotechnology.

On Tuesday, July 6, that decision was affirmed by the Court of Justice of the European Union. This is the highest judicial body of the European Union, so there will be no further appeals, and this would appear to be the final word on the subject. The decision was reported in an article posted on IPKat, a respected European IP blog, available here. I am no expert on European law, but here are a few thoughts on the significance of this case.

First, my interpretation of the decision.

In a nutshell, the Court of Justice held that although the so-called Biotech Directive, promulgated by the European Union in 1998, permits the patenting of naturally occurring DNA sequences, the scope of patent protection only extends to products incorporating the DNA if the DNA is capable of performing “the function for which it was patented." Applying this criterion to the facts of the case, the Court held that the patentable function of the gene at issue was to confer glyphosate (i.e., RoundUp) resistance upon a plant, and that since the soy meal is dead and thus incapable of expressing this function, the DNA residing in the soy meal is ineligible for patent protection.

The Court went on to hold that the Biotech Directive supersedes national law, and precludes individual European nations from enacting legislation that would permit patenting of DNA sequence per se. It also held that the prohibition against patenting DNA sequences per se applies retroactively to patents predating the EU’s adoption of Directive in 1998. In short, this unappealable ruling appears to be binding upon all 27 European Union Member States, and all DNA patents, no matter when they were issued.

The ruling could have a substantial impact on biotechnology. Obviously, it provides an opening for growers to circumvent gene patents used to protect genetically modified crops by growing the crops in a country where the gene is not patented, such as Argentina in this case, or in a jurisdiction with weak patent enforcement, and then importing the product into a European Union member wherein the patent is in force with impunity.

According to the logic of the decision, if viable seeds were imported, they would likely be found infringing because the DNA would still be capable of performing the function for which it was patented. But if the product has been processed, and as a result no longer viable, as exemplified by the soy meal at issue in this case, importation should not be found to constitute infringement.

The ruling could also have implications for the scope of protection afforded by gene patents for genetic diagnostic testing. Genetic diagnostic testing, such as by DNA sequencing, typically involves the isolation and/or amplification of the gene sequence being tested. This isolation and amplification might be characterized as the manufacture of the DNA, which could constitute infringement of a patent claiming the DNA sequence. For example, the ACLU challenge to Myriad’s BRCA gene patents is based in part on an assumption that the patent claims reciting isolated BRCA sequences would be infringed by unauthorized testing for mutations in the BRCA genes (which typically involves DNA sequencing).

However, this assumption is premised on the patents covering the isolated DNA sequences per se. But arguably, the isolated and amplified DNA fragments generated in the course of DNA sequencing and testing are not capable of performing their function, and thus after this week’s Court of Justice decision are ineligible for patent coverage in the European Union.

Of course, this would depend upon how one defines the "function of the patented gene. For example, one might argue that one important function of BRCA sequences claimed in Myriad’s patents is for diagnostic testing, and hence isolated DNA sequences generated in the course of genetic testing are performing a function for which they are patented

However, under a more restrictive view the function of the BRCA genetic sequences is to code for the BRCA protein product, i.e., the actual physiological function of the BRCA gene in the human body. Myriad’s patents specifically discuss use of the isolated BRCA gene for production of the BRCA protein in a recombinant cell, which could be a useful research tool in drug discovery. As discussed in earlier posts relating to the ACLU lawsuit, I point out that in practice BRCA testing does not involve the amplification of the full length BRCA coding sequence, but only amplicons representing fragments of the gene. These fragments would not be capable of achieving the function of expressing the full-length protein, and thus arguably lack the requisite functional potential.

I think reasonable minds could go either way on the issue, but given the current level of antipathy towards the use of gene patents to block genetic diagnostic testing, I can envision a European court adopting a restrictive interpretation of what it means for a genetic sequence to be capable of performing its patentable function, and decide that gene patent coverage does not extend to use of the genetic sequence in diagnostic testing.

In a related context, the Court’s decision could have implications for the effect of gene patents on whole genome sequencing. There is much buzz these days regarding the imminent arrival of personal whole genome sequencing, which will permit individuals to have their entire genome sequenced for a relatively small amount of money. Some have worried that a thicket of gene patents might impede the ability of firms to provide whole genome sequencing. However, DNA “manufactured” in the course of whole genome sequencing is unlikely to be found capable of performing the function of individual patented genetic sequences residing therein, in which case genome sequencing would not result in patent infringement liability in Europe.

I personally do not think gene patents will substantially impede whole genome sequencing, in the US or elsewhere. But if I am wrong, and patents on genes pose a substantial impediment to whole genome sequencing in the US, the patents could be circumvented by exporting the process to a place like Europe. The EU court decision could substantially reduce the likelihood that whole genome sequencing in Europe will result in liability for patent infringement.

On the other hand, the ruling should not affect the ability of biotechnology companies to use gene patents to protect their biologic drugs. In this context, the patented gene is performing its primary function of expressing the protein encoded by the gene, and thus satisfies the criterion established by Tuesday's decision of the Court of Justice.

The Impact of Bilski on Biotechnology

Prior to the Federal Circuit’s 2009 en banc decision in In re Bilski (Bilski I), the Supreme Court had established a test for patent eligibility that was quite straightforward in the abstract, albeit fraught with uncertainty as to how the test should be applied in practice. In a series of decisions, mostly dating from the 1970s and early 1980s, the Court established that essentially any man-made process or product is eligible for patent protection so long as the patent claims do not cover what the court characterized as a "fundamental principle." In these decisions, the Court identified a number of specific categories of patent ineligible fundamental principles, including principles of nature, natural phenomena, abstract ideas and mental processes.

As a practical matter, up until a few years ago patent eligibility was rarely an issue for those attempting to patent inventions relating to biotechnology. So long as there was some element of human intervention, such as isolation of a gene sequence or genetic engineering of a living organism, biotechnology inventions were generally assumed to be eligible for patent protection. Patenting of biotechnology flourished, notwithstanding the protests of many who argued that some inventions based on fundamental biological discoveries, particularly gene patents and patents broadly claiming the practical exploitation of fundamental biological discoveries (such as physiological correlations useful in the diagnosis and treatment of disease), or unsuited for patent protection and should be treated as patent ineligible.

In Bilski I, a majority of the judges on the Federal Circuit badly misinterpreted Supreme Court precedent and declared the so-called "machine or transformation" test to be the universal and exclusive criterion for determining the patent eligibility of all process claims, including by implication processes relating to biotechnology. In essence, Bilski I shifted the patent eligibility inquiry from whether a claimed biotechnology process covered a fundamental principle (i.e., a natural phenomenon) to whether the process entailed sufficient involvement of a machine or transformation

The machine or transformation test was subsequently used as the basis for invalidating a number of biotechnology process claims, including Myriad’s claims to methods of detecting mutations in BRCA genes. The PTO also began to employ the machine or transformation test to reject biotechnology claims, particularly those relating to diagnostics and personalized medicine. Some commentators, including myself, expressed concern that the machine or transformation test, as mandated by Bilski I, threatened to seriously undermine the ability of companies and researchers engaged in the discovery and commercialization of diagnostics and personalized medicine to obtain adequate patent protection for their inventions, although these concerns were to some extent allayed by the Federal Circuit’s restrained application of the test to a personalized medicine patent claim in Prometheus v. Mayo.

Fortunately, the Supreme Court agreed to hear an appeal of Bilski I, and last Monday the Court decided the case, formally titled Bilski v. Kappos (Bilski II), in a manner that effectively rejected the Federal Circuit's interpretation of the machine or transformation test. The Court held that while the involvement of a machine or transformation in a claimed process is often informative in assessing patent eligibility, it is not a general prerequisite for patent eligibility, and admonished the Federal Circuit that the test for patent eligibility remains whether or not the patent claims encompass a fundamental principle.

In essence, the Supreme Court has turned back the clock, negating Bilski I and the Federal Circuit's ill-conceived experiment with the machine or transformation test. Significantly, however, the Supreme Court provided little if any guidance with respect to what it means for a patent to claim a fundamental principle, and absolutely no guidance with respect to how to apply the test when the fundamental principle is a biological natural phenomenon, leaving it to the lower courts to sort out this important issue
I predict that the issue of patent eligibility for biotechnology inventions, both products and processes, will continue to be actively litigated well into the foreseeable future, as courts and the patent office struggle to figure out just what exactly it means for a patent claim to cover a biological natural phenomenon. In this article, I summarize important developments in the patent eligibility doctrine leading up to and including Bilski II, particularly as they relate to biotechnology, and discuss the issues relating to patent eligibility that will need to be addressed in a post-Bilski world.

Patent Eligibility Prior to LabCorp

There are four requirements of patentability which an invention must satisfy in order to be patentable : patent eligibility, practical utility, novelty and nonobviousness. The first, patent eligibility, has been characterized as the threshold criterion, used to exclude purported inventions that are useful and innovative, but nonetheless unsuited for and hence ineligible for patent protection.

Prior to the advent of modern biotechnology, some biological subject matter, particularly living organisms, were generally considered patent ineligible. This explains why Congress saw fit to enact legislation explicitly creating alternate forms of intellectual property protection for plants (plant patents and plant variety protection certificates). However, with the increasing commercial significance of biotechnology in the 1970s, the question of whether living organisms and other biotechnological inventions of were eligible for patent protection became of increasing importance, and in 1980 the Supreme Court answer to the question in the affirmative in its landmark Diamond v. Chakrabarty decision.

In Chakrabarty, the Supreme Court essentially held that any man-made product or process is patentable, so long as the patent does not purport to claim a "fundamental principle." In Chakrabarty and other Supreme Court decisions relating to the doctrine of patent eligibility, the Court has at various times identify specific categories of fundamental principles, including natural phenomena, physical phenomena, principles of nature, abstract ideas, and mental processes.

As a practical matter, after Chakrabarty patent eligibility was not a major issue for biotechnology. So long as there was some degree of human intervention, biotechnology inventions were generally deemed patent eligible by the patent office and the courts. While living organisms and other biological organisms could not be patented as they exist in nature, genetic engineering of an organism was deemed sufficient to render the non-naturally occurring modified organism patentable. Similarly, isolation of a naturally occurring DNA sequence was deemed sufficient human intervention to render the isolated molecule patentable.

It was not until the Supreme Court granted certiorari in LabCorp v. Metabolite in 2005 that patent eligibility once again took on significance in the context of biotechnology. The patent at issue in lab were was based upon the discovery of a natural correlation between the level of total homocysteine (a naturally occurring metabolite) in the human body and existence of a vitamin B deficiency. Based on this discovery, the patent broadly claimed any method of detecting a vitamin B deficiency that involves assaying a patient's blood for total homocysteine content and correlating elevated total homocysteine with such a deficiency. Although the issue of patent eligibility was never directly addressed in the lower courts, the Supreme Court agreed to hear the case specifically to address the question of whether or not the patent violated the prohibition against the patenting of fundamental principles, i.e., natural phenomena, principles of nature and abstract ideas.

Upon further consideration, however, the Supreme Court had second thoughts about taking the case, and dismissed the LabCorp appeal without deciding it. However, three of the Justices signed on to a dissenting opinion penned by Justice Breyer stating that they considered the claimed process patent ineligible for embodying the natural phenomenon of a correlation between total homocysteine and vitamin B deficiency. Although this dissenting opinion by three of the nine justices has absolutely no binding legal authority, it has proven highly significant because at least established the viability of asserting the doctrine of patent eligibility to challenge patents based on fundamental biological discoveries, particularly patents broadly encompassing the use of natural correlations in a diagnostic method, which had become increasingly common with the emergence of genetic diagnostic testing and personalized medicine.

Patent eligibility after LabCorp

No doubt encouraged by Justice Breyer's dissent, accused infringers began raising the defense of patent ineligibility in patent infringement litigation. Three of these cases, Ariad v. Lilly, Classen v. Biogen, and Prometheus v. Mayo, have been extensively discussed in previous articles on my blog. Significantly, in all three of these cases the case for patent ineligibility was based upon an argument that the challenged claims effectively preempted all practical uses of a biological natural phenomenon, essentially the same rationale propounded by the dissenting justices in LabCorp.

These patent ineligibility-based challenges met with mixed success at the district court level. In Ariad, the district court rejected the challenge, based on a rationale that frankly made absolutely no sense to me. In any event, the issue was rendered moot because the court ruled the claims invalid on the alternate grounds that the claims violated the written description requirement, decision that was ultimately affirmed by the en banc Federal Circuit.

However, in Classen and Prometheus the district court found for the accused infringers and held the asserted claims patent ineligible for broadly preempting the practical exploitation of biological natural phenomena. The patent owners both appealed their cases to the Federal Circuit, but before the Federal Circuit heard the cases issued its en banc decision in Bilski I, which effectively changed the test for patent eligibility, as discussed in the next section.

Patent eligibility in the time between Bilski I and Bilski II

In Bilski I, the Federal Circuit essentially ignored Supreme Court precedent establishing that the test for patent eligibility is based on an inquiry into whether the patent claims a fundamental principle, and announced that the test for patent eligibility of any process claim was whether or not the claimed process included sufficient involvement of a machine or transformation. Bilski I was flawed in a number of regards. For one thing, the holding that no process could be patent eligible without substantial involvement of a machine or transformation was entirely inconsistent with Supreme Court precedent. In attempting to justify its holding, the Bilski I majority pointed to Supreme Court precedent suggesting that a process involving a machine or transformation must be patent eligible, and concluded that this meant that a patent eligible process must include a machine or transformation, a fundamental error in logic that effectively transformed a safe harbor for patentees into an absolute prerequisite for patent eligibility.

As I explained in an earlier article, the machine or transformation test is fundamentally inappropriate for assessing patent eligibility of some processes, especially those involving biotechnology. In crafting the test, the court seemed focused on the perceived problem of so-called business method patents and the like, such as the specific patent claims issue in Bilski I, and erred by declaring the test applicable to all process claims, without adequately considering the implications.

Despite its flaws, Bilski I was an en banc decision of the Federal Circuit, and thus controlling law on the subject absent Supreme Court intervention. Even though Classen and Prometheus were both decided at the district court level prior to Bilski I, based on arguments that focused on alleged preemption of biological natural phenomena, by the time the appeals made it to the Federal Circuit the law had shifted, and as a consequence the parties had to change their arguments to focus upon the involvement (or lack thereof) of a machine or transformation in the claimed processes.

The Federal Circuit decided Classen first, and upheld the district court determination, concluding that the claim, which was originally held invalid or in compassing a natural phenomenon, was invalid for failing to satisfy the machine or transformation test. The decision was only a few sentences in length, and provided absolutely no explanation as to the basis for the court’s decision.

The Federal Circuit then issued a lengthy decision in Prometheus, this time reversing the district court and finding the challenged patent claims to be patent eligible. Specifically, the Federal Circuit found that the steps of administering a drug and determining the level of drug metabolites in a patient's body were both sufficiently transformative to satisfy the machine or transformation test.

The Bilski I machine or transformation test was also the basis relied upon by the district court in invalidating the method claims in the ACLU/Myriad gene patent case, as discussed in previous posts to this blog.

Bilksi II

In Bilski II, the Supreme Court identified the flawed logic in Bilski I, and rejected the Federal Circuit’s machine or transformation test, holding that while the presence of a machine or transformation in a process claim can be relevant in assessing the patent eligibility, there is no general requirement that a patent eligible process include a machine or transformation. The Court reiterated that the test for patent eligibility hinges upon whether or not the claim encompasses a fundamental principle, and held that because the claims at issue were directed towards an abstract idea, one of the fundamental principles expressly identified in earlier Supreme Court decisions, they were patent ineligible.

In essence, Bilski II has voided the Bilski I decision and turned back the clock to where we were prior to Bilski I. The patent eligibility of biotechnological inventions is still very much in play, and there will be much for the courts and patent office to sort out over the next years, but the focus will again be upon figuring out what it means for a patent claim to cover a fundamental principle, not whether it involves a machine or transformation.

The Supreme Court has vacated the Federal Circuit decisions in Classen and Prometheus, and sent those cases back to the Federal Circuit to decide based on Bilski II. Since Bilski II is essentially the law prior to Bilski I, this will require the Federal Circuit to consider the arguments that were actually made a district court level which focused upon preemption of biological natural phenomena, the correct test for patent eligibility. To a large extent, the Federal Circuit will be working on a blank slate. Although the Supreme Court has made clear that the determination of patent eligibility should be based on an inquiry into whether the patent claims encompass a biological natural phenomenon, the Court has provided very little specific guidance as to how this test is to be applied in practice.

An alleged failure to comply with the machine or transformation test was the basis for the invalidation of Myriad’s method claims in the ACLU gene patent challenge. These were the broadest and most relevant of the claims challenged in the case. In my view, Myriad’s product claims directed to polynucleotides are either highly susceptible to invalidation based on prior art (this applies to the fragment claims) or clearly not infringed by BRCA testing (the full-length coding sequence claims). I also think it is highly likely that the Federal Circuit will reverse the lower court’s ruling these product claims are patent ineligible.

However, I thought that the Federal Circuit would probably uphold the finding of patent ineligibility for some of Myriad’s method claims broadly claiming the detection of mutations in the BRCA genes. The processes recited in these claims did not seem to require the use of any machine or transformation, and the district court was probably correct in holding that the claims failed the machine or transformation test.

I think it is pretty apparent that if the district court had decided the case prior to Bilski I, or subsequent to Bilski II, it would have found the method claims patent ineligible for preempting natural phenomena. It just so happened that the district court decided the case during the brief tenure of the machine or transformation test, and thus through no fault of its own conduct the analysis based on the incorrect test. It remains to be seen how the claims will whether a patent ineligibility challenge based on the correct test as set forth in Bilski II.

Bilski II will also force the PTO to alter its examination practices. After Bilski I, the PTO began applying the machine or transformation test as a basis for rejecting patent claims, including claims relating to biotechnology methods, particularly with respect to inventions relating to diagnostics and personalized medicine. Since Bilski I was an en banc decision of the Federal Circuit, the PTO was required to implement it, but now that the Supreme Court has rejected Bilski I rejections based solely on the lack of a machine or transformation are improper. The PTO will need to either forgo rejections based upon a patent ineligibility, or if it chooses to continue on this route, to ground them in a finding of preemption of a fundamental principle, such as a biological natural phenomenon.

Patent eligibility post-Bilski II

I predict that patent eligibility will be a relevant issue for biotechnology in the foreseeable future. Now that the Supreme Court has squashed the red herring of the machine or transformation test, the focus is again upon whether a claim preempts a fundamental principle. For claims like those at issue in Bilski, including claims to so-called business methods, financial methods, and the like, the category of fundamental principle most implicated has been "abstract idea."

Biotechnology inventions do not implicate the claiming of abstract ideas, so much as the patenting of a natural phenomenon. Bilski II provided almost no guidance with respect to what it means for a patent claim an abstract idea, other than pointing out that methods of hedging risk are well known in the economics literature, and concluding that a claim directed to a method of hedging risk improperly encompasses an abstract idea. The Supreme Court has provided even less guidance with respect to what it means to claim a biological natural phenomenon.

Moving forward, the courts, and the PTO if it chooses to base rejections of biotechnology patent claims based on lack of patent eligibility, will need to grapple with two fundamental questions. First, what exactly is a biological natural phenomenon? And second, what does it mean for a patent to impermissibly claim a natural phenomenon?

The first question was addressed in Prometheus. The inventors had discovered that for certain drugs there was a relationship between the level of specific drug metabolites in a patient's body and the optimal dosage of the drug. The patent claimed a method that involved determining the level of the specific drug metabolites in a patient's body and using that information to adjust the dosage of the drug, thereby tailoring the dosage to the physiology of an individual patient, an example of a personalized medicine. The district court held that the relationship between the level of drug metabolites in a person's body and optimal dosage was a patent ineligible "natural phenomenon."

On appeal to the Federal Circuit, I filed an amicus brief arguing that the District Court had erred in this regard, and that the interaction of a man-made, non-naturally occurring molecule (such as a drug metabolite) with the human body is not a natural phenomenon. In my brief, I pointed out that characterizing the interaction of a non-naturally occurring molecule with the human body as a natural phenomenon simply because the interaction is governed by natural principles of chemistry and physiology is akin to characterizing the interaction of an airplane with the atmosphere as a natural phenomenon simply because the interaction of airplane with the air is governed by fundamental scientific principles. I also pointed out that if the interaction of a drug metabolite with the human body is treated as a natural phenomenon, then logically this implied that in general the interaction of drugs with the human body are natural phenomena, which would generally cast doubt upon the validity of many drug patents.

On appeal, the Federal Circuit avoided the issue by simply relying on the machine or transformation test, but now in the wake of Bilski II the Supreme Court has remanded the case to the Federal Circuit, and on remand I think the court needs to address head-on the question of whether or not the interaction of a drug metabolite with the human body is a natural phenomenon.

In contrast, in LabCorp the claim was based on a correlation between a naturally occurring metabolite (homocysteine) and a physiological condition (vitamin B deficiency). This looks much more like a natural phenomenon to me than the correlation between a non-naturally occurring drug metabolite and optimal drug dosage. All of the examples of natural phenomena that have been provided by the Supreme Court involve phenomena that are present absent any human intervention, such as the law of gravity or E=mC2. In Chakrabarty to Supreme Court made clear that for biological inventions human intervention is the key to determining patent eligibility. By drawing a line between biological phenomena that occurs absent human intervention and phenomena that occurs as a result of human intervention, one could have a principled basis for finding the LabCorp claim patent ineligible while upholding the eligibility of the Prometheus claims, and drug patents in general.

This approach could also be a way of dealing with gene patents. Myriad's method claims are directed towards identification of naturally occurring mutations in the BRCA gene. Like a correlation in LabCorp, the correlation between naturally occurring genetic mutation and susceptibility to cancer, or even simply the presence or absence of a national mutation, could plausibly be characterized as a natural phenomena, and therefore a claim preempting the phenomena would be patent ineligible. On the other hand, a patent claim directed towards a correlation between a genetic mutation and a person's optimal medical treatment might be fine because it is not implicate a natural phenomenon. For example, genetic testing is used to identify patients that will benefit from treatment with the cancer drug Herceptin. Since Herceptin is a non-naturally occurring drug, the correlation between genotype and response to Herceptin treatment should not be considered a natural phenomenon, and thus a patent claim directed towards this correlation would not be susceptible to the same sort of challenge that a patent claim directed more broadly simply to the mutation itself.

The benefit of this approach is that would allow some principled means for drawing a line between patent claims broadly encompassing the practical exploitation of a naturally occurring biological phenomenon, which a sizable number of people find objectionable, and patent claims directed towards drugs, personalized medicine, and specific diagnostic applications, which most would agree warrant patent protection. Many people do not like Myriad’s claims broadly directed towards identification of naturally occurring mutations in the BRCA genes, nor did they like claims of the type at issue in LabCorp, which broadly encompass the observation of naturally occurring biological correlations, but would not object to patent protection denied for more targeted protection of methods of treatment or diagnosis, or the combination of the two embodied in personalized medicine

Furthermore, the Supreme Court has failed to articulate what exactly it means to impermissibly patent such a natural phenomena. The admonition could be interpreted as a simple statement of the obvious, i.e., that it is impossible to patent a natural phenomena per se. It is well-established that only products or processes can be claimed in a patent, so inherently it would be impossible to patent a natural phenomenon per se. For example, it would be impossible to simply claim “gravity,” since gravity is neither a product or process. If the prohibition against patenting natural phenomena were interpreted this narrowly, the Supreme Court dictum regarding the patenting of natural phenomena would be entirely gratuitous, and provide absolutely no additional limitation on patenting beyond the statutory limitation of patent protection to products and processes.

However, with all the talk in Supreme Court decisions about the patent ineligibility of natural phenomena, we should assume that the Supreme Court envisions some actual limitation on the scope of patentable subject matter, implying that the prohibition must extend beyond the mere patenting of natural phenomena per se. Clearly Justice Breyer and the other dissenting justices in LabCorp saw its reach in much broader terms. The claim at issue in LabCorp was not directed towards the physiological correlation per se, but rather to a method that involves assaying the blood for total homocysteine level and using that information to diagnose the vitamin B deficiency, thus requiring substantial human and all. Nonetheless, the court concluded that this process amounted to an impermissible attempt to claim the natural phenomenon itself.

On the other hand, it cannot be the case that an invention is patent ineligible simply because it involves a practical application of a natural phenomenon. Indeed, it is difficult to imagine a technology that is not based to some extent on the practical exploitation of natural phenomena, a point made in my Prometheus amicus brief.

If there is indeed a prohibition against the patenting of natural phenomena, and the Supreme Court has repeatedly stated that there is, logically it must go further than simply barring the patent eligibility of natural phenomena per se, but it cannot go so far as to declare all inventions involving the use of a natural phenomena patent ineligible. The line must be drawn somewhere, and there is language from the Supreme Court suggesting that the line is crossed when a patent claim effectively preempts all practical uses of a natural phenomenon. It seems to me this is the most sensible place to draw the line, and this is the criterion that was applied by the district court in Prometheus.

In that case, the district court held that the process claims effectively encompass all practical uses of the natural phenomena at issue, i.e., the correlation between drug metabolite and optimal dosage. In the ACLU gene patent decision, the district court also concluded that the claims at issue effectively encompassed all practical uses of the claimed genes.

If this is correct, a determination of patent eligibility based on the patenting of a natural phenomenon will require two showings: first, a true natural phenomenon will need to be identified, and second, if a natural phenomenon is identified, that must be determination of whether the claim effectively preempts all practical uses of the phenomenon. The impact of the patent eligibility doctrine on biotechnology will depend in large part on how "preemption" is defined. For example, arguably the claim at issue in LabCorp covers any practical method of exploiting the discovery of a correlation between total homocysteine levels and vitamin B deficiency. A court might conclude that this claim is so broad it entirely preempts the practical use of the correlation, thereby preempting a natural phenomenon and thus rendering the claim patent ineligible. However, one could alternatively find that since the claim has no impact on the correlation as it exists and functions naturally in the human body, the phenomenon is not entirely preempted by the claim.

Similarly, some of the Myriad gene patent method claims broadly cover identification of mutations in the BRCA genes. One could consider this preemptive, to the extent it covers any diagnostic use of the information regarding the mutations. On the other hand, the claim does not cover the mutations as they exist in nature, nor the effect of changes in the BRCA sequence on human physiology, so arguably the claim does not preempt the natural phenomenon. Depending on how a court conducts its preemption analysis, patent in eligibility based on preemption of a natural phenomenon could have little impact on these patent claims, or if interpret more restrictively, could constitute a new in substantial obstacle to broad patent claims such as those at issue in Prometheus, Classen in the ACLU patent lawsuit.

Although the natural phenomenon category is probably the most relevant for biological inventions, mental processes has also been identified as a category of patent ineligible fundamental principle, and some biotechnology process patents might be challenged for claiming a thought process. For example, it has been argued that the LabCorp claim, the Prometheus claims, and the Myriad claims directed to methods of detecting mutations all could be infringed by a doctor simply recognizing and thinking about the claimed correlation. Some of the Myriad claims appear to be broadly directed at simply identifying or observing a mutation in a BRCA gene, which could be challenged as improperly covering the mental process of simply noting the existence of the mutation.

Biogen Launches Submarine Patent against Competing Providers of Interferon-Beta Products

Biogen sells AVONEX, an interferon-beta product used in the treatment of multiple sclerosis. On May 27, Biogen filed a patent infringement lawsuit against Pfizer, Serono, Bayer (formerly known as Berlex) and Novartis for the production and sale of the competing interferon-beta products REBIF, BETASERON and EXTAVIA

Biogen's patent, which issued in 2009 and is not due to expire until at least 2026, claims priority to a British patent application filed in 1980. This is a classic example of what many would refer to as a "submarine patent”: not only does the term of the patent extend nearly 50 years after the original filing date, but the patent application was not published prior to issuance of the patent in 2009, and thus the public had no notice that this potentially blockbuster patent was pending in the US patent office.

In this article, I briefly explore the history of the asserted patent, the history of patent litigation involving the marketing of interferon-beta as a protein therapeutic, and some potentially winning arguments the defendants could raise in their defense.

History of a Biotech Submarine Patent

A submarine patent is an informal term used to describe patents which issue without warning many years after the original filing date of the application. Wikipedia has a page devoted to submarine patents, which explains that they typically arise out of two unique aspects of US patent law: (1) a 17 year term that does not start running until the date the patent is issued (only for patents arising out of an application filed prior to June 8, 1995); and (2) the secret status of patent applications that have not been published.

Prior to November 29, 2000, US patent applications were not published unless and until the application resulted in an issued patent. Even today, an applicant for US patent can choose not to allow the PTO to publish its application so long as the applicant does not seek patent protection outside the US. Without publication, the public has no notice that the application is pending in the patent office, and thus no warning prior to the issuance of the resulting patent. Some have proposed amending US patent law to require publication of all patent applications 18 months after filing, but as of yet this is just a proposal.

Submarine patents are also fostered by relatively loose continuation rules in the US, which permit an applicant to keep a patent application pending virtually indefinitely, and to freely amend the claims to encompass previously unclaimed subject matter (so long as the later claimed subject matter is adequately disclosed in the application as filed). In a previous post, I discussed the relationship between continuation practice and late claiming, and my suspicion that restrictions on continuation practice proposed by the patent office a couple years ago were largely intended to address perceived abuses of continuation practice.

A few years ago, Mark Lemley (Stanford law professor) and Kimberly Moore (currently a judge on the Federal Circuit, but at the time a law professor) wrote a law review article complaining that some patent applicants, particularly pharmaceutical companies, were abusing continuation practice to extend patent protection beyond the statutory term, a practice they refer to as "evergreening." They would likely point to Biogen's patent as an example of what they consider to be abusive continuation practice.

Biogen’s patent, US patent number 7,588,755, arose out of a patent application filed by Walter Fiers in April of 1981 (and claiming priority to a British application filed in April of 1980), which disclosed, among other things, the DNA sequence for the gene encoding interferon-beta, methods of using the gene to produce recombinant interferon-beta protein, and use of the interferon beta protein as a biologic drug for the treatment of cancer and viral conditions. The core claims, directed to the gene itself, became involved in a three-way patent interference, which eventually went before the Federal Circuit and in 1993 resulted in Fiers v. Revel, a seminal biotech patent decision that proved instrumental in the creation of what is often referred to as the "Lilly written description requirement" (the subject of the recent Ariad v. Lilly decision).

In Fiers v. Revel, the Federal Circuit affirmed the board's decision in favor of Sugano, the Japanese party to the interference, and thus denying Fiers a patent on the gene itself. Sugano’s patent on claiming the gene (5,326,859) issued on July 5, 1994, and assuming no patent term extension should expire July 5, 2011, more than 30 years after the patent application was initially filed. In this case, the long pendency between filing date and patent issuance can largely be attributed to the time consumed by the interference proceeding. According to USPTO records, Sugano’s patent is assigned to the Japanese Foundation for Cancer Research, and has never been asserted in a lawsuit.

Although Fiers lost the battle, he did not necessarily lose the war. Denied patent coverage of the gene itself, he took advantage of continuation practice and on May 25, 1995, filed a divisional application claiming priority to the 1980 British patent application. Note that the application was filed just in time to still qualify for a 17 year from date of issuance term; if the application had been filed a few weeks later it would have been subject to a 20 year term from the date the original application was filed, and thus no patent could have issued having a term extending beyond 2001.

The patent ultimately issued on September 15, 2009, with claims essentially reciting methods of using recombinantly produced interferon-beta for “immunomodulation or treating a viral conditions, a viral disease, cancers or tumors." Because the divisional application was filed prior to June 8, 1995, it was granted a 17 year term starting on the date of issuance, resulting in a patent term (assuming no extensions) that will not expire until September 15, 2026, more than 46 years after the patent application was initially filed in Great Britain.

It bears emphasizing that this sort of long delay between filing date and patent expiration is only possible for patent applications filed prior to June 8, 1995. But this case illustrates that some of these applications are still pending, and in cases where the application has not been published there is no public notice of the potential landmine that might explode for companies like Bayer and Novartis at any time.

Note that in some ways the method of treatment patent obtained by Biogen is potentially more valuable than Sugano’s gene patent. The gene patent could be circumvented by producing the interferon-beta product outside of the US, and then importing it into the US. Use of the gene outside of the US, and importation of the protein product, would not infringe a patent limited to the gene itself. In contrast, Fiers method of treatment patent could be infringed by a company selling interferon-beta in the US, regardless of where it is produced.

Furthermore, because of the long delay between the interference and the issuance of Fiers’ method of treatment patent, the term of the patent extends 15 years beyond the term of Sugano’s gene patent. Assuming that the market for interferon-beta as a therapeutic has expanded over time, the 17 years covered by Fiers’ patent is more valuable than Sugano’s 17 year term.

As an aside, note also that Sugano’s gene patent is invalid according to the holding of a recent district court decision in the ACLU challenge to Myriad’s BRCA gene patents, although I feel fairly confident that that decision will not stand (as discussed here).

Previous interferon-beta patent litigation

This is not the first patent infringement lawsuit between these parties involving interferon-beta. On July 3, 1996, Biogen filed a declaratory judgment action against Bayer (at that time Berlex) seeking a declaration that Berlex patents claiming methods for the recombinant production of interferon in Chinese hamster ovary (CHO) cells were not infringed by Biogen's method of producing its interferon-beta product (AVONEX). A district court granted summary judgment in Biogen's favor, finding no infringement.

While the case was on appeal to the Federal Circuit, the parties entered a settlement agreement allowing Biogen to stay on the market, pursuant to which Biogen agreed to pay Berlex $20 million upfront and an additional $55 million if the Federal Circuit reversed the district court’s ruling granting summary judgment in Biogen’s favor (the litigation and settlement are discussed in my article on human gene patent litigation, available here). Ultimately, the Federal Circuit affirmed the lower court's decision that Biogen did not literally infringe Berlex’s patents, but remanded the case to the district court to determine whether there was infringement under the doctrine of equivalents (Biogen v. Berlex, 318 F.3d 1132 (Fed. Cir. 2003)). However, as a result of the settlement the district court never had to decide the issue of eivalent infringement.

Potential Weaknesses in Biogen’s Case

I can imagine a couple of potential avenues by which the defendants in this case might escape liability for infringement of Biogen’s patent. For one thing, the primary use of interferon-beta products is in the treatment of multiple sclerosis. But the only independent claim in the patent recites a "method for immunomodulation or treating a viral conditions, a viral disease, cancers or tumors comprising the step of administering to the patient in need of such treatment a therapeutically effective amount of a composition comprising [recombinantly expressed interferon-beta].” A court would likely only find this claim infringed by use of interferon-beta in the immunomodulation or treatment of "viral conditions, viral diseases, cancers or tumors."

Clearly, MS is not a tumor or cancer, and to my knowledge it has not been established that it is caused by a virus. For example, an article on the website WebMD entitled Multiple Sclerosis: What Causes It? States that “[d]octors still don't understand what causes MS, but there are interesting data that suggest that genetics, a person's environment, and possibly even a virus may play a role.” The patent owner bears the legal burden of proving infringement, and without some fairly persuasive evidence showing that MS is a viral disease, I think that Biogen might have difficulty proving infringement.

There is also the issue of prosecution latches. In Symbol Technologies v. Lemelson, the Federal Circuit affirmed a lower court's determination that certain patents were unenforceable for unreasonable delays in the prosecution of the patent. In that case, the lag between filing date and patent issuance for the patents in suit ranged from 18 to 39 years.

Earlier this year, in Cancer Research Technology v. Barr Laboratories, Inc., 679 F.Supp.2d 560 (D.Del.,2010), a district court cited Symbol Technologies in ruling that a drug patent was unenforceable based on nine years of delay in prosecution.

In this case, Biogen’s patent issued about 28 years after the initial 1981 US filing date. The patent interference was limited to claims directed towards the gene itself, not claims to the method of treatment which ultimately issued in the patent, so I don't think Biogen will be able to point to the interference as an excuse for the 28 year delay. In any event, I think it is likely Biogen will need to provide some justification for the long delay or risk having its patent ruled unenforceable.