Computer-Implemented Method for Guiding Therapeutic Treatment Ruled Patent Ineligible under Mayo v. Prometheus

On March 30 the United States District Court for the District of Columbia dismissed a lawsuit between Plaintiff SmartGene, Inc., a North Carolina corporation and Defendant Advanced Biological Laboratories, SA, a company with its principal place of business in Luxembourg, after declaring the patents in dispute (U.S. Patent No. 6,081,786 (the “786 patent”) and U.S. Patent No. 6,188,988 B1 (the “988 patent”)) patent ineligible under 35 USC 101. (Click here for decision)

The plaintiff SmartGene brought the suit as a declaratory judgment action, after ABL filed a lawsuit alleging that “Smartgene’s IDNS™ HIV program incorporates at least one technology which infringes at least claim 1 of each [of] the ‘786 and ‘988 Patents.”

The court's analysis focused on Claim 1 of the ‘786 patent as exemplary of the subject matter covered by the patent dispute:

1. A method for guiding the selection of a therapeutic treatment regimen for a patient with a known disease or medical condition, said method comprising:
(a) providing patient information to a computing device comprising:
a first knowledge base comprising a plurality of different therapeutic treatment regimens for said disease or medical condition;
a second knowledge base comprising a plurality of expert rules for evaluating and selecting a therapeutic treatment regimen for said disease or medical condition;
a third knowledge base comprising advisory information useful for the treatment of a patient with different constituents of said different therapeutic treatment regimens; and
(b) generating in said computing device a ranked listing of available therapeutic treatment regimens for said patient; and
(c) generating in said computing device advisory information for one or more therapeutic treatment regimens in said ranked listing based on said patient information and said expert rules.

The district court began by observing that a recent Federal Circuit decision, MySpace, Inc. v. Graphon Corp., had cast doubt upon the use of § 101 subject matter inquiry as a threshold question, and cautioned that lower courts should avoid the “swamp of verbiage that is § 101 by exercising their inherent power to control the processes of litigation, . . . and insist that litigants initially address patent invalidity issues in terms of the conditions of patentability defenses as the statute provides, specifically §§ 102, 103, and 112.” However, the district court concluded that the Supreme Court's recent decision in Mayo v. Prometheus had unambiguously rejected this approach, and firmly established “the § 101 subject matter patentability inquiry as the threshold inquiry for patent validity.
The court's analysis focused on comparing the claims at issue to “Supreme Court caselaw ‘guideposts’ on the subject of patent subject matter eligibility [Benson, Diehr, Flook, Bilski, Prometheus]; and then examining whether the patents-in-dispute [] satisfy the MOT test, and [] constitute eligible subject matter irrespective of the MOT test.”

The court analyzed the claim under the approach used by the Supreme Court in Prometheus, i.e., by determining that the individual steps recited in the claim method are "routine, well understood and conventional." The court concluded that the steps of the claim “describe abstract ideas that are commonly performed by medical professionals in evaluating, considering and constructing treatment options for a patient presenting a specific medical condition. As with the claim examined in Prometheus, these ‘steps consist of well understood, routine, conventional activity already engaged in by the scientific community; and those steps, when viewed as a whole, add nothing significant beyond the sum of their parts taken separately.’”

The machine or transformation test played a substantial role in the courts analysis. The court concluded that the claim failed the machine prong of the test because the “generic token reference of a ‘computing device’ in the claims [] does not identify any particular machine or provide any indication of what particular type of machine is to be used,” and because “the computing device referenced in the claims is incidental to the claimed invention and is not used for more than ‘insignificant postsolution activity’”.

Regarding the transformation prong of the test, the court held that “transformation must be central to the purpose of the claimed process” and the “mere manipulation or reorganization of data . . . does not satisfy the transformation prong.” The court concluded “that the defendants’ claims mirror the mental processes that a physician performs, and therefore embody the ‘basic tools of scientific and technological work’ that are free to all men and reserved exclusively to none.’”

Thanks to Docket Navigator for making me aware of this decision.

District Court Sees through Misleading Allegations in PubPat Lawsuit against Monsanto

In a recent post, I pointed out similarities between "fabrications" regarding conditions at factories in China manufacturing Apple products, and the misinformation being promulgated regarding gene patents and agricultural biotechnology. Some prime examples of this sort of misleading information are evident, I think, in the lawsuit filed last year by the Public Patent Foundation against Monsanto. In a post on the case, I pointed out that the plaintiffs in the case seemed to lack standing, and that there seemed to be no basis for PubPat’s allegation that Monsanto had sued involuntary/inadvertent infringers, or that there was any reasonable likelihood that the plaintiffs (organic farmers and the like) would be sued for infringing Monsanto patents on recombinant crops.


Fortunately, the district court saw through the exaggerated allegations raised by the Public Patent Foundation in the lawsuit against Monsanto, and dismissed the case last February. The court's decision specifically addresses some of these unfounded assertions.

For example, the complaint alleges that certain plaintiff farmers and seed distributors were afraid that their crops and seeds would be contaminated by recombinant Monsanto products. In rejecting this argument, the court pointed out that none of the plaintiffs claimed that contamination had actually occurred in any of the crops they had grown or seeds they have sold.

The complaint further alleged that organic farmers risked losing their organic certification if their fields became contaminated by recombinant product, but the court found “no evidence in the record that any farmer has ever been decertified as organic by the U.S. Department of Agriculture National Organic Program (the “NOP”) because of seed contamination.” In fact, according to the NOP, “[o]rganic certification is process based, and as a result, “[i]f all aspects of the organic production or handling process were followed correctly, the presence of a detectable residues from a genetically modified organism alone does not constitute a violation of this regulation.”

The complaint also alleged that the plaintiff farmers risk being sued for patent infringement based on inadvertent growth of crops with Monsanto's patented traits. However, the court found that Monsanto had never filed a patent infringement suit against a certified organic farm or handling operation over the presence of patented traits in its operations. In fact, during oral arguments Monsanto stated that they had never sued the party who did not “want to make use of the traits that are manifested in [defendants’] transgenic products.” The court noted that Monsanto had expressly declared that it is not their policy “to exercise [their] patent rights where trace amounts of our seed or traits are present in [a] farmer’s fields as a result of inadvertent means.” The court went on to find that although the complaint “alleges without specification that defendants have accused certain non-intentional users of Monsanto’s seed of patent infringement and threatened them with [litigation, no] plaintiffs claim to have been so threatened.”

The complaint alleged that the organic farmers feel threatened by the fact that between 1997 and 2010 Monsanto filed 144 patent infringement lawsuits against farmers. However, the court found that plaintiffs had overstated the magnitude of Monsanto's patent enforcement, since this "average of roughly 13 lawsuits per year is hardly significant when compared to the number of farms in the United States, approximately two million."

The plaintiffs alleged that Monsanto had filed patent infringement lawsuits against other farmers who did not want to grow patented crops, citing specific examples where this had allegedly occurred, but the court found that this assertion was:

“belied by the decisions in the suits against the referenced individuals. See Monsanto Co. v. Parr, 545 F. Supp. 2d 836, 842-44 (N.D. Ind. 2008) (defendant intentionally induced others to infringe Monsanto’s patents); Monsanto Co. v. Nelson, No. 4:00-CV-1636, 2001 U.S. Dist. LEXIS 25132, at *2 (E.D. Mo. Sept. 10, 2001) (Monsanto alleged that defendants had intentionally saved and replanted second generation seed with patented traits in violation of their licensing agreement); Monsanto Can. Inc. v. Schmeiser, 2001 FCT 256 [120] (Can.) (finding that the defendant saved and planted seed “he knew or ought to have known was Roundup tolerant”).”

I found it particularly gratifying that the court addressed the widely held misperception that Percy Schmeiser, a Canadian farmer who took Monsanto to the Canadian Supreme Court (and lost) and became somewhat of a folk hero in the process, was an innocent victim whose fields were contaminated by Monsanto product. If you actually read the decisions from the Canadian courts, it is very clear that the court was convinced that Schmeiser had actively selected for and cultivated Monsanto Roundup ready seeds on his property without authorization and without paying any licensing fee (see my previous post).

The court was particularly critical of the Public Patent Foundation’s characterization of an attempt by Monsanto to reassure organic farmers that they would not be sued for inadvertent infringement as an "implicit threat" by Monsanto. The Public Patent Foundation had written a letter to Monsanto basically asking for a blanket immunity for all the plaintiffs against ever being sued for patent infringement, even if they did intentionally engage in infringing activity. Monsanto responded with a statement of its policy, which it had previously published in other venues:

“It has never been, nor will it be[,] Monsanto policy to exercise its patent rights where trace amounts of our patented seeds or traits are present in [a] farmer’s fields as a result of inadvertent means.”

Amazingly, the Public Patent Foundation characterized Monsanto's statement as an implicit threat, and as such the basis for declaratory judgment action.

The court totally rejected this flawed logic, declaring it "objectively unreasonable for plaintiffs to read [the language of Monsanto statement] as a threat." The court also stated that,

"[i]ndeed, plaintiffs’ letter to defendants seems to have been nothing more than an attempt to create a controversy where none exists. This effort to convert a statement that defendants have no intention of bringing suit into grounds for maintaining a case, if accepted, would disincentivize patentees from ever attempting to provide comfort to those whom they do not intend to sue, behavior which should be countenanced and encouraged. In contrast, plaintiffs’ argument is baseless and their tactics not to be tolerated.”

It bears noting that critics of Myriad Genetics have repeatedly complained that Myriad should make an explicit statement that the company promises not to sue entities that infringe its BRCA patents in the context of research or non-commercial testing. But I've always maintained that Myriad is rightly concerned that such a statement could be used against them. Here we see a perfect example of this, with the Public Patent Foundation using Monsanto's attempt to reassure inadvertent infringers that they will not be sued as a weapon against Monsanto.

The district court in this case, fortunately, rejected the argument, and noted that public policy dictates that companies such as Monsanto should be encouraged to provide such reassurance, not punished, and that the Public Patent Foundation's tactic of using the statement against Monsanto is "not to be tolerated." But with all the advocacy groups out there gunning for Myriad, is it any wonder the company would be reluctant to open itself up to the negative unintended consequences of an explicit statement of immunity for some infringers?

Interesting Empirical Study Looks at Role of DNA Patents and Tech Transfer Licensing Policies in the Development of Diagnostic Tests

Before becoming an independent consultant, Lori Pressman was Assistant Director of the MIT Technology Licensing Office. She recently published an article in the Bloomberg BNA Life Sciences Law & Industry Report that provides interesting empirical insight into the role of "DNA patents" in the development of diagnostic tests, and a comparison of the licensing practices of the NIH and independent academic institutions with respect to these patents and technologies.

Ms. Pressman conclused that the results of her study suggest that "broad patent eligibility combined with field specific license exclusivity and diligence best serve innovation in diagnostics and personalized medicine."

Her article is described in a recent press release issued by the Association of University Technology Managers (AUTM), which includes a link to the article. An abstract of the article is provided below.


Abstract:

To investigate the effect of exclusivity in license agreements, licensing outcomes for patents with DNA sequences in their claims “DNA Patents” managed under the Bayh-Dole Act at academic institutions “AI’s”, and under the Stevenson-Wydler Technology Innovation Act and the Federal Technology Transfer Act of 1986 at the NIH OTT were studied; the former permits and favors more exclusivity than the latter. Timelines for i) patent filing, ii) patent publication, iii) license execution, and iv) receipt of a first earned royalty , for products which read on DNA Patents are generated and analyzed. The fraction of patents ever licensed and the duration of the licenses, are documented and compared. The data show that, relative to AI managed DNA Patents, fewer NIH OTT managed DNA Patents are ever commercially licensed, and that more NIH OTT licenses to DNA Patents end early and unexpectedly, before either patent expiration, or a predetermined end date. The data suggest that products associated with AI managed DNA Patents may get to market sooner than products associated with NIH OTT managed DNA Patents, -though the data sets are small and the null hypothesis can’t be ruled out. The data also suggest that at both the NIH OTT and at academic institutions, licenses with exclusivity are executed more consistently before a product sale, and thus are more consistent with incentive creation than nonexclusive licenses, which tend to be “just-in-time” licenses, executed at about the same time as a product sale.

Using a relational database which maps NIH OTT managed DNA Patents to licenses and from there to products, the sensitivity and specificity of i) the bioinformatic algorithm for identifying “DNA Patents” alone, and ii) the algorithm refined by expert curators, are tested for their ability to predict which patents will cover “genetic diagnostic tests”. The data show that the field of use in the license agreement is significantly more specific and sensitive a predictor than the patent claims. Timeline analysis applied to NIH products associated with DNA Patents suggests that diagnostics generally take longer to develop than reagents, but not as long as therapeutics.

The author concludes that these results considered in concert with i) the publication of the human genome in 2001, ii) increased emphasis on enablement and written description by the USPTO, and iii) the blurring distinction between therapeutics and diagnostics, suggest that broad patent eligibility combined with field specific license exclusivity and diligence best serve innovation in diagnostics and personalized medicine.

Judge Posner Questions Whether Owner of Patent on Heart-Healthy Cookies Would Be Entitled To Nontrivial Damages

Last year I reported that Brandeis University had joined its exclusive licensee GFA Brands in suing a number of cookie companies for infringing its patents directed towards methods of "Increasing the HDL Level in the HDL/LDL Ratio in Human Serum by Balancing Saturated and Polyunsaturated Dietary Fatty Acids." The case is being heard by Judge Richard Posner in the Northern District of Illinois. On March 16, Judge Posner issued an interesting order in the case, ordering the parties to brief the issue of whether plaintiffs, if successful, would be entitled to nontrivial damage awards. Here is the order:

“I am concerned whether the plaintiffs if successful in establishing liability will be entitled to nontrivial damages awards. Suppose the defendants infringed the asserted patents but that none of the defendants marketed its products as low in bad cholesterol (LDL) or high in HDL, or as having a high ratio of HDL to LDL; and suppose further that the defendants obtained no cost savings by infringing the patents rather than using some non‐infringing recipe and that neither Brandeis nor its licensee GFA Brands lost any business as a result of the infringement. On those assumptions, would the plaintiffs have any claim for damages, whether compensatory or punitive, or restitution? I would like the parties to address this question in briefs filed simultaneously by close of business on April 2.”

In other words, if the cookie manufacturers are not profiting from the healthy cookie recipe by using it to market their cookies, and the recipe does not cut their costs, then how has the patent owner been harmed, and what does Brandeis want the court to do? Perhaps the answer is that customers do pay a premium for healthier cookies, even if the cookie manufacturer does not use that information in marketing its products. And in any event, Brandeis/BFA would presumably like to get an injunction against the cookie manufacturers, as leverage to demand royalty payments, or to keep them off the market, thus reducing competition in the market for healthy cookies. But if the defendant cookie manufacturers do not profit from the technology, perhaps they will simply change their recipe, perhaps rendering their cookies less healthy but no less profitable.

Thanks to Docket Navigator for making me aware of this order.

Addendum to Yesterday's Post on NPR Retraction and the Attacks on Biotechnology

In yesterday's post, I stated that "the author [of "Who Owns You?" has] characterized himself as an intellectual property attorney." It's been years since I read the book, but I seem to clearly recall the author of the book holding himself out as an attorney with expertise in intellectual property. However, that author has contacted me and asked me to retract that statement, stating that he has never claimed to be an "intellectual property attorney." I don't have his book at hand, and perhaps I was mistaken in my recollection, if so I apologize.

I'd rather not delve into his book again, but a quick Google search will show that he claims to be an attorney, to have JD from a US law school, to have spent years researching in the area of intellectual property and technology, to lecture on the subject of intellectual property, and to have published more than one book with a focus on intellectual property. I will leave it to readers to judge for themselves whether these credentials might lead one to infer that he holds himself out as an attorney with some expertise in intellectual property.

NPR Retraction of Story on Apple Factories Provides Insight into the Mentality behind Attacks on Gene Patents and Agricultural Biotechnology

On March 16, the popular National Public Radio (NPR) program This American Life (TAL) was forced to retract statements made during an episode that aired in January alleging abuse of workers at Chinese factories manufacturing products for Apple. The explanation provided by “monologist” Mike Daisy, source of the "significant fabrications" reported on the TAL program, provide some insight I think into the mentality behind the flood of misinformation that has been promulgated with respect to gene patents and agricultural biotechnology, and which unfortunately has found its way into the courts and Congress.

TAL admits to having excerpted the fabricated story from "The Agony and The Ecstasy of Steve Jobs," a one-man show that Mike Daisey had been performing across the country, and which is currently in production at the Public Theater in New York. In a press release, TAL says it first learned Daisey had fabricated parts of his story when another public radio program, Marketplace, tracked down Daisey's interpreter, who disputed parts of Daisey's monologue. After being caught lying, Daisey apologized to NPR, explaining that:

“I’m not going to say that I didn't take a few shortcuts in my passion to be heard. [] My mistake, the mistake I truly regret, is that I had it on your show as journalism, and it's not journalism. It's theater.'"

Daisey's rationalization of his lies reminds me a lot of the response of an author after I reviewed his book entitled "Who Owns You? The Corporate Gold Rush to Patent Your Genes", and pointed out some of the numerous inaccuracies in the book regarding patent law in general, and gene patents in particular. In the book, the author characterized himself as an intellectual property attorney, but when he was unable to refute the many inaccuracies in his book that I pointed out in my review, he dismissed them, and asserted that it did not matter because he had approached the issue as a philosopher, rather than as a lawyer or scientist; very reminiscent of Daisey's explanation that his report on NPR was "theater," not journalism.

The problem is, these people target a lay audience largely unfamiliar with the subject matter they cover, and push forward their work as evidence allegedly supporting their position. It would be one thing if Daisey had explained to his NPR audience that he was merely engaged in theater, or if the author of "Who Owns You?" had explained that his book was nothing more than philosophical ponderings, with no grounding in fact. But that is not how they present their work, and unfortunately their works can play an important role in motivating others (including judges and members of Congress) to take action.

For example, according to NPR the TAL piece featuring Daisey made him "Apple's chief critic and it also inspired a Change.org petition that collected more than 250,000 signatures demanding that Apple better the working conditions at the factories.” Books like "Who Owns You?” have no doubt played a role in shaping the current widespread antipathy toward gene patents.

I also found it interesting that Daisey characterizes his fabrications about Apple factories as "shortcuts in [his] passion to be heard." I suspect that this sort of mentality might explain the bending of reality routinely engaged in by the opponents of gene patents and agricultural biotechnology. They are convinced that gene patents and genetically engineered crops endanger society, and that companies like Myriad Genetics and Monsanto are evil, and will seemingly say anything in their passion to be heard. Like Daisey, they do not appear to be bothered by specific facts, and are willing to take shortcuts around the truth in seeking to eliminate these evils from the world.

The disturbing thing is that there is so much incentive for people to propagate these myths. People like Daisey clearly love being in the spotlight, and the more sensational he can make his reports of condition Apple factories, the more people he will have listening. NPR reported that this episode of TAL had the largest audience that show had ever achieved, and that Daisey became the most prominent critic of Apple factories because of the coverage. Unfortunately, I think there are also incentives at play, particularly in academia and with respect to advocacy groups such as the ACLU and Public Patent Foundation, for making overblown and sensationalistic allegations on hot button issues such as gene patents and agricultural biotechnology.

Supreme Court Sends Myriad Back to the Federal Circuit

Today the Supreme Court granted certiorari in Association for Molecular Pathology v. Myriad Genetics, and sent the case back to the Federal Circuit to reconsider in light of Mayo v. Prometheus. The case has important implications not only for the patent eligibility of isolated DNA, but more generally for purified natural products and other inventions based on naturally occurring biological materials.

When the Federal Circuit originally decided Myriad, it held the method of genetic diagnostic claims to be patent ineligible, but the claims directed towards isolated DNA molecules patent eligible. The Supreme Court's decision in Mayo clearly would not change the outcome regarding the former - Myriad's diagnostic method claims lie further down the spectrum of patent ineligibility than the Prometheus claims, since they do not recite a step of physically analyzing a DNA molecule, but could potentially be infringed by merely comparing DNA sequence information (at least according to the Federal Circuit's interpretation of the claims). However, it could alter the result with respect to the isolated DNA claims, and presumably that is the issue which the Supreme Court wishes the Federal Circuit to revisit.

There is a sense of déjà vu. Recall that the Federal Circuit originally decided the Prometheus appeal prior to the Supreme Court's Bilski decision, and found the Prometheus personalized medicine claims patent eligible. Mayo petitioned for certiorari, and then the Supreme Court decided Bilski, granted Mayo's petition, vacating the Federal Circuit's earlier decision and directing the Federal Circuit decision to reconsider the patent eligibility of Prometheus’ claims in light of Bilski. The Federal Circuit responded by again upholding the patent eligibility of the Prometheus claims, relying to a large extent on the same rationale used in the original pre-Bilski decision, and arguably paying insufficient heed to the Supreme Court's pronouncement in Bilski. This prompted the Supreme Court to take up the Prometheus case, and unanimously reject the Federal Circuit's narrow interpretation of Bilski as the court had applied it to the Prometheus claims. Clearly the Supreme Court has a significantly narrower view of the scope of patent eligible subject matter than many of the judges on the Federal Circuit, and it will be interesting to see how this tension plays out in the Myriad case.

On remand, I can see the Federal Circuit going either way on the patent eligibility of Myriad's isolated DNA claims. I think the Mayo decision could plausibly read as rendering claims to isolated (naturally occurring) DNA patent ineligible, an outcome that would be consistent I think with the rationale and tenor of Mayo. After all, naturally occurring DNA sequences would seem to fall squarely into the category of natural phenomena, and under Mayo patent eligibility of the claims would depend on a determination of whether the "isolated" limitation is sufficient to can find the claim to a patent eligible "application" of the phenomenon.

In Mayo Justice Breyer concluded that the specific recitation of a step of determining the level of drug metabolite a patient sample was "well-understood, routine and conventional," and for that reason did not render the claim patent eligible. At the time Myriad filed its patent applications on isolated BRCA sequences, the isolation of naturally occurring DNA could be characterized as routine and conventional, and hence insufficient to impart patent eligibility on a claim to isolated DNA. I think that would likely be the outcome were the Supreme Court to decide the issue itself, and perhaps the Federal Circuit will feel obliged to come to that outcome, particularly after being implicitly chastened by the Mayo decision.

On the other hand, I think that many of the judges on the Federal Circuit, including the two in the Myriad majority (Lourie and Moore) believe that isolated DNA claims should be patent eligible, and there is I think sufficient ambiguity in Mayo to support that outcome (although I do not think that decision would be likely to withstand Supreme Court review, were the Court inclined to take up a third patent eligibility case). For one thing, Mayo only addressed method claims, and the Federal Circuit could read the decision as having limited applicability to product claims reciting compositions of matter. Significantly, Mayo did not overturn Diehr and Chakrabarty, so the Federal Circuit could cite to those cases as supporting patent eligibility of isolated DNA.

As I pointed out in my Mayo blog post last week, the Supreme Court left the door open for lower courts to declare a claim patent eligible if it includes some limitation that is, in the words of Justice Breyer, "[significant] in terms of patent laws objectives." Perhaps the Federal Circuit could point to this language, and affirm the patent eligibility of Myriad's isolated DNA claims based on a determination that the isolation of DNA significantly furthers the objectives of patent law (whatever those are).

If the Federal Circuit finds Myriad's isolated DNA claims patent ineligible, I'm not sure how significant that decision will be for biotechnology. I don't think it would be good, since it unfortunately sends a message to investors that the courts might come in at anytime and declare patent ineligible subject matter that for years has been treated as patentable, and invalidate a whole category of patents that have been deemed important in investment decisions (as discussed in an earlier post).

On the other hand, I don't think it would be devastating for biotechnology, or even diagnostics. I tend to think that claims to isolated forms of naturally occurring DNA molecules are becoming less and less relevant, and that method claims are in fact much more important for the protection of innovation in personalized medicine diagnostics. I think that product claims directed towards DNA constructs based on naturally occurring DNA molecules, but drafted more narrowly so as to be limited to particular embodiments, such as gene therapy vectors or recombinant expression vectors, should remain patentable.

On the other hand, the prospects appear to not be so bright for claims directed towards isolated natural products, such as proteins or other naturally occurring biomolecules. In the Federal Circuit's Myriad decision, Judge Lourie emphasized that the Federal Circuit was not declaring purified biomolecules patent eligible, and in fact he seemed to cast doubt on the patent eligibility in general of purified biomolecules. He took pains to explain that isolated DNA is different, because it involves the breaking of covalent bonds, resulting in a different chemical structure for isolated DNA relative to its naturally occurring counterpart. I suspect he did this in order to frame the decision as a narrow one, and thus hopefully avoid Supreme Court review of the decision.

In general, Mayo has raised some question as to the degree of human intervention that will be required to transform naturally occurring biological material from a patent ineligible natural phenomenon into a patent eligible application of that phenomenon.