Tag Archives: invalidity

Fed Circuit Reverses Finding of Indefiniteness of “Visually Negligible” Term

by: Robert Wagner, intellectual property attorney at the Pittsburgh law firm of Picadio Sneath Miller & Norton, P.C. ()

Inventors often use generalized language in patent claims when they are dealing with concepts that are not easy to quantify. This generalized language can create issues in litigation, when a defendant argues that the claims are so imprecise as to be indefinite. The Federal Circuit recently addressed such an issue in Sonic Technologies Co., Ltd. v. Publications International, Ltd. (Case No. 2016-1449). In that decision, the Court, in a unanimous opinion written by Judge Lourie, held that the trial court erred when it concluded that the term “visually negligible” rendered the claim indefinite.

Background

Sonic Technologies owned a patent that described a system and method for using a “graphical indicator” to encode information on the surface of an object that could be read by an “optical device.” Sonic recognized that such a general concept was not new–for example bar code readers have been in existence for decades–but the novel twist was that the “graphical indicator” was essentially imperceptible to the naked eye. The claims required that the “graphical indicator” be “visually negligible.”

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Defendants argued that the term “visually negligible” was too subjective and did not provide reasonable guidance on its meaning. Sonix argued that the term was sufficiently definite in light of the specification, which discussed how the “graphical indicator” did not interfere with an observer’s view of item, in contrast with a bar code, which obscures the content below it.

The trial court agreed with defendants and found that the term “visually negligible” was indefinite and the claims were invalid. Sonic appealed to the Federal Circuit, which reversed, finding that the term was sufficiently definite.

indefiniteness standard

Under 35 U.S.C. § 112, ¶ 2, the claims of a patent must particularly point out and distinctly claim the subject matter of the invention. Supreme Court precedent requires that “a patent’s claims, viewed in light of the specification and prosecution history, inform those skilled in the art about the scope of the invention with reasonable certainty.” (citing Nautilus v. Biosig Instruments, Inc., 134 S.Ct. 2120 (2014)) Because, absolute precision is not required to meet this standard, courts frequently have allowed more generalized language, especially where the specification provides guidance in interpreting the language.

The Federal Circuit looked at the prior cases and concluded that “visually negligible” was not so uncertain as to render the claims indefinite. It contrasted other cases that dealt with terms that were purely subjective, such as “aesthetically pleasing,” with this one. The specification indicated that an indicator was “visually negligible” when it could not readily be seen by the naked eye and provided examples of such indicators. This specificity was sufficient in the Federal Circuit eyes. Moreover, the Court looked to the extension prosecution history (with multiple reexaminations), which indicated that the Patent Office was able to determine the meaning and scope of the term without issue.

The Court ultimately concluded:

Our holding in this case does not mean that the existence of examples in the written description will always render a claim definite, or that listing requirements always provide sufficient certainty. Neither does the fact that an expert has applied a contested claim term without difficulty render a claim immune from an indefiniteness challenge. As always, whether a claim is indefinite must be judged “in light of the specification and prosecution history” of the patent in which it appears. . . . We simply hold that “visually negligible” is not a purely subjective term and that, on this record, the written description and prosecution history provide sufficient support to inform with reasonable certainty those skilled in the art of the scope of the invention. The examiner’s knowing allowance of claims based on the term that is now questioned, plus the acceptance of the term by both parties’ experts, force us to the conclusion that the term “visually negligible” is not indefinite. Accordingly, we reverse the district court’s conclusion that the asserted claims are invalid as indefinite.

No Good Faith Invalidity Defense to Induced Infringement, Supreme Court Holds

by: Robert Wagner, intellectual property attorney at the Pittsburgh law firm of Picadio Sneath Miller & Norton, P.C. ()

SupremeCourtImage_1The Supreme Court issued another patent law opinion today; this time focusing on whether a good-faith belief that a patent is invalid can be a defense to a claim of induced infringement. In Commil USA, LLC v. Cisco Systems, Inc. (No. 13-896), the Court concluded in a 6-2 decision that the answer is no, reversing the Federal Circuit. Justice Kennedy delivered the opinion for the Court, and Justices Scalia and Roberts dissented. (Justice Breyer took no part in the decision.)

Background

Commil holds a patent relating to short-range wireless networks (Patent No. 6,430,395). It sued Cisco under direct and in6430395 Imageduced infringement theories, contending that Cisco directly infringed by making and using network equipment and induced others to infringe by selling them the network equipment that they used in an infringing manner. Eventually, after significant motion practice, a reexamination at the Patent Office, and multiple trials, Commil prevail on both theories. The Federal Circuit reversed on two grounds. First, it found an error in the jury instructions regarding induced infringement that would have allowed a finding in Commil’s favor based on negligence, instead of actual knowledge. And, second, it found that the district court improperly barred Cisco from arguing as a defense that it had a good-faith belief that the patent was invalid.

The first point was not at issue before the Supreme Court. Only the second issue, whether a good-faith (but ultimately incorrect) belief that a patent is invalid is a defense to a claim of induced infringement. The Supreme Court found that it is not a defense.

Holding

The Court first looked at the induced infringement statute, 35 U.S.C. § 271(b), which provides that “[w]hoever actively induces infringement of a patent
shall be liable as an infringer.” Citing its previous decision in Global-Tech Appliances, Inc. v. SEB S. A., 563 U. S. ___ (2011), the Court stated that to be liable for induced infringement, a patentee must show that the defendant knew both of the patent and that the induced acts constituted infringement of the patent.

Before considering the good-faith defense, the Court took time to specifically reject Commil and the government’s position that induced infringement only requires knowledge of the patent. Under Global-Tech, induced infringement requires both the knowledge of the patent and the knowledge that the induced acts infringe the patent. Therefore, a good-faith belief that there was not infringement can be a defense to induced infringement.

Having dispensed with that argument, the Court next turned to the heart of the matter–whether a good-faith belief that the patent is invalid can be a defense. The Court started with the language of the statute, which only is concerned with infringement, and it noted that patent infringement and invalidity are separate issues. It further considered the effect that allowing such a defense might have on patent owners. Under the Patent Act, all issued patents are presumed valid and to allow such a defense would undermine that presumption and its effect. The Court noted that an invalidity defense is not a defense to infringement; it is a defense to liability (although it did note the truism that an invalid patent cannot be infringed). Finally, the Court was concerned that allowing such a defense would only increase the burdens of litigation.

Taken together, it concluded that knowledge or intent regarding invalidity was not relevant to whether someone induced another to infringe.

Dissent

Justice Scalia, joined by Chief Justice Roberts, dissented. First, they agreed with the majority’s opinion relating to the Global-Tech decision and that induced infringement requires proof that the defendant knew of the patent and knew that the induced acts infringed the patent. They disagreed over the central issue in the case and would have found that a good-faith belief that the patent was invalid is a defense to a claim of induced infringement.

The dissent rejected the majority’s analysis based primarily on the truism that only valid patents can be infringed. If a defendant has a good-faith belief that the patent is invalid, then it would have a good-faith belief that the acts were not causing infringement of a valid patent.

Ripple Effect from Alice and Mayo Cases Being Felt in Patent World

shutterstock_26396608By: Henry Sneath, Chair of the Intellectual Property practice at Picadio Sneath Miller & Norton, P.C. in Pittsburgh, Pa.  hsneath@psmn.com or 412-288-4013

Sharing a great post from Dennis Crouch and his tremendous blog: Patently-O

New Section 101 Decisions: Patents Invalid

The Supreme Court’s decisions from Alice and Mayo are beginning to really have their impact. A few examples:

  • Walker Digital v. Google (D. Del. September 2014) (data processing patent invalid under 101 as an abstract idea) (Judge Stark).
  • Genetic Tech v. LabCorp and 23AndMe (D. Del. September 2014) (method of predicting human performance based upon genetic testing invalid under 101 as a law of nature) (report and recommendation from Magistrate Judge to Judge Stark)
  • Ex parte Cote (P.T.A.B. August 2014) (computer method and hardware for ‘phase shifting’ design data invalid under 101)
  • Ex parte Jung (P.T.A.B. August 2014) (diagnostic method associated with epigenetic risk factors invalid under 101).” Patently-O.

To view the entire post – please visit Patently-O at this link: http://tinyurl.com/otj6v6n

End of Experimental Use Exception? Hamilton Beach v. Sunbeam

by: Robert Wagner, intellectual property attorney at Picadio Sneath Miller & Norton, P.C. ()

Hamilton BeachThe Federal Circuit issued an interesting decision today in Hamilton Beach Brands, Inc. v. Sunbeam Products, Inc. (No. 2012-1581). The opinion, written by Judge O’Malley and joined by Judge Bryson, invalidated a patent based on the patentee’s contractual agreement with its own supplier to purchase a product that utilized the patented invention more than one year before the date of the patent application.  The dissent, written by Judge Reyna, argued that this decision is inconsistent with the requirement that an offer for sale must by a commercial offer and that it will eviscerate the experimental-use exception.

Background

The patentee, Hamilton Beach, developed an improved slow cooker with clips to hold the lid of the cooker to the body of the cooker. Hamilton Beach’s original design had the clips mounted to the body. Sunbeam designed a competing version of the product with clips mounted to the lid. In response, Hamilton Beach filed a continuation patent application that specifically incorporated Sunbeam’s new design. This application eventually matured into the patent involved in the lawsuit.

In defense, Sunbeam argued that it did not infringe and that the patent was invalid as anticipated because Hamilton Beach introduced new matter into its continuation application and therefore could not take advantage of the earlier filing date. Sunbeam also argued that the patent was invalid due to an offer for sale more than one year before the earliest priority date.

More than one year before the original patent application was filed, Hamilton Beach issued a purchase order to one of its foreign suppliers, asking it to manufacture nearly 2,000 slow cookers based on Hamilton Beach’s specifications and designs. The supplier agreed to fulfill the order once it obtained a release from Hamilton Beach. The supplier’s confirmation occurred more than one year before Hamilton Beach filed its patent application. Hamilton Beach issued the release to its supplier within the one-year period before it filed its application, though.

The District Court ultimately agreed with Sunbeam on all three grounds, finding that Sunbeam did not infringe and that the patent was invalid.

The Federal Circuit’s Decision

A patent can be invalidated under 35 U.S.C. § 102(b)’s on sale bar provision “when two conditions are satisfied before the critical date: (1) the claimed invention must be the subject of a commercial offer for sale; and (2) the invention must be ready for patenting.” There is an exception to the on sale bar where the use is experimental in nature, which negates the commercial requirement of § 102(b).

The Federal Circuit only addressed Sunbeam’s on-sale bar argument, finding that the offer from Hamilton Beach’s supplier to manufacturer the slow cooker once it received the release was an offer for sale under § 102(b). Because this offer occurred more than one year before Hamilton Beach filed its patent application and Hamilton Beach clearly had specifications and drawings of its invention, the patent was invalid as anticipated.

It reaching its decision, the Court noted that there need not be a binding contract for purposes of § 102(b)—only an offer is required. Moreover, the Court found that there is no “supplier exception” to the on-sale bar.

The key dispute between the majority and dissent was whether Hamilton Beach’s purchase order should have been analyzed under the experimental use exception.

The majority stated that it was expressly not considering the experimental use exception because (1) Hamilton Beach never raised this argument and (2) the order of almost 2,000 slow cookers strongly suggested that the use was not experimental. The majority went out of its way to specifically state that this opinion has no bearing on that exception:

“Experimental use” is simply not at issue. There is, thus, no threat that this decision will have any impact on that defense; it certainly will not “eviscerate” that defense as the dissent fears.

The dissent disagreed, finding that Hamilton Beach had raised this issue and that there was sufficient evidence to suggest that the 2,000 units were being ordered in order to work out a defect in the design. The dissent further expressed concern that this ruling would “eviscerate” the experimental use exception and create havoc for companies that have third parties manufacture their goods.

Conclusion

It is somewhat difficult to predict how this case will be used in the future, but there are certainly some points to take away from it. First, companies need to be aware that contractual negotiations and offers with their own suppliers potentially can be used against them to invalidate their patents. This highlights the need to file provisional applications and keep track of the relevant dates so as not run into this issue. Second, where a use is experimental in nature, it is helpful to document its experimental nature for use later in litigation. Third, the majority fairly clearly states that this decision does not destroy or even implicate the experimental use exception, so that exception should still be available if properly raised at the trial court. Finally, this case highlights the importance of preserving this argument explicitly and clearly.

Method to Estimate Risk of Fetal Down’s Syndrome Not Patent-Eligible Subject Matter

By: Joe Carnicella, intellectual property attorney at Picadio Sneath Miller & Norton, P.C.

On November 20, 2012, the Federal Circuit held that a method to assess the risk of fetal Down’s syndrome is not patent-eligible subject matter pursuant to 35 U.S.C. 101.  In PerkinElmer Inc. v. Intema Ltd., a unanimous panel considered the issue of patentability under section 101 and concluded that Intema’s screening patent, U.S. Patent No. 6,573,103 (“the ‘103 patent”), was not drawn to patent-eligible subject matter.

According to 35 U.S. C. 101, “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor . . . .”  The U.S. Supreme Court has held that section 101, while broad in nature, is subject to certain limitations, and laws of nature, natural phenomena, and abstract ideas are not patentable.  Mayo Collaborative Servs. v. Prometheus Labs, Inc., 132 S. Ct. 1289, 1293 (2012).  For example, mental processes and products of nature are not patent-eligible subject matter.  For a process claim to cover a patentable application of, for example, a natural law, it must contain other elements or a combination of elements sufficient to ensure that the patent in practice amounts to significantly more than a ptent upon the natural law itself.

The ‘103 patent disclosed specific screening methods, which used markers from both the first and second trimesters of pregnancy, to estimate the risk of fetal Down’s syndrome.  The Federal Circuit relied on two decisions to support its ruling that such methods do not cover patent-eligible subject matter.  In Mayo Collaborative Services, the U.S. Supreme Court held that two patents on a diagnostic test used to treat autoimmune diseases were invalid because patents based on the use of a natural law must also contain an inventive concept.  In Association for Molecular Pathology v. Myriad Genetics Inc., the Federal Circuit held that isolated human genes are patent-eligible but method claims for comparing or analyzing DNA sequences are not patent-eligible because the process claims were drawn to abstract mental processes.  With respect to PerkinElmer, the Federal Circuit noted that the ‘103 patent did not require any action besides comparing data with known statistical information.  Also, the court concluded that the relationship between screening marker levels and the risk of fetal Down’s syndrome related to a law of nature claim.  According to the Federal Circuit, because the asserted claims recite an ineligible mental step and natural law, and no aspect of the method converts these ineligible concepts into patent applications of those concepts, the claims cannot stand.

Full Scope Enablement — Magsil Corp. v. Hitachi Global Storage Techs., Inc.

by: Robert Wagner, intellectual property attorney at Picadio Sneath Miller & Norton, P.C. ()

An often-overlooked aspect of patent drafting is the requirement under 35 U.S.C. § 112, ¶ 1 that the entire scope of the claims must be enabled by the disclosures in the specification. As can be seen from the Federal Circuit’s recent decision in Magsil Corp. v. Hitachi Global Storage Technologies, Inc., Case No. 2011-1221, the failure to fully enable a claim can have grave consequences.

The case involved read-write sensors for computer hard disk drive storage systems. The inventors claimed a method of manufacturing a tri-layer junction and the junction itself. Information is stored by varying the magnetization of an electrode on the hard disk. In one orientation, the resistance is higher than the other, which can be measured to determine whether the electrode is in a “0” or “1” state. At issue was the phrase “causes a change in the resistance by at least 10% at room temperature.” Past inventions were unable to achieve this large of a change, peaking at only 2.7%.

The problem for the patentee was the open-ended language of “at least 10%,” which the Court noted could include changes from 10% to infinity. The specification only described how to achieve changes between 10.0–11.8%, and was silent on how to achieve changes larger than that. The district court granted summary judgment for the defendant, finding that the claims were not enabled and therefore invalid, and the Federal Circuit affirmed.

The Federal Circuit reviewed the history of the full scope enablement requirement, which serves two purposes—(1) to ensure that the patentee adequately discloses the claimed invention and (2) to prevent claims that are broader than what is disclosed. The Court noted that “a patentee chooses broad claim language at the peril of losing any claim that cannot be enabled across its full scope of coverage.” Therefore, in order to meet the enablement requirement, “[t]he specification must contain sufficient disclosure to enable an ordinary skilled artisan to make and use the entire scope of the claimed invention at the time of filing” without undue experimentation.

In this case, the Court found that the claim was invalid because the specification did not enable the full scope of the claims. There was nothing in the specification that described how to achieve changes of the magnitude encompassed by the open-ended claim. In fact, the inventor testified that even he did not know how to create changes greater than 20%. Because “[t]he ‘922 patent specification only enables an ordinarily skilled artisan to achieve a small subset of the claimed range,” the Federal Circuit affirmed the district court’s summary judgment of invalidity.

This case provides an important practice pointer when drafting claims. While one is generally interested in drafting broad claims, it is important that the specification fully supports the range of the claims; otherwise, the entire claim might be invalid. This further suggests that drafters consider using dependent claims to narrow ranges or using so-called “picture” claims, which are more tightly focused on any embodiments known to the inventors at the time of the application.

Federal Circuit Confirms That Abstract Mental Processes Are Not Patentable — CyberSource Corp. v. Retail Decisions, Inc.

by: Robert Wagner, intellectual property attorney at Picadio Sneath Miller & Norton, P.C.

What constitutes patentable subject matter under 35 U.S.C. § 101 has been a topic of keen interest, especially since the Supreme Court issued its decision in Bilski v. Kappos, 130 S. Ct. 3218 (2010) that rejected the Federal Circuit’s machine-or-transformation test. On Tuesday, the Federal Circuit further clarified what can be patented, affirming a rejection under § 101 of a claim for detecting fraud in credit card transactions over the internet. Written by Judge Dyk, the unanimous decision in CyberSource Corp. v. Retail Decisions, Inc. (Case No. 2009-1358) found that claims involving mental processes that can performed by the human mind are not patent eligible.

The Underlying Claims

Two claims were at issue in CyberSource. They both involved a method for detecting fraud in credit card transactions over the internet by looking at the customer’s IP address. The claims were very broad with no specific algorithms for identifying fraud claimed.

The first was a method claim with no linkage to any physical structures:

3. A method for verifying the validity of a credit card transaction over the Internet comprising the steps of:

obtaining information about other transactions that have utilized an Internet address that is identified with the [ ] credit card transaction;

constructing a map of credit card numbers based upon the other transactions and;

utilizing the map of credit card numbers to determine if the credit card transaction is valid.

The second was a “Beauregard claim,” which is a claim to a computer readable medium containing programing instructions regarding a particular process:

2. A computer readable medium containing program instructionsfor detecting fraud in a credit card transaction between a consumer and a merchant over the Internet, wherein execution of the program instructions by one or more processors of a computer system causes the one or more processors to carry out the steps of:

obtaining credit card information relating to the transactions from the consumer; and

verifying the credit card information based upon values of plurality of parameters, in combination with information that identifies the consumer, and that may provide an indication whether the credit card transaction is fraudulent,

wherein each value among the plurality of parameters is weighted in the verifying step according to an importance, as determined by the merchant, of that value to the credit card transaction, so as to provide the merchant with a quantifiable indication of whether the credit card transaction is fraudulent,

wherein execution of the program instructions by one or more processors of a computer system causes that one or more processors to carry out the further steps of;

[a] obtaining information about other transactions that have utilized an Internet address that is identified with the credit card transaction;

[b] constructing a map of credit card numbers based upon the other transactions; and

[c] utilizing the map of credit card numbers to determine if the credit card transaction is valid.

Claim 3 Is an Unpatentable Abstract Mental Process

The Federal Circuit found that the method of claim 3 was nothing more than an abstract mental process. While the Supreme Court in Bilski rejected the machine-or-transformation test as the sole test of patentability under § 101, the Federal Circuit began its analysis there. It found that the claim recited no machines and did not perform any transformations. Following Bilski, it considered whether the claim was nonetheless patent eligible. It concluded that it was not because the claim recites a mental process, which is unpatentable under the Supreme Court’s decision in Gottschalk v. Benson, 409 U.S. 63, 67 (1972). Here, all of the steps of claim 3 could be performed by the human mind using a pen and paper. The Court suggested that if claim 3 had recited a more complex algorithm that could not have been performed easily using pen and paper, the result may have been different.

Thus, claim 3’s steps can all be performed in the human mind. Such a method that can be performed by human thought alone is merely an abstract idea and is not patent-eligible under § 101. Methods which can be performed entirely in the human mind are unpatentable not because there is anything wrong with claiming mental method steps as part of a process containing non-mental steps, but rather because computational methods which can be performed entirely in the human mind are the types of methods that embody the “basic tools of scientific and technological work” that are free to all men and reserved exclusively to none.

Claim 2 Is Also an Unpatentable Abstract Mental Process

Claim 2 required a slightly different analysis. It basically recited the same method as in claim 3, but it tied it to a computer readable medium. The question was whether tying it to this structure created a machine that was patent eligible under § 101. The Federal Circuit concluded that it was not sufficient because the underlying invention was the method, not a manufacture for storing computer-readable information. To be patent eligible, the machine “must impose meaningful limits on the claim’s scope,” so the “the incidental use of a computer to perform the mental process of claim 3 does not impose a sufficiently meaningful limit on the claim’s scope.” Thus, claim 2 (like claim 3) was not patent eligible under § 101.

The Federal Circuit Is Looking Carefully at Software/Method Claims

Inventors seeking to patent computer software or method claims should consider this decision carefully. If the claims simply recite steps that a human could perform with pen and paper, there is a real chance that the claim might not be eligible for patenting. Merely adding a limitation requiring a computer to perform the steps may not be sufficient to overcome this problem. Courts can look behind the words of the claim to determine what the underlying invention is and whether the use of a computer is meaningful. As always, careful claim drafting is very important if an inventor wants to obtain and enforce his or her patent.

Fixing Obvious Drafting Errors During Litigation — The CBT Flint Partners, LLC v. Return Path, Inc. Decision

by: Robert Wagner, intellectual property attorney at Picadio Sneath Miller & Norton, P.C.

In the CBT Flint Partners, LLC v. Return Path, Inc. decision last week (No. 2010-1202, -1203), the Federal Circuit considered when a court can rewrite a claim during litigation to fix mistakes in drafting. The Court concluded that a district court has the authority to rewrite claims to correct obvious errors even if there are multiple ways to “fix” the claim, as long as all the possible solutions leave the claim with the same scope and meaning.

The Claim at Issue

The patent at issue in CBT Flint involved an e-mail spam filtering system. One of the claim limitations required a computer to detect and analyze an e-mail. The patent drafters forgot the word “and” between these words, which led to problems. The claim at issue (with the problematic term highlighted) read:

13. An apparatus for determining whether a sending party sending an electronic mail communication directed to an intended receiving party is an authorized sending party, the apparatus comprising:

a computer in communication with a network, the computer being programmed to detect analyze the electronic mail communication sent by the sending party to determine whether or not the sending party is an authorized sending party or an unauthorized sending party, and wherein authorized sending parties are parties for whom an agreement to pay an advertising fee in return for allowing an electronic mail communication sent by the sending party to be forwarded over the network to an electronic mail address associated with the in-tended receiving party has been made.

The district court determined that there were three possible ways to fix this problem—(1) remove the word “detect”; (2) remove the word “analyze”; or (3) add the word “and” between the words “detect” and “analyze.” Because it felt that it was debatable which solution should be used, it concluded it lacked the authority to rewrite the claim. Thus, it found the claim indefinite under 35 U.S.C. § 112, ¶ 2 and granted summary judgment in favor of the defendant. The Federal Circuit reversed.

Case Law History for Rewriting Claims

The Federal Circuit noted that courts have long had the power to fix obvious drafting mistakes, citing to the Supreme Court’s decision in I.T.S. Rubber Co. v. Essex Rubber Co., 272 U.S. 429, 442 (1926). The Court further noted that it held in Novo Industries L.P. v. Micro Molds Corp., 350 F.3d 1348, 1357 (Fed. Cir. 2003) that“[a] district court can correct a patent only if (1) the correction is not subject to reasonable debate based on consideration of the claim language and the specification and (2) the prosecution history does not suggest a different interpretation of the claims.”

The Court determined that the district court erred because the three alternative solutions it was considering were not meaningfully different when viewed from the perspective of one skilled in the art. The concepts of “detecting” and “analyzing” were implicit in the rest of the claim, even if one of these terms was explicitly deleted. Thus, the scope and meaning of the claim were the same regardless of which solution the district court could have adopted. In these situations, the district court does have the authority to fix this kind of obvious mistake.

Practice Pointers and Takeaways From This Case

While this case suggests that courts are willing to bail out patentees and fix mistakes in claims during litigation, patentees should not rely on courts fixing their problems for them. In this particular case, the Federal Circuit found that the three possible solutions were all functionally identical. That will not always be the case, and, it is far more likely it will not be the case.

Obviously, the best practice is not to make mistakes in the first place, but that is often easier said than done. Patentees should be especially vigilant about reviewing the claims during prosecution to make sure that there are no mistakes. In addition, patentees should make sure to review the final, published version from the Patent Office, as mistakes sometimes do happen in the printing process. If a mistake happens after issuance, there are mechanisms to correct a patent (e.g., a certificate of correction). Finally, if a patentee is going to sue on a patent, it is especially important to review the patent again to make sure there are no mistakes. Don’t count on the court to bail you out!

The other takeaway from this case from the defense viewpoint is that courts may be more reluctant to find claims indefinite for obvious mistakes or typographic errors. Significant errors are still likely to doom patent claims, but it is not prudent to count on minor errors sinking them, too.

The bottom line with minor mistakes is that neither side should be confident in how a court will react. It may fix them, but it may not. And how a court will act likely depends on some very specific facts.

Federal Circuit Holds That Isolated Genes Are Patent Eligible — Association for Molecular Pathology v. Myriad Genetics

by: Robert Wagner, intellectual property attorney at Picadio Sneath Miller & Norton, P.C.

The patentability of genes and genetic testing remains a controversial topic, enough so that the Supreme Court granted cert in Mayo Collaborative Services v. Prometheus Laboratories to address some of these issues. (See our prior post). On Friday, the Federal Circuit issued a lengthy and fractured 105-page decision in Association for Molecular Pathology v. Myriad Genetics, Inc. (No. 10-1406) that held that claims to an isolated DNA molecules were patentable subject matter under 35 U.S.C. § 101. Judge Lourie delivered the decision of the Court, Judge Moore concurred in part, and Judge Bryson concurred and dissented in part.

Background

The patents at issue are directed a test to screen for mutations in BRCA genes that correlate with an increased risk of breast and ovarian cancer. The inventors identified markers in DNA sequences from individuals with inherited breast and ovarian cancers. This knowledge allowed Myriad to create diagnostic testing services for women.

Myriad began sending cease-and-desist letters to doctors who performed testing that it believed infringed its patents. A number of doctors and researchers then filed a declaratory judgment action against Myriad Genetics, Inc., claiming that certain claims in seven of Myriad’s patents were invalid because they contain patent-ineligible subject matter under 35 U.S.C. § 101. The district court agreed with the plaintiffs and invalidated all fifteen challenged claims. The Federal Circuit reversed as to three of the claims (in a 2–1 decision) and unanimously affirmed the district court’s decision as to the remainder.

The Claims at Issue

Myriad’s claims fell into three broad categories: (1) three composition claims, (2) a screening method claim, and (3) eleven comparing/analyzing method claims. The Federal Circuit found that the first two types were patent-eligible under § 101, but the third type was not.

The composition claims were for two “isolated” human genes (BRCA1 and BRCA2) that are free-standing portions of a larger, native DNA molecule and synthetic complementary DNA molecule (cDNA). In essence, these isolated genes are sections of DNA that has been cleaved from a naturally-occurring DNA molecule. Myriad isolated the portions of the naturally-occurring DNA molecule that correlated with the cancer and patented it.

The screening method claim recites the steps of growing host cells transformed with an altered BCRA gene in the presence of a potential cancer therapeutic, determining the growth rate of these cells, and comparing the growth rate of the host cells. The comparing/analyzing method claims, on the other hand, simply call for comparing samples from a tumor of the isolated genes from a patient with a non-tumor sample.

The Court Finds the Composition Claims Are Patentable Subject Matter

Before making its determination, the Court traced the state of the law regarding § 101 by looking at the Supreme Court’s decisions in Diamond v. Chakrabarty, 447 U.S. 303 (1980) and Funk Borthers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948). These decisions involved whether man-made, living microorganisms are patentable under § 101.

Ultimately, the Federal Circuit concluded that § 101 requires that a composition’s identity must be “markedly different” in comparison with what exists in nature for the composition to be patent-eligible:

The distinction, therefore, between a product of nature and a human-made invention for purposes of § 101 turns on a change in the claimed composition’s identity compared with what exists in nature. Specifically, the Supreme Court has drawn a line between compositions that, even if combined or altered in a manner not found in nature, have similar characteristics as in nature, and compositions that human intervention has given “markedly different,” or “distinctive,” characteristics.

Judge Lourie found that Myriad’s composition claim satisfied this test because the isolated genes, while they could be found inside a naturally-occurring DNA molecule, had distinct chemical identities and natures different from the DNA molecule once they were removed. The isolated genes are not the same molecules as exist in the body, and the creation of these isolated genes requires human intervention. He rejected the argument that the isolated genes are merely purified forms of a natural material.

Judge Moore, in her concurrence, reached the same result. She found that a fragment of a DNA sequence has different properties and different physical characteristics than the parent DNA from which it is obtained. In addition, the cDNA gene is entirely different than the naturally-occurring DNA molecule because introns are removed and it contains the opposite (complementary) sequence of RNA. The exact cDNA gene is not found in nature, so it is easily patent-eligible.

In his dissent, Judge Bryson sharply disagreed with respect to the non-cDNA composition claims. He would have held that any gene that is found in nature, even if found within a larger DNA molecule, is unpatentable. Judge Bryson analogized these genes to minerals discovered in the earth. Simply extracted a naturally-found mineral is not patentable, so simply extracting a naturally-found gene from DNA should not be patentable.

The Method Claims

The decisions with respect to the method claims were much easier for the Court, and the Judges unanimously agreed. The comparing/analyzing claims were not patent eligible because they amounted to nothing more than the mental steps of comparing two genes. There was no transformation involved, so they were not patent eligible. The screening method claim, on the other hand, had a number of transformations central to the purposes of the claimed process. Thus, it was patent eligible.

Standing to Bring the Action

A significant part of the decision also addressed whether any of the plaintiffs had standing to bring the claim under the Declaratory Judgment Act. All three Judges agreed that at least one of the doctors did have standing. For those interested in standing issues and what is sufficient under the Declaratory Judgment Act, this decision is an interesting read.

The Takeaways

The Federal Circuit seems to have a different test for genetic materials than other compositions. All three Judges agreed that extracting a naturally-found mineral or element from a rock would not be eligible for patent protection. Under the majorities’ holding, however, extracting genetic material from a naturally-occurring DNA molecule is eligible for patent protection (assuming the other requirements of the Patent Act can be met). The decision maintains a long history of allowing patents in the field of genetics.

It will be interesting to see if this case is addressed en banc or whether the Supreme Court will weigh in on these issues in its upcoming case in Mayo Collaborative Services. Given the sharp dissent in this case, and the importance of these types of patents, it is unlikely that we have seen the last of these decisions.

Supreme Court to Consider Patentability of Natural Phenomena—Grants Cert in Mayo Collaborative Services v. Prometheus Laboratories

by: Robert Wagner, intellectual property attorney at Picadio Sneath Miller & Norton, P.C.

Yesterday, the Supreme Court granted cert in Mayo Collaborative Services v. Prometheus Laboratories, Inc. (No. 10-1150) to address whether a patentee can monopolize basic, natural biological relationships. This case could have far-reaching effects for those patenting medical procedures and biological processes. In particular, the Court appears to be confronting the issue of what are the bounds of patentable subject matter with natural phenomena and processes. The specific question presented is:

Whether 35 U.S.C. § 101 is satisfied by a patent claim that covers observed correlations between blood test results and patient health, so that the claim effectively preempts all uses of the naturally occurring correlations, simply because well-known methods used to administer prescription drugs and test blood may involve “transformations” of body chemistry.

The Court previously began to consider this issue in Laboratory Corp. of America Holdings v. Metabolite Laboratories, Inc., 548 U.S. 124 (2006), but dismissed the case for technical reasons. Three dissenting Justices (Breyer, Stevens, and Souter) and would have decided the case and held that such claims are not patentable subject matter because they cover a law of nature and a basic scientific relationship. The full Court will now consider this issue.

The Patent at Issue

At issue in Mayo Collaborative is Prometheus’s patent claim involving the treatment of autoimmune disorders by administering a drug and determining whether the dosage was appropriate based on an observed metabolite level in the patient. Once administered, the body automatically converts the drug into a metabolite, the amount of which determines whether the dosage was appropriate. Specifically, the claim reads:

1. A method of optimizing therapeutic efficacy for treatment of an immune-mediated gastrointestinal disorder, comprising:

(a) administering a drug providing 6-thioguanine to a subject having said immune-mediated gastrointestinal disorder; and

(b) determining the level of 6-thioguanine in said subject having said immune-mediated gastrointestinal disorder,

wherein the level of 6-thioguanine less than about 230 pmol per 8×108 red blood cells indicates a need to increase the amount of said drug subsequently administered to said subject and

wherein the level of 6-thioguanine greater than about 400 pmol per 8×108 red blood cells indicates a need to decrease the amount of said drug subsequently administered to said subject.

The Case Below

Defendant (Mayo) argued that this claim was invalid because it was not patentable subject matter–all it amounts to is administering a drug and observing a reaction. Prometheus did not try to patent the reaction, which is a naturally-occurring one. Mayo also argued that the claim was unpatentable as a matter of public policy because of its broad scope and the effect it would have on public health and research. In particular, Mayo argued that any doctor that administered a drug and saw the results may infringe the patent, even if the doctor never took any action based on the results.

The patent was held invalid in the District Court, but the Federal Circuit reversed, finding that the claims satisfied the “machine-or-transformation” test under 35 U.S.C. § 101. On its first appeal, the Supreme Court remanded so that the Federal Circuit could consider the then-recent decision in Bilski v. Kappos, 130 S. Ct. 343 (2010). On remand, the Federal Circuit again reversed the District Court, finding that the patent claims were not invalid. Mayo again petitioned the Supreme Court for cert, which was granted yesterday.

What This Case Means

This case should clarify the scope of patents, especially as they relate to biological and natural processes. In Bilski, the Court rejected the Federal Circuit’s prior “machine-or-transformation” test as being too rigid. It will be interesting to see if and how they revise or clarify that standard. In addition, the Court will likely have to address whether an idea that is not abstract can nonetheless be so broad as to be unpatentable on that basis (as opposed to being anticipated or obvious).

If the LabCorp decision is any guide, the Court (or at least Justice Breyer) will be particularly hostile to claims that appear to cover laws of nature, natural phenomena, and abstract ideas. In that case, which also involved a patent claim for correlating test results with a physical condition, Justice Breyer found the claim invalid because it simply patented a natural phenomenon, albeit in the cloak of the abstract patent language of a process. In addition, Justice Breyer was concerned about the chilling effect of patents like these on doctors and their patients.

Regardless of what the Court determines, this case should be particularly important for those in the biological and pharmaceutical markets and could have a large impact on what kinds of inventions and processes can be patented.