Tag Archives: patent eligible subject matter

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

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Significant Interest in Alice Corp. v. CLS Bank Int’l Case at Supreme Court

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

SupremeCourtImage_1The Supreme Court granted certiorari in Alice Corp. Pty. Ltd. v. CLS Bank International, (No. 13-298), to address the boundaries of what constitutes patent eligible subject matter under 35 U.S.C. § 101 and, more specifically, whether and to what extent software is patent eligible. We’ve been following this case since it was at the Federal Circuit (see our prior post here) and noted the chaos that emerged from the Federal Circuit’s en banc decision that could not decide on the proper standards for software patent eligibility.

Since Alice Corp. filed its petition for a writ of certiorari, 34 amicus briefs have been filed, indicating the importance of this case to the patent community. (To read the briefs, click here). The briefs have been circulated to the justices, and oral argument is scheduled for March 31, 2014.

As numerous commentator’s have pointed out (see, e.g., here), software has been patent-eligible subject matter for almost 50 years and accounts for a significant number of granted patents. A decision by the Supreme Court that software is not patent eligible would have huge repercussions throughout the patent and software worlds. We will be monitoring the case and will report on the oral argument, once it occurs.

Supreme Court Announces It Will Hear Four New Intellectual Property Cases

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

SupremeCourtImage_1The Supreme Court announced on Friday that it will hear four additional intellectual property cases this term, which makes nine total intellectual property cases this term so far. Brief summaries of the issues presented are provided below, along with links to more information about each of these cases from our friends at SCOTUSblog.

New Cases

Limelight Networks, Inc. v. Akamai Technologies, Inc. (No. 12-786)

The issue in this case is whether a party may be liable for infringement under either 35 U.S.C. § 271(a) or § 271(b) where two or more entities join together to perform all of the steps of a process claim.

Nautilus, Inc. v. Biosig Instruments, Inc. (No. 13-369)

Two issues are raised in this case. Does the Federal Circuit’s acceptance of ambiguous patent claims with multiple reasonable interpretations—so long as the ambiguity is not “insoluble” by a court—defeat the statutory requirement of particular and distinct patent claiming? And, does the presumption of validity dilute the requirement of particular and distinct patent claiming?

POM Wonderful v. Coca-Cola (No. 12-761)

The issue in this case is whether the court of appeals erred in holding that a private party cannot bring a Lanham Act claim challenging a product label regulated under the Food, Drug, and Cosmetic Act.

ABC, Inc. v. Aereo, Inc. (No. 13-461)

The issue in this case is whether a company “publicly performs” a copyrighted television program when it retransmits a broadcast of that program to thousands of paid subscribers over the Internet.

Previous Cases

Medtronic v. Boston Scientific Corp. (No. 12-1128)

The issue in this case is is whether, in a declaratory judgment action brought by a licensee under MedImmune, the licensee has the burden to prove that its products do not infringe the patent, or whether (as is the case in all other patent litigation, including other declaratory judgment actions), the patentee must prove infringement.

This case was argued on November 5, 2013.

Lexmark International v. Static Control Components (No. 12-873)

The issue in this case is whether the appropriate analytic framework for determining a party’s standing to maintain an action for false advertising under the Lanham Act is (1) the factors set forth in Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters (“AGC”), 459 U.S. 519, 537-45 (1983), as adopted by the Third, Fifth, Eighth, and Eleventh Circuits; (2) the categorical test, permitting suits only by an actual competitor, employed by the Seventh, Ninth, and Tenth Circuits; or (3) a version of the more expansive “reasonable interest” test, either as applied by the Sixth Circuit in this case or as applied by the Second Circuit in prior cases.

This case was argued on December 3, 2013.

Highmark Inc. v. Allcare Management Systems (No. 12-1163)

The issue in this case is whether a district court’s exceptional-case finding under 35 U.S.C. § 285 (in a patent infringement lawsuit), based on its judgment that a suit is objectively baseless, is entitled to deference.

This case will be argued on February 26, 2014.

Octane Fitness v. Icon Health and Fitness (No. 12-1184)

The issue in this case is whether the Federal Circuit’s promulgation of a rigid and exclusive two-part test for determining whether a case is “exceptional” under 35 U.S.C. § 285 improperly appropriate a district court’s discretionary authority to award attorney fees to prevailing accused infringers in contravention of statutory intent and this Court’s precedent, thereby raising the standard for accused infringers (but not patentees) to recoup fees and encouraging patent plaintiffs to bring spurious patent cases to cause competitive harm or coerce unwarranted settlements from defendants?

This case will be argued on February 26, 2014.

Alice Corporation Pty. Ltd. v. CLS Bank International (No. 13-298)

The issue in this case is whether claims to computer-implemented inventions—including claims to systems and machine, processes, and items of manufacture—are directed to patent-eligible subject matter within the meaning of 35 U.S.C. § 101 as interpreted by this Court.

This case will be argued on March 31, 2014.

Supreme Court Rules That Genes Are Not Patentable Subject Matter

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

SupremeCourtImage_1Today, the United States Supreme Court unanimously ruled in Association for Molecular Pathology v. Myriad Genetics, Inc., No. 12-398, that a naturally-occurring DNA segment (or gene) is not patent eligible even if it has been isolated from a genome (reversing the Federal Circuit). The Court also ruled that cDNA (complementary DNA) is patent eligible because it is not naturally occurring (affirming the Federal Circuit). Justice Thomas wrote the opinion for the unanimous Court, and Justice Scalia wrote a short concurrence. We have been following this case for some time (see herehere, and here).

The Court began by restating its position that laws of nature, natural phenomena, and abstract ideas are not patentable subject matter under 35 U.S.C. § 101. The question for the Court was whether Myriad’s patents claimed any new and useful composition of matter.

To answer this question, the Court looked at what Myriad claimed. With respect to the DNA claims, Myriad claimed the DNA segment it found in nature, and it did not change or alter any of the genetic information in that segment. Because it claimed something naturally found in nature, it was not patent eligible subject matter.

With respect to the cDNA claims, the Court reached a different result. The cDNA is not found in nature, but is created in the laboratory. This key difference meant that it was patent eligible subject matter. The Court did not address whether these claims met the other requirements of the patent statute, such as §§ 102, 103, and 112.

The Court was also very clear on what it was not deciding in this case. There were no method claims at issue, such as an innovative method for manipulating genes. Similarly, there were no  claims directed to how this new knowledge might be applied to achieve some useful result. The Court suggested (without holding) that those types of claims would be patent eligible. Finally, it noted that the claims were not directed to naturally occurring genetic code that had been altered to create some new and not natural DNA. The Court refused to suggest how it might address claims like those.

In the end, the Court stated that “[w]e merely hold that genes and the information they encode are not patent eligible under § 101 simply because they have been isolated from the surrounding genetic material.”

Is Software Patentable? Fed Circuit Isn’t Sure—CLS Bank v. Alice Corp.

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

Alice Tea PartyEarlier this month, the Federal Circuit issued its long-awaited en banc opinion on the patentability of software in CLS Bank International v. Alice Corporation Pty. Ltd., No. 2011-1301. In an ironic twist, the result is something more akin to Alice in Wonderland than the clear guidance patent practitioners were hoping for. The Federal Circuit issued a 135-page decision comprised of separate written opinions by Judges Lourie, Rader, Moore, Newman, and Linn, as well as an “Additional Reflection” by Chief Judge Rader, none of which commanded a majority. The end result was a one-paragraph per curiam opinion in which a majority of the Court determined that the particular method  and computer-readable media claims were not directed to patent eligible subject matter (for different reasons) and an equally-divided Court affirmed by default the District Court’s holding that the system claims were not patent eligible.

The Claims at Issue

Alice Corp. owned four patents relating to a computerized trading platform used for conducting financial transactions in which a third party acts as an intermediary to assure the first and second parties that they will both perform. If one of the parties cannot perform, the transaction is not completed and neither side risks non-performance of the other.

The patents contained method, computer-readable media, and system claims, all of which involved software aspects.

Judge Lourie’s Opinion

Judge Lourie, joined by Judges Dyk, Prost, Reyna, and Wallach, would have held that all of the claims were not directed to patent-eligible subject matter under 35 U.S.C. § 101.

The statute contains four eligible classes of inventions:

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, subject to the conditions and requirements of this title.

35 U.S.C. § 101. He noted that the statute is to be interpreted broadly, but is also limited by three judicially-created exceptions that are not patent eligible: laws of nature, natural phenomena, and abstract ideas.

In determining whether something is patent eligible, Judge Lourie set forth a two-step process: (1) is the claimed invention a process, machine, manufacture, or composition of matter, and, if so, (2) does it fall within one of the three judicially-created exceptions? He acknowledged that this determination is easier said than done.

To determine whether it falls within any of the exceptions, courts are to answer two more questions: (1) does the claim pose any risk of preempting an abstract idea, and, if so, (2) are there substantive limitations that narrow, confine, or otherwise tie down the claim so that it does not preempt the full abstract idea?

Turning to the claims at issue, Judge Lourie broke them down into the “gist” of the invention and what, at heart, it was trying to claim. He concluded that all of the claims were attempting to claim the abstract idea of facilitating a trade through a third-party intermediary. In his opinion, none of the additional claim language provided any meaningful limitation on the claims.

Chief Judge Rader’s OPinion

Chief Judge Rader, joined in full by Judge Moore and in part by Judges Linn and O’Malley, would have held that the system claims are patent eligible, but the method and media claims are not (Judges Linn and O’Malley would have held that all the claims are patent eligible).

Chief Judge Rader focused on the judicially-created exceptions to § 101. Courts must determine whether a claim includes meaningful limitations that restrict the claim to an application, rather than claiming an abstract idea.  Claims are not meaningfully limited where it describes an abstract idea and simply adds “apply it” or if its purported limitations cover all possible ways to achieve the result.

A claim is meaningfully limited if it requires a particular machine to implement it or a particular transformation or where it adds limitations that are essential to the invention. “At bottom, where the claim is tied to a computer in such a way that the computer plays a meaningful role in the performance of the claimed invention, and the claim does not pre-empt virtually all uses of an underlying abstract idea, the claim is patent eligible.”

Chief Judge Rader cautioned that the patent-eligibility inquiry is different and distinct from other statutory requirements, such as non-obviousness, novelty, and enablement. Whether something is obvious is irrelevant to whether it is directed to patent-eligible subject matter. He also confirmed that the standard for proving a violation of § 101 is by clear and convincing evidence.

Taking this all together, he found that the system claims were directed to patent eligible subject matter—the claims recited a machine that performed specific transactions that was not a disembodied concept. However, the method and media claims he found to claim only an abstract concept.

Judge Moore’s Opinion

Judge Moore, joined by Judges Rader, Linn, and O’Malley, wrote to express her concern that Judge Lourie’s view would signal the end of all software patents as we know them. She believed that the five judges ignored precedent and have left the Court “irreconcilably fractured.”  She called for the Supreme Court to step in and resolve the issue.

She would have held that the system claims are directed to patent-eligible subject matter, as they include limitations relating to hardware and software, and were not limited to abstract ideas.

Judge Newman’s Opinion

Judge Newman, writing for herself, believed that the Court was overanalyzing the requirements of § 101. She stated that the inquiry should be simple and straightforward—does the invention fall within one of the four types of inventions allowed? If so, the patent-eligibility analysis ends and the other requirements for patentability kick in to determine whether a patent should be granted.

She also wrote to explicitly confirm that study and experimental use is not patent infringement. She was concerned that too many commentators were wrongly stating that patents would prevent individuals from conducting research or evaluating patented inventions.

Experimental use—such as experiments to (1) improve or build on patented subject matter, (2) compare patented subject matter with alternatives, (3) understand its mechanism, and (4) find new applications or modifications—is not infringement, regardless of whether it is for scientific knowledge or commercial potential.

Judge Linn’s Opinion

Judge Linn, joined by Judge O’Malley, would have found all of the claims to be directed to patent-eligible subject matter.

First Judge Linn was concerned that no claim construction was ever done in this case. The parties did agree that all of the claims required a computer to implement them. Having created this explicit tie to a machine, the claims were not directed to an abstract idea. He had grave concerns that the Court was rewriting the claims and ignoring limitations in order to distill down some essence of the claim, which he believed was improper.

Chief Judge Rader’s “Additional Reflections”

Chief Judge Rader also wrote some official “additional reflections,” which is highly unusual. He reflected on how the positions of the Judges have changed over the last 25 years, even though § 101 has not changed at all in that time period. He also reflected on the chaos of this opinion before concluding that “When all else fails, consult the statute!”

COnclusions—What to Make of All of This?

As a practical matter, this decision provides no precedential value. No rationale was able garner a majority of the Court. What it does signal is that the Federal Circuit cannot, at this, decide what to do with software patents. Five of the Judges (Lourie, Dyk, Prost, Reyna, and Wallach) appear hostile to software patents, while the other five (Rader, Moore, Linn, O’Malley, and Newman) are more receptive. Truly, one’s panel draw could be outcome determinative on appeals involving software patents.

Given the chaos, one could reasonably expect that the Supreme Court will have to step in and provide some clarity. Although, given its track record, even if it does grant cert on this case, it still might not provide clear guidance.

For some other, interesting views on this decision, see our friends at IPWatchdog (here, here, here, and here) and Patently-O (here).

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.