Federal Circuit Hears UC Appeal of Interference Ruling on CRISPR Patent Rights

    The long running patent dispute between two leading players in the development of the genome editing CRISPR-Cas9 (CRISPR) technology has finally reached the Federal Circuit. On April 30, 2018, the University of California, Berkeley (UC) and the Broad Institute of MIT (Broad) met at the court to argue inventorship rights in foundational patents on methods for the use of CRISPR technology.
    Briefly, the first-filed UC patent application to Jennifer Doudna, Emmanuelle Charpentier and their colleagues is directed to methods for the use of CRISPR in all cells. A later-filed application by Feng Zhang and his colleagues at the Broad resulted in an issued patent for the use of CRISPR in eukaryotic cells (includes human and animal cells). Between these two rivals, the UC scientists were first to publish on the CRISPR technology in the scientific literature.
    Historically, U.S. patent law, requiring the issuance of a patent to the first inventor, has had a mechanism for identifying the first inventor where two separate applicants file for a patent on overlapping subject matter, known as an interference proceeding. The 2011 America Invents Act (AIA) instituted a first inventor to file regime, which largely eliminated the need for interferences. These CRISPR patent applications were filed before the effective date of the AIA in 2013, and are thus subject to the older regime. Thus, the patent rights to one of the most important advances in biotechnology are being sorted out according to the now-discarded first inventor paradigm of U.S. patent law. UC requested an interference proceeding from the U.S. Patent and Trademark Office (USPTO) Patent Trial and Appeal Board (PTAB), believing that the Broad application covered the same subject matter as their own patent application and was therefore not valid (asserting that eukaryotic cells are a subset of all cells, and fall within the scope of the UC patent). The UC argument is that their patent application is prior art to the Broad patent, and provided enough information to allow other scientists to use CRISPR in eukaryotic cells with a “reasonable expectation of success.” UC asserted that the Broad subject is therefore obvious and not patentable. The PTAB declared an interference in 2016 (more background here).
    In early 2017, the PTAB ruled that there were no conflicting patent rights (no interference) between the pending UC patent application and the already issued Broad patents. According to the PTAB, the Broad patent was not obvious in view of the UC patent application. Therefore, the existing grant of patents to the Broad for the use of CRISPR in eukaryotic cells was upheld, and the UC application for the use of CRISPR in all cells could continue prosecution. Effectively, this was a win for Broad. UC then appealed the PTAB decision to the Federal Circuit.
    In the oral argument at the Federal Circuit on April 30th, the dispute centered on whether the PTAB applied the correct evidentiary standard to the determination of nonobviousness, and whether it properly considered all available evidence in its review. The PTAB had found that there was enough uncertainly about the technology in the 2012 time frame that the Broad scientists had no “reasonable expectation of success” and its work in eukaryotic cells was nonobvious; UC argued that the PTAB misapplied the obviousness standard.
    It appears that the Federal Circuit may be likely to affirm the ruling of the PTAB. Looking forward, it is possible that the coexistence of a UC patent (upon issuance) and the Broad patents could require licenses from both patent holders for the use of CRISPR in eukaryotic cells by third parties, and cross-licenses between the patent holders for such use. The fate of patent rights to one of the most important biotechnologies in decades could soon be clarified. Depending on the ruling, a Supreme Court appeal could follow; however, it is unlikely that the Court would take the case.

UC Berkeley Appeals Adverse CRISPR Genome Editing Patent Interference Decision

A recent inventorship dispute between the University of California at Berkeley (UC) and the Broad Institute at MIT centered on which institution was entitled to patents for the use of CRISPR-Cas9 (CRISPR) genome editing methods in eukaryotic cells (an interference proceeding). In its recent adjudication of the conflict, the United States Patent and Trademark Office Patent Trial and Appeal Board (PTAB) declared no conflicting patent rights between a UC patent application and the already issued patents of MIT; therefore, the existing grant of patents to MIT for the use of CRISPR in eukaryotic cells was upheld, and the UC application for the use of CRISPR in all cells could continue prosecution. In the decision, the PTAB found that the patent claims of the Broad Institute to the use of CRISPR in eucaryotic cells was not obvious in view of the originally filed UC patent application, therefore, the subject matter of Broad did not overlap with that of UC. MIT has already issued patents, while UC's patent application is still pending. Now, UC has announced an intention to file an appeal with the Federal Circuit of the adverse PTAB ruling in February. From the UC press release:

Given the revolutionary nature of the CRISPR-Cas9 technology, UC believes that obtaining a timely confirmation that its scientific team was the first to invent the use of the technology in all environments, including eukaryotic cells, is important for current and potential users of the technology, including academia, industry and the public at large.

 In parallel, UC intends to pursue continuing applications in the U.S. and globally to obtain patents claiming the CRISPR-Cas9 technology and its application in non-cellular and cellular settings, including eukaryotic cells. Corresponding patents have already been granted to UC in the United Kingdom, and the European Patent Office has announced that it will grant UC’s patent on May 10, 2017.

The Broad Institute has issued a statement on the appeal: 

UCB has filed a Notice of Appeal asking the United States Court of Appeals for the Federal Circuit, based in Washington DC, to review the recent decision by the PTAB (Patent Trial and Appeals Board) that there is no interference between the Broad Institute, MIT and Harvard claims concerning the use of the CRISPR system in eukaryotic cells and the patent application of UCB because the claims are patentably distinct.

Given that the facts have not changed, we expect the outcome will once again be the same.

We are confident the Federal Circuit will affirm the PTAB decision and recognize the contribution of the Broad, MIT and Harvard in developing this transformative technology.

The Federal Circuit can review the PTAB ruling for any error or law or lack of substantial evidence, but will defer to the factual findings from the board. If the ruling is left in place, UC can still move ahead with its patent application to the use of CRISPR in all cells. Theoretically, such a UC patent could coexist with the Broad patent to the use of CRISPR in eucaryotic cells. A potential user might then have to seek permission or license from both patent holders to use the CRISPR system in eucaryotic cells. The parties themselves (UC, Broad) might need to seek cross-licensing from each other to utilize CRISPR in eucaryotic cells. While the current dispute centers on the specific and valuable CRISPR-Cas9 system, other permutations of the CRISPR methodology can utilize different enzymes (e.g., CRISPR-Cpf1) and are therefore separately eligible for patenting, unconnected to this particular UC/Broad conflict.

Supreme Court Denies Certiorari in Sequenom v. Ariosa

The Supreme Court has denied certiorari for the appeal in Sequenom v. Ariosa (Fed. Cir. 2015). There has been widespread interest in this case, which invalidated patent claims to a method of performing prenatal diagnosis using cell-free fetal DNA (cffDNA) collected from a maternal blood sample (see earlier post here). The method has been critical to the development of non-invasive prenatal testing (NIPT). NIPT testing can be used to identify chromosomal abnormalities or other genetic aberrations, and it offers an alternative to the invasive techniques of amniocentesis or chorionic villi sampling, both of which carry some risk to the fetus. Sequenom would have followed a sequence of recent Supreme Court decisions, AMP v. Myriad (2013) and Mayo v. Prometheus (2012) (Mayo) that each invalidated patent claims in the life sciences for a lack of patentable subject matter. The most controversy has followed the Mayo decision, which was then followed by a software-related patent case, Alice v. CLS (2014). The Mayo/Alice pair has distilled an analytic framework for determining when method patent claims impermissibly read on a law of nature or a natural phenomenon. The framework has been criticized for being overly broad, and for having a deleterious impact on the viability of method patent claims in the life sciences, particularly in the diagnostic testing sector. In the Federal Circuit decision in Sequenom last year, the concurrence by Judge Linn also took direct issue with the Court’s recent dictates in these method patent cases. But the Court did not take the invitation to focus on its own recently developed test. So in deciding not to take the case, the Court will not - for now - review its Mayo/Alice roadmap. One example of continuing influence of the Court's current paradigm is Cleveland Clinic v. True Health Diagnostics (N.D. Ohio 2016), invalidating the method patent claims on a method of detecting cardiovascular disease by detecting the elevation of specific enzyme levels (see earlier post here).

Sequenom Petitions Supreme Court to Review Denial of Prenatal DNA Testing Patent

In the closely-watched patent law case with significant implications for the patenting of diagnostic and other methods in biomedicine, Ariosa v. Sequenom (Fed. Cir. 2015), new developments could result in the case finally reaching the Supreme Court. Sequenom (the assignee of the patent) has now filed a petition for certiorari at the Supreme Court, seeking to overturn the ruling of the Federal Circuit that invalidated its patent to a method of performing prenatal diagnosis using cell-free fetal DNA (cffDNA) collected from a maternal blood sample (see here). Here is Claim 1 of U.S. Patent No. 6,258,540: 

A method for detecting a paternally inherited nucleic acid of fetal origin performed on a maternal serum or plasma sample from a pregnant female, which method comprises amplifying a paternally inherited nucleic acid from the serum or plasma sample and detecting the presence of a paternally inherited nucleic acid of fetal origin in the sample. 

The Federal Circuit applied a two-part test from  Mayo v. Prometheus (2011) and found a lack of patentable subject matter: 

Thus, in this case, appending routine, conventional steps to a natural phenomenon, specified at a high level of generality, is not enough to supply an inventive concept. Where claims of a method patent are directed to an application that starts and ends with a naturally occurring phenomenon, the patent fails to disclose patent eligible subject matter if the methods themselves are conventional, routine and well understood applications in the art. The claims of the ’540 patent at issue in this appeal are not directed to patent eligible subject matter and are therefore, invalid. 

The petitioners argue that earlier Supreme Court case law does not mandate the result that the Federal Circuit arrived at. Citing the landmark case of Diamond v. Diehr (1981), concerning whether a patent claim to a rubber-curing method preempted the use of a mathematical formula, the petition notes that Diehr stated that “[i]n determining the eligibility of respondents’ claim[s]...under §101, their claims must be considered as a whole.” The petition further notes that the recent Mayo test is not rooted in the central imperative for excluding certain subject matter from patenting, which is a preemption of fundamental knowledge that becomes an obstacle to scientific progress. They characterize the Mayo test as a rote application of a two-step formula that avoids an actual analysis of whether a patent claim “preempts” further use of fundamental subject matter in the field. The petitioners argue that no preemption occurs here: 

Demonstrated methods show that cffDNA may be used without practicing each of the patent’s core steps: One need not fractionate the sample; one may forego  amplification; and one can use cffDNA without distinguishing paternally inherited sequences at all. These non-preempted innovations are conclusive evidence that petitioner’s patent does not claim the natural phenomenon itself —instead claiming merely one set of applications then  known only to the inventors. 

The petition further develops the impact of the Ariosa (and Mayo) decisions on a wide swath of method patents in the life sciences: 

[T]he decision below threatens to destroy the predictability and certainty the patent system needs to do its job. At a minimum, the biomedical community is now adrift in determining whether or not patents will ever be available in these or related fields. And that’s essentially the ballgame, because once you must seriously question the availability of patent protection, you cannot: (1) confidently invest in research; (2) confidently invest in clinical validation and commercialization of existing patents; or (3) confidently predict that it is better to disclose your discoveries through the patent system than it is to keep them a trade secret. 

In the denial for rehearing en banc, several judges of the Federal Circuit noted their disagreement with an outcome mandated by the Mayo test, but not commanded by the overall objectives of the patentable subject matter doctrine. This case is well-positioned to provide the Court with an opportunity to investigate the method (diagnostic, therapeutic, etc.) claims in biotechnology and consider whether the Mayo test has imposed a rigid formula that short-circuits case-by-case consideration of preemption. For that reason, the Court may respond to the appeal for clarification and review and accept the case; if so, this case would add to an unprecedented involvement by the Court in this patent law doctrine (5 cases in 6 years).

More Diagnostic Method Patent Claims Found Invalid Under Mayo/Alice Framework

Some instability in the interpretation of allowable subject matter in biotechnology patent law continues, as the life science sector contends with recent Supreme Court decisions affecting both composition of matter and method claims. For composition of matter claims, the AMP v. Myriad (2013) Supreme Court case established that an isolated gene was not patentable because it is a product or law of nature, while synthetic non-natural DNA sequences (cDNA) were patentable. The method claims in that case (largely directed to methods to identify mutations in the BRCA1 and BRCA2 genes) were held to be invalid, on the basis that such claims were directed to abstract ideas. Two other cases from the Court established a test for method claims in order to differentiate between impermissible claims to abstract ideas, laws of nature, natural phenomena, and permissible claims to applications or inventive manipulation of such subject matter. The test from Mayo v. Prometheus (2011) (a case with patent claims to method of drug optimization using metabolite testing) was as follows: 

First, we determine whether the claims at issue are directed to a patent-ineligible concept. If the answer is yes, then we next consider the elements of each claim both individually and “as an ordered combination” to determine whether additional elements “transform the nature of the claim” into a patent-eligible application. 

Later, in the software-based Alice v. CLS (2014), the Court reaffirmed this test. In the last several years, lower court cases have contended with applying this test to challenged life science method claims. Most notably, in Ariosa v. Sequenom (Fed. Cir. 2015), using the Mayo test, the Federal Circuit decided that methods for the detection of fetal DNA in maternal serum were invalid as directed to natural laws (see here). That case is likely to be appealed to the Supreme Court.  A recent district court case illustrates the ongoing impact of all of these decisions on patent claims to diagnostic methods iin biotechnology. In Cleveland Clinic v. True Health Diagnostics (N.D. Ohio 2016), the court considered a defendant’s invalidity challenge on its motion to dismiss under Rule 12(b)6. A representative claim from one of the patents in suit is as follows: 

14. A method of assessing a test subject's risk of developing a complication of atherosclerotic cardiovascular disease, comprising: 
determining levels of myeloperoxidase (MPO) activity, myeloperoxidase (MPO) mass,or both in a bodily sample of the test subject, said bodily sample being blood,serum, plasma, blood leukocytes selected from the group consisting of neutrophils and monocytes, or any combination thereof; 
wherein elevated levels of MPO activity or MPO mass or both in the subject's bodily sample as compared to levels of MPO activity, MPO mass or both, respectively,in comparable bodily samples obtained from control subjects diagnosed as not having the disease indicates that the test subject is at risk of developing a complication of atherosclerotic cardiovascular disease. 

Effectively, the method utilizes the observation that levels of the enzyme MPO correlate with blood vessel inflammation, and can thus be indicative of an elevated risk of a cardiovascular event. The patent claim is somewhat similar to the method claim in Mayo, where the observation of a metabolite level was indicative of pharmaceutical effectiveness (or toxicity). On a motion to dismiss by the defendant, the district court applied the Alice/Mayo test and decided that the correlation between MPO and cardiovascular risk was a law of nature, and that the addition of claim steps to “determining” and “comparing” only supplied routine and conventional processes that did not constitute an “inventive concept.” The court noted its standard that it would only “grant the motion only if defendant is able to show invalidity by clear and convincing evidence,” which it found here. The Cleveland Clinic decision (and other similar opinions) reflect the continuing influence of the Mayo/Alice test on life science method claims despite judicial criticism; the field awaits a possible return by the Supreme Court to these issues if Sequenom files a petition for certiorari this year and the Court accepts review.

NIH Asked to Exercise March-In Rights for High-Priced Patented Cancer Drug; HHS Indicates Possible Receptivity

It may not be widely known that the federal government retains a specific legal authority to expand the use of a patented invention that was developed using federal research grants, under a federal statute that was enacted in 1980 to remedy the underutilization of American inventive efforts. The Bayh-Dole Act accelerated the transfer of federally funded research into practical real world use; toward that end, the law allows federal grantees (such as universities) to pursue patent rights for any inventions developed in the course of the federally funded work. In addition, a little-known provision in the Bayh-Dole Act gave authority to any federal agency that funds research, such as the National Institutes of Health (NIH) (the major source of federal biomedical funding), to order a “march-in” of patent rights (35 U.S.C. 203) where the funding agency determines such action is necessary to achieve the goals of the statute. This authority is held by any federal granting agency/department (e.g., NASA, DOE, DOD). Effectively, then, NIH (or others) can compel a patent owner to allow third parties to make and use the patented invention. The patent owner is to be reasonably compensated for the use. According to the statute, march-in authority is justified when "action is necessary to alleviate health or safety needs which are not reasonably satisfied by the contractor, assignee, or their licensees" or "action is necessary to meet requirements for public use." To date, the NIH has refused to exercise this authority; five requests have been submitted since 1980. Most recently, in 2012, NIH was asked by Knowledge Ecology International (KEI) to use march-in rights for the AIDS drug Norvir due to excessive price raises (Abbott Pharmaceuticals held the patents); a previous KEI petition on Norvir had been filed in 2004. The NIH declined both requests (see earlier post). In its 2012 rejection, the NIH rejected the contention that price disparities between the price of drugs in the U.S. drugs compared to other high-income justified a march-in maneuver:

The NIH continues to agree with the public testimony in 2004 that the extraordinary remedy of march-in is not an appropriate means of controlling prices of drugs broadly available to physicians and patients. 

In 2010, the NIH also declined to implement a march-in when a KEI petition was filed to remedy the manufacturing shortage of Fabryzyme by Genzyme, Inc. Now, KEI has filed a march-in petition with NIH over the high pricing of the prostate cancer drug Xtandi (patents granted to the University of California; now assigned to Astellas Pharma): 

This letter is a request that the U.S. federal government use its rights in patents for the prostate cancer drug (enzalutamide), marketed under the brand name of Xtandi by Japan-based Astellas Pharma. This is a product that has an average wholesale price (AWP) of $129,269 per year, and which is far more expensive in the United States than in other countries. Specifically, we ask the Department of Health and Human Services (DHHS), National Institutes of Health (NIH), and/or the Department of Defense (DoD) to use its royalty free rights in the relevant patents, or to grant this request for march in rights. The relevant patents include, but are not limited to, the three patents listed in the FDA Orange Book for Xtandi (7,709,517, 8,183,274, and 9,126,941), all of which were granted to the Regents of the University of California, a public institution. All three inventions were made with the support of the United States government under National Institutes of Health SP ORE grant number 5P50CA092131 and Department of Defense (Army) grant number W81XWH0410129. 

What can be expected with this most recent march-in petition to the NIH? In an environment where drug pricing is high on the radar screen for patients and for physicians (see earlier post on "financial toxicity"), and where the U.S. generally does not subscribe to price controls in health care, the high cost of drugs – especially new, targeted drugs – is causing politicians and bureaucrats to pay more attention. In January, prior to the filing of the new KEI petition, 50 members of Congress wrote a letter to NIH, asking that the agency set true guidelines for when the exercise of march-in rights would be reasonable. Then, in a hearing in the House Ways and Means Committee last week, Department of Health and Human Services (HHS) Secretary Burwell stated that HHS would consider the request for march-in guidance from the legislators. In the current campaign season, efforts to control drug prices are already part of political platforms and discourse (see here, for example). But with respect to the dormant march-in authority granted to the federal government, it may be that HHS and/or NIH are more willing to consider all measures and now actually welcome the existence of a statutory authority long ignored. At the least, NIH could begin to clarify how the march-in provisions are to be interpreted. However, that is not to say that march-in rights are a wholesale solution to drug pricing (see here for one study on the limits of such authority). For example, the ability of the federal government to negotiate drug prices for Medicare is often proposed as a leavening force; Congress has explicitly banned that option but it could be rescinded (or possibly by executive order?). Because some of the new “precision medicine” drugs are the most expensive (especially cancer drugs), the disconnect between the promise of genetically-informed medical care and actual access to biotech drugs is growing. That asymmetry will only add to the pressure on both legislative and executive branches to incorporate drug pricing realities into the overarching project of health care access as exemplified by the Affordable Care Act (Obamacare).

Patent Rights to CRISPR Gene Editing Technology Will Be Sorted Out by Interference Proceeding

The powerful gene editing technology, CRISPR/Cas9, is now the subject of debate over its uses and applications (see here), and whether any limits should be set on possible applications in reproductive medicine (see here). However, a wholly separate controversy has been circulating in the field, involving a messy patent dispute between two of the main players in the development of the technology. A patent application on the technology was filed by Jennifer Doudna and her colleagues (Doudna) (assigned to UC Berkeley). In the same time frame, CRISPR-related patent applications were also filed by Feng Zhang and his colleagues (Zhang) (assigned to MIT and its Broad Institute). Doudna filed in May, 2012, while Zhang filed in December, 2012. Doudna's application is still pending, while Zhang has a number of issued patents to date (e.g., U.S. Patent No. 8,607,359); Zhang requested an accelerated patent examination and thus received the earliest issued patents. U.S. patent law underwent a significant change in 2013 when the America Invents Act (AIA) came into force, establishing a first-inventor-to-file standard in the law. Until then, the U.S. required that a patent be awarded to the first inventor (in time); that individual might or might not be the first to file a patent application on the invention. U.S. patent law has had a mechanism for identifying the first inventor where two separate applicants file for a patent on overlapping subject matter, known as an interference proceeding. The U.S. Patent and Trademark Office (PTO) has issued a Declaration of interference between Doudna and Zhang, based on the sequence of the Doudna/Zhang patent filings, which both claim overlapping subject matter (since both were filed before the AIA took effect, the conflict will be settled under the old first-to-invent standard). The Administrative Patent Judge has issued a "count," which is a fictional claim that encompasses the conflicting subject matter: 

A method, in a eukaryotic cell, of cleaving or editing a target DNA molecule or modulating transcription of at least one gene encoded thereon, the method comprising:
    contacting, in a eukaryotic cell, a target DNA molecule having a  target sequence with an engineered and/or non-naturally-occurring Type II Clustered Regularly lnterspaced Short Palindromic Repeats (CRISPR)-CRISPR associated (Cas) (CRISPR-Cas) system comprising: 
    a) a DNA-targeting RNA comprising
       i) a targeter-RNA or guide sequence that hybridizes with the target sequence, and 
       ii) an activator-RNA or tracr sequence that hybridizes with the targeter-RNA to form a double-stranded RNA duplex of a protein-binding segment, and
    b) a Cas9 protein,
    wherein the DNA-targeting RNA forms a complex with the Cas9 protein, thereby targeting the Cas9 protein to the target DNA molecule, whereby said target DNA molecule is cleaved or edited or transcription of at least one gene encoded by the target DNA molecule is modulated.

Although this is an oversimplification, a key dispute centers on whether Doudna is only entitled to patent rights on an in vitro CRISPR/Cas9 component system, while Zhang is entitled to patent rights on the use of CRISPR in eukaryotic cells (the most valuable application of the technology). In an interference, the first filer (Doudna) is deemed the senior party, while the second filer (Zhang) is the junior party, and thus has the burden of proof to establish an earlier date of invention. Invention requires conception of the inventive idea, as well as either actual or constructive reduction to practice (meaning actual work on the invention or the actual filing of a patent application). A judge from the PTO’s Patent Trial and Appeal Board (PTAB) will conduct the proceeding. The interference could be expected to take several years, at least. The parties could settle along the way, with priority conceded and possible licensing options established. Since U.S. patent interferences are phasing out of American law due to the changes instituted by the AIA, it is no small irony that one of the most high-profile interferences will occur 3 years after the statute took effect. In addition, the patent rights to one of the most important advances in biotechnology will be sorted out according to the now-discarded first inventor paradigm of U.S. patent law. The patent rights at stake are immensely valuable, and even with an uncertain IP landscape, gene editing startups are proliferating as well as investments from established pharmaeutical companies in gene editing ventures.

Federal Circuit Denial of Rehearing for Prenatal DNA Testing Patent: Supreme Court Review?

The Federal Circuit denied a petition for an en banc rehearing of Ariosa v. Sequenom (Fed. Cir 2015). This case tests the patent eligibility of a method to detect fetal DNA in maternal blood in order to perform prenatal testing. This case is set against a lingering unrest over the recent Supreme Court decision in Mayo v. Prometheus (2012), invalidating a method of drug dosaging as the improper patenting of a natural phenomenon. Claim 1 of the Sequenom patent is as follows: 

A method for detecting a paternally inherited nucleic acid of fetal origin performed on a maternal serum or plasma sample from a pregnant female, which method comprises amplifying a paternally inherited nucleic acid from the serum or plasma sample and detecting the presence of a paternally inherited nucleic acid of fetal origin in the sample. 

The denial was accompanied by two concurring opinions (Judges Lourie and Moore, Judge Dyk) and one dissent (Judge Newman). The concurrences both thought that Ariosa was wrongly decided as a policy matter, but that their court was bound by the Mayo decision. In Mayo, a 2-part test which required the identification of any "patent-ineligible concept" and if found, a patent claim would then need an "inventive concept" to make the claim patentable.

Application of the Mayo test in the panel decision of the Federal Circuit identified a natural phenomenon (the presence of the fetal DNA in maternal serum) in Claim 1 that was appended to conventional laboratory techniques (not to an inventive concept) and that result did not present a patentable invention. The recent petition for a rehearing and the accompanying amici involvement indicate continued discomfort with Mayo’s demand for the addition of an inventive concept to any discovered natural phenomeon before patenting is permitted. An “inventive concept” is not identified, nor is that requirement demanded by the statute or even explicitly required by the earlier 35 U.S.C. 101 landmark cases of the high Court (while also suggesting a consideration of prior art as well). It should be noted that the current debate is particularly centered on method claims, especially those with either diagnostic or therapeutic application. Will the Mayo test not only invalidate many diagnostic patent claims but challenge the eligibility of standard pharmaceutical treatment claims, for example, if the underlying metabolic processes are simply natural phenomena? Judge Dyk suggested that the Mayo framework may overlook a form of creativity that can emerge from discovery-based effort: 

But, as I see it, there is a problem with Mayo insofar as it concludes  that  inventive concept cannot come from  discovering something new in nature — e.g. , identification  of a previously  unknown natural relationship or property. In my view, Mayo did not fully take into account the fact that an inventive concept can come not just from creative and unconventional application of a natural law, but also from the creativity and novelty of the discovery of the law itself. This is especially true in the life sciences, where development of useful new diagnostic and therapeutic methods is driven by investigation of complex biological systems.

Thus, until the Supreme Court returns to consider whether Mayo has imposed a rigid, inflexible test with inapposite and/or ambiguous requirements, many argue that diagnostic and therapeutic innovation is at risk. Alternatively, however, more attention to embedding unambiguously detailed and physical manipulation into patent claims may overcome some of the concerns with breadth and scope underlying the preemption rationale for exclusion of the type of claim seen in the Sequenom patent. A petition for certiorari to the Supreme Court can be expected; 2016 could see the Court return to the issue of life science patent eligibility.

Federal Circuit Considers Rehearing on Denial of Patent to Noninvasive Prenatal Testing of Fetal DNA

Non-invasive prenatal testing (NIPT) is an alternative to the invasive techniques of amniocentesis or chorionic villi sampling used in reproductive medicine, both of which carry some risk to the fetus. The research demonstrating that fetal DNA could be recovered from maternal serum prompted the development of testing techniques that could simply rely on maternal blood testing in order to recover fetal DNA and perform genetic analysis. The scientists were awarded U.S. Patent No. 6,258,540. Claim 1 of the patent: 

A method for detecting a paternally inherited nucleic acid of fetal origin performed on a maternal serum or plasma sample from a pregnant female, which method comprises amplifying a paternally inherited nucleic acid from the serum or plasma sample and detecting the presence of a paternally inherited nucleic acid of fetal origin in the sample. 

Sequenom, Inc. holds the rights to the patent. It sued Ariosa Diagnostics and several other genetic testing companies for infringement of the patent. In Ariosa Diagnostics, Inc. v. Sequenom, Inc., issued in June, the Federal Circuit ruled that the patent claims to methods for detecting and recovering the fetal DNA from a maternal sample were invalid for lack of patentable subject matter (35 U.S.C. § 101) (see here). That decision followed a sequence of recent Supreme Court cases, AMP v. Myriad (2013) (Myriad) and Mayo v. Prometheus (2012) (Mayo) that each invalidated patent claims in the life sciences for a lack of patentable subject matter. The Federal Circuit relied on the analytic framework from Mayo to dissect the patent claims, summarizing the test as follows: 

First, we determine whether the claims at issue are directed to a patent-ineligible concept. If the answer is yes, then we next consider the elements of each claim both individually and “as an ordered combination” to determine whether additional elements “transform the nature of the claim” into a patent-eligible application. 

The court noted that the presence of fetal DNA in maternal serum was a patent- ineligible natural phenomenon (step 1) and then proceeded to step 2, where it considered whether any other elements of the patent claim (detecting, amplifying) operated to transform the unpatentable natural phenomenon: 

Thus, in this case, appending routine, conventional steps to a natural phenomenon, specified at a high level of generality, is not enough to supply an inventive concept. Where claims of a method patent are directed to an application that starts and ends with a naturally occurring phenomenon, the patent fails to disclose patent eligible subject matter if the methods themselves are conventional, routine and well understood applications in the art. The claims of the ’540 patent at issue in this appeal are not directed to patent eligible subject matter and are therefore, invalid. 

Judge Linn filed a concurrence, but made it clear that he did so because Mayo demanded the application of a fairly unforgiving test that led to an incorrect result in this case. In August, Sequenom filed a petition with the Federal Circuit requesting a rehearing en banc, contending that the panel’s decision wrongly applied the Mayo framework to find a groundbreaking invention unpatentable (see here): 

To avoid this absurd result, all the Court must do is reaffirm—as did the Supreme
Court in Mayo—that a combination of known steps that incorporates or is motivated by an unpatentable natural phenomenon is nonetheless patentable if that combination “considered as a whole” was not routine before the patent disclosed it.

Sequenom then described the future impact of the decision as "an existential threat:" 

The full Court's intervention is particularly necessary because, if this Court does not step in and draw this line, the panel's rule threatens to swallow many more meritorious inventions along with this one. 

Ariosa has recently filed its response to the Sequenom petition. Ariosa argues that the Federal Circuit’s decision properly utilized the Mayo-based framework as an analytic device:   

Appellants’ only legal argument (as opposed to their dire policy-based prognostications) in favor of rehearing en banc is that Mayo, Myriad and Diehr must be read as teaching that “a combination of known steps that incorporates or is motivated by an unpatentable natural phenomenon is nonetheless patentable if that combination ‘considered as a whole’ was not routine before the patent disclosed it.” Yet Appellants’ misreading of those precedents amounts to nothing short of a wholesale revision of the Supreme Court’s two-part test for determining whether a claim recites patent-eligible subject matter.   

The contrasting arguments of the parties frame a question for the Federal Circuit regarding whether a patent claim embedding a natural phenomenon requires a holistic interpretation (Sequenom) or should be subject to a more splintered analysis (Ariosa). A decision from the Federal Circuit on the petition for rehearing is likely to issue in the next several months; if they do not accept it, the decision could then be appealed to the Supreme Court, which has issued two life science decisions on patentable subject matter in the last three years.

PTO Issues AIA-Mandated Report on Genetic Testing and Gene Patents

In the debates over the legitimacy of gene patents, one of the central concerns over the impact of gene patenting was whether patients could access second-opinion (confirmatory) genetic testing of positive test results. This circumstance was most acutely illustrated in the BRCA1 and BRCA2 breast cancer gene testing field, where the patents on these genes were held by Myriad Genetics, Inc.. Unlike some other gene patent holders, Myriad did not license other genetic testing laboratories to offer commcercial clinical testing, with the result that almost all BRCA1/2 genetic tests in the U.S. were performed by Myriad. Of relevance here, this meant that patients lacked opportunities for independent assessment of test results that indicated the presence of a mutation in either gene which significantly increased risk of developing breast and/or ovarian cancer. As is well-known now, the Myriad patents were invalidated in the landmark case of Association for Molecular Pathology v. Myriad Genetics in 2013. However, several years earlier, as part of the America Invents Act of 2011 (AIA), Congress instructed the U.S. Patent and Trademark Office (PTO) to conduct a study on the impact of gene patents on the availability of confirmatory genetic diagnosis. The AIA required the PTO to assess the following:

(1) The impact that the current lack of independent second opinion testing has had on the ability to provide the highest level of medical care to patients and recipients of genetic diagnostic testing, and on inhibiting innovation to existing testing and diagnoses.

(2) The effect that providing independent second opinion genetic diagnostic testing would have on the existing patent and license holders of an exclusive genetic test. 

(3) The impact that current exclusive licensing and patents on genetic testing activity has on the practice of medicine, including but not limited to: the interpretation of testing results and performance of testing procedures. 

(4) The role that cost and insurance coverage have on access to and provision of genetic diagnostic tests.

Although behind schedule, the PTO report has now issued. No doubt, assessing the climate of genetic testing against a backdrop of gene patenting has been significantly altered by AMP v. Myriad; it could be argued that the PTO’s report is somewhat obsolete now. However, the agency acknowledges the changes in the field since 2011, and simply advances some modest conclusions and recommendations about the availability of genetic testing in general. From the report:

Although the evidence on each of these points was limited in its scope and mixed in its implications, recent Supreme Court decisions make it unlikely that exclusive provision of a diagnostic test, whether for an original diagnosis or to confirm the original result, will be possible based on patenting and licensing behavior. Patients seeking independent confirmation of diagnostic results will almost certainly be able to find it as long as the demand level for the test (or research interest in the particular gene or condition) supports a market for multiple test providers. For this reason, much of the USPTO’s factual findings may now be superseded by intervening judicial decisions. In view of the altered legal landscape, the USPTO’s recommendations to Congress are limited in scope. 

The first recommendation is to proceed cautiously, monitoring changes in the actual availability of gene-based diagnostic tests from multiple providers. The second recommendation is to consider creating mechanisms to facilitate sharing data on diagnostic correlations in order to build robust databases of the relationships between genetic mutations and the presence, absence, or likelihood of acquiring the relevant medical condition. Data sharing of this kind would promote the most rapid advances in the diagnostic accuracy  of individual tests. The third recommendation is to consider the role of cost and insurance. However, because the USPTO does not have the institutional expertise to make specific recommendations regarding insurance coverage for gene-related diagnostic tests, this report can only emphasize that insurance coverage does appear to play significant a role in access to testing and should be taken into consideration when issues of access are examined. 

It was always a jurisdictional stretch to require the PTO to undertake this kind of analysis; the fact that such a mandate emerged from the AIA illustrates the high level of controversy over the validity of gene patents, an issue that was unresolved at the time of the law’s enactment. The PTO in general is not charged with considering the impact of patenting on market access or health care. However, its observations on the need for data-sharing of genetic correlations to clinical findings is on target. With respect to the BRCA1 and BRCA2 genetic mutations correlated with increased cancer risk, one of the consequences of the Myriad dominance of the testing market through its patents was that the company maintained the repository of most test results for these genes (important gene mutations), and was under no obligation to share them. Loss of its gene patents did not alter the fact that it had established significant genetic databases of clinically relevant mutations in the breast cancer genes. However, resistance to the establishment of proprietary genetic databases of critical genetic mutations has emerged through such initiatives such as Free the Data, and later, with the international genetic data-sharing efforts underway through the Global Alliance for Genomics and Health. Notably, the federally-funded ClinVar was established in 2013, which is an open-access public database of clinically relevant genetic data. However, the PTO report is correct in identifying this phenomenon as a determinant of whether patients are able to receive state of the art interpretations of mutational significance as the basis for medical decision-making. Furthermore, issues of cost and insurance access remain as determinants for consumers, and the patent structure of a genetic testing market will affect cost, but - apart from the notice in this PTO report - ongoing evaluations of patent validity in biotechnology do not consider such issues directly; they are collateral to decisions that are made with reference to the strictures of patent law. However, this report does sketch out an accurate field-wide portrayal of the access determinants that are indirectly influenced by patent rights.

High Court of Australia Rejects Myriad Genetics BRCA1 Gene Patents

In 2013, the U.S. Supreme Court invalidated patent claims to isolated BRCA1 and BRCA2 breast cancer genes in the case of Association for Molecular Pathology v. Myriad Genetics, on the basis that genes are not patentable subject matter (see here). Now, the High Court of Australia (HCA) has issued a decision in a case that challenged the legitimacy of patent claims to isolated genes. This month, in the case of D’Arcy v. Myriad Genetics, Inc., the HCA invalidated similar Myriad patent claims on the isolated BRCA1 gene. In contrast to the U.S. patent, the Australian claims were confined to mutated or polymorphic BRCA1 genes that are indicative of cancer risk, but which are central to a patenting strategy that would control much of current BRCA1 genetic testing. The Court’s summary: 

Today the High Court unanimously allowed an appeal from a decision of the Full Court of the Federal Court of Australia. The High Court  held that an isolated nucleic acid, coding for a BRCA1 protein, with specific variations from the norm that are indicative of susceptibility to breast cancer and ovarian cancer, was not a "patentable invention" within the meaning of s 18(1)(a) of the Patents Act 1990 (Cth) ("the Act").

The term "nucleic acid" includes  two kinds of molecules, deoxyribonucleic acid (DNA) and ribonucleic acid  (RNA), which are found inside a human cell. A gene is a functional unit of DNA which encodes a particular protein produced by the cell. The protein produced depends on the sequence of nucleotides. The BRCA1 gene codes for the production of a  protein called BRCA1.

The first respondent filed a patent which contained  30 claims. Relevantly, Claims 1 to 3 concerned a nucleic acid coding for a BRCA1 protein, and with one or more specified variations from the norm in its nucleotide sequence, isolated from its cellular environment. Those specified variations, characterised as mutations or polymorphisms, are indicative of susceptibility to breast cancer and ovarian cancer. 

Section 18(1)(a) of the Act requires that, for an invention to be patentable, it must be "a manner of manufacture" within the meaning  of s 6 of the Statute of Monopolies. The appellant commenced proceedings in the Federal Court of Australia challenging the validity of Claims 1 to 3 on the basis that the invention claimed did not meet the requirement of s 18(1)(a). 

The primary judge dismissed the appellant's challenge, holding that the invention fell within the concept of a "manner of manufacture”. The Full Court dismissed an appeal from that decision. The Full Court held that an isolated nucleic acid was chemically, structurally and functionally different from a nucleic acid inside a human cell. The invention was a manner of manufacture because an isolated nucleic acid with the characteristics specified in Claims 1 to 3 resulted in an artificially created state of affairs for economic benefit. 

By grant of special leave, the appellant appealed to the High Court. The Court unanimously allowed the appeal, holding that the invention claimed did not  fall within the concept of a manner of  manufacture. The Court held that, having regard to the relevant factors, an isolated nucleic acid, coding for the BRCA1 protein, with specified variations, is not a manner of manufacture. While the invention claimed might be, in a formal sense, a product of human action, it was the existence of the information stored in the relevant sequences that was an essential element of the invention as claimed. A plurality of the Court considered that to attribute patentability to the invention as claimed would involve an extension of the concept of a manner of manufacture which was not appropriate for judicial determination. 

In the reasoning behind the Australian decision, the Court invoked some similar themes from the U.S. 2013 decision, such as favoring an interpretation of the claims as drawn to information rather than a chemical: 

It follows that in reality the claim in suit is no more expressed in terms of a chemical formula than was the claim in respect of the BRCA1 gene simpliciter which was rejected in the United States. 

The scope of the claims were also cited as concerns: 

Myriad acknowledges that a sample taken from a patient will infringe claim 1 if one or more of the specific mutations and polymorphisms identified in the claim are present, even if the testing is not directed at the BRCA1 gene or the identified mutations and polymorphisms. That is a problem. 

Another international challenge to gene patenting (both product and method claims) remains on deck from Canada, in a case filed by the Children’s Hospital of Eastern Ontario (CHEO) against the University of Utah Research Foundation, Genzyme Genetics and Yale University over the patents covering five genes related to Long QT syndrome, a cardiac disorder. That case is also noteworthy in presenting a patent challenge from a government health provider (CHEO), reflecting the government-centered structure of Canada's healthcare system, where provincial governments assume responsibility in this sector.

Financial Toxicity: Oncologists Call for Drug Pricing and Patent-Related Measures to Reduce Cost of Biotech Cancer Drugs

In an unusual foray into advocacy involving the pharmaceutical marketplace, a coalition of oncologists has published a call to action in the Mayo Clinic Proceedings regarding the high price of cancer drugs; the physicians advocate for a number of regulatory and legislative measures to reduce the cost of cancer drugs, increase market competition, and ultimately improve patient access. It has been evident for a while that while molecular research has resulted in the development of new therapeutic approaches to cancer – especially targeted biotech drugs – the price of some of these drugs has well exceeded both patient and physician expectations; hence, the term "financial toxicity." In just one example, the Amgen drug Blincyto, an immunotherapy for leukemia, can cost about $178,000 for a course of treatment. The recent attention to funding research on "precision medicine" from the NIH and the White House focused on how cancer treatment (new drugs) is one of the chief beneficiaries of these efforts. In the published commentary, the oncologists make several points: 

In 2014, all new US Food and Drug Administration (FDA) approved cancer drugs were priced above $120,000 per year of use.

For a patient with cancer who needs one cancer drug that costs $120,000 per year, the out-of-pocket expenses could be as high as $25,000 to $30,000—more than half the average household income and possibly more than the median take-home pay for a year. Patients with cancer then have to make difficult choices between spending their incomes (and liquidating assets) on potentially lifesaving therapies or foregoing treatment to provide for family necessities (food, housing, education). 

The commentary specifically calls for the following measures:

(1) Creating a post-FDA drug approval review mechanism to propose a fair price for new treatments, based on the value to patients and heath care.
(2) Allowing Medicare to negotiate drug prices.
(3) Allowing the Patient-Centered Outcomes Research Institute, created through the Affordable Care Act initiatives to evaluate the benefits of new treatments, and similar organizations to include drug prices in their assessments of the treatment value.
(4) Allowing importation of cancer drugs across borders for personal use (e.g., prices in Canada are about half of prices in the United States).
(5) Passing legislation to prevent drug companies from delaying access to generic drugs (pay-for-delay).
(6) Reforming the patent system to make it more difficult to prolong product exclusivity unnecessarily (patent “evergreening”).
(7) Encouraging organizations that represent cancer specialists and patients (e.g., American Society of Clinical Oncology, American Society of Hematology, American Association for Cancer Research, American Cancer Society, National Comprehensive Cancer Network) to consider the overall value of drugs and treatments in formulating treatment guidelines. 

A number of the suggested measures are familiar tactics, although not all in force. For example, the patent recommendations overlap with ongoing efforts to improve either patent quality or forestall dubious attempts to extend the term of lucrative patents (the “evergreening” phenomenon, for example, has been countered using patent law theories of double patenting). The phenomenon of “pay for delay” in which brand name companies pay would-be generic competitors to stay out of the market has encountered the Supreme Court’s Federal Trade Commission (FTC) v. Actavis decision in 2013 which endorsed antitrust inquiries into such arrangements; the Federal Trade Commission actively monitors such agreements. The call for the FDA to incorporate a pricing determinant in the drug approval process runs counter to any agency mandate to consider such questions in its regulatory work. Federal legislation to allow patients to import prescription drugs from Canada has been introduced, but not enacted. The call for the government to allow Medicare to negotiate bulk pricing with drug companies has been a political football for more than a decade since the enactment of Medicare Part D prohibited that option; the Obama administration has endorsed such negotiations, but the realities of Congress today make that unlikely. With respect for the calls to professional organization, the American Society for Clinical Oncology (ASCO) is actively pursuing methods for drug valuation that incorporate pricing. Despite these particulars, the Mayo commentary lines up with other public acts of priced-based resistance from the oncology community, such prescribing refusals based on cost (e.g., Sloan-Kettering oncologist practices) or cost-consciousness in prescribing practices. The article further endorses a consumer petition drive which seeks patient support for these efforts. A critical mass of attention is developing to the high pricing of new biotech cancer drugs; the British medical journal Lancet published a recent editorial: 

It therefore seems depressingly clear that industry's inflated pricing of new cancer drugs is contributing to a failure of health systems to offer promising new therapies to the very people for whom the drugs are created—cancer patients worldwide.

It should be noted that despite the Lancet's pessimism, the U.K. did actually establish a Cancer Drugs Fund under the National Health Service to target assistance to those needing expensive cancer drugs; however, as just announced, the fund is over-budget and now restricting which drugs will be covered.

Zarxio Becomes the First Biosimilar Drug to Enter U.S. Market

The first biosimilar drug has entered the U.S. market, with the launch of the Sandoz product Zarxio, which is a biosimilar of the Amgen reference product Neupogen; it received the first FDA approval for a biosimilar drug earlier this year (following expert panel approval). The biologic drug Neupogen, used to restore white blood cell function for cancer patients undergoing chemotherapy, has been one of the most successful biotech drugs of the biotechnology industry. In general, biologics are produced from living systems, such as microorganisms or cells, rather than from direct chemical synthesis; a biosimilar is a product that is "similar" to the originally approved biologic. Under the biosimilar drug approval pathway established under the Biologics Price Competition and Innovation Act of 2009 (enacted as part of the Affordable Care Act), the FDA was empowered to receive applications from companies wishing to offer a biosimilar drug that could replace and/or compete with the reference product. Importantly, a distinction is made between “biosimilar” and “interchangeable.” The FDA explains: 

A biosimilar product is a biological product that is approved based on a showing that it is highly similar to an FDA-approved biological product, known as a reference product, and has no clinically meaningful differences in terms of safety and effectiveness from the reference product. Only minor differences in clinically inactive components are allowable in biosimilar products. 

An interchangeable biological product is biosimilar to an FDA-approved reference product and meets additional standards for interchangeability. An interchangeable biological product may be substituted for the reference product by a pharmacist without the intervention of the health care provider who prescribed the reference product.

FDA requires licensed biosimilar and interchangeable biological products to meet the Agency’s rigorous standards of safety and efficacy. That means patients and health care professionals will be able to rely upon the safety and effectiveness of the biosimilar or interchangeable product, just as they would the reference product.

To date, the FDA has not established the formal guidelines for a biosimilar to earn the designation of “interchangeable;” Sandoz, among others, has called for such action. As a result, the full market scope of market competition contemplated for an age of “biotech generics” awaits further regulatory developments from the FDA. This contrasts with the fate of Zarxio in the European Union, where the biosimilar has been approved since 2009 and where an approval by the the European Medicines Agency (EMA) means that a physician could decide that a biosimilar is interchangeable as a function of professional judgment, rather than regulatory designation.

The entry of Zarxio into the U.S. market has been accompanied by a patent-related dispute between Sandoz and Amgen regarding what level of information exchange between biosimilar applicant and reference product sponsor is required by the BCPIA (the so-called "patent dance"). In 2014, Sandoz provided notice to Amgen that it had filed a Biologics License Application (BLA) with the FDA to produce a biosimilar of Neupogen. A legal scuffle followed this notice, with Amgen claiming that Sandoz did not provide the actual BLA application as required by the BCPIA. The district court agreed with Sandoz that the statute did not require the application to be provided, but it did recognize an obligation of the application to provide notice of commercial marketing to the sponsor after FDA approval. In July of this year, the Federal Circuit subsequently sided with Sandoz and did not require it to provide the application to Amgen, and interpreted the BCPIA to establish that the notice to Amgen triggered a 180-day delay of marketing for Sandoz, which is why Zarxio has just entered the market now despite its approval in March.The growing pains for the age of biotech generics continue on another front, as the FDA has just released proposed naming guidelines to distinguish follow-on products from the original reference drug.

Sequenom Seeks En Banc Rehearing After Federal Circuit's Denial of Prenatal DNA Testing Patent

In June, the Federal Circuit ruled that a prenatal testing method for detecting fetal DNA in maternal serum was not patentable, violating the prohibition against the patenting of natural phenomena (see here). In the case, Ariosa Diagnostics, Inc. v. Sequenom Inc. (2015), a representative claim from U.S. Patent No. 6,258,540 is as follows:

1. A method for detecting a paternally inherited nucleic acid of fetal origin performed on a maternal serum or plasma sample from a pregnant female, which method comprises amplifying a paternally inherited nucleic acid from the serum or plasma sample and detecting the presence of a paternally inherited nucleic acid of fetal origin in the sample.

In the invalidity challenge asserted by Ariosa when the company was sued for patent infringement by Sequenom, Ariosa argued that the method claim effectively covered (or preempted) all uses of the newly observed natural phenomenon - namely, the presence of fetal DNA in maternal blood. The method is centered on that discovery - detect the fetal DNA and perform genetic assessments on that sample, thereby avoiding more risky invasive prenatal procedures. The trial court, and then the Federal Circuit, concluded that the method patent claims were invalid, that they did attempt to patent a natural phenomenon, not an actual invention. As the Federal Circuit stated: 

Thus, in this case, appending routine, conventional steps to a natural phenomenon, specified at a high level of generality, is not enough to supply an inventive concept. Where claims of a method patent are directed to an application that starts and ends with a naturally occurring phenomenon, the patent fails to disclose patent eligible subject matter if the methods themselves are conventional, routine and well understood applications in the art. 

Now, Sequenom has filed a petition at the Federal Circuit, asking for an en banc review of the court's panel decision in June. Sequenom challenges the panel's application of a test for patent eligibility derived from the Supreme Court's 2012 decision in Mayo v. Prometheus. Further, Sequenom argues that the impact of the patent denial on future method patent claims that center on a newly discovered natural phenomena is devastating to future innovation:

The full Court’s intervention is particularly necessary because, if this Court does not step in and draw this line, the panel’s rule threatens to swallow many more meritorious inventions along with this one. The core of nearly every major innovation is the discovery of a fact about the natural world that motivates inventors to combine existing techniques to achieve new practical results. Accordingly, the panel’s test would threaten an invention implementing the discovery that a certain form of Ebola virus provokes an immune response that prevents infection (to take just one timely example). Nearly all vaccines have this problem: The hard part is determining the natural law that a given attenuated virus creates lasting immunity; once you know that, the rest is “routine.” The same goes for future holy-grail discoveries like simple, non-invasive methods of detecting early-stage cancer— ironically, the cheaper and simpler the method discovered, the less patentable it will be. In truth, the problem goes well beyond diagnostics or even medicine: If combining conventional techniques in an unconventional fashion, motivated by a discovery about nature’s laws, is unpatentable subject matter, it is hard to see how any process claim can survive. 

The Ariosa decision particularly impacts method claims, not composition of matter claims (which were already severely impacted by AMP v. Myriad in 2013). Whether the Federal Circuit decides to accept the petition and rehear the case en banc is unknown; what is known, however, is that the Ariosa decision does jeopardize the validity of similar method claims to the detection of many biochemical or molecular relationships, just at a time when much of modern biotech research is devoted to uncovering exactly that kind of information.

Federal Circuit Invalidates Patent Claims to Methods for Noninvasive Prenatal Testing of Fetal DNA

The recognition that fetal DNA could be recovered from maternal serum launched the development of non-invasive prenatal testing (NIPT) using cell free fetal DNA (“cffDNA”). NIPT testing can be used to identify chromosomal abnormalities or other genetic aberrations, and it offers an alternative to the invasive techniques of amniocentesis or chorionic villi sampling, both of which carry some risk to the fetus. Sequenom, Inc. holds the rights to the foundational U.S. Patent No. 6,258,540.  Sequenom sued Ariosa Diagnostics, Inc. (formerly Aria) and several other genetic testing companies for infringement of the patent based on their offerings of NIPT tests. Claim 1 of the patent is as follows: 

1. A method for detecting a paternally inherited nucleic acid of fetal origin performed on a maternal serum or plasma sample from a pregnant female, which method comprises amplifying a paternally inherited nucleic acid from the serum or plasma sample and detecting the presence of a paternally inherited nucleic acid of fetal origin in the sample. 

In Ariosa v. Sequenom (2015), the Federal Circuit has just ruled that the patent claims to methods for detecting and recovering the fetal DNA are invalid for lack of patentable subject matter (35 U.S.C. § 101). This patent case follows a sequence of recent Supreme Court decisions, AMP v. Myriad (2013) and Mayo v. Prometheus (2012) (Mayo) that each invalidated patent claims in the life sciences for a lack of patentable subject mater. At the trial court in 2013, the judge had granted summary judgment to Ariosa, ruling that the patent claims impermissibly claimed a natural phenomenon and thereby preempted other uses of the natural subject matter, an outcome in conflict with Supreme Court dictates. The Federal Circuit has just affirmed that lower court decision, relying on the analytic framework from Mayo to dissect the patent claims. The court summarized the Mayo test: 

First, we determine whether the claims at issue are directed to a patent-ineligible concept. If the answer is yes, then we next consider the elements of each claim both individually and “as an ordered combination” to determine whether additional elements “transform the nature of the claim” into a patent-eligible application. 

The court notes that the presence of fetal DNA in maternal serum is a patent-ineligible natural phenomenon (step 1) and then goes on to step 2, where it considers whether the other elements of the patent claim (detecting, amplifying) operate to transform the unpatentable natural phenomenon, deciding that they do not:

Thus, in this case, appending routine, conventional steps to a natural phenomenon, specified at a high level of generality, is not enough to supply an inventive concept. Where claims of a method patent are directed to an application that starts and ends with a naturally occurring phenomenon, the patent fails to disclose patent eligible subject matter if the methods themselves are conventional, routine and well understood applications in the art. The claims of the ’540 patent at issue in this appeal are not directed to patent eligible subject matter and are therefore, invalid. 

Judge Linn filed a concurrence, but made it clear that he did so because Mayo demanded the application of a fairly unforgiving test, and without that standard, he did regard the Sequenom method claim to be patentable: 

But for the sweeping language in the Supreme Court’s Mayo opinion, I see no reason, in policy or statute, why this breakthrough invention should be deemed patent ineligible. 

Thus, the Federal Circuit has reinforced an analytic approach to the patentable subject matter question of method claims that applies the Mayo framework. Mayo requires that if a patent claim reads on a natural phenomenon, all of the surrounding elements of the claim are analyzed separately to determine if they supply an “inventive concept.” This claim dissection does appear to conflict with a well-known maxim from Diamond v. Diehr (1981), and antecedent to Mayo, that patent claims need to be evaluated as a whole, not as set of constituent parts:

In determining the eligibility of respondents' claimed process for patent protection under § 101, their claims must be considered as a whole.

Ariosa can be added to a line of life science patent cases that are struggling with several issues: how to precisely identify when a natural phenomenon or law of nature is present in a patent claim; and how to evaluate the eligibility of a patent claim that embeds natural subject matter but does not preempt that use.