Detecting Disease Is Not a “Tangible and Useful Result” Eligible for PatentingThe federal appeals court with jurisdiction over questions of patent law has consistently held that methods of diagnosing a disease or other biological condition violate the Supreme Court’s ban on patenting “natural phenomena.” A recent decision reaffirmed this position (in the veterinary sphere), and for the first time in many years clearly articulated the test that a method of diagnosis fails: In the court’s opinion, mere diagnosis of a disease is not a “tangible and useful” result. However, due to the history of this test, it is of questionable value to patent stakeholders.

Diagnosis without Treatment Is Banned from Patenting

Readers of this blog are aware that the Supreme Court decided that a method of determining whether a patient receiving a drug is overdosed or under-dosed was banned from patenting in Mayo Collaborative Services v. Prometheus Laboratories, Inc., for the stated reason that the method was nothing more than a recognition of a “natural phenomenon” (i.e., that the artificial drug in question is effective at certain dosages and toxic at other dosages). The U.S. Court of Appeals for the Federal Circuit (CAFC) has interpreted Mayo to ban patents on methods of diagnosis, but to allow methods of medical treatment that depend on a diagnosis (i.e., personalized medicine). This trend, and the cases that define it, were blogged about in late 2018 in “Patenting Diagnostics and Biomarkers Six Years After Mayo.”

Since 2018, the majority of a triumvirate panel of the CAFC decided that a method of diagnosing previously un-diagnosable cases of myasthenia gravis by detecting a newly discovered biomarker fell under the Supreme Court’s Mayo ban (Athena Diagnostics, Inc v. Mayo Collaborative Services, LLC). The longest serving judge in the CAFC, Pauline Newman, offered a lengthy and thorough dissent. She emphasized that the patented method of diagnosis was new, used a wholly unrecognized approach, and produced a “tangible and useful result.” The “tangible and useful result” standard was taken from the earlier decision in Rapid Litigation Management Ltd., v. Cellzdirect, Inc., in which the CAFC upheld the patent-eligibility of a method of freezing cells. Because effectively preserving cells was considered a “tangible and useful result,” the court allowed the patent in that case to stand.

Diagnosis and Genotyping Not “Tangible and Useful”

The CAFC has again applied the “tangible and useful result” standard in the recent case of Genetic Veterinary Sciences v. LABOKLIN GmbH & Co. KG. In Genetic Veterinary Sciences the patent at issue claimed methods of diagnosing the canine disease known as hereditary nasal parakeratosis, a disease that causes unsightly crusting and fissures in the dog’s nose. The claims were directed to genotyping the SUV39H2 gene, which was discovered to cause the disease. Dependent claims included limitations for specific sequencing techniques, all of which had previously been known and used to sequence other genetic loci. A unanimous panel of the CAFC decided that the invention, as claimed, was not eligible for patenting because the invention was nothing more that the recognition of a natural phenomenon, notwithstanding claims to specific techniques such as PCR (or even the use of specific DNA primers). In comparing this invention to the cell cryopreservation technique in Cellz Direct, the court concluded that “Here, the Asserted Claims provide no tangible result save the observation and detection of a mutation in a dog’s DNA. While a positive and valuable contribution, these claims fall short of statutory patentable subject matter.”

A New Standard of Patent Eligibility?

The CAFC seems to be relying on a test for patent eligibility that rests on shaky ground. The “tangible and useful result” test is actually an old standard, first established by the CAFC in the State Street Bank case. Although this standard was never explicitly overturned, Associate Justice Stephen Breyer has written disparagingly of it in his concurring opinion in Bilksi v. Kappos and his dissent from the refusal of the petition for certiorari in Labcorp v. Metabolite Labs. The USPTO’s internal procedure forbids the use of this standard, as the USPTO interprets Supreme Court precedent as incompatible with it. The CAFC’s recent reliance on a standard that is apparently disfavored by the Supreme Court would seem to be setting the scene for yet another Supreme Court reversal of CAFC precedent. It could be risky for patent stakeholders to rely on this test to evaluate the patent-eligibility of inventions for two reasons. First, the CAFC is notorious for internal divisions, and a panel of different judges from those on the Veterinary Sciences panel might reject the “tangible and useful result” test. Second, this Supreme Court reverses the CAFC frequently, and it is foreseeable that the “tangible and useful result” test could be the subject of such a Supreme Court reversal. Apart from the potential demise of the test, it is anything but clear when an invention produces “tangible and useful” results based on the CAFC’s decisions. Why does a method freezing cells produce a tangible and useful result, but not a method of genotyping dogs? Until questions such as these are resolved, the “tangible and useful result” test remains of dubious value to the regulated public.

Eliminate Medical Treatment Patents? An Effort Approaches the Supreme CourtWill the Supreme Court’s banning of methods of medical diagnosis from patenting in Mayo v. Prometheus be extended to patents for medical treatments? Since Mayo some have argued that some methods of medical treatment should also be banned from patenting. Up until recently these arguments have seemed futile, as the U.S. Court of Appeals for the Federal Circuit has consistently held that treating a disease or other condition is not merely a “mental process” or “natural law.” Critics of medical treatment patents are now making their case to the Supreme Court.

Will the Supreme Court Ban Medical Treatment Patents in Hikma?

The U.S. Supreme Court is now considering whether to rule on this question in the Hikma Pharmaceuticals USA Inc. v. Vanda Pharmaceuticals Inc. case. The Hikma case involves “personalized medicine” combining diagnosis and treatment. The invention is a method for treating schizophrenia with the drug iloperidone that is tied to determining the patient’s tolerance for iloperidone with a new genetic test. The inventors discovered certain genotypes that indicate poor metabolism of iloperidone, that in turn increase the patient’s risk of cardiac complications of iloperidone treatment at doses of at least 12 mg/day (the risk at lower doses is not increased). The claims comprise determining whether the patient has the poor metabolizer gene, administering 12 mg/day or less iloperidone if the patient has the poor metabolizer gene, but otherwise administering 12-24 mg/day iloperidone. This is a classic application of personalized medicine, in which the side effects of treatment are minimized by varying the dosage based on the patient’s genotype.

After losing at the Federal Circuit, the infringer in Hikma urged the Supreme Court to invalidate the patent. The infringer’s argument is that the patent protects only a medical diagnostic method, and that the course of treatment based on the test results are mere “window dressing” to fool the court.

Similar arguments have been made to the Federal Circuit in several recent cases without success.

The Federal Circuit’s Defense of Medical Treatment Patents

Classen Immunotherapies Inc. v. Biogen IDEC was the seminal case in this line, although arguably not the strongest. A Federal Circuit panel considered the patent eligibility of a method of immunization of a subject that involves first immunizing a number of other subjects according to two immunization schedules and determining which has the least risk of side effects, then immunizing the subject according to the schedule with the lowest risk. The panel was unanimous that the act of immunizing two groups of subjects and comparing the results to determine the best immunization schedule, without applying that schedule to a subject, was not eligible for patenting. However, with the extra step of actually immunizing a subject based on the schedule, the majority of the panel held the method was patent eligible. While the majority held that a method of medical treatment is eligible for patenting, even if it involves mental steps, a dissenting judge thought the claims were “a monopoly over the scientific method itself.”

In Natural Alternatives International, Inc. v. Creative Compounds, LLC, the patent claimed methods of increasing a human subject’s anaerobic capacity by the administration of one of three amino acids (β-alanine, an ester of β-alanine, or an amide of β-alanine). The infringer argued that the method was merely a recognition of the natural principle that the listed compounds increase human anaerobic capacity, and therefore was a patent-ineligible natural law. Although the trial court agreed and declared the patents invalid, the majority of a three-judge panel for the Federal Circuit reversed the trial court.  The Federal Circuit panel decided that the method of increasing anaerobic capacity was more than a mere “natural phenomenon,” but rather a specific and useful application of a natural law: All drugs function according to natural principles, and a ban on methods of medical treatment that rely on natural principles would be tantamount to a ban on all methods of medical treatment.

In Endo Pharmaceuticals Inc. v. Mallinckrodt, LLC, the patent claimed a method of treating pain in renal patients by administering a controlled-release form of oxycodone, measuring the patient’s creatinine clearance rate, and then administering another lower dose of oxycodone until the AUC of oxycodone drops below 21 ng hr/mL. The inventors observed that a patient’s clearance rate of oxycodone was directly correlated with the creatinine clearance rate (a proxy for kidney function), and developed methods of preventing excessive levels of oxycodone by customizing the dosage regiment based on the patient’s ability to clear creatinine. This is another classic application of personalized medicine, in which the treatment is varied based on the metabolic idiosyncrasies of the individual patient. Although the trial court felt this was merely a natural law that could not be patented, the Federal Circuit panel again reversed. The Federal Circuit viewed the patent as not claiming a natural law, but as claiming a method of safely treating pain that applies a natural law.

The Federal Circuit’s Invalidation of Diagnosis Patents

There are several counter-examples in which attempts to patent methods of medical diagnosis alone have been denied by the Federal Circuit. These include Myriad (by the Federal Circuit, before it went to the Supreme Court), PerkinElmer Inc v. Intema Ltd., Univ. of Utah Research Foundation v. Ambry Genetics Corp., Cleveland Clinic Foundation v. True Health Diagnostics, LLC, Roche Molecular Systems, Inc. v Cepheid, and Ariosa Diagnostics, Inc. v. Sequenom, Inc. The facts vary in each of these cases, but in every case the end result of the method is diagnosis, not the treatment of a patient.

Will the Supreme Court Eliminate Patents for Medical Treatment Tied to Diagnosis?

This Supreme Court is hostile to patents, and if the Court agrees to review this decision, there is a real possibility that personalized medicine patents are in jeopardy. The Supreme Court has a nearly unbroken streak of deciding every patent it considers to be at least partially ineligible for patenting since the Chakrabarty case in 1980; of the four times the Court has considered that question since, it has at least partially invalidated every patent it considered except one (in J.E M. Ag Supply, Inc. v. Pioneer Hi-Bred International, Inc.). Both sides have arguments that are at least plausible at first blush.  Opponents to medical treatment patenting proffer that a method of diagnosis is of no use without a treatment; therefore adding a treatment step to a banned method of diagnosis actually adds nothing.  Proponents of the status quo argue that if a method of treating a medical condition may be patented in the absence of a diagnostic step, it makes no sense to ban the same method of treatment in combination with a diagnostic step.

One indication that the Supreme Court might take the case is that it requested the U.S. Department of Justice to provide its opinion on the case. Typically, the Supreme Court requests an opinion from the DOJ if it considers a given case to be of significance. The DOJ has not responded yet, but it will be interesting to see what position it takes. All in all, this case and its possible consideration by the nation’s highest court are additional illustrations of the instability and constant uncertainty surrounding current U.S. patent law.

Introduction

The lack of clarity in the law with regards to patent subject matter eligibility under 35 U.S.C. § 101 has made it difficult for patent attorneys to advise their clients with regards to patent protection for software inventions. Since the case law regarding subject matter eligibility is nebulous and seems to be ever changing, the USPTO guidance to its examiners regarding the eligibility of software is also nebulous and is not consistently applied by the patent examiners. Given this lack of clarity, it is exceedingly difficult for patent attorneys to advise their clients regarding their chances of receiving patent protection for software inventions. In an effort to get more consistent rulings from their patent examiners, the USPTO published the 2019 Revised Patent Subject Matter Eligibility Guidelines (hereinafter, the “Revised Guidelines”). Overall, the Revised Guidelines do synthesize the current case law and provide clearer standards for patent examiners to follow when determining if claims to an invention, such as software, is too abstract to receive patent protection. Understanding the Revised Guidelines should make it somewhat easier for patent attorneys to advise their clients regarding software inventions.

Background

It is no secret that the USPTO has struggled to apply the Supreme Court’s Alice/Mayo test for patent subject matter eligibility in a consistent and clear manner. The USPTO provides a two-step framework for determining whether a claim is drawn to patent-eligible subject matter:

Step 1: A claim must be directed to a process, machine, manufacture, or composition of matter.

Step 2: This is a two-part analysis from Alice Corp.

Step 2A: Determine whether a claim is directed to a judicial exception (e.g., an abstract idea, a law of nature, or a natural phenomenon).

Step 2B: Even if a claim is determined to be directed to an abstract idea (or another judicial exception), the claim may still be patentable if any element, or combination of elements, in the claim is sufficient to ensure that the claim as a whole amounts to significantly more than an abstract idea.

In an effort to provide clarity regarding the application of the above mentioned Alice/Mayo test in Step 2, the USPTO published the Revised Guidelines on January 7, 2019. The USPTO explicitly states that the Revised Guidelines supersede MPEP 2106.04(II) to the extent it equates claims “reciting” a judicial exception with claims “directed to” a judicial exception, along with any other portion of the MPEP that conflicts with this guidance. The reason for this change will be apparent from the discussion below. The Revised Guidelines also supersede all versions of the USPTO’s “Eligibility Quick Reference Sheet Identifying Abstract Ideas” and any eligibility-related guidance issued prior to the Ninth Edition, R-08.2017, of the MPEP (published January 2018). The USPTO, however, makes the following caveat that “any claim considered patent eligible under prior guidance should be considered patent eligible under this guidance.”

Summary

Software Inventions Face New USPTO Standards for PatentingThe Patent Office asserts that the Revised Guidelines are “designed to more accurately and consistently identify claims that recite a practical application of a judicial exception.” To do this, the USPTO has segmented the Alice/Mayo test under Step 2 into three prongs, the first two applying to Step 2A and the last to Step 2B. In the first two prongs of the USPTO’s version of the Alice/Mayo test under the Revised Guidelines, the USPTO makes the distinction between claims that merely “recite” and claims that are “directed to” a judicial exception. In Prong One, the examiner must determine whether the claim recites a judicial exception and, in Prong Two, the examiner must determine whether the recited judicial exception is integrated into a practical application. If a claim recites a judicial exception but fails to integrate the exception into a practical application, then the claim is “directed to” a judicial exception and further analysis is needed under Prong Three (i.e., Step 2B). In Prong Three, a claim that does not integrate a judicial exception into a practical application may nonetheless be patent eligible if additional elements recited in the claim recite “significantly more” than the judicial exception.

Prong One: Evaluate Whether the Claim Recites a Judicial Exception

Prong One is the first prong of the analysis under Step 2A. Prong One requires an examiner to evaluate whether the claim recites a judicial exception (i.e., an abstract idea, a law of nature, or a natural phenomenon). If no judicial exception is recited, this concludes the analysis and the claim is eligible. However, if the claim does recite a judicial exception, then it requires further analysis in Prong Two of revised Step 2A to determine whether it is directed to the recited judicial exception.

For laws of nature and natural phenomena, the guidance does not change, and examiners will continue to follow existing guidance to identify whether a claim recites one of these exceptions under MPEP § 2106.04 (b)-(c). However, there is a change to previous guidance with respect to abstract ideas. According to the Revised Guidelines at pg. 16:

To determine whether a claim recites an abstract idea in Prong One, examiners are now to: (a) identify the specific limitation(s) in the claim under examination (individually or in combination) that the examiner believes recites an abstract idea; and (b) determine whether the identified limitation(s) falls within the subject matter groupings of abstract ideas enumerated in Section I of the 2019 Revised Patent Subject Matter Eligibility Guidance.

The abstract idea exception under Section I, pgs. 9-11 of the Revised Guidelines includes the following groupings of abstract subject matter:

a) Mathematical concepts – mathematical relationships, mathematical formulas or equations, mathematical calculations;

b) Certain methods of organizing human activity – fundamental economic principles or practices (including hedging, insurance, mitigating risk); commercial or legal interactions (including agreements in the form of contracts; legal obligations; advertising, marketing or sales activities or behaviors; business relations); managing personal behavior or relationships or interactions between people (including social activities, teaching, and following rules or instructions);

and

c) Mental processes – concepts performed in the human mind (including an observation, evaluation, judgment, opinion).

(Citations Omitted)

Claims that do not fall within the enumerated categories should not be treated as abstract ideas except in the rare circumstance that the claim limitation does not fall within the enumerated categories, but nonetheless the examiner still believes that the claim limitation should be treated as an abstract idea. In such a case, the examiner is to follow the guidance described in Section III. C of the Revised Guidelines for analyzing the claim. According to Section III. C of the Revised Guidelines, the examiner should initially treat the claim limitation as a tentative abstract idea and continue with the analysis in Prong Two and Prong Three to determine if the claim would be considered “directed to” the judicial exception and if the claim has additional elements that recite significantly more than the judicial exception. If the examiner believes that the tentative abstract idea is directed to the judicial exception and there aren’t additional elements that make the claims significantly more than the judicial exception, then the tentative abstract idea must be approved as an abstract idea by the technology center director.

Prong Two: If the Claim Recites a Judicial Exception, Evaluate Whether the Judicial Exception Is Integrated into a Practical Application

 Prong Two is the second part of the analysis under Step 2A. In Prong Two, the claim is evaluated to determine whether the claim “as a whole integrates the recited judicial exception into a practical application of the exception.” According to the Revised Guidelines, a practical application “will apply, rely on, or use the judicial exception in a manner that imposes a meaningful limit on the judicial exception, such that the claim is more than a drafting effort designed to monopolize the judicial exception.” To analyze the claim, the examiner should (a) identify whether there are “additional elements” recited in the claim beyond the judicial exception(s) and then (b) evaluate the additional elements individually and in combination to determine whether they integrate the exception into a practical application. To determine whether the claim is directed to a judicial exception, the USPTO points the examiner to the case law of the Federal Circuit and the Supreme Court. This clearly marks a place in the analysis where the patent practitioner should be able to draft claims and make arguments based on analogous case law from the Federal Circuit and the Supreme Court. The Revised Guidelines at pgs. 20-21 specifically list exemplary and non-exclusive “considerations” indicative that judicial exception has been integrated into a practical application, including:

  • an additional element reflects an improvement in the functioning of a computer, or an improvement to other technology or technical field;
  • an additional element that applies or uses a judicial exception to effect a particular treatment or prophylaxis for a disease or medical condition;
  • an additional element implements a judicial exception with, or uses a judicial exception in conjunction with, a particular machine or manufacture that is integral to the claim;
  • an additional element effects a transformation or reduction of a particular article to a different state or thing; and
  • an additional element applies or uses the judicial exception in some other meaningful way beyond generally linking the use of the judicial exception to a particular technological environment, such that the claim as a whole is more than a drafting effort designed to monopolize the exception.

(Citations omitted)

If the claim is not integrated into a judicial exception, then the claim is “directed to” the judicial exception, and one must analyze the claim under Step 2B and Prong Three. One interesting part of the analysis from the Revised Guidelines is that it specifically excludes evaluations of whether the additional element is well-understood, routine, conventional activity from the analysis of Step 2A. In fact, the Patent Office expressly admits that a claim that includes conventional elements may still integrate the exception into a practical application and thus be patent eligible. Instead, the analysis with respect to well-understood, routine, conventional activity has been shifted to Step 2B and Prong Three.

Step 2B: If the Claim Is Directed to a Judicial Exception, Evaluate Whether the Claim Provides an Inventive Concept

 A claim that does not integrate the judicial exception into a practical application may still be patent eligible if the additional elements recited in the claims provide “significantly more” than the judicial exception. More specifically, if the element is unconventional and is more than well-understood, routine, conventional activity in the field, the claim may have an inventive concept (i.e., additional elements that amount to significantly more than the judicial exception itself) that makes the claim patent eligible. Whether the additional element(s) amounts to significantly more may depend on whether the additional element or combination of elements “adds a specific limitation or combination of limitations that are not well-understood, routine, conventional activity in the field, which is indicative that an inventive concept may be present” or instead “simply appends well-understood, routine, conventional activities previously known to the industry, specified at a high level of generality, to the judicial exception, which is indicative that an inventive concept may not be present. One specific example of a situation where additional elements may provide significantly more relates to data gathering. In this example, the USPTO states that the examiner may consider the data gathering steps to be insignificant extra-solution activity under revised Step 2A, but may then determine under Step 2B that the data is gathered in an unconventional way and therefore includes an “inventive concept” that makes the claim patent eligible under Step 2B. However, a claim that does not meaningfully integrate the judicial exception into a practical application and does not include additional subject matter that amounts to significantly more should be rejected as patent ineligible.

Conclusion

Given the analysis under the Revised Guidelines, it is advisable that the patent practitioner stay away from the categories enumerated by the Patent Office under Prong One of the analysis.  However, in some circumstances, this may not be possible. In such a case, the patent practitioner should try as much as possible to draft claims that are analogous to patent eligible claims written in Federal Circuit or Supreme Court cases or that clearly and unequivocally fall under the principles of patent eligibility in those cases. In this manner, the claims are likely to be considered integrated into a practical application of a judicial exception and thus be patent eligible under Prong Two. In the circumstance where neither of these are possible, the patent practitioner should try as much as possible to find what is unconventional about a client’s invention and focus the claims on these unconventional features in order to pass Prong Three of the analysis under the Revised Guidelines.