On Remand, Federal Circuit Reverses Patent Ineligibility Findings

On Remand, Federal Circuit Reverses Patent Ineligibility Findings

WASHINGTON, D.C. - (Mealey's) In a divided ruling, the Federal Circuit U.S. Court of Appeals on Aug. 16 reversed a New York federal judge's determination that composition claims related to isolated DNA molecules are patent-ineligible products of nature and scientific principles pursuant to Section 101 of the Patent Act (The Association for Molecular Pathology, et al. v. U.S. Patent and Trademark Office and Myriad Genetics Inc., No. 10-1406, Fed. Cir.).

The panel of Circuit Judges Alan D. Lourie, Kimberly A. Moore and William C. Bryson, acting on remand from the U.S. Supreme Court, heard oral arguments in the dispute less than one month ago.

"The district court in effect created a categorical rule excluding isolated genes from patent eligibility. But the Supreme Court has more than once cautioned that courts 'should not read into the patent laws limitations and conditions which the legislature has not expressed and has repeatedly rejected new categorical exclusions from § 101's scope,'" the Federal Circuit wrote, citing Bilski v. Kappos (130 S. Ct. 3218, 3225 [2010]) [enhanced version available to lexis.com subscribers].

"Contrary to the conclusions of the district court and the suggestions of Plaintiffs and some amici, § 101 applies equally to all putative inventions, and isolated DNA is not and should not be considered a special case for purposes of patent eligibility under existing law," the appellate panel added.

Diagnostic Test Kits

The panel in July 2011 found that Myriad Genetics Inc.'s U.S. patent No. 5,747,282 - which covers diagnostic test kits for mutations along the BRCA1 and BRCA2 genes - is valid, over objections by the Association for Molecular Pathology, which Myriad had accused of infringement in 2009 before U.S. Judge Robert W. Sweet of the Southern District of New York. The association then appealed the findings to the Supreme Court, which, in the interim, decided Mayo Collaborative Services v. Prometheus Laboratories Inc. (No. 10-1150, U.S. Sup.) [enhanced version]. In that case, the Supreme Court found that processes claimed by a patent reciting laws of nature are not themselves patentable absent the presence of "additional features" that "transform" natural correlations into patentable applications.

After the decision, the Supreme Court granted the association's petition for certiorari for the limited purpose of vacating and remanding the dispute for reconsideration in light of Mayo. The Federal Circuit in April announced that oral arguments would be held July 20.

Man-Made Molecules

Turning first to Myriad's composition claims, the appellate panel reversed Judge Sweet, instead finding that isolated DNA molecules "are not found in nature."

"They are obtained in the laboratory and are man-made, the product of human ingenuity. While they are prepared from products of nature, so is every other composition of matter. All new chemical or biological molecules, whether made by synthesis or decomposition, are made from natural materials. For example, virtually every medicine utilized by today's medical practitioners, and every manufactured plastic product, is either synthesized from natural materials (most often petroleum fractions) or derived from natural plant materials. But, as such, they are different from natural materials, even if they are ultimately derived from them. The same is true of isolated DNA molecules," the Federal Circuit held.

While the parties, including the U.S. government, were unable to agree on whether and to what degree isolated DNA molecules fall within the exception for products of nature, the Federal Circuit was less uncertain.

"The challenged claims . . . whether limited to cDNAs [complementary DNA] or not, are directed to patent-eligible subject matter under § 101," the Federal Circuit wrote, because under the test espoused in Diamond v. Chakrabarty (447 U.S. 303 [1980]) [enhanced version], "the claims cover molecules that are markedly different - have a distinctive chemical structure and identity - from those found in nature."

"Under the statutory rubric of § 101, isolated DNA is a tangible, man-made composition of matter defined and distinguished by its objectively discernible chemical structure. Whether its unusual status as a chemical entity that conveys genetic information warrants singular treatment under the patent laws as the district court did is a policy question that we are not entitled to address," the appellate panel added.

Not Naturally Occurring

Similarly, Judge Sweet's disposition of Myriad's method claim 20 relating to the screening of potential cancer therapeutics via changes in cell growth rates of novel, man-made transformed cells is also subject to reversal, according to the Federal Circuit. Noting that all parties agreed that transformed cells arise from human effort, the appellate panel rejected the association's claim that the claimed method preempts the basic scientific principle that a slower growth rate in the presence of a potential therapeutic compound suggests that the compound is a cancer therapeutic and that such a claim is indistinguishable from what the Supreme Court held ineligible in Mayo.

"Claim 20 recites a method that comprises the steps of (1) growing host cells transformed with an altered BRCA1 gene in the presence or absence of a potential cancer therapeutic, (2) determining the growth rate of the host cells with or without the potential therapeutic, and (3) comparing the growth rate of the host cells. Claim 20 thus recites a screening method premised on the use of 'transformed' host cells. Those cells, like the patent-eligible cells in Chakrabarty, are not naturally occurring. Rather, they are derived by altering a cell to include a foreign gene, resulting in a man-made, transformed cell with enhanced function and utility. The claim thus includes more than the abstract mental step of looking at two numbers and 'comparing' two host cells' growth rates," the Federal Circuit wrote.

With regard to method claims relating to the comparison of certain DNA sequences, however, the appellate panel cited Mayo and reaffirmed both Judge Sweet and the Federal Circuit's since-vacated 2011 ruling, finding that the methods claim only patent-ineligible abstract mental processes.

Concurrence, Dissent

Judge Moore authored a concurrence, in which she joined the majority's holdings with regard to issues of standing and the patentability of Myriad's method claims. In a dissent, Judge Bryson also indicated his agreement with regard to the method claim but criticized the majority's findings as they relate to isolated DNA.

"In my view, those claims are not directed to patentable subject matter, and the court's decision, if sustained, will likely have broad consequences, such as preempting methods for whole-genome sequencing, even though Myriad's contribution to the field is not remotely consonant with such effects.

"The essence of Myriad's argument in this case is to say that it has not patented a human gene, but something quite different - an isolated human gene, which differs from a native gene because the process of extracting it results in changes in its molecular structure (although not in its genetic code). We are therefore required to decide whether the process of isolating genetic material from a human DNA molecule makes the isolated genetic material a patentable invention. The court concludes that it does; I conclude that it does not," Judge Bryson wrote.

The association is represented by Christopher Hansen, Steven R. Shapiro, Sandra S. Park, Aden J. Fine and Lenora M. Lapidus of the American Civil Liberties Union Foundation in New York and Daniel B. Ravicher and Sabrina Y. Hassan of Public Patent Foundation, Benjamin N. Cardozo School of Law in New York. Myriad is represented by Gregory Castanias of Jones Day in Washington.

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