By Kevin E. Noonan --
The Federal Circuit waded into the question of patent ownership in a dispute between a patent attorney and Applera-Applied Biosystems over patents involving nucleic acid sequencing technology in Applera Corp. v. Illumina, Inc. The case is unusual in at least three respects: the inventor is a lawyer, not a scientist; the patents are substantially prophetic in a technology that is heavily dependent on experimental results; and the dispute was resolved not on the basis of a patent law issue but with the Federal Circuit interpreting the provisions of California employment law. The result, while nonprecedential, does shed some light on how these issues are intimately dependent on the underlying facts of the inventor's employment as well as the provisions of state law (which, in view of its variability, prevents there being any definite rubrics from this decision for resolving these issues).
The patents at issue were U.S. Patent Nos. 5,750,341; 5,969,119; and 6,306,597 (all three patents are related). All three name Stephen Macevicz, Ph.D. as inventor. While employed as a patent attorney for Applera, Dr. Macevicz developed a method for nucleic acid sequencing based on "repeated rounds of ligation and cleavage of oligonucleotide probes." Claim 1 of the '597 patent is illustrative of these methods:
1. A method for identifying a sequence of nucleotides in a polynucleotide, the method comprising the steps of:
(a) extending an initializing oligonucleotide along the polynucleotide by ligating an oligonucleotide probe thereto to form an extended duplex;
(b) identifying one or more nucleotides of the polynucleotide; and
(c) repeating steps (a) and (b) until the sequence of nucleotides is determined.
It is undisputed that Dr. Macevicz did not inform Applera of these applications while they employed him. It is also undisputed that these patents stemmed from related but distinct technology developed by Sydney Brenner, a Nobel Prize-winning biologist for whom Dr. Macevicz had prepared and prosecuted patents for the technology. (Curiously, he performed this patent prosecution work for Dr. Brenner while being employed by Applera, who apparently had a policy of allowing their patent professionals to take on "outside work.") Finally, it is undisputed that Applera was given the opportunity to license Dr. Brenner's patents but declined based on its determination that the technology was "'far too expensive' and 'complex and thus not a 'viable commercial product' for Applera." Thereafter, Applera acquired Agencourt Personal Genomics, which had developed its own "ligation-and-cleavage" sequencing technology and formed the basis of Applera's "SOLiD™ System DNA sequencing technology." Dr. Macevicz had moved on to Solexa by this time, which licensed both Dr. Brenner's patents as well as Dr. Macevicz's. The instant lawsuit resulted from Applera filing a declaratory judgment action claiming ownership of Dr. Macevicz's patents, as well as non-infringement and invalidity.
Solexa won jury verdicts in its favor on the ownership issues and that claim 1 of the '119 patent was not invalid, but the jury also determined that this claim was not infringed by Applera. The District Court denied the parties' motions for JMOL.
The Federal Circuit, in an opinion by Judge Moore joined by Judges Lourie and Gajarsa, considered three contested issues: patent ownership, non-obviousness of claim 1 of the '119 patent, and claim construction of claim 1 of the '597 patent (which the parties stipulated was not infringed under the District Court's interpretation). On the ownership issue, the Federal Circuit construed the provisions of Dr. Macevicz's employment agreement with Applera, which provided that Dr. Macevicz was obligated to assign any inventions he developed while employed by Applera unless:
(1) the invention was developed entirely on his own time;
(2) "no equipment, supplies, facility, or trade secret of the Company was used in its development"; and
(3) "(i) it does not relate to the business or actual or demonstrably anticipated research or development of the Company, or (ii) it does not result from any work performed by [him] for the Company."
The jury by special verdict found that Dr. Macevicz satisfied all three of these provisions. According to the opinion, the first provision was not in dispute. Dr. Macevicz's satisfaction of the second provision stemmed from the singular nature of his invention -- it was purely prophetic and there was no experimental verification in the specification -- as well as from Dr. Macevicz's sagacity in "detail[ing] his inventions in a laboratory notebook he purchased himself." There was a secondary issue of whether Dr. Macevicz had utilized any of Applera's trade secrets, specifically the work of an Applera scientist (Dr. Fung), but there was substantial evidence that Dr. Fung's work was unrelated to conception of Dr. Macevicz's invention.
The question to be decided by the panel was whether the jury's determination that the third criterion was satisfied was supported by substantial evidence. The parties disagreed on whether Dr. Macevicz needed to satisfy only one (Solexa) or both (Applera) provisions of this criterion, i.e., whether Dr. Macevicz's invention did not "relate to the business or actual or demonstrably anticipated research or development of the Company," or did not "result from any work performed by [him] for the Company." This question came down to a matter of contract interpretation, which the Federal Circuit said was a state law question, subject to the Court's de novo review. In analyzing this issue, the Court cited a California Court of Appeals case, Cubic Corp. v. Marty, and how that court construed the provisions of a "similar provision" (§ 2870) of the California Labor Code, which reads as follows:
Any provision in an employment agreement which provides that an employee shall assign or offer to assign any of his or her rights in an invention to his or her employer shall not apply to an invention for which no equipment, supplies, facility, or trade secret information of the employer was used and which was developed entirely on the employee's own time, and
(a) which does not relate
(1) to the business of the employer or
(2) to the employer's actual or demonstrably anticipated research or development, or
(b) which does not result from any work performed by the employee for the employer.
Any provision, which purports to apply to such an invention, is to that extent against the public policy of this state and is to that extent void and unenforceable. Cal. Lab. Code § 2870 (West 1979).
In the Cubic
case, the California court held that unless both conditions (a) and (b) were
met, the contract was enforceable under California law. Here, the Federal Circuit distinguished
Cubic, deciding that the better view (and one that the panel was not convinced
the California Supreme Court would dispute) was to construe the language of the
employment agreement according to the plain meaning of its terms. Thus, the CAFC held that the
provisions of the third criterion were in the alternative, i.e., disjunctive
not conjunctive, and that if Dr. Macevicz satisfied either provision, then there
was substantial evidence to support the jury's determination that he was not
obligated to assign his rights to Applera. The panel found that there was substantial evidence that Dr.
Macevicz's inventions did not result from any work he performed for
Applera. This conclusion was
supported by the existence of another patent on nucleic acid sequencing Dr.
Macevicz obtained before he began working for Applera, refuting Applera's
contention that his work for them was the basis for conception of the
inventions disclosed and claimed in the patents-in-suit.
The non-obviousness question regarded claim 1 of the '119 patent:
1. An oligonucleotide probe of the formula:HO—(3')(B)j(5')—OP(=O)(O—)NH—(B)k-Bt*
B is a nucleotide or an analog thereof;
j is in the range of from 1 to 12;
k is in the range of from 1 to 12, such that the sum of j and k is less than or equal to 12;
Bt* is a labeled, nonextendable chain terminating moiety.
It was not disputed that the prior art disclosed every aspect of the oligonucleotide recited in this claim except that the chain-terminating moiety, Bt, comprised a label. Also undisputed was that labeled oligonucleotides were known in the prior art. The question of whether the skilled worker would have been motivated to combine these references (or, in the language of KSR v. Teleflex, whether there would have been a reasoned basis to do so) was presented to the jury as a factual question, with each parties' contentions supported by expert testimony. According to the Federal Circuit, "[t]he jury apparently found the testimony of Solexa's expert more credible. We will not disturb its verdict."
Finally, regarding construction of claim 1 of the '597 patent (set forth above), the issue before the Court was the meaning of the following terms:
• "extending an initializing oligonucleotide along the polynucleotide by ligating an oligonucleotide probe thereto to form an extended duplex" in step (a);
• "identifying" in step (b) and
• "repeating steps (a) and (b) until the sequence of nucleotides is determined" in step (c).
Solexa argued that the first term must be interpreted to mean that "each oligonucleotide probe must be ligated to an initializing nucleotide during repetition of the cycle" rather than that "the oligonucleotide probe can be ligated to an extended duplex (an initializing probe that has already been extended by an oligonucleotide probe)." The District Court disagreed, interpreting the claim to require that "step (a) includes an extension process, whereby, with each repetition, an additional probe is added to what is already there, so that the chain gets longer and longer." In construing the claim in agreement with the District Court, the Federal Circuit referenced the specification, "which repeatedly describes regenerating an extendable end on the extended duplex to allow for successive cycles of ligation."
Regarding the meaning of the term "identifying" in step (b) of the claimed method, the District Court construed the term to mean that "at least one nucleotide [is] identified during step (b), that is, its identity as an A, G, C or T must be determined." The Court also construed step (c) as requiring such identification to occur during each cycle of repeating steps (a), (b) and (c). Solexa argued that the use of the word "comprising" meant that the method could be practiced in such a way that the identifying step was "skipped" in some iterations of the method, and then multiple nucleotides identified by the end of the process.
The Federal Circuit disagreed with Solexa's interpretation, citing Dippin' Dots, Inc. v. Mosey, 476 F.3d 1337, 1343 (Fed. Cir. 2007) that "'[c]omprising' is not a weasel work with which to abrogate claim limitations." Again consulting the specification, the panel held that the invention was described as comprising repeated cycles of the steps (a), (b) and (c), and that "in order to repeat steps (a) and (b)" (as required in step (c)), "one must actually perform step (b)." Moreover, the Court cited the prosecution history of the '597 patent to reject Solexa's construction of step (c), affirming the District Court's construction giving the words of claim step (c ) their ordinary and customary meaning.
Applera Corp. v. Illumina, Inc. (Fed. Cir. 2010)
Panel: Circuit Judges Lourie, Gajarsa, and Moore
Opinion by Circuit Judge Moore