By Kevin E. Noonan --
On Friday, the Federal Circuit continued its explication of the metes and bounds of patent-eligible subject matter after the Supreme Court's Bilski v. Kappos decision by revisiting (and reconsidering) its decision in Prometheus Laboratories, Inc. v. Mayo Collaborative Services. The Court in its earlier decision had reversed a District Court determination that the claims of the patents-in-suit (U.S. Patent Nos. 6,355,623 and 6,680,302) were invalid as being outside the scope of patent-eligible subject matter under 35 U.S.C. § 101, based on its application of the "machine or transformation" test enunciated in In re Bilski. The Supreme Court granted Mayo's petition for certiorari, vacated the Federal Circuit's earlier decision, and remanded to the appellate court for reconsideration under the patent-eligibility standard(s) the Court announced in its Bilski decision. A relevant part of that decision was the Court's direction that the Federal Circuit develop its case law on what would constitute an "abstract idea" for purposes of patent eligibility. (And the importance of this case, if only as a stalking-horse for the upcoming AMP v. USPTO (Myriad) case, is illustrated by the lineup of amici filing briefs in this case, including Novartis, Myriad, the AIPLA, the American College of Medical Geneticists, Arup Labs, the Biotechnology Industry Organization (BIO), and biotech patent-knowledgeable academic Christopher Holman).
The panel opinion, by Judge Lourie joined by Chief Judge Rader and Judge Bryson, noted that there were two general types of claims at issue: those that affirmatively recited an "administrative" step, exemplified by Claim 1 of the '623 patent:
1. A method of optimizing therapeutic efficacy for treatment of an immune-mediated gastrointestinal disorder, comprising:
(a) administering a drug providing 6-thioguanine to a subject having said immune-mediated gastrointestinal disorder; and
(b) determining the level of 6-thioguanine in said subject having said immune-mediated gastrointestinal disorder,
wherein the level of 6-thioguanine less than about 230 pmol per 8x108 red blood cells indicates a need to increase the amount of said drug subsequently administered to said subject and
wherein the level of 6-thioguanine greater than about 400 pmol per 8x108 red blood cells indicates a need to decrease the amount of said drug subsequently administered to said subject.
and claims that did not recite such a step, exemplified by Claim 46 of the '302 patent:
46. A method of optimizing therapeutic efficacy and reducing toxicity associated with treatment of an immune-mediated gastrointestinal disorder, comprising:
(a) determining the level of 6-thioguanine or 6-methylmercaptopurine in a subject administered a drug selected from the group consisting of 6-mercaptopurine, azathiop[u]rine, 6-thioguanine, and 6-methyl-mercaptoriboside, said subject having said immune-mediated gastrointestinal disorder,
wherein the level of 6-thioguanine less than about 230 pmol per 8x108 red blood cells indicates a need to increase the amount of said drug subsequently administered to said subject, and
wherein the level of 6-thioguanine greater than about 400 pmol per 8x108 red blood cells or a level of 6-methylmercaptopurine greater than about 7000 pmol per 8x108 red blood cells indicates a need to decrease the amount of said drug subsequently administered to said subject.
(Relevant to the Federal Circuit's assessment of the claims was the District Court's construction of the claim term "indicates a need" to mean "a warning that an adjustment in dosage may be required." "This construction did not require doctors to adjust drug dosage if the metabolite level reached the specified levels; rather, the court found the two 'wherein' phrases to mean 'that when the identified metabolites reach the specified level, the doctor is warned or notified that a dosage adjustment may be required, if the doctor believes that is the proper procedure.'")
Both types of claims were patent-eligible, according to the panel opinion.
The Court rejected the District Court's characterization that the claims consisted of three steps: (1) administering the drug to a subject, (2) determining metabolite levels, and (3) being warned that an adjustment in dosage may be required, wherein the first two steps were "data-gathering," leaving the third step as merely an unpatentable mental step, comprising the correlation, because no step requiring a change in administered dose. The Court agreed that the last (comparison) step was a mental step, but maintained (as it had in the original opinion) that this by itself cannot provide legitimate grounds for invalidating the claims (because the claims must be considered in their entirety). Here, the Court again determined that the claims at issue satisfied the "machine or transformation" test and that this was sufficient; the Federal Circuit specifically rejected Mayo's contention that the Supreme Court had abrogated this test in favor of a "complete preemption" test. In this regard, Mayo argued on remand that "'[b]ecause the claims cover the correlations themselves, it follows that the claims 'wholly pre-empt' the correlations.'"
The panel characterized the Supreme Court's opinion in Bilski to have rejected the machine-or-transformation test as the "sole, definitive test" (but did not reject it per se), and "declined to adopt any categorical rules outside the well-established exceptions for laws of nature, physical phenomena, and abstract ideas, and resolved the case based on its decisions in Gottschalk v. Benson, 409 U.S. 63 (1972), Parker v. Flook, 437 U.S. 584 (1978), and Diamond v. Diehr, 450 U.S. 175 (1981)." According to the Federal Circuit, the Supreme Court has historically construed patent-eligibility broadly, limiting eligibility to exclude only laws of nature, physical phenomena, and abstract idea (based, the panel suggested, on historical precedent extending back to the 19th century; Le Roy v. Tatham, 55 U.S. (14 How.) 156, 174-75 (1853), and continued in the Court's most recent opinion on this issue (Bilski). The panel also stated that while laws of nature, physical phenomena, and abstract ideas are ineligible for patenting, applications thereof can be patented, citing Bilski and Diehr. Using this standard, the opinion recited its rationale expressly: do the Prometheus claims recite and preempt a natural phenomenon, alá Benson and Flook, or are they merely a particular application thereof, alá Diehr? Mayo argued that satisfaction of the machine or transformation (MOT) test was not "outcome determinative" under the Supreme Court's Bilski test. Prometheus, on the other hand, argued that the Supreme Court's Bilski opinion mandated that claims that fail the MOT test are not necessarily unpatentable unless they totally preempt an abstract idea or natural law; thus its claims, which satisfied the MOT test, are patent-eligible. Importantly, Prometheus also argued that these claims did not totally preempt an abstract idea or natural law, since they are a particular application of the natural phenomenon ("specific means of treating specific diseases using specific drugs"). This argument was persuasive to the panel, which held that application of the machine or transformation test "leads to a clear and compelling conclusion" in favor of patent-eligibility (being directed to "the treatment of a specific disease by administering specific drugs and measuring specific metabolites"):
The inventive nature of the claimed methods stems not from preemption of all use of these natural processes, but from the application of a natural phenomenon in a series of steps comprising particular methods of treatment.
While the Court recognized that some of the claims recited an administering step while others did not, the Court found both types of claims to be patent-eligible. With regard to claims that recited an administering step, the Court found (as it had in its original decision) that treatment steps are "always transformative when one of a defined group of drugs is administered to the body to ameliorate the effects of an undesired condition." The Court cited with approval the Prometheus argument that "quite literally every transformation of physical matter can be described as occurring according to natural processes and natural law [because] [t]ransformations operate by natural principles." What is transformative in these claimed methods is administration of drugs (treatment) which is not a natural process; what is transformed is the human to whom the drugs are administered. The panel also cited its Bilski opinion that "[i]t is virtually self-evident that a process for a chemical or physical transformation of physical objects or substances is patent-eligible subject matter.'" Bilski, 545 F.3d at 962.
Turning to the claims that do not recite an administering step, the Court found that they are also patent-eligible because the determining step is also transformative as well as being "central" to the claimed methods. (The "central" characterization is in contrast to the argument that this is "mere" data-gathering.) The Court's rationale was that at the end of the procedures used to determine metabolite levels, whatever was assayed has been transformed. "The determining step, by working a chemical and physical transformation on physical substances, likewise sufficiently confines the patent monopoly, as required by the machine-or-transformation test."
The panel distinguished two earlier cases: In re Grams, 888 F.2d 835 (Fed. Cir. 1989), which the Court called the "closest comparison," and In re Abele, 684 F.2d 902 (C.C.P.A. 1982). The Grams case, according to the panel, involved a combination of data-gathering steps plus a fundamental principle. In Grams, the method recited steps of performing a clinical test and then using an algorithm to determine whether an abnormality existed and possible causes thereof. The Grams court found that this was "merely" an algorithm coupled with a data-gathering step, because the tests were not "transformative." Here, the Court distinguished Grams by finding the administering and determining steps to be transformative. This is in contrast to a method claim that does not contain administering or determining steps: "a physician who only evaluates the result of the claimed methods, without carrying out the administering and/or determining steps that are present in all the claims, cannot infringe any claim that requires such steps."
The other case, In re Abele, involved claims related to X-ray attenuation data, which the Court said required the "production, detection and display [using] a CAT scan," and also involved an algorithm. The Abele court found these claims to be patentable, according to this panel, because even without the algorithm step the claim contained all the CAT scan steps, which that court found was "manifestly statutory subject matter" despite the presence of the algorithm step. The panel opinion cited its Bilski decision to again emphasize the proposition that a claim must be considered as a whole in making this determination (something that is directly contrary to Justice Breyer's manner of analysis in Laboratory Corp. v. Metabolite Labs., Inc. ("LabCorp")):
[I]t is inappropriate to determine the patent eligibility of a claim as a whole based on whether selected limitations constitute patent-eligible subject matter. After all, even though a fundamental principle itself is not patent-eligible, processes incorporating a fundamental principle may be patent-eligible. Thus, it is irrelevant that any individual step or limitation of such processes by itself would be unpatentable under § 101.
The implications of this decision may be significantly limited by the Court's emphasis on the "treatment" steps as being transformative and thus almost by-definition patent-eligible:
The crucial error the district court made in reaching the opposite conclusion was failing to recognize that the first two steps of the asserted claims are not merely data-gathering steps. See Invalidity Opinion, 2008 WL 878910, at *6 (finding that "the 'administering' and 'determining' steps are merely necessary data-gathering steps for any use of the correlations"). While it is true that the administering and determining steps gather useful data, it is also clear that the presence of those two steps in the claimed processes is not "merely" for the purpose of gathering data. Instead, the administering and determining steps are part of a treatment protocol, and they are transformative. As explained above, the administering step provides thiopurine drugs for the purpose of treating disease, and the determining step measures the drugs' metabolite levels for the purpose of assessing the drugs' dosage during the course of treatment.
Ultimately, the Court seems to make a policy argument, which can be dangerously subjective ("we know it when we see it"):
Viewing the treatment methods as a whole, Prometheus has claimed therapeutic methods that determine the optimal dosage level for a course of treatment. In other words, when asked the critical question, "What did the applicant invent?," Grams, 888 F.2d at 839 (citation omitted), the answer is a series of transformative steps that optimizes efficacy and reduces toxicity of a method of treatment for particular diseases using particular drugs.
This is a frankly utilitarian analysis, basing what is patent-eligible on whether it is useful, provided that what is claimed does not wholly preempt an abstract idea or natural law.
Finally (and according to some commentators, provocatively), the panel disagreed with Mayo's contention that the Supreme Court's Bilski decision somehow affirmed Justice Breyer's dissent in Metabolite:
Mayo, as did the district court, points to the opinion of three Justices dissenting from the dismissal of the grant of certiorari in Lab. Corp., 548 U.S. 124 (Breyer, J., dissenting from dismissal of certiorari as improvidently granted). See Invalidity Opinion, 2008 WL 878910, at *8 (discussing the dissent in Lab. Corp. at length and finding Justice Breyer's reasoning persuasive). Again, with respect, we decline to discuss a dissent; it is not controlling law, and it involved different claims from the ones at issue here. Mayo further claims that five Justices in two concurrences cited Lab. Corp. with approval in Bilski, but such citations fail to transform a dissent into controlling law. Moreover, one concurrence cites Lab. Corp. for the proposition that "too much patent protection can impede rather than 'promote the Progress of . . . useful Arts,'" in arguing for a categorical rule that business method patents do not qualify as patent-eligible processes under § 101. Bilski, 130 S. Ct. at 3255 (Stevens, J., concurring). But this case does not involve business method patents.
That such sentiments will be sufficient to motivate the Supreme Court to revisit the question of the patent-eligibility of diagnostic method claims is at odds with the Court's mandate that the Federal Circuit in the first instance test the proper scope of patent-eligibility on a case-by-case basis. Such an approach has the potential to adequately (or at least sufficiently) illuminate the relevant principles in the fire of litigation, to provide a collection of decisions that might assist the Court when (and if) it decides to reenter the patent-eligibility waters. The Court in Bilski was properly prudent in its approach with regard to "new technologies" ("there are reasons to doubt whether the [machine or transformation] test should be the sole criterion for determining the patentability of inventions in the Information Age . . . the machine-or-transformation test would create uncertainty as to the patentability of software, advanced diagnostic medicine techniques, and inventions based on linear programming, data compression, and the manipulation of digital signals"), suggesting that the Court can only benefit from the Federal Circuit's exercise of "its sound judgment in this area of its special expertise."
Prometheus Laboratories, Inc. v. Mayo Collaborative Services (Fed. Cir. 2010)
Panel: Chief Judge Rader and Circuit Judges Lourie and Bryson
Opinion by Circuit Judge Lourie