By
Kevin E. Noonan —

The
Federal Circuit vacated and remanded a District Court decision denying a
preliminary injunction to patentee Sequenom over the claims of U.S. Patent No.
6,258,540.  While the Court rendered its decision
based on traditional principles of claim construction and the lower court's
balancing of the equitable factors considered for granting preliminary
injunctions in patent cases, the decision also bears consideration in view of
the panel's mention of whether the claims at issue were patent eligible under
the Supreme Court's recent AMP v. Myriad
Genetics decision.

The
claims of the '540 patent (owned by Isis Innovation Limited and exclusively
licensed to Sequenom) are directed towards detecting paternal DNA sequences
derived from a fetus in maternal circulation from a pregnant woman.  Claim 1 is representative:

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.

(emphasis
in the opinion).  Sequenom's commercial
product (and Aria's) is directed to diagnosing trisomy disorders (Down's,
Edwards and Patau) in the fetus by detecting these disorders from "non-nucleated
free-floating fetal DNA (cffDNA) in maternal blood.  This test is much less invasive than
traditional amniocentesis (and poses no risk to the developing child, unlike
amniocentesis) and avoids the necessity of isolating the "rare nucleated
[fetal] cells" that can be found in maternal blood.  Fortuitously, it appears that women bearing a
trisomy-affected child have more cffDNA in their blood than women bearing an
unaffected child.  As the result of these
biological phenomena the test is not only safer but also more reliable in
providing a diagnosis.

Aria
(now, Ariosa) Diagnostics filed a declaratory judgment action that its genetic
test, termed "Harmony," did not infringe Sequenom's claims, and
Sequenom counterclaimed for patent infringement and asked for a preliminary
injunction, which the District Court denied.

The
Federal Circuit opinion, by Chief Judge Rader, joined by Judges Dyk and Reyna,
begins with the standard for appealing denial of a preliminary injunction:  not
only that at least one of the District Court's factual finding was clearly
erroneous, but that the court abused its discretion in denying the injunction,
citing Reebok Int'l Ltd. v. J. Baker, Inc., 32 F.3d 1552, 1555 (Fed.
Cir. 1994).  While the parties disagreed
over the extent to which claim construction is determinative in the preliminary
injunction context (the opinion invites a comparison between Chamberlain
Group, Inc. v. Lear Corp., 516 F.3d 1331, 1340 (Fed. Cir. 2008), and Int'l
Cmty. Materials v. Ricoh Co., 108 F.3d 316, 318-19 (Fed. Cir. 1997)), here "the
court need not reach out to comment on those alternative approaches to the
question" because "[e]ven under the ostensibly more relaxed standard,
the district court erred in its claim construction" and "[a]s a
consequence, the district court erred in finding a substantial question of
noninfringement."  In this regard
the panel reviewed construction of the terms "paternally inherited nucleic
acid" and "amplifying" in the claims.  With regard to the term "paternally
inherited nucleic acid," the District Court held the term to mean "DNA
sequence known [in advance] to be received only from the father which is not
possessed by the mother."  (Note
that while the District Court did not include the bracketed [in advance] in its
claim construction order it is undisputed that it must be known "in
advance" that the sequence is derived from the father and not the mother
for the test to be diagnostic.)  Thus,
for infringement to arise the user must know the father's genotype, and this
requirement renders the District Court's claim construction incorrect according
to the panel.

The
reason for this determination by the Court is that this requirement is not part
of the plain meaning of the term "paternally
inherited nucleic acid," nor is it supported by the specification; indeed, the panel opinion asserts that this
interpretation is based on a single sentence from the '540 patent
specification:  the "method according to the invention can be applied to
the detection of any paternally-inherited sequences which are not
possessed by the mother."  The opinion does not find this sentence to be
limiting but rather an expansive statement "reflect[ing] the broad meaning
of 'paternally inherited nucleic acid' that is found in the claims — a meaning
which does not limit them to those known in advance to have come from the
father."  In the panel's opinion the
term encompasses any paternal characteristics
by comparison to maternal characteristics (emphasis in opinion), not a
limitation only to those paternal nucleic acids identified in advance.

The
Court also found that this construction was not consistent with other portions
of the specification, particularly the examples.  For instance, Example 3 expressly recites a
prior determination of the mother's RhD negative status but is silent as to a
similar determination of the father's RhD gene; although this example detects
the RhD gene allele inherited by the fetus from the father there is no teaching
that the father's RhD gene was known in advance.  Thus, even if the claims were limited to what
was expressly disclosed in the examples (an outcome the panel specifically
points out is not the claim construction standard), Example 3 illustrates
embodiments of the invention falling outside the District Court's construction
of the term.

Regarding
the prosecution file history, the Court also found no support for limiting the "paternally
inherited nucleic acid" term to paternal DNA known in advance.  The panel assessed three incidents asserted
in support of the District Court's construction.  First, the claims were amended to recite the "paternally
inherited nucleic acid limitation" during prosecution to secure an
allowance, but the Court found that this portion of the prosecution history
does not require prior knowledge of the paternally inherited sequence.  Second, during prosecution of a related
continuation application Isis argued that the claims should not be limited to
paternally inherited nucleic acids, citing instances where DNA distinct for the
fetus (such as due to "spontaneous" or "chance" changes or
mutations or other fetus-specific differences between fetal and maternal
nucleic acids.  However the Court did not
find these arguments to "approach the clear and unequivocal statement
needed before prosecution history can operate to extinguish subject matter
otherwise within the claims."  Third, with regard to those continuation application claims, the examiner
asserted that the specification did not enable detection of chromosome 21 "caused
by maternal inheritance or genetic mutation," but the panel found these statements to be
too ambiguous to support Ariosa's arguments or the District Court's claim
construction (as well as being directed to an issue, enablement, not considered
by the District Court).

Because
the District Court erred in imposing this limitation on the claims, the Federal
Circuit held that the District Court erred in finding that Ariosa had raised a
substantial question of noninfringement precluding grant of a preliminary
injunction to Sequenom.

Regarding
the term "amplifying," the District Court construed the term to mean "increasing
the concentration of a paternally inherited nucleic acid relative to the other
DNA in the sample."  Under this
construction, only paternally derived DNA would be amplified, not the fetal DNA as
a whole.  This was error, according to
the Federal Circuit, because the plain meaning of the claims require that
paternally derived nucleic acid is amplified "without any mention of an
effect on the quantity of other nucleic acid" and thus the claims would be
infringed "whether, or not, other nucleic acid is amplified."  The specification is contrary to the District Court's construction, according to the panel, citing passages from the
specification that distinguish between "amplification" and "enrichment"
of paternally inherited nucleic acid.  The
panel concluded that "the specification does not support, but instead
points away from the district court's claim construction, which already is at
odds with the plain language of the claim."  And the prosecution file history is no less
availing:  the examiner's statements cited to support the District Court's
construction of the "amplifying" term are directly related to enrichment
rather than amplification according to the panel because "[t]he examiner
could not have been objecting to lack of support for amplification, because
amplification was described through traditional PCR and other methods."  As with its erroneous construction of the "paternally
inherited nucleic acid" term, the Federal Circuit found that the District Court had incorrectly construed the "amplifying" term and thus erred
in concluding that Ariosa had raised a substantial question of noninfringement.

Finally,
the District Court had found that there was "a substantial question over
whether the subject matter of the asserted claims was to eligible subject
matter."  Noting the intervening
decision by the Supreme Court in the Myriad
case, the panel's remand instructs the District Court to consider the subject
matter eligibility question.  However:

To be clear, this court
offers no opinion as to whether there is or is not a substantial question
regarding the subject matter eligibility of the asserted claims.  This court
merely concludes that in light of Myriad and the different claim
construction, this court would benefit from the district court's initial and
further consideration.  On remand, the district court may once again consider
this issue, as well as whether there is a substantial question of validity of
the asserted claims under other defenses raised by Ariosa but not reached
previously by the district court.

To
be equally clear, the claims of the '540 patent do not claim isolated
paternally inherited nucleic acid per se and thus should fall outside the ambit
of the Supreme Court's Myriad
decision.  The question that will need to
be addressed is whether these claims recite diagnostic method claims that
remain patent eligible under the Court's Mayo
v. Prometheus Labs. decision, both a different question and one for which it
is much harder to predict an outcome.

The
Court also provided "additional guidance" to the District Court with
regard to its application of the other equitable factors (irreparable harm,
balance of the hardships and the public interest) should the lower court find
in Sequenom's favor on the "likelihood of succeeding on the merits"
prong of the preliminary injunction test.  Concerning the "irreparable harm" prong, the District Court
found that "price and market erosion would occur," these being
factors that can be used to support a preliminary injunction (for example,
under Celsis in Vitro, Inc. v. CellzDirect, Inc., 664 F.3d 922, 930
(Fed. Cir. 2012)).  The District Court
cited four reasons why Sequenom's showing of harm was not sufficient to satisfy
this prong of the test.  First, the Court
found that the market and price erosion were not "irreparable"
because Sequenom's superior product (if it turned out to be so) would recover
the market and receive damages for any infringement.  The panel found this to be an assumption
rather than a fact and said that "[i]n the face of that kind of universal
assumption, patents would lose their character as an exclusive right as
articulated by the Constitution and become at best a judicially imposed and
monitored compulsory license."  Second, the Court found that Sequenom's expert witness had not
demonstrated the "degree" of price and market erosion adequately,
because he had not considered other, potentially rival tests.  In addition to the contingent and speculative
nature of this assessment, the panel noted that the "'fact that other
infringers may be in the marketplace does not negate irreparable harm,"' citing
Pfizer, Inc. v. Teva Pharm. USA, Inc., 429 F.3d 1364, 1381 (Fed. Cir.
2005).  Next, the District Court found
that granting a preliminary injunction "would put Ariosa out of business."  While such a showing can be a factor (see
Intel Corp. v. ULSI Sys. Tech., Inc., 995 F.2d 1566, 1568, 1570 (Fed.
Cir. 1993)) it does not control the "balance of the hardships" prong
of the standard, citing Bell & Howell Document Mgmt. Prods. Co. v. Altek
Sys., 132 F.3d 701, 708 (Fed. Cir. 1997).  The panel indicated that the District Court will need to educe evidence
of the balance of the hardships (i.e., on Sequenom if the injunction is
denied as well as Ariosa if it is granted) to properly establish where the
balance of the hardships lies.  Finally,
the Court noted that at least some of the grounds used by the District Court in
finding in favor of Ariosa on the public interest prong was that Ariosa
marketed its Harmony test to both "high- and low-risk women"
(approximately 3.5 million) while Sequenom made its test available only to
high-risk women (e.g., over 35 years
of age and amounting to about 750,000 women).  The panel noted that more recently "an expert organization had
warned that cffDNA tests should not, yet, be used in low-risk women. Am. Coll.
of Obstetricians and Gynecologists Comm. on Genetics, Noninvasive Prenatal
Testing for Fetal Aneuploidy, Op. No. 545 (Dec. 2012).  This report raises questions that the panel
should consider when rendering its decision on Sequenom's preliminary
injunction motion on remand.

Aria
Diagnostics, Inc. v. Sequenom, Inc. (Fed. Cir. 2013)
Panel:
Chief Judge Rader and Circuit Judges Dyk and Reyna
Opinion
by Chief Judge Rader