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« AARP Seeks Reduced Data Exclusivity Period in TPP | Main | Webinar on Unitary Patent and Unified Patent Court »

October 31, 2013

Comments

Sad but accurate.

Well said.

But will this satisfy those who believe that Prometheus was a clear (if not great) decision?

I remain...

Kevin,

Bravo! Couldn't have described the current (and thoroughly subjective) state of the chaotic patent-eligibility law under 35 USC 101 any better. The Mayo decision is an utter disaster for rational patent law jurisprudence.

Amen

Totally Agree.
The bicycle-patent analogy makes a lot of sense!

Kevin,

I quite agree that S Ct has revived the discovery v invention distinction despite the 1952 Patent Act, using the only tool it could use to do so--section 101 patentable subject matter. And it is a matter of judgment, although I do not despair so completely of the ability to draw lines, they probably won't be bright ones.

But my underlying disagreement is with your location of the problem. My own diagnosis is that S Ct is pushing back, not on whether there should be lines, but how far the lines have expanded to claim exclusive rights. Every judge in the Myriad case saw something patentable in the activity, but not the very expansive claims that were granted. Ditto Wednesday's decision in San Francisco by Judge Illston in the cell-free fetal DNA case (she uses the logic of Mayo more than Myriad).

The courts are saying, I think fairly clearly, not that there should be no lines but "you have claimed far more than you have contributed," which suggests that the lawyers and businesspeople who are sitting at those tables making very practical decisions have been giving advice that is proving to be wrong in the face of courts thinking through the consequences of doing business as it has been done for the past couple decades. My own sense is that it is the folks drafting the claims who have to change their practices, and so it is not surprising that they are encountering rejections at USPTO. That's what the system does when it re-adjusts.

Going back to Myriad, the message seems to me to be "You can still get patents. If you discover a gene, you can patent a way to detect mutations. But you cannot assert exclusive rights over all ways to make or use that gene or to the gene itself." If Myriad had claimed several hundred flanking primers and specified them and a method of stitching together the BRCA1 sequence (probably not BRCA2, which Stratton beat them to by a month), they could have done the same test and dominated the same market, but for a shorter time until other methods for determining the sequences came on line. Instead, they claimed the gene itself. That made sense for therapeutics, and if it were therapeutics at stake, their patents would have been upheld as cDNAs, and they would not rely on genomic sequence. But for diagnostics, their claims were over-broad and that's that the court is reacting to. It's hard to know if Mayo establishes a "pre-emption test," but if so, it will indeed be a debatable standard. They call them judges.

And dare I say it? The pre-emption concern would be much less intense if we had a research use exemption from infringement liability in US law. Right now, 101 is the only tool S Ct justices have to address the problem they accurately perceive in over-broad exclusivity that reaches to basic methods and discoveries.

I agree completely. It is sad but accurate. Thanks for saying it Kevin. This needs to be said over and over in as many fora as possible. I think I will forward this to the press. Its time they did something useful for a change.

Bob,

Do you really think that it is proper for the Supreme Court to be legislating from the bench as you indicate?

Do you think it is even up to them to address "the problem" of a patent system that provides such expansive breadth?

In Bob Cook-Deegan's excellent post, he should have cited O'Reilly v. Morse, which illustrates his point exactly.

If you are going to recite case law from before the 1952 Act in order to 'revive' some legal principle that arguably does not exist after the 1952 Act (calling on the notion that revival implies cessation), perhaps you too, Prof. Stern, would care to answer my question about the propriety of the Supreme Court taking that action.

When the Justices are more interested in not letting their exceptions become dead letters, one has to wonder whether they are playing the role of interpretor or legislator.

Skeptical,

The 1952 Act did not abolish prior law. At the moment of passage, the floor manager denied (not wholly accurately, perhaps) that it was intended just to codify prior law rather than change it.

Nothing in the legislative history suggests any congressional desire to change anything but dicta in Cuno Engineering, Mercoid (271(d)), and Halliburton/sec. 112, par. 3/6 (means-for claims). Certainly no one remotely suggested any desire to change the law of (now) sec. 101.

The Morse case is still good law and has repeatedly been cited and followed in Sup Ct ops since 1970. (As well as in earlier Sup Ct cases on what can be patented, reviewed in Benson.) For example, whether you love Benson or hate it, the fact is that the op in that case is wholly based on Morse. And Flook and then Bilski are based on Morse's reading of Nielsen.

When Congress re-enacts the patent laws without trying to overturn a major precedent such as Morse, as it did in the 1952 Act, it must be taken as approving or acquiescing in the decision; and for the Court then to continue to follow and apply that precedent is not judicial legislation, but rather simply doing what it is supposed to do.

You, Skeptical, are the one trying to legislate new law, and there is no obvious propriety in it. As the Court said at the end of the Benson op, if you have a problem persuade Congress to write new laws embodying your views. If you can...

If you cannot, grin and bear it or lump it. Or complain in the blogosphere.

Prof. Stern,

It is truly an understatement to say "not wholly accurately, perhaps"

I would reference for you the removal of common law determination of patent eligibility by way of "invention" with the introduction of non-obviousness.

I would also reference that eligibility is not (and cannot be - as recognized by the Supreme Court itself) be equated with 112.

Your wish to say (now) 101 is misplaced.

Your wish to say that I am legislating new law, likewise fails.

No complaint from me - other than you have not answered my question.

Bob:

Whether the Court has identified overly expansive application of patent law or not (and I would suggest that they have performed a much less critically extensive assessment than you have), the post was meant to address the practical consequences of their failure to enunciate a coherent test or even philosophy. "We know it when we see it" standard or even your "we think you've gone too far" sentiment may be within their purview (although I suggest you compare the statements about the Court's role per Chief Justice Burger in Chakrabarty with statements substantially to the contrary from Justice Breyer in Mayo), but it makes a mess of how patent law is administered.

I think the Court has a responsibility to take the time and effort to provide a coherent test. They haven't, and so we have the current situation.

We will post on the recent district court decision early next week, but for now I note that the court was very concerned with preemption of commercially viable alternatives. Which I think you would admit isn't dispositive.

Thanks as always for the comment

Dear Prof. Stern:

Thanks for providing your comments. I certainly agree that the Morse case is still good law, but the scope of that claim was similar to the scope of the Myriad claims invalidated by the district court and affirmed by the Federal Circuit. That is not the case for diagnostic claims generally, as evidenced by the allegations in the Quest DJ complaint where they contend they don't infringe Myriad's method claims because they use a different method. Assuming they are correct, this reflects exactly how the patent system is supposed to work - Quest came up with a different way to perform the same test.

Thanks again.

Bob,

With all due respect, Kevin's comment in response to yours is spot on and I agree with it completely. Clients don't like chaos, and that's what we've currently gotten from SCOTUS, first with Bilski, then compounded by Mayo. There is simply no objective standard enunciated by SCOTUS in either of these cases as to what is or is not a patent-ineligible "abstract idea" in view of 35 USC 101. Litigators and academics may enjoy such chaos, but our clients who have to make significant business (and expensive) decisions don't, and they definitely let us attorneys know their angst.

Kevin:

I've asked you this before:

Researcher 1 discovers that people with genotype A/A respond more favorably to drug X than people with genotype A/B or B/B (assume A and B are the only alleles), and acquires a diagnostic method patent "claiming" this association. Few years later, Researcher 2 discovers that people with genotype B/B have an adverse reaction to drug Y but people with A/A or A/B do not, and acquires a diagnostic method patent "claiming" this association.

Researcher 1 and Researcher 2 separately offer a test to consumers that consists of determining whether a person is A/A or A/B or B/B. Researcher 1's marketing materials say "This test is to predict whether drug X will work on you." Researcher 2's marketing materials say "This test is to predict whether you will have an adverse reaction to drug Y." The "determining" in both tests is done by techniques that have been around for 50 years. Researcher 1 sues Researcher 2 for patent infringement, and vice versa.

Who wins?

I wanted to emphasize one point made by Bob (and echoed in part by Dr. Noonan), that is neglected by Prof. Stern.

There is a definite notion that the Court has resurrected something from before the 1952 Act.


Without getting bogged down in 101/102/103/112 semantics, it should be clear that the Court is not merely interpreting the 1952 Act in its 101 jurisprudence, as much as the Court is attempting to keep alive its ability to legislate views (policy and philosophy driven as they are) in the post-1952 law.

Call it 'implicit' or whatever, an underlying theme still persists: we have an activist Court re-writing what Congress plainly said. The juxtaposition (as rightly noted by Dr. Noonan) between the expansive view in Chakrabarty and the clinging to the judicial exceptions as noted in Prometheus could not be more glaring.

When it comes to separation of powers, I believe that in one hundred years, this patent-centric battle will rival the initial confrontation between the branches of the government in academic focus (which dealt with a far less important issue of mere presidential appointment). Without casting aspersions (and injecting my own cynicism), it is noteworthy that current academia seems oblivious to the current ongoing power struggle.

I would also point out that the 'infection' that is the Supreme Court desire to hold onto its 'implicit writing ability' and oversight power has contaminated the judicial body created especially by Congress to bring order to patent law: the CAFC.

The recent barrage of Supreme brow-beating has resulted in the Alice (non)decision.

Someone should study this branch of government power struggle.

Dear Gary:

I expect the claims would only grant with a limiting preamble about drugs X and Y, and that neither would infringe. I also expect these patents would be licensed by the companies selling drugs X and Y, and they wouldn't care about the other test

"but when do we decide how much preemption is too much?"

When you're preempting judicially excepted subject matter.

Jebus, how many times does the court have to tell you this for you to stop saying that the "court doesn't say"?

"A bicycle is merely a collection of previously known "simple" machines (wheels, levers, gears, pulleys) that are put together in a routine and conventional way to preempt the use of human muscle motion to take advantage of natural laws of motion. A similar analysis can be applied to almost anything."

None of those "simple" machines are judicially excepted subject matter now are they?

"Of course, if Justice Breyer's view of patent-eligibility was the law in the 1980's there would have been little chance for azidothyidine (AZT), for many years the only treatment for Acquired Immunodeficiency Syndrome, to have been commercially available. After all, it is patently unlikely that Burroughs Wellcome would have incurred the costs of developing and obtaining regulatory approval of the drug without the very patent exclusivity the Court would deny Myriad."

Why must they patent the administration of the AZT? Why not simply, you know, patent the parts about the making of AZT as is proper and make your dime that way? And before you tell me about the hardships of detecting infringement or whatever, spare me.

"(It is the rare applicant that has not encountered a rejection under § 101 based on the Mayo opinion, and district courts in addition to those in the Myriad cases are grappling with these issues, often on summary judgment.) "

Glad to hear it. After decades of the law having fallen into disrepair on the Circuit's watch, it has been reinstated.

"One of the many consequences of the Mayo decision, trivial for the discussion of our "position" but important for continued innovation in America, is that the Court has dismantled one of the outstanding achievements of thirty years of Federal Circuit jurisprudence (although the Federal Circuit has been doing some dismantling of its own lately): providing sufficient stability and clarity to U.S. patent law that a businessperson could sit down with her patent lawyer and assess the metes and bounds of her patent claims and those of her competitors, to make rationale, legally sound business decisions. That task has become much more daunting in an era where the only honest answer to a client's question of whether a claim is valid or an invention eligible for patenting will be "that depends on what court reviews the claims." "

Oh spare us. If you guys are that hopeless then call in the big guns. I'm available over at patentlyo most days of the week and can fly to your location within a day or two to help your poor poor selves out on a given case. I barely charge anything compared to lawyer's rates.

Mr. Stern, a pleasure to have you amongst us. I have been trying to revive the application of those cases for a few years now, I wonder if you could help me out by telling me the history of how they fell into such neglect approximately 20 years ago? I'm a youngen and wasn't around.

6, you ask, “I wonder if you could help me out by telling me the history of how they fell into such neglect approximately 20 years ago?”

It started more than 20 years ago. Initially, Judge Rich and the Patent Office were on the same page as to patent-eligibility—then called “patentability” and “non-statutory subject matter.” He gave a speech to the Patent Academy in the early 1950s in which he pointed out that many advances were not rewarded with patents because the patent law did not extend to everything under the sun. He gave as an example from personal experience what he called the greatest invention of our times—the diaper service (this was long before the invention of Pampers and such products), which freed him and his wife from having to deal too personally with their (then) young daughter’s waste products. Why was the invention of the diaper service not patentable (that was what they termed patent-eligible in those days)? Because it was a method of doing business. They did not stay on the same page, however.

Fast forward a few years to (a) Judge Rich on the CCPA and (b) the Patent Office, not having any “shoes” for algorithms and computer programs, having no way to search such art, unable to cope with the new advice from Graham v. Deere about how to lessen the width of the “notorious discrepancy” between Patent Office patentability standards and judicial patentability standards, and therefore rejecting patent applications on algorithms under section 101 while the CCPA, led by Judge Rich in this, uniformly reversed the Office. At this point the Solicitor’s Office (mainly Deputy Solicitor Joe Schimmel) persuaded the Antitrust Division of the Department of Justice to take up appellate cudgels for the Office under the (then) newly recognized cert jurisdiction for CCPA reversals of Patent Office rejections of patent applications. The Antitrust Division persuaded the Solicitor General to seek cert in the Benson case. This led to Gottschalk v. Benson, 409 U.S. 63 (1972), which reversed the CCPA on the basis of Morse, and a many decades long struggle between the CCPA/CAFC and the Patent Office/PTO (with title of party changes on both sides over the decades) followed.

The CCPA did not accept Benson as valid authority, because it was convinced that it knew much more about patent law than the Supreme Court, the Department of Justice, and the Patent Office. As a starter, the CCPA just ignored Benson. Then it decided that Benson applied only to method claims, not “machine” claims—where the machine was a series of means for performing the steps of the method. This led to Dann v. Johnston, 425 U.S. 219 (1976), where Judge Rich dissented below because he could see no difference in principle between method and apparatus claims in this context. After the Supreme Court reversed the CCPA in Johnston, on obviousness grounds, the CCPA went back to simply ignoring Benson and the Supreme Court reversed it on section 101 grounds in Parker v. Flook, 437 U.S. 584 (1978). The Court then vacated the CCPA’s decision in In re Berge, 563 F.2d 1031 (CCPA 1977), and told the CCPA to reconsider its judgment in the light of the Supreme Court’s opinion in Flook. In the second Berge opinion, 596 F.2d 952 (CCPA 1979), Judge Rich told the Supreme Court that its Flook opinion shed no light so that the CCPA was going to reverse the Patent Office’s rejection of the patent application all over again (“To conclude on the light Flook sheds on these cases, very simply, for the reasons we have stated, we find none.”). The CCPA’s feeling, apparently, was that it was going to be there a long time, there would be changes of personnel on the other side, adversaries would find other things in which to be interested, and that eventually the CCPA would wear the opposition down.

It was correct in this, until the Supreme Court began (decades later) to start taking cases from the Federal Circuit and reversing them because the Federal Circuit (like the CCPA) would not follow the decisions of the Supreme Court and (often) the other US courts of appeals.

Anyway, that’s how Morse and related precedents fell into neglect.

Bob:

I intended to put this up days ago, and got busy. Regarding the role of judges, Learned Hand said it better than I can (in the context of obviousness):

"The test laid down [in 35 U.S.C. § 103] is indeed misty enough. It directs us to surmise what was the range of ingenuity of a person "having ordinary skill" in an "art" with which we are totally unfamiliar; and we do not see how such a standard can be applied at all except by recourse to the earlier work in the art, and to the general history of the means available at the time. To judge on our own that this or that new assemblage of old factors was, or was not, "obvious" is to substitute our ignorance for the acquaintance with the subject of those who were familiar with it. Reiner v. I. Leon Co., 285 F.2d 501 (2d Cir. 1960)

"Courts, made up of laymen as they must be, are likely either to underrate, or to overrate, the difficulties in making new and profitable discoveries in fields with which they cannot be familiar; and so far as it is available, they had best appraise the originality involved by the circumstance which preceded, attended and succeeded the appearance of the invention. Safety Car Heat & Light Co. v. General Electric Co., 155 F.2d 937 (2d Cir. 1946)."

Thanks for the comment

Prof. Stern:

I've heard Paul Clement say it differently, that the Federal Circuit "quietly walked away" from Supreme Court precedent it found unavailing in its role in harmonizing patent law, generally in a pro-patent manner.

The Federal Circuit has had its comeuppance over the past decade, but that doesn't mean they were wrong.

Thanks for the comment.

Many thanks Mr. Stern. Some of that I had been able to amateurishly put together myself. I'm still quite amazed that it took so many decades between the late 80's/90's and the early 00's for them to get on the ball. But I guess people's ability to misinterpret Diehr somewhat played a role in this. Shame they didn't lay that decision out more clearly.

Hope to see you around more often, I know there is at least one guy over at patentlyo that has routinely called you out as apparently being his archnemisis, hah, or close to it.

Perhaps Prof. Stern can clarify the "simply ignoring" of Benson with a more accurate statement of simply ignoring the dicta in Benson.

Let's try to keep it real, OK?

Thanks for the helpful thoughts, Kevin. In terms of incorporating this uncertainly into everyday development and IP strategy, does it point in one direction as to whether one should steer away from understanding the biological basis (mechanism of action: MOA) for a Dx test. Put another way, does understanding (and disclosing) the MOA do the applicant a disservice if applicant can otherwise meet the requirements of patentability without knowing/disclosing the MOA? For example, if you can train a classifier with correlative science that leads you to a method of generating raw data with a machine from a biological sample and then transforming that raw data into an actionable, predictive treatment information, where the biological basis for the raw data is not known, are you better off from a 101 perspective NOT knowing the MOA. But for all the other reasons you likely need to understand the MOA, it seems like one could use the 101 story as a reason to encourage obscurity rather than simplicity in establishing a MOA connection. Put another way, a test that uses one raw data input where that input's biological basis is clearly understood is less patentable than the same test that uses 100 data inputs where the MOA of the 100 inputs are not well understood. If the answer is yes, then this rewards anti-Occam's razor development which runs contrary to nearly all regulatory drivers. The time element here is interesting too. Over time the MOA of the 100 inputs may become known which leads to further questions of patentability down the road.

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