BIO Files Amicus Brief in Bilski Case

    By Kevin E. Noonan --

Perhaps surprisingly, the Biotechnology Industry Organization (BIO) filed an amicus brief last week in In re Bilski, a case under en banc consideration by the Federal Circuit over a Patent Office determination that the claimed subject matter (a method of managing the risk of bad weather through commodities trading) is non-statutory under 35 U.S.C. § 101.

BIO contends that the question of what falls within the province of statutory subject matter is vitally important to the biotechnology industry and argues that the Federal Circuit should construe § 101 broadly, consistent with the Supreme Court's maxim that "anything under the sun made by man" should be patentable (see Diamond v. Chakrabarty, 447 U.S. 303 (1980)).  BIO's brief contends that this principle is constrained by the limited number of exceptions noted by the Supreme Court in Chakrabarty (laws of nature, natural phenomena, and abstract ideas):

a new mineral in the earth or a new plant found in the wild is not patentable subject matter.  Likewise Einstein could not patent his celebrated law that E=mc2; nor could Newton have patented the law of gravity.  Such discoveries are "manifestations of . . . nature, free to all men and reserved exclusively to none."

Chakrabarty, 447 U.S. at 309, quoting Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130 (1948).

Moreover, the fact that an invention is "an application of a law of nature, natural phenomenon or abstract idea" should not preclude patentability because, in some respects, "all inventions can be reduced to underlying principles of nature" (see Diamond v. Diehr, 450 U.S. 175 (1981)).

This clear teaching has become muddied, according to BIO's brief, by arguments aimed at excluding specific types of inventions, including mathematical algorithm and business methods, and involving unhelpful concepts such as the presence or absence of "mental steps, physical transformation, machine-implementation, post-solution activity, preemption and the like."  Indeed, the brief cites State Street Bank & Trust Co. v. Signature Financial Group, Inc. for the proposition that the Federal Circuit has recognized the mischief-making potential of cherry-picking certain types of inventions, outside the limited exceptions laid out by the Supreme Court, as being patent-ineligible.  The brief implores the Federal Circuit not to adopt artificial tests of unpatentability, but to conform to the Supreme Court's expansive interpretation of the scope of statutory subject matter.  And the brief cautions that the Federal Circuit appears to be soliciting answers (specifically, to questions 2, 3 and 4 in the questions presented) that are aimed to limiting statutory subject matter scope in a way inconsistent with Supreme Court precedent.

BIO's brief goes back to the Telegraph cases to illustrate how the actual deficiency in claims to fundamental processes -- such as electromagnetism -- are not problems of statutory subject matter but instead stem from overbroad claiming:

And if [Samuel F. B. Morse] can secure the exclusive use by his present patent he may vary it with every new discovery and development of the science, and need place no description of the new manner, process, or machinery, upon the records of the patent office.  And when his patent expires, the public must apply to him to learn what it is.  In fine he claims an exclusive right to use a manner and process which he has not described and indeed has not invented, and therefore could not describe when he obtained his patent.  The court is of the opinion that the claim is too broad, and not warranted by law.

O'Reilly v. Morse, 56 U.S. 15 How. 62, 113 (1853).

BIO contends that, properly understood, the deficiency in Morse's claims was a matter of a failure to satisfy § 112 rather than patent-ineligibility under § 101 (under the principle of preemption), something the Supreme Court appeared to espouse in the Telegraph cases.  Confusion about this plain reason for the Court's decision later arose, according to BIO's brief, because the Supreme Court later characterized the deficiency of the claim as being directed to "a mere principle," citing Risdon Iron & Locomotive Works v. Medart, 158 U.S. 68, 76 (1895).  The better principle is to understand that Morse did not satisfy the extant sufficiency of disclosure requirements (analogous to current 35 U.S.C. § 112, first paragraph) to entitle him to the broad claims he sought.  This is yet another aspect of the issues before that court that the Federal Circuit recognized in State Street, according to BIO.

The brief also suggests that "policy issues," rather than application of the law, is behind challenges to patentability of broad technological sections, such as the challenge to biotechnology in the Chakrabarty case and the challenge to business methods here.  Policy concerns are common, BIO says, in new areas where the examination burden on the U.S. Patent and Trademark Office is greatest, due to the lack of established expertise in new technology areas and the dearth of relevant prior art.  Specifically with regard to business methods, the brief touches on four policy concerns that could be said to mitigate against patent protection for business methods:

• no patent incentive is needed for such methods that, essentially, drive human behavior, because humans inherently figure out new ways of behaving and interacting all the time;
• because such methods may be capable of easy re-invention, society would lose little by denying patent protection and forcing trade secret protection;
• the need for a patent incentive is reduced for such claims because the development of such methods may require little investment that must be recouped through a patent monopoly; and
• such claims would be extremely difficult to enforce because infringement is hard, or impossible, to detect.

Regardless of the force of these concerns, BIO asserts, they are for Congress, not the courts, to address (an argument accepted by the Supreme Court almost thirty years ago in the Chakrabarty case).

Perhaps with an eye to cases like Laboratory Corp. v. Metabolite Labs., Inc. (Labcorp), BIO also contends that it is unnecessary to carve out a preempted category of claims involving "mental steps," since any claim comprising entirely mental steps is already outside the scope of § 101 as being an abstract idea.  And a physical transformation is also not requirement for patentability, according to BIO, asserting a number of patented biotechnology-related patent claims that satisfy § 101 but do not involve such a physical transformation.  Claim 1 of U.S. Patent No. 6,303,324 is a representative example:

1.  A method for making a prognosis of disease course in a human cancer patient, the method comprising the steps of:
    (a) obtaining a sample of a tumor from the human cancer patient;
    (b) determining a level of nuclear localization of p53 protein in the tumor sample and comparing the level of nuclear localization of p53 in the tumor sample with the level of nuclear localization of p53 protein in a non-invasive, non-metastatic tumor sample;
    (c) determining a level of thrombospondin 1 expression in the tumor sample and comparing the level of thrombospondin 1 expression in a non-invasive, non-metastatic tumor sample;
    (d) determining by immunohistochemistry an extent of microvascularization in the tumor sample and comparing the extent of microvascularization in the tumor sample with the extent of microvascularization in a non-invasive, non-metastatic tumor sample;
    wherein said prognosis is predicted from considering a likelihood of  further neoplastic disease which is made when the level of nuclear localization of in the tumor sample is greater than the level of nuclear localization of p53 protein in the non-invasive, non-metastatic tumor sample; the level of thrombospondin 1 expression in the tumor sample is less than the level of thrombospondin 1 expression in the non-invasive, non-metastatic tumor sample; and the extent of microvascularization in the tumor sample is greater than the extent of microvascularization in the non-invasive, non-metastatic tumor sample, and wherein the human cancer patient has breast cancer or prostate cancer.

BIO notes that none of these claims "is limited by a physical transformation of an article or machine implementation.  Nevertheless, they are neither abstract ideas, laws of nature nor natural phenomena but instead each provides a valuable contribution to the pharmaceutical or biotechnological useful arts" and are hence properly considered patentable subject matter.

Finally, BIO's brief addresses directly Justice Breyer's (at left) criticism of State Street in his dissent from the Supreme Court's decision that certiorari was improvidently granted in the Labcorp case.  According to Justice Breyer, the Supreme Court has never held that "transformation of data . . . by a machine . . . into a final share price, constitutes a practical application of a mathematical algorithm, formula or calculation, because it produces 'a useful, concrete and tangible result'," and that the literal meaning of the statement is inconsistent with Supreme Court precedent in Morse, Flook, and Diehr.  The "difficulty" with Justice Breyer's analysis, according to BIO, is that "he extended the holding of State Street to all processes, and took it out of the specific factual context in which it was made -- machine-implemented data transformation."  BIO also disagrees with the substantive assertion that the Supreme Court has not based patent eligibility holdings on the "useful, concrete and tangible result" standard, citing Mackay Radio & Telegraph Co. v. Radio Corp. of Am., 306 U.S. 86, 94 (1939) and Funk Bros. Seed Co.

The brief closes with an exhortation that the Federal Circuit decide the patentability issue narrowly as to Bilski, and not take the occasion to make a broad statement of patentability vel non of business method patents:

State Street and AT&T are consistent with the language of § 101 and controlling precedent and should not be revisited on the basis of Justice Breyer's dissent in LabCorp.  To the extent this Court believes that it must reemphasize the specific factual context in which it reached its holdings in State Street and AT&T (machine-implemented data transformation systems and methods), it can do so in this case without disturbing the earlier holdings -- holdings clearly reached after careful consideration of the facts of each case and the applicable law.

This may be an unlikely outcome, however, since the Federal Circuit sua sponte decided to hear the case en banc and solicited the parties and amici to provide briefs directed to precisely the type of broad reconsideration of business method patents BIO cautions against.

Comments

[Sean]

Much of the problem in this area is due to State Street. The CAFC puts forth this "useful, concrete and tangible" mantra but failed to adhere to it.

What exactly is "concrete" or "tangible" about a calculated share price?? I for one have never been able to touch an abstract number, nor another abstract number that is calculated from a bunch of other abstract numbers. Had they adhered to their own mantra, and decided the case THE OTHER WAY, there might be a lot more clarity in the field today.