Like Two Ships Passing in the Night: U.S. and Europe Consider Patent Eligibility of Biological Materials

By Kevin E. Noonan --

Sometimes the U.S. and Europe seem to be on diametrically opposed trajectories when it comes to patent policy.  One such moment was in the 1980's, when the U.S. Patent and Trademark Office responded to the Supreme Court's Diamond v. Chakrabarty decision by permitting broad patenting of biotechnological inventions while Europeans debated the wisdom of such a course and suffered the resulting lag in development of a native biotechnology industry.  A similar outcome may result from the recent European Court of Justice decision to ban patenting of any invention that involves the destruction of a human embryo; while U.S. efforts in this industry were retarded by the Bush Administration's wrongheaded stem cell ban, European stem cell science prospered (and American efforts devolved at least in theory to states like Massachusetts and California, which funded their own stem cell research initiatives).

Conversely, the U.S. patent system is in the throes of judicial review over subject matter eligibility of isolated genes (something settled in Europe in the affirmative by the Biotechnology Directive 99/44EC issued in 1998) as well as questions over the patent-eligibility of diagnostic method claims.  A recent decision by the U.K. Supreme Court (a bench comprising a subset of the House of Lords called the "Law Lords" although the Court is institutionally separate from Parliament; see "Biographies of the Justices") overturned a decision by Judge Kitchen denying a patent to Human Genome Sciences on the human Neurokine-alpha gene, and in doing so seems to have expanded the scope of patent eligibility to be greater than exists under current U.S. law (even before the challenge to the Myriad patents by the American Civil Liberties Union and the Public Patent Foudation).

The case involved a nullity action brought by Eli Lilly and Co. over the U.K. national phase counterpart (U.K. 0,939,804) of HGS's European Patent for the human Neurokine-alpha gene and protein encoded thereby (EP 0939804).  Claim 1 is representative:

An isolated nucleic acid molecule comprising a polynucleotide sequence encoding a Neutrokine-α polypeptide wherein said polynucleotide sequence is selected from the group consisting of: 
(a) a polynucleotide sequence encoding the full length Neutrokine-α polypeptide having the amino acid sequence of residues [as defined]; and 
(b) a polynucleotide sequence encoding the extracellular domain of the Neutrokine-α polypeptide having the amino acid sequence of residues [as defined].

The patent was granted by the EPO and invalidated by the Opposition Division, only to be reinstated (in modified form) by a decision of the EPO Technical Boards of Appeal (whose decisions have significantly less precedential value, in the EPO and the EP member nations, than does the Federal Circuit in the U.S.).  The patent, filed on October 25, 1996, contained the nucleotide and amino acid sequences of the isolated nucleic acid and predicted protein product, respectively.  The patent disclosed the structural relationship between the human Neutrokine-alpha (hNα) gene and other memebrs of the tumor necrosis factor (TNF) "superfamily" of related cytokine proteins.  The specification further noted that "all known members" of the superfamily "are involved in regulation of cell proliferation, activation and differentiation, including control of cell survival or death by apoptosis or cytotoxicity" but failed to disclose any particular biological function for the hNα protein.  The in vivo expression pattern of the hNα gene was disclosed as being expressed in "neutrophils . . . in kidney, lung, peripheral leukocyte, bone marrow, T-cell lymphoma, B-cell lymphoma, activated T-cells, stomach cancer, smooth muscle, macrophages and cord blood tissue."  Although the patent discloses the use of the hNα protein for "the diagnosis, prevention, or treatment of an extraordinarily large and disparate number of, sometimes widely expressed, categories of disorders of the immune system," "nowhere in the Patent is there any data or any suggestion of in vitro or in vivo studies" and "there is no experimental evidence to support any of those suggestions."

Both the U.K. High Court and the U.K. Court of Appeals found the patent to be invalid, based on a failure to describe any specific uses for the hNα protein or the gene that encodes it.  As characterized by the U.K. Supreme Court opinion (by Lord Neuberger, joined by Lords Hope, Walker, Clarke, and Collins), the "central issue" considered by the lower U.K. courts and the Opposition Division of the EPO was "whether, in the light of the common general knowledge at October 1996, by disclosing the facts summarised in para 10 above (namely the existence and structure of Neutrokine-α, the sequence of its encoding DNA, its tissue distribution, its expression, and its membership of the TNF ligand superfamily), the Patent satisfied Articles 52 and 57 of the EPC so as to enable HGS to claim the encoding gene for Neutrokine-α."  Articles 52 and 57 read as follows:

Article 52:

European patents shall be granted for any inventions, in all fields of technology, provided that they are new, involve an inventive step and are susceptible of industrial application.

Article 57:

An invention shall be considered as susceptible of industrial application if it can be made or used in any kind of industry, including agriculture.

The U.K. courts decided in the negative, finding (as did the EPO Opposition Division) that the disclosed function of the hNα protein or the gene that encodes it were speculative and lacked a "concrete basis for anything other than a research project."  HGS's argument, as frankly put by the Supreme Court's opinion, was that these lower U.K. courts were wrong and had "set too high a standard for industrial applicability in the context of a patent for biological material."

This being a case of first impression before the U.K. courts regarding the patent-eligibility of human gene patents, the parties and the courts relied upon decisions of the EPO Technical Boards of Appeal, "decisions of courts in the United States" and some earlier U.K. decisions on patent-eligibility of biological material.  Citing U.K. Appellate Court Judge Jacob, the standard enunciated in the High Court's opinion is that "[h]owever clever and inventive you may have been in discovering a gene sequence, you cannot have a patent for it or for the protein for which it encodes if you do not disclose how it can be used."  The question thus became whether the HGS patent specification satisfied that standard.  The opinion finds little help in deciding this question in the prior U.K. precedent, and while the legal analyses in the U.S. cases "deserve great respect," they entail "obvious risks" relating to the differences between European and U.S. patent law (citing as "notorious examples" the "first to file" rule in Europe and the existence of prosecution history estoppel in the U.S.).

The Supreme Court thus turned to decisions from the EPO Technical Boards of Appeal (TBA) for guidance, noting the parallel considerations that the countries of the EPC interpret the Articles consistently while permitting individual member states to make their own determinations on sovereignty grounds.  As may be expected, the opinion notes several diverse opinions of the TBA (including T 0870/04 BDP1 Phosphatase/ Max-Planck; 0898/05 Hematopoietic receptor/ZymoGenetics; T 1329/04 Factor- 9/John Hopkins; T 0604/04 PF4A receptors/Genentech; T 1452/06 Serine protease/Bayer; and T 1165/06 IL-17 related polypeptide/Schering) that support both parties here, and ultimately decides that the lesson of this jurisprudential review is that each situation requires specific application of the Article 52 and 57 requirements to its own unique facts.

Considering the U.K. High Court decision, the Supreme Court noted that Judge Kitchin accepted HGS's contention that its claims were "significant" because of the "importance of the identification of the tissues where [it] is expressed, the tissues where it acts, the nature of its biological activity and how that profile varies in any particular disease state" while noting that there was "no data is provided to support these claims" and that "the variety of conditions for which the described method is said to be useful [is] puzzlingly wide and . . . the method itself impossible to operate in the absence of any information as to the standard level of Neutrokine-α expressed in each of these tissues in normal conditions."  Under these conditions, the High Court characterized "the idea that Neutrokine-α and [its antagonists] could be used to treat the extraordinary range of diseases identified was fanciful" and that "the skilled person would come to the conclusion that the inventors had no idea as to the activity of Neutrokine-α when drafting the Patent."  "[S]imply identifying a protein is not necessarily sufficient to confer industrial utility upon it," according to Judge Kitchin, contrasting the situation with "insulin, human growth hormone and erythropoietin" (where the utility was "immediately suggest[ed]") with cases, as here in the High Court's opinion, where "the function of the protein is not known or is incompletely understood and if no disease has been attributed to a deficiency or excess of it."

In rendering its decision that the lower U.K. courts had erred in finding the HGS claims to be patent ineligible, the Supreme Court noted that "it is plainly appropriate in principle, and highly desirable in practice, that all [national] tribunals interpret the provisions of the EPC in the same way" (here, to find the claims patent eligible), a sentiment supported by several earlier court cases both in the U.K. (Generics (UK) Ltd v H Lundbeck A/S [2009] UKHL 12; [2009] RPC 13) and Germany (Case Xa ZR 130/07 (10 September 2009)).  This principle is limited by instances where courts "form different judgments in view of the same expert and factual evidence" in the application of the same "relevant principles" -- i.e., reasonable minds may differ while agreeing with the underlying legal rationale behind patent eligibility.  And the Court adds instances where a national court believes that a TBA decision "may take the law in an inappropriate direction, misapplies previous EPO jurisprudence, or fails to take a relevant argument into account."  But such instances should require "very unusual facts" where the EPO Board "has adopted a consistent approach to an issue in a number of decisions."  And the opinion asserts that it considered a letter from the BioIndustry Association (BIA) informing it of its members' opinion that "clarity and certainty" were required to support an industry "with an aggregate turnover in 2010 of about £ 5.5 billion and a workforce of 36,000 in the U.K., in view of the "large amount of research and development [] required before there can be any therapeutic benefit" from a newly discovered biological molecule like hNα:

If the application is filed early, . . . [t]he company will be left with no patent protection, but would have disclosed its invention in the published patent application to competitors.  If the application is filed late, there is a risk in such a competitive environment where several companies may be working on the same type of research projects, that a third party will already have filed a patent application covering the same or a similar invention, in which case the company may not be able to gain any patent protection for its work and by continuing their programme they may risk infringing that third party's patents.  In both cases, the company will have lost much of the benefit of its costly research and development.

Ultimately, while acknowledging the legal and logical force behind the High Court opinion by Judge Kitchin (and his better position to hear and evaluate the evidence), Lord Neuberger decided that the claims at issue were patent eligible, as that decision being most consistent with what the opinion calls the "general principles" enunciated by the EPO Board for the satisfaction of Article 57 by claims to biological materials:

• (i)  The patent must disclose "a practical application" and "some 
profitable use" for the claimed substance, so that the ensuing monopoly "can be expected [to lead to] some . . . commercial benefit" (T 0870/04, para 4, T 0898/05, paras 2 and 4);

• (ii)  A "concrete benefit", namely the invention's "use . . . in industrial practice" must be "derivable directly from the description," coupled with common general knowledge (T 0898/05, para 6, T 0604/04, para 15);

• (iii)  A merely "speculative" use will not suffice, so "a vague and speculative indication of possible objectives that might or might not be achievable" will not do (T 0870/04, para 21 and T 0898/05, paras 6 and 21);

• (iv)  The patent and common general knowledge must enable the skilled person "to reproduce" or "exploit" the claimed invention without "undue burden," or having to carry out "a research programme" (T 0604/04, para 22, T 0898/05, para 6);

Where a patent discloses a new protein and its encoding gene:

• (v)  The patent, when taken with common general knowledge, must demonstrate "a real as opposed to a purely theoretical possibility of exploitation" (T 0604/04, para 15, T 0898/05, paras 6, 22 and 
31);

• (vi)  Merely identifying the structure of a protein, without attributing 
to it a "clear role," or "suggest[ing]" any "practical use" for it, or suggesting "a vague and speculative indication of possible objectives that might be achieved," is not enough (T 0870/04, paras 6-7, 11, and 21; T 0898/05, paras 7, 10 and 31);

• (vii)  The absence of any experimental or wet lab evidence of activity of the claimed protein is not fatal (T 0898/05, paras 21 and 31, T 1452/06, para 5);

• (viii)  A "plausible" or "reasonably credible" claimed use, or an "educated guess," can suffice (T 1329/04, paras 6 and 11, T 0640/04, para 6, T 0898/05, paras 8, 21, 27 and 31, T 1452/06, para 6, T 1165/06 para 25);

• (ix)  Such plausibility can be assisted by being confirmed by "later evidence," although later evidence on its own will not do (T 1329/04, para 12, T 0898/05, para 24, T 1452/06, para 6, T 1165/06, para 25);

• (x)  The requirements of a plausible and specific possibility of exploitation can be at the biochemical, the cellular or the biological level (T 0898/05, paras 29-30);

Where the protein is said to be a family or superfamily member:

• (xi)  If all known members have a "role in the proliferation, differentiation and/or activation of immune cells" or "function in controlling physiology, development and differentiation of mammalian cells," assigning a similar role to the protein may suffice (T 1329/04, para 13, T 0898/05, para 21, T 1165/06, paras 14 and 16, and T 0870/04, para 12);

• (xii)  So "the problem to be solved" in such a case can be "isolating a 
further member of the [family]" (T 1329/04, para 4, T 0604/04, 
para 22, T 1165/06, paras 14 and 16);

• (xiii)  If the disclosure is "important to the pharmaceutical industry," 
the disclosure of the sequences of the protein and its gene may suffice, even though its role has not "been clearly defined" (T 0604/04, para 18);

• (xiv)  The position may be different if there is evidence, either in the patent or elsewhere, which calls the claimed role or membership of the family into question (T 0898/05 para 24, T 1452/06, para 5);

• (xv)  The position may also be different if the known members have different activities, although they need not always be "precisely interchangeable in terms of their biological action," and it may be acceptable if "most" of them have a common role (T 0870/04, para 12, T 0604/04, para 16, T 0898/05, para 27).

The Supreme Court based its decision on satisfaction of points viii through xiii based on the relationship between the disclosed hNα gene and the properties of the other TNF superfamily members.

The issue before the U.K. Supreme Court as "first impression" will be readily apparent to participants in the U.S. patent system; in the wake of an avalanche of gene patent filings at the end of the last century the U.S. Patent and Trademark Office promulgated examination guidelines that required isolated gene sequences to encode a protein for which a specific, substantial and credible utility was disclosed or would be apparent to the skilled worker.  This standard is much narrower than the standard adopted by the U.K. Supreme Court.  Indeed, the U.K. Supreme Court in its opinion seems to adopt a standard requiring an alleged use to be merely "indeed plausible" to give rise prima facie to satisfying Article 57 EPC; this is far less than the "specific, substantial and credible" standard adopted by the USPTO.  Whether these differences, and the course U.S. patent law will take after it has traversed the seas of judicial consideration on patent eligibility of biological materials and methods, lead to a continued strength of U.S. biotechnology or an eclipse by a resurgent Europe cannot be predicted.  But it can be, and rightly should be, feared by those interested in continued prosperity and contributions to human health and well-being by American inventors.

Comments

[EG]

Kevin,

So much for "harmonizaton," even in the area of patent-eligibiity. And have a very nice Thanksgiving holiday!

[BOB]

Kevin: "But it can be, and rightly should be, feared by those interested in continued prosperity and contributions to human health and well-being by American inventors."

I'm very interested in the "continued prosperity" of most of the world's citizens but it's fair to say that on a scale of 1 to 100, where 100 is a "very meaningful impact", this EP case ranks about a 2, at least as far as the US is concerned. Probably a 3 as far as the EP is concerned.

I don't see anything about the UK decision or its impact on the US that frightens me in the least.

But another decade of forced "austerity", high unemployment, cutbacks to social programs which help poor people, and more handouts to failed banks and so-called "job creators"? That's something for citizens of both the UK and the US to be afraid of. Patents are utterly irrelevant to addressing the issue of "continued prosperity" for the vast majority of the citizens of these countries. Maybe you were addressing those privileged members of the population whose wealth depends on the existence of certain types of patents?

[Kevin E. Noonan]

Dear BOB:

By "prosperity" I mean the fact that since 1980 millions of people (and not just "those privileged members of the population whose wealth depends on the existence of certain types of patents") have prospered from the benefits of biotechnology. There is insufficient room here to list all the illnesses for which biotech has had a positive effect, and what is to be feared is that misguided reliance on "morality" (anyone's) should make one more person suffer one more day longer than necessary. I would hope you would agree that steering the ship to miss the iceberg is a better course than rearranging the deck chairs after impact; my position is that decisions like Europe's for hESCs and the impending gene patenting decision by our Supreme Court could provide just the right incentives for investors to fund the latest iDevice rather than the latest cure.

Humanity tried "from each according to his abilities, to each according to his needs" as a principle for running a society, and it didn't turn out so well. Like it or not, somebody is going to make money bringing new therapies to market, but without it there will be no new therapies. Which I think is something to be feared.

Thanks for the comment.