By Kevin E. Noonan --
Last Wednesday, Judge
Susan Illston of the Northern District of California granted summary judgment
to declaratory judgment plaintiff Ariosa Diagnostics Inc. in Ariosa Diagnostics v. Sequenom. The legal basis of the court's decision was
an application of the Supreme Court's patent eligible subject matter
jurisprudence under Section 101 of the Patent Act, and as one might expect it
didn't go so well for the patentee. But
it is important to remember at times like this that "[o]ne swallow
does not a summer make, nor one fine day . . . " and to take what lessons
we can from the decision.
The technology at issue
is non-invasive
prenatal diagnosis of sex determination, blood typing, other genetic disorders
and detection of pre-eclampsia, using a simple blood test that reduces or
eliminates the need for amniocentesis and chorionic villus sampling (which
incur risks to both mother and child). Sequenom
Inc. is the exclusive licensee of U.S. Patent No. 6,258,540 originally obtained
by Isis Inc.; there are three independent claims attacked by Ariosa and
asserted by Sequenom in its patent infringement counterclaims:
1. 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.
24. A method
for detecting a paternally inherited nucleic acid on a maternal blood sample, which method
comprises:
removing all or
substantially all nucleated and anucleated cell populations from the blood
sample,
amplifying a
paternally inherited nucleic acid from the remaining fluid and subjecting the
amplified nucleic acid to a test for the Paternally [sic] inherited fetal
nucleic acid.
25. A method for performing
a prenatal diagnosis on a maternal blood sample, which method comprises
obtaining a non-cellular
fraction of the blood sample
amplifying a paternally
inherited nucleic acid from the non-cellular fraction and
performing
nucleic acid analysis on the amplified nucleic acid to detect paternally
inherited fetal nucleic acid.
Ariosa's DJ action was filed
December 19, 2011 and this summary judgment motion filed after Myriad decided. The district court previously denied Sequenom's
motion for preliminary injunction (on July, 2012), based on substantial
question of invalidity under Section 101 (those with a refined temporal sense
will recognize that this was before
the Supreme Court's Myriad decision,
and under prevailing Federal Circuit law where both genomic and cDNA was patent
eligible). The Federal Circuit vacated
the court's denial of Sequenom's preliminary injunction motion for reconsideration
under the Myriad decision. In addition, the Federal Circuit also
construed the claims, wherein the appellate panel (Chief Judge Rader joined by
Judges Dyk and Reyna) reversed the district court's sub silentio construction of the claim term "paternally
inherited nucleic acid" to mean "DNA sequence known [in advance] to
be received only from the father which is not possessed by the mother." (Chief Judge Rader's opinion recognizes that
the bracketed phrase was not expressly recited by the district court but the
court and parties acknowledged it as an essential component of the district
court's claim construction.) The court's
opinion also reversed the district court's construction of the term "amplifying"
to require preferential amplification of paternally inherited DNA, stating that:
[T]he claim as written
stands infringed without regard to whether, or not, other nucleic acid is
amplified. A party that amplifies paternally inherited nucleic acid satisfies
this claim limitation without regard to amplification beyond other nucleic
acid. The claim does not state that paternally inherited nucleic acid is "selectively"
or "only" amplified.
On remand and in deciding to grant
Ariosa's summary judgment (and deny cross-motion for summary judgment of
infringement by Sequenom), the district court did not further construe the
claims.
In setting forth its patent eligibility analysis,
the court recognized that exceptions to patent eligibility under the statute are
to be narrowly construed according to both the Federal Circuit and Supreme
Court:
The Federal
Circuit has explained that these exceptions should be applied narrowly. Ultramercial,
Inc. v. Hulu, LLC, 722 F.3d 1335, 1342 (Fed. Cir. 2013); see also
Prometheus, 132 S. Ct. at 1293 ("The Court has recognized . . . that
too broad an interpretation of this exclusionary principle could eviscerate
patent law. For all inventions at some level embody, use, reflect, rest upon,
or apply laws of nature, natural phenomena, or abstract ideas.").
The court then set forth its understanding of the "relevant"
Supreme Court precedent (or at least that precedent from 1940 onward); this
exercise loses to comprehensiveness any coherent application of relevant law
(i.e., this is a dicta-fest) as
follows:
Funk Bros.
Seed Co. v. Kalo Inoculant Co., 333 U.S.
127, 129 n.3 (1948):
"If
there is to be invention from such a discovery, it must come from the
application of the law of nature to a new and useful end." Id. at
130. The Court recognized that the aggregation of select strains of the species
of bacteria into one product is an application of a newly-discovered natural
principle, but explained that the application of that principle "is hardly
more than an advance in the packaging of the inoculants."
Gottschalk
v. Benson, 409 U.S. 63, 64 (1972):
The Supreme
Court held that the claims were ineligible subject matter because the formula
for converting BCD numerals to pure binary numerals was an abstract idea. See
id. at 71. The Court explained: "The mathematical formula involved
here has no substantial practical application except in connection with a
digital computer, which means that if the judgment below is affirmed, the
patent would wholly pre-empt the mathematical formula and in practical effect
would be a patent on the algorithm itself." Id. at 71-72.
Parker
v. Flook, 437 U.S. 584, 585 (1978):
The Court
noted that "[t]he only difference between the conventional methods of
changing alarm limits" and the claimed method "rests in the second
step – the mathematical algorithm or formula." Id. at 585-86
The Supreme
Court explained that "[t]he only novel feature of the method is a
mathematical formula," id. at 585, and the discovery of a
phenomenon of nature or mathematical formula "cannot support a patent
unless there is some other inventive concept in its application." Id. at
594
The Court
recognized that the invention did not wholly preempt the formula, but explained
that "'if a claim is directed essentially to a method of calculating,
using a mathematical formula, even if the solution is for a specific purpose,
the claimed method is nonstatutory.'" Id. at 595 (quoting In re
Richman, 563 F.2d 1026, 1030 (CCPA 1977)); see also id. at 590 ("The
notion that post-solution activity, no matter how conventional or obvious in
itself, can transform an unpatentable principle into a patentable process
exalts form over substance. A competent draftsman could attach some form of
post-solution activity to almost any mathematical formula; the Pythagorean
theorem would not have been patentable, or partially patentable, because a
patent application contained a final step indicating that the formula, when
solved, could be usefully applied to existing surveying techniques.").
Diamond v.
Diehr, 450 U.S. 175, 177 (1981):
The Court
held that "a physical and chemical process for molding precision synthetic
rubber products falls within the § 101 categories of possibly patentable
subject matter." Id. at 184. . . . The Court recognized that "the
process admittedly employs a well-known mathematical equation, but [the
patentees] do not seek to pre-empt the use of that equation. Rather, they seek
only to foreclose from others the use of that equation in conjunction with all
of the other steps in their claimed process." Id. at 187.
Bilski v.
Kappos, 130 S. Ct. 3218, 3223 (2010):
The Supreme
Court held that the claims were unpatentable under Benson, Flook,
and Diehr because the claims "are attempts to patent abstract
ideas." Id. at 3230. . . . "Allowing
petitioners to patent risk hedging would preempt use of this approach in all
fields, and would effectively grant a monopoly over an abstract idea." Id.
Mayo
Collaborative Servs. v. Prometheus Labs., Inc.,
132 S. Ct. 1289 (2012):
At the time
of the invention, scientists already understood that the levels of certain
metabolites in a patient's blood were correlated with the likelihood that a
particular dosage of a thiopurine drug could cause harm or prove ineffective. Id.
The Court
explained that "Prometheus' patents set forth laws of nature – namely,
relationships between concentrations of certain metabolites in the blood and
the likelihood that a dosage of a thiopurine drug will prove ineffective or
cause harm." Id. at 1296. "If a law of nature is not
patentable, then neither is a process reciting a law of nature, unless that
process has additional features that provide practical assurance that the
process is more than a drafting effort designed to monopolize the law of nature
itself. A patent, for example, could not simply recite a law of nature and then
add the instruction 'apply the law.'" Id. at 1297. Therefore, the Court concluded that although
the patents recited additional steps in addition to the law of nature, the
additional steps were insufficient to transform the character of the claims.
See id. at 1297-98 ("[T]he claims inform a relevant audience about certain
laws of nature; any additional steps consist of well understood, routine,
conventional activity already engaged in by the scientific community; and those
steps, when viewed as a whole, add nothing significant beyond the sum of their
parts taken separately.").
Association
for Molecular Pathology v. Myriad Genetics, Inc.,
133 S. Ct. 2107 (2013):
The Supreme
Court held that "a naturally occurring DNA segment is a product of nature
and not patent eligible merely because it has been isolated, but that cDNA is
patent eligible because it is not naturally occurring." Id. at
2111. . . . "To be sure, [Myriad] found an important and useful gene, but
separating that gene from its surrounding genetic material is not an act of
invention." Id. at 2117.
The district court then explains how it synthesized
this case law into a decision. It first
set forth Ariosa's (convincing) argument:
"Ariosa
argues that claims 1, 2, 4, 5, 8, 19-22, 24, and 25 of the '540 patent are not
drawn to patent eligible subject matter because paternally inherited cffDNA is
a natural phenomenon and the claims of the '540 patent merely add
well-understood, routine, conventional activity in the field to that natural
phenomenon."
And then set forth some of the relevant "facts"
(which the court says are what must be established by clear and convincing
evidence):
The parties
agree that neither cffDNA nor the discovery of cffDNA in maternal plasma or
serum is patentable, because the presence of cffDNA in maternal plasma or serum
is a natural phenomenon.
However, the
'540 patent does not claim as an invention the discovery of cffDNA in maternal
plasma or serum. The '540 patent claims methods of detecting paternally
inherited cffDNA in maternal plasma or serum.
The issue (according to the court):
Therefore,
the issue before the Court is whether the steps of the claimed methods in the '540
patent, applied to that natural phenomenon, are sufficient to render the claims
patentable.
The court comes down in the side of
patent-ineligibility, based on the following considerations:
A process or
method is not unpatentable simply because it contains a law of nature, a
natural phenomenon, or an abstract idea. Prometheus, 132 S. Ct. at 1293;
Flook, 437 U.S. at 590
But, to be
patentable, a process that focuses upon the use of a natural law, a natural
phenomenon, or an abstract idea must contain other elements or a combination of
elements, sometimes referred to as an "inventive concept," sufficient
to ensure that the patent in practice amounts to significantly more than a
patent upon the natural law, natural phenomenon, or abstract idea itself. Prometheus,
132 S. Ct. at 1294 (this statement nicely illustrates the problem of judicial
subjectivity that enters into the assessment of patent eligibility under the
Supreme Court's case law).
As in
Prometheus, the court requires that "the claimed process – apart from the
natural law, natural phenomenon, or abstract idea – must involve more than "well-understood,
routine, conventional activity," previously engaged in by those in the
field. Prometheus, 132 S. Ct. at 1294,
1299.
Ariosa's
argument was simple: the claims at issue
did not "add enough" to the natural phenomenon to render the claims
patent eligible. Because the additional
limitations "either apply well-understood, routine, and conventional
activity to the natural phenomenon or limit the natural phenomenon to specific
types of the natural phenomenon, which are also unpatentable."
This
is what the court agreed with. The
question is why, and the court sets forth its reasoning as follows. According to the opinion, amplifying and
detecting DNA from plasma or serum was well known at the time the invention was
made, based on "evidence" in the specification. However, this interpretation seems to be a
misreading of the specification, which states that amplification was achieved using
standard techniques, not that amplifying DNA from plasma or serum was itself a
standard technique. The prosecution
history was cited for the same point with regard to detecting DNA, but the use
of standard techniques to detect DNA does not make detecting DNA from plasma or
serum standard. This understanding was
aided by Sequenom's expert, Dr. Evans, who "also acknowledged that others
before the inventors had amplified and detected nucleic acid in plasma or
serum."
In a footnote, the court illustrates another
problem stemming from a revitalization of Funk
Bros., to the effect that new discovery is not enough, something that could
unnecessarily preclude a large amount of patentable subject matter:
Dependent
Claims 5, 8, 19, and 20 merely limit the natural phenomenon of paternally
inherited cffDNA to specific types of that natural phenomenon, such as
requiring that the cffDNA is from a Y chromosome or requiring that the cffDNA
is at least a certain percentage of the total DNA. See '540 Patent at
25:1-3, 25:8-10, 25:39-26:3. A specific type of a natural phenomenon is still a
natural phenomenon and, thus, is not patentable. See Myriad, 133 S. Ct.
at 2116; Prometheus, 132 S. Ct. at 1293.
The court then illustrates the difficulties
that arise when patent eligibility is assessed element–by-element rather than
by looking at the claim as a whole:
Because the
claimed processes at issue -- apart from the natural phenomenon of paternally
inherited cffDNA -- involve no more than well-understood, routine, conventional
activity, previously engaged in by those in the field, they are not drawn to
patent eligible subject matter and are invalid under § 101.
And the decision illustrates how important where
you start (eligible or not) determines where you end up:
The Supreme
Court has never stated that any use of a natural phenomenon is patentable. To
the contrary, the Supreme Court has held that "simply appending
conventional steps, specified at a high level of generality, to laws of nature,
natural phenomena, and abstract ideas cannot make those laws, phenomena, and
ideas patentable." Prometheus, 132 S. Ct. at 1300. It is only an
innovative or inventive use of a natural phenomenon that is afforded patent
protection.
Thus the conclusion is reached:
But, based
on the undisputed facts before the Court, the only inventive part of the patent
is that the conventional techniques of DNA detection known at the time of the
invention are applied to paternally inherited cffDNA as opposed to other types
of DNA. Thus, the only inventive concept contained in the patent is the
discovery of cffDNA, which is not patentable.
Amazingly, the court does not state the obvious,
that this case can be fitted within the contours of the Supreme Court's Mayo decision (which would have been
understandable). Instead the court says:
The Court's
conclusion conforms with the relevant Supreme Court case law, in particular Flook
and Myriad. The patent in Flook, like the present patent,
claimed methods that utilized an abstract idea or a natural phenomenon -- a
mathematical algorithm in Flook, paternally inherited cffDNA in the
present case.
(In another footnote, the court justified
this "Waring blender" approach to patent eligibility analysis by
saying that "the Supreme Court has never drawn a
distinction between natural phenomena, laws of nature, and abstract ideas in
determining patent eligibility.")
This has consequences:
Sequenom
argues that its use of cffDNA is inventive because prior to the invention, no
one had started with the mother's plasma or serum to detect paternally
inherited fetal DNA. Docket No. 223 at 7, 16. Even assuming this true, the same
argument could be made for the claims in Flook. Prior to the invention
in Flook, no one had used that particular mathematical formula to update
alarm limits. Despite this, the Supreme Court held that the claims in Flook were
not drawn to patent eligible subject matter. Thus, use of a newly discovered
natural phenomenon, law of nature, or abstract idea will not render a claim
patentable if the use of that natural phenomenon, law of nature or abstract
idea is the only innovation contained in the patent.
And:
As explained
in Flook, "the Pythagorean theorem would not have been patentable,
or partially patentable, because a patent application contained a final step
indicating that the formula, when solved, could be usefully applied to existing
surveying techniques." 437 U.S. at 590. The Court similarly concludes that
paternally inherited cffDNA is not patentable simply because the claims contain
steps indicating that it may be detected using existing DNA detection methods.
It is a statistical certainty that somewhere there
is a universe where this logic makes sense, but it isn't this one.
The court also finds that the Myriad decision supports its conclusion
(seemingly ignoring Section III of the decision, which says, at least, that the
holding in the case does not apply to
method claims generally or to methods employing the knowledge of the
chromosomal location or sequence of the human BRCA genes). But in the application of the Myriad decision, the court asserts that,
to be patent eligible, Sequenom needed to invent novel ways of detecting
cffDNA. ("Similarly, had the inventors of the '540
patent created an innovative method of performing DNA detection while searching
for paternally inherited cffDNA, such as a new method of amplification or
fractionation, those claims would be patentable."), based on dicta from the Myriad case.
The court's answer to the charge that it is
merely (and improperly) "engaging in a step-by-step dismantling of the
claims (citing Diehr, that "[i]n
determining the eligibility of respondents' claimed process for patent
protection under § 101, their claims must be considered as a whole. It is
inappropriate to dissect the claims into old and new elements and then to
ignore the presence of the old elements in the analysis. This is
particularly true in a process claim because a new combination of steps in a
process may be patentable even though all the constituents of the combination
were well known and in common use before the combination was made") and Ultramercial is that:
[T]he Court
has not dissected the claims into their individual limitations and then
determined whether the individual elements are old or new. Rather, the Court
has considered the claimed processes as a whole. The unrebutted evidence does
not merely show that the individual steps of fractionation, amplification and
detection were well-understood, routine, and conventional activity at the time
of the invention. The evidence shows that it was well-understood, routine, and
conventional activity to combine these steps to detect DNA in serum or plasma.
The court does not even recognize that is doesn't
know what it has done, much less know what it is doing; it has read the subject
matter of the amplified DNA out of the claim, something that is not "routine,
well-understood and conventional" but that the court does not consider. Reading the claim as a whole, the question is
whether what was "routine, well-understood and conventional" was
amplifying cffDNA from blood plasma and serum, wherein then (and only then) the
correlation between the detection of this DNA and fetal pathology might be
merely the natural phenomenon that was claimed (and even then the argument that
such a claim should not be patent eligible is doctrinally unsound). But those are not the claims at issue here,
and by ignoring this distinction the court comes to the wrong conclusion.
As to preemption (which the court reads Flook as saying can condemn a claim but
not save one if it doesn't completely preempt):
In support
of this argument, Sequenom has presented the Court with scientific articles describing
methods for detecting cffDNA. Ariosa argues that even if these articles disclose
alternative methods of detecting cffDNA, Sequenom has failed to present any
evidence showing that any of these alternative methods are practical and
commercially viable. In response, Sequenom argues that it is only relevant that
the alternative methods can be practiced, not that they are commercially viable
alternatives. The Court disagrees. If the alternative methods are not
commercially viable, then the effect of the patent in practice would be to
preempt all uses of the natural phenomenon. It is important to note that the '540
patent does not merely claim uses or applications of cffDNA, it claims methods
for detecting the natural phenomenon. Because generally one must be able to
find a natural phenomenon to use it and apply it, claims covering the only
commercially viable way of detecting that phenomenon do carry a substantial
risk of preempting all practical uses of it. It is also important to note the
age of the patent. The '540 patent was issued in July 2001. That twelve years
have passed since the issuance of the patent but Sequenom does not present the
Court with any evidence of a commercially viable alternative method of
detecting cffDNA reflects the broad scope of the '540 patent's claims and the
great risk that the patent could preempt the use of cffDNA. Indeed, Sequenom
itself has acknowledged the preemptive effect of its patent. (albeit supported
by some improvident statements by Sequenom in the record).
(citations to the
record omitted)
The court cites no precedent, because there is
none, that the preemption standard is commercially viable alternatives. Indeed, Quest's allegations in its
declaratory judgment action against Myriad illustrate the incentive broad
patents provide (when they don't totally preempt), because Quest can now
purportedly practice Myriad's methods without infringing their claims, due to
Quest's efforts to design around using advances in technology in the 15 years
since Myriad applied for its patents.
The court doesn't appreciate this, either:
Further, the
articles cited by Sequenom were published after the issuance of the patent and
wellafter the date of the invention. Therefore, even assuming that the articles
disclose alternative methods of detecting cffDNA, Sequenom has failed to show
that any alternative methods existed at the time of the invention or at the
time of issuance of the patent. Thus, it appears that the effect of issuing the
'540 patent was to wholly preempt all known methods of detecting cffDNA at that
time. Accordingly, the Court concludes that the claims at issue pose a
substantial risk of preempting the natural phenomenon of paternally inherited
cffDNA and that the preemption inquiry supports the Court's conclusion that the
claims are not drawn to patent eligible subject matter.
Under the district court's view, the only patent
eligible method claim would be one that could be practiced without infringing
at the time the invention was made. It
is hard to discern any advantage to patenting (as opposed to holding new methods
as trade secrets) under this standard, because it would provide no benefit if
the claims recited a specific method that one of ordinary skill in the art
would understand could be circumvented using another known method. Under this standard, there would be little
incentive to disclose, an outcome directly contrary to the Constitutional
mandate to "promote the progress . . . of the useful arts."
This case illustrates the uncertainty that comes
from enunciating a standard that raises a court's subjective opinion on patent
eligibility to be dispositive, as illustrated by the Court's finding of a
substantial question before the
Supreme Court's Myriad decision came down.
Most of this anti-patent animus stems from two
sources: first, an "inverted telescope" view of what the patentee
gets from her "monopoly" versus what the public gets from disclosure,
wherein an excessive focus on private benefits thwarts the benefits to the
public; and second the Goldilocks idea that a court's role is to ensure the
proper balance between too much and too little patenting. Judge Illston has evinced her anti-patent
animus in the past: according to Price-Waterhouse Coopers report, 2013 Patent Litigation Study, patentees never
prevail at summary judgment before her.
This case just demonstrates the consequences of deciding cases wherein judicial
prejudices under the guise of law are used to decide what should and shouldn't
be patent eligible.
