SmartGene, Inc. v. Advanced Biological Laboratories, SA (Fed. Cir. 2014)

By Michael Borella --

While non-precedential, this recent Federal Circuit decision further illustrates the Court's thinking with regard to the patent-eligibility of computer-implemented inventions under 35 U.S.C. § 101, and provides a reminder about the importance of procedural issues in § 101 cases.

SmartGene filed a declaratory judgment action against the defendants ("ABL"), alleging non-infringement and invalidity of U.S. Patent Nos. 6,081,786 and 6,188,988, both owned by ABL.  On summary judgment, the District Court found both patents invalid under § 101.  A Federal Circuit panel consisting of Judges Lourie, Dyk, and Taranto affirmed.  Judge Lourie was the author of the contentious en banc CLS Bank v. Alice Corp. plurality concurrence that is currently under review by the Supreme Court, and Judge Dyk joined him in that opinion.  Judge Taranto, who wrote the present opinion, began his tenure at the Federal Circuit after the en banc Court heard oral arguments for CLS Bank.

Each patent includes independent claims directed to a method, a system, and a computer readable medium, respectively, "for guiding the selection of a treatment regimen for a patient with a known disease or medical condition."  In December 2011, SmartGene moved for summary judgment under § 101, stating that that "for the purpose of the § 101 analysis, claim 1 of the '786 patent is representative of all of the claims of the patents-in-suit."  The District Court granted the motion based solely on its analysis of this claim, stating that "the differences between the various method and system claims within the patents-in-dispute are immaterial with respect to whether the patents constitute eligible subject matter under 35 U.S.C. § 101."

ABL never contested this grouping of the claims in its responsive brief.  In oral argument against summary judgment, however, ABL attempted to rectify this omission by noting that "claiming an actual system . . . makes it even less abstract because it's not just a method . . . it is even more intimately connected to the computer."  But the District Court held firm, based on ABL's failure to contest the representativeness of claim 1 in its brief, as well as ABL's apparently non-persuasive oral arguments.

ABL appealed both the District Court's grouping of the claims in its § 101 analysis, and the outcome of this analysis.

Turning first to the grouping of the claims, the Federal Circuit quickly dismissed ABL's contentions.  Judge Taranto wrote that "[i]t is well established that arguments that are not appropriately developed in a party's briefing may be deemed waived."  Consequently, the District Court acted within its discretion to rule that "ABL forfeited any argument that any patent claims here are to be treated differently from claim 1 of the '786 patent."

Moving to the substantive § 101 issue, the Federal Circuit once again upheld the District Court's position.  The claim at issue recites:

1.    A method for guiding the selection of a therapeutic treatment regimen for a patient with a known disease or medical condition, said method comprising:
    (a)  providing patient information to a computing device comprising:
        a first knowledge base comprising a plurality of different therapeutic treatment regimens for said disease or medical condition;
        a second knowledge base comprising a plurality of expert rules for evaluating and  selecting a therapeutic treatment regimen for said disease or medical condition;
        a third knowledge base comprising advisory information useful for the treatment of a patient with different constituents of said different therapeutic treatment regimens;
and
    (b)  generating in said computing device a ranked listing of available therapeutic treatment regimens for said patient; and
    (c)  generating in said computing device advisory information for one or more therapeutic treatment regimens in said ranked listing based on said patient information and said expert rules.

Notably, all steps of the method either require the involvement of a computing device, or are performed by the computing device.  Nonetheless, the Federal Circuit still found that the claim was directed to a patent-ineligible mental process.

Leaning heavily on the reasoning in CyberSource Corp. v. Retail Decisions, Inc., Judge Taranto wrote "section 101 [does] not embrace a process defined simply as using a computer to perform a series of mental steps that people, aware of each step, can and regularly do perform in their heads."  Also echoing Justice Breyer in Mayo v. Prometheus, Judge Taranto found that each step of claim 1 involved "well-understood, routine, conventional activity previously engaged in by researchers in the field."

Particularly, in Judge Taranto's view, step (a) was directed to "routine input, memory, look-up, comparison, and output capabilities," step (b) was directed to generating "a ranked listing of available therapeutic treatment regimens, and step (c) was directed to generating "advisory information for one or more therapeutic treatment regimens in said ranked listing."  Consequently, he found that, without citing to any evidence or explaining why, these steps were routinely and consciously performed by doctors.  As a result, he found claim 1 to recite "a mental process excluded from section 101: the mental steps of comparing new and stored information and using rules to identify medical options."

This decision, which I again emphasize is non-precedential, is another illustration of the Federal Circuit's § 101 reasoning post-Mayo and post-CLS Bank, and of the Court's current willingness to disregard the non-abstractness of general-purpose computer hardware when undertaking such reasoning.  However, a further issue is hidden within the subtext of this case.

The alleged "mental process" of claim 1 is more than a series of purely mental steps.  For the claimed invention to be useful, a doctor would have to access a "knowledge base" of different therapeutic treatment regimens, and then produce a "ranked listing of available therapeutic treatment regimens."  Thus, it is implicit that the Federal Circuit considers "mental processes" to include steps that may require looking information up in a book or a database, and perhaps using pencil and paper to produce a result.

But even if the breadth of claim 1 permits such a reading, the Court's § 101 "mental process" jurisprudence has essentially become a patent-eligibility bar on any computer-implemented algorithm that could conceivably be performed with pencil and paper, no matter how long it takes, how complicated, or how error-prone.  In today's "big data" systems, billions of data entries can be received, processed, analyzed, and used to draw conclusions.  It would take an army of humans thousands, or in some cases millions, of years to perform the same steps that could be performed in seconds, minutes, or hours by a modern cloud-computing system.

As just one example, Amazon.com and Netflix are two entities that use recommendation engines to suggest to their users what media and products those users might want to purchase.  These suggestions are often based on the consumption habits of other users (e.g., using logic such as "people who buy product A also buy product B").  These systems often require a large amount of data (much more than one person could hold in his or her head or organize on paper) and a large amount of computing power to make useful recommendations.  Thus, without being computer-implemented, such recommendation engines would not exist.  And yet, method claims drawn to a recommendation engine operating on a general-purpose computer would likely be subject to § 101 challenges.

Judge Lourie's CLS Bank concurrence sets forth this problematic reasoning:  "At its most basic, a computer is just a calculator capable of performing mental steps faster than a human could.  Unless the claims require a computer to perform operations that are not merely accelerated calculations, a computer does not itself confer patent eligibility."  Nonetheless, accelerating calculations has enabled new technologies that drive the information economy.

One of aspect of innovation is to make products and services faster, cheaper, and better.  The patent system is intended to incentivize individuals and organizations to publically disclose such inventions, and as a result receive a limited property right thereover.  A broad exclusion of computer-implemented "mental processes" via § 101 is illogical and disregards the fundamental tradeoff on which the system is based.

SmartGene, Inc. v. Advanced Biological Laboratories, SA (Fed. Cir. 2014)
Nonprecedential disposition
Panel: Circuit Judges Lourie, Dyk, and Taranto
Opinion by Circuit Judge Taranto

Comments

[EG]

Michael,

Nice write up on Smartgene and why its reasoning is problematic. I wrote an article for IPWatchdog on the district court decision in this case: http://www.ipwatchdog.com/2012/04/13/divining-what-mayo-means-exploring-the-smartgene-case/id=24153/ . The nonsensical reasoning in Mayo and now its progeny as illustrated by Smartgene, is creating utter chaos and illogicalness in determining patent-eligibility under 35 USC 101 of any method/process, even when it's computer implemented, and in complete derogation of Diehr's command that the claimed subject matter be considered "as a whole," even under 35 USC 101.

[Mike Borella]

EG,

Thanks for the interesting perspective. My biggest problem is perhaps illustrated by the Judge Lourie quote in the second to last paragraph. His view of accelerated calculations implicitly combines sections 101, 102, and 103. Sure, a claim directed to a computer performing routine calculations is subject to invalidity under 102 or 103, but with Lourie's 101 analytical framework, the claim can be invalidated under 101 without citing any evidence or prior art. So now 101 is now an end run around 102 and 103, and facts don't matter.

As you noted, we can thank Mayo for that.

[EG]

Michael,

You're most welcome. The Mayo opinion is an utter travesty and disingenuously says it is consistent with its prior SCOTUS precedent, including Diehr. There is simply no way to logically square the reasoning in Mayo with the prior precedent in Diehr. And Diehr has it right in terms of you must consider the claimed subject matter "as a whole" across the validity statutes (101, 102, 103, and 111) or you'll have a huge disconnect in claim construction, including how those claims are construed for infringement purposes.

In my opinion, Lourie uses the most obtuse and odd reasoning in his opinions, including his Prometheus opinion that was overturned by Mayo. Now, as illustrated by Smartgene, he no longer has any will to "buck" the nonsensical reasoning of SCOTUS.