Thoughts on the USPTO's Patent Eligibility Guidelines (and What to Do About Them)

By Kevin E. Noonan --

The U.S. Patent and Trademark Office recently issued (without public notice or opportunity to comment) its interpretation of the standards for subject matter eligibility in view of the Supreme Court's recent decisions in Mayo v. Prometheus and AMP v. Myriad.  The framework of the Office's issued Guidelines has been discussed previously (see "USPTO Issues Guidance for Analyzing Subject Matter Eligibility of Claims Reciting Laws of Nature/Natural Principles, Natural Phenomena or Natural Products").  Stripped of the Guidelines' flow charts, factors, and factual inquiries, the Guidelines in large part mandate the following exclusion from patent eligibility:

[C]hemicals derived from natural sources (e.g., antibiotics, fats, oils, petroleum derivatives, resins, toxins, etc.); foods (e.g., fruits, grains, meats and vegetables); metals and metallic compounds that exist in nature; minerals; natural materials (e.g., rocks, sands, soils); nucleic acids; organisms (e.g., bacteria, plants and multicellular animals); proteins and peptides; and other substances found in or derived from nature . . . regardless of whether particular words (e.g., "isolated", "recombinant", or "synthetic") are recited in the claim.

The response from the patenting and biotech communities has been appropriately Apocalyptic; however, when considering the impact of these Guidelines there are a few considerations that should be kept in mind.

The first is that these Guidelines have no force of law; they are merely administrative tools for how the Office will administer the law under its (mis)understanding of the Supreme Court's rubrics.  Such Guidelines have been issued before -- involving how the Office would apply the law relating the utility and written description (in 2001), for example.  While the Federal Circuit has occasionally referenced such Guidelines (see, for example, the first, vacated decision in Enzo v. GenProbe), courts have consistently recognized that they are not bound by the Office's understanding of how to apply the law.  Thus, bemoaning the loss of thousands of granted patents is at best premature; until this interpretation of subject matter eligibility gets judicial imprimatur these Guidelines have no effect on existing patents.

It is also important to recognize that the Office made a categorical, per se distinction between the types of inventions enumerated above and other types of inventions.  The last time the Office made such a distinction was when it decided that patents would not be granted on "living things" in the Bergy and Chakrabarty cases.  The CCPA (and Judge Rich) made short work of this distinction (for many reasons the Judge's opinion in the In re Bergy case is delightful reading), and the Supreme Court also found that whether something is alive is not a categorical distinction supporting patent ineligibility.  The Supreme Court has spent over a decade reversing the Federal Circuit's bright line, per se rules on everything from the standards for granting an injunction to those for non-obviousness, and the window dressing of flow charts and the other parts of the Office's analytical framework does not disguise the per se nature of the Office's Guidelines for determining patent ineligibility.  While it is possible the Supreme Court (or certain members thereof) might welcome this PTO action, if this is what the Court wanted to mandate it would have done so.

It is also important to understand how far the Office's Guidelines have gone beyond what the Supreme Court actually ruled in the recent spate of patent eligibility cases.  The Court has tried to be parsimonious in these decisions (even in the Mayo case, although it is more difficult to recognize the Court's restraint in view of Justice Breyer's tendency to include copious dicta).  But in Bilski v. Kappos, Bowman v. Monsanto, and even Myriad, the Court has been direct in limiting the scope of its decisions to the cases at hand, and to caution against over-interpreting its holdings.  By crafting the absolute, categorical prohibitions contained in the Guidelines, the Office has seriously overreacted to these decisions in ways both unnecessary and inconsistent with the Supreme Court's more measured approach.

This inconsistency is evident by a cursory perusal of the Office's prior practices and behavior, specifically with regard to isolated species in the chemical and biochemical arts.  In the Bergy case itself, Judge Rich noted that no one, including the Office, disputed the patent eligibility of lincomycin, the antibiotic produced by the bacterial species (Streptomyces vellosus) whose patent eligibility was at issue.  Mere inspection of Patent Office records will reveal numerous patents on isolated enzymes, chemicals, and other "products of nature" whose distinction was that they had been isolated from nature by the hand of man into a form not found in nature and thus that were patent eligible.  And the cases to the contrary -- of vanadium, lithium and other minerals, for example -- were the exceptions perhaps because of their more fundamental nature as elements as opposed to complex molecules having beneficial utilities.  It is nothing more than pedantic absolutism to ignore these distinctions just because antibiotics and other important molecules come from "nature"; as Chief Judge Rader has noted, all we have is nature and the Office's Guidelines ignore these well-established distinctions.

It is perhaps not a surprise that the Office issued these Guidelines, in view of the hostility to patents evinced almost weekly by the Obama administration.  Whether the result of undue influence from companies themselves hostile to patenting due to the impact patents can have on their industries, or from academics having their own reasons for taking an anti-patent stance, or simply because administration officials believe that patents make drugs and other products more expensive, it has consistently been the case that in its public statements and policy initiatives the Executive Branch has acted in ways not supportive of patenting and frequently seemingly naïve about the issues and the effects of the positions that have been taken (recall the "magic microscope," for example).  Former Director Kappos seemed to be a buffer between the Office and the rest of the administration in this regard, consistent with his broad experience.  His absence (and the consequences of not naming a permanent Director since Mr. Kappos left) is evident in the substance of these Guidelines.

The Guidelines also remind us of the foolishness of the idea that courts should give greater deference to Patent Office determinations, or worse, that the Office should be given substantive rulemaking authority.  The Guidelines illustrate a policy heavily influenced by politics, and politics change from administration to administration.  This is the case even without direct influence on the Office by higher ups in the Executive; there is no evidence that the infamous "claims and continuation" rule changes under Director Dudas were part of a patent-unfriendly effort by the Bush administration rather than the Office's response to criticism from agencies like the Federal Trade Commission, bodies like the National Academies of Science, and (again) academic critics making specious arguments about an applicant's ability to "wear down" an examiner to grant a patent improperly.  But such politicking does not benefit innovation or promote progress.

That the Guidelines do not implement the Supreme Court's decisions in a reasonable and workable way to promote American innovation can be appreciated readily by noting that none of the inventions in the following list are now patent eligible:

• Isolated chemical compound from crude oil useful as a lubricant
• Isolated chemical compound from a plant useful as a drug
• Isolated antibiotic produced by bacteria
• Isolated protein from an animal useful to cure/ameliorate human disease
• Isolated cucumber gene that extends freshness
• Isolated human gene (erythropoietin)

(unless, of course, either of the two genes are claimed as cDNA, or as part of a recombinant expression construct, for example).

These Guidelines will work their mischief until they are appealed to the Federal Circuit, or until the Supreme Court has the opportunity to clarify its thinking on subject matter eligibility.  Perhaps the extent of this mischief will convince those companies and professional organizations that have sat on the sidelines to get involved in informing Members of Congress, their friends in the administration, and the popular press about the outcome we can expect if these broad prohibitions stand against patenting subject matter that has been responsible for most progress in the life sciences over the past century (and that have fueled one of the drivers of the American economy since the 1980's).  If life, health, better nutrition, and independence from conventional sources of fossil fuels aren't enough to be convincing, then maybe stressing the effects on jobs and the economy will be.

Comments

[EG]

Kevin,

Nice article and astute comments about how these USPTO guidelines not only overreach, but misinterpret Myriad and Mayo, and are contrary to controlling precedent such as In re Bergy (which I know well have written a law review on living subject matter/product of nature controversy in this case not long after graduating from law school). For example, Paul Cole in his article posted on IPWatchdog has pointed to the mind-boggling example in these guidelines involving the hypothetical Amazonian cherry tree/amazonic acid (a pretty clear analogy to the Pacific Yew tree bark/Taxol in "real life"). The Federal Circuit should pound these guidelines to rubble (and hopefully Our Judicial Mount Olympus will shut up and stay out this situation), but unfortunately our clients will be paying the cost for this USPTO foolishness.

[Leslie Meyer-Leon]

Kevin,
I agree entirely. Regarding "professional association" involvement, I direct you to the amicus brief submitted by the Boston Patent Law Association to the Supreme Court in Myriad. The chief focus of this brief is on the impact of the decision on other natural products such as antibiotics.
Leslie Meyer-Leon

[Chase]

Kevin, thanks for the well-reasoned article. Incidentally, we have already been getting rejections for claims directed to cDNA despite the favorable mention in Myriad.

[Diana Cox]

1) Does anyone think that these Guidelines have been written to deliberately take the Myriad and Mayo holdings to their logical extremes, in order to highlight that they are inconsistent with years of prior holdings, settled expectations of businesses and USPTO practice, and thereby to force a resolution outside the USPTO?

2) What will likely be the route of quickest/most effective resolution? CAFC/SCOTUS? Or corrective legislation clarifying 101?

3) Is a legislative clarification of 101 narrowing the scope of patent ineligibility doomed by countervailing interests of the software/computer industry?

4) Is judicial review likely to uphold this sweeping expansion of the scope of patent-ineligible subject matter?

[Kevin E. Noonan]

Dear Leslie:

I am happy to include the Boston PLA with the ranks of those who have filed amicus briefs. But I think that if we are to prevail we need more; the "other side," mostly doctors who use their white coats to justify theft, have a strong backer in Justice Breyer and base their arguments on emotion, prejudice against property rights and a loosely defined argument that "everybody knows" patenting things like genes is just wrong. The argument needs to be made by industry that no one is going to spend $500 million to commercialize the next cutting edge technology without some ability to produce a return on that investment.

Which is why the article focuses at the end on jobs - it seems to be the only thing that gives the Supreme Court pause (read Bilski) and motivates Congress to act (even when it does so in ways that don't help).

Thanks for the comment.

[Kevin E. Noonan]

Dear Chase:

Why am I not surprised?

Thanks for the comment.

[Tobias Tenpenny]

" Incidentally, we have already been getting rejections for claims directed to cDNA despite the favorable mention in Myriad."

Just because you call a molecule a "cDNA" doesn't mean that it's eligible. Nor does the fact that you isolated it as a cDNA. What matters for eligibility purposes is the sequence of the molecule you are claiming. The Supreme Court was clear about that.

Without seeing the rejections, it's hard to know whether it's your claims that are the problem, or the Examiner's interpretation of the art and law. But again: a "cDNA molecule" is not per se eligible. It all depends on the relationship of the claimed sequence to all sequences found in nature and/or in the prior art.

[Tobias Tenpenny]

Kevin: "The response from the patenting and biotech communities has been appropriately Apocalyptic"

As a member of this community who works with many other members, I can tell you that none of us saw anything remotely resembling an "apocalypse" in the Myriad decision, nor do we see anything in these guidelines.

The vast majority of the most innovative companies out there are not in the business of identifying or claiming merely isolated compounds, whether those compounds are DNA or any other molecules. Did some companies get caught up in the Myriad meat grinder. Sure. There's nothing apocalyptic about that.

Most people in biotech community that I know were very glad to see Myriad's claims go up in smoke. Much more of a celebratory event than an "apocalypse."

Try to keep calm, Kevin.

[Kevin E. Noonan]

Well, Diana, I have little faith in the ability of Congress to provide a fix, in the face of the massive amounts of money that is being spent to kill patenting. I used to have faith in the CAFC, but they are like a dog that has been beaten - not much fight left in enough of the judges to stand up to SCOTUS, and as long as Justice Breyer is on the Court (and the rest of the so-called "business" Justices worry more about rewarding the unworthy than promoting progress) we will be stuck with this kind of thing.

Maybe the next Administration will be less influenced by politics and more realistic when it comes to patenting. But I doubt it.

Thanks for the comment.

[Kevin E. Noonan]

Quite right, Tobias, but I wouldn't presume that was the basis for the Office's rejection.

On another note, I am always fascinated by the pseudonyms readers choose to use when providing their comments on the blog. Is there a literary or other reference I am missing in your choice, or is it just an idiosyncrasy of yours?

Thanks for the comment.

[Tobias Tenpenny]

Kevin: "no one is going to spend $500 million to commercialize the next cutting edge technology without some ability to produce a return on that investment."

(1) What in the world does this have to do with the Myriad decision?

(2) People will continue to donate money in all kinds of stuff that they want to see happen. Not everyone is a greedy capitalist who demands massive profits or any monetary profit at all in return for their "investment".

(3) People who might have invested in arrogant, self-entitled, greedy, money-grubbing companies like Myriad can invest in other companies who are less offensive and inclined to push the envelope of what can be patented at ever turn. That's a good thing.

(4) In a recession like the massive historical recession we are just now crawling out of, the government should be much more involved in funding basic and directed research and creating jobs for researchers where the fruits of that research can be enjoyed by the public (including companies).

(5) Generally speaking, Kevin, you have a bad habit of appearing to worry very deeply about insanely wealthy people and whether they are going to give your clients money, and very little else. The "argument" you seem to think is so important (above) really isn't going to be relevant or persuasive to the vast majority of people in this country, nor are they likely to buy the baloney that without insanely rich investors throwing their money at junk patents like Myriad's or Prometheus' or Bilski's or Alice's then technologcial progress will grind to a halt. You're fearmongering. You've got no evidence. All the evidence shows the exact opposite.

[EG]

Kevin,

You might also ask those "white coats" how many doctors are willing to take on new Medicare patients. And why won't they take on those new Medicare patients? (Hint: it has do with insufficient pay for services provided, and I frankly don't blame them.)

As far as Breyer is concerned, what can you expect from a virulently anti-patent philosophy major? Breyer frankly has a lot of nerve to denigrate the "draftsman's art" (as well as making other snide remarks during oral argument in other patent cases) after writing that atrocious opinion in Mayo.

[Skeptical]

Dr. Noonan,

From the tone, the assumed familiarity and the assumption that the speaker speaks for a mass of the population out there, and the speech that strikes out "against rich people," I wonder if "Tobias" does not post under the pseudonym Malcolm Mooney or any of the other ever growing hoard of sockpuppets that "MM" uses (but claimed on another blog that he did not use and complained bitterly that such sockpuppets were 'the worst thing ever.")

"Tobias", perhaps you would be willing to confirm or deny this...?

(based on other outbreaks here, will we see such a response? I am...

[Kevin E. Noonan]

Not to spend too much time on this (which has been discussed elsewhere), there is very little evidence that Myriad is the most profitable genetics diagnostic company or that what they have charged for their testing is out of line with other commercially available tests. The cost will go down over time, which it has, because that's what maturing technologies do.

And, remember that my retirement is secure no matter what SCOTUS or the CAFC does. There was a time when the Federal Circuit was succeeding in making patent law relatively straightforward, with the goal of providing certainty to investors and business people. This has been reversed, mostly by the Supreme Court but also by Congress, over the past decade. The more arcane the area of the law, and the more important it is to companies making a profit, the more those people as clients need lawyers and are willing to pay for them.

I preferred it the other way, but so be it.

As for the rest, my positions have been clearly laid out over the past 8 years or so on the blog.

[EG]

Skeptical,

Presume that "Tobias T." is MM until proven otherwise. Very hard for this leopard to hide his spots.

[Chase]

To clarify, the 101 rejections we have gotten on cDNA have been maintained in cases where the cDNA is consistent with the description of eligible subject matter on pages 16-17 of the Myriad opinion, and where we submitted sequence information to the patent office to demonstrate that to the Examiner.

And as part of the biotech community myself, I completely agree with Kevin's take on this.

Diana--wasn't it supposedly high tech, generally anti-patent interests who helped push the AIA through, and who seem (I believe according to Hal Wegner) to be behind these PTO anti-patent initiatives? If that is correct, Congress would seem to be the last place to expect help. I hope the courts might eventually realize what a mess this explosion of misguided 101 doctrine is creating, and pull back on it.

[Skeptical]

Chase,

Would it be too much to hope for a Chakrabarty/Diehr response to the pattern of Benson/Flook type of rulings?

Alas, I remain...

[Tobias Tenpenny]

Chase: "To clarify, the 101 rejections we have gotten on cDNA have been maintained in cases where the cDNA is consistent with the description of eligible subject matter on pages 16-17 of the Myriad opinion, and where we submitted sequence information to the patent office to demonstrate that to the Examiner"

If this is true and your "cDNA" sequence as claimed is non-identical to any DNA sequence in the prior art or in nature, it sounds as if you are just dealing with human error. That's never going to go away.

It has nothing do with the Supreme Court or the PTO guidelines, however. I'd love to see the actual file wrapper, in any case, if you are willing to share the application number.

[Paul Cole]

Just for the record the same conclusion for much the same reason had been reached in my posting in the patents4life blog.

[Alan Dow]

I think that the PTO overstepped, and I think that the Supreme Court was wrong in Prometheus and Myriad. But for present purposes, I'd be grateful if the PTO could avoid confusing the matter further by using the terms "significantly different" and "markedly different" interchangeably and without any attempt at definition. We know that a DNA sequence cloned from an organism is neither "significantly" or "markedly" different than the same DNA sequence prior to cloning (Myriad), but that's not much help. We are left to the mercy of the good judgment and interpretive skills of patent examiners until the Federal Circuit provides further guidance.