Examination of Myriad-Mayo Guidance Comments -- International Bioindustry Associations

By Donald Zuhn --

On March 4, the U.S. Patent and Trademark Office issued a guidance memorandum, entitled "Guidance For Determining Subject Matter Eligibility Of Claims Reciting Or Involving Laws of Nature, Natural Phenomena, & Natural Products" (or "Myriad-Mayo Guidance"), to implement a new procedure for determining the subject matter eligibility of claims under 35 U.S.C. § 101 in view of the Supreme Court's decisions in Association for Molecular Pathology v. Myriad Genetics, Inc. (2013), and Mayo Collaborative Services v. Prometheus Laboratories, Inc. (2012).  At a biotechnology/chemical/pharmaceutical (BCP) customer partnership meeting in April, the Office announced that it would be hosting a public forum on the Guidance in May to receive public feedback on the Guidance, and at that forum encouraged shareholders to submit written comments on the Guidance.  The original "end of June" deadline for submitting comments on the Guidance was subsequently extended to July 31.  With that extended deadline now passed, Patent Docs has begun to focus on selected comments in a series of posts.

The Office has posted the comments that were submitted on the USPTO website.  The comments are divided into five groups (with the number of submissions in each group also provided):  Intellectual property organizations and other associations (18), academic and research institutions (7), law firms (6), companies (9), and individuals (42).  Today, we examine the comments submitted by the International Bioindustry Associations, a coalition of twelve associations and organizations representing "thousands of biotech businesses, academic and nonprofit research centers, technology transfer organizations and other entities dedicated to biotechnological innovation throughout the world."  The twelve signatories to the comments include:  ASEBIO -- The Spanish Bioindustry Association; AusBiotech, Australia's Biotechnology Organisation; Belgian Biotechnology Industry Organisation; BIA, The UK BioIndustry Association; BIO Deutschland; BIOTECanada; Biotechnology Industry Organization; CropLife International; EuropaBio; HollandBIO; Japan Bioindustry Association; and P-BIO, Portugal's Biotechnology Industry Organization.

The coalition begins its comments letter by expressing "concern over the recent judicial and administrative expansion of nonstatutory patent law governing the patent-eligibility of certain classes of biotechnology inventions in the United States, as manifested in the PTO's March 4 Guidance."  The group also "note[s] with concern the significant departure from internationally accepted norms of patentability that would be established by the Guidance, particularly with regard to industrial, agricultural, and pharmaceutical preparations of naturally-derived substances, compositions, and processes."  Among the many examples of inventive preparations based on naturally-occurring substances, the letter points to a number of vaccine antigens, crop protection products, plant biotechnology and breeding, industrial enzymes, immunosuppressive drugs, anticancer compounds, and antibiotic drugs (in several footnotes, the coalition lists an array of specific naturally-occurring substances, many of which have been patented).

With respect to drug discovery, the letter states that "preparations of novel and unobvious naturally occurring molecules continue to be an important source for drug discovery," citing Swinney & How, 2011, Nat. Rev. Drug Discov. 10: 507-19, for the proposition that "naturally-occurring molecules and their close derivatives have contributed an estimated 36% of all first-in-class small molecules approved by the FDA between 1999 and 2008."  Pointing to the costs associated with drug discovery (the letter indicates that the average drug requires an investment of $1.2 billion with clinical testing taking eight years), the coalition explains that:

For every successful biopharmaceutical product, thousands of candidates are designed, screened, and rejected after large investments have been made.  Only a small minority of drugs even advance to human clinical trials and most of those fail to obtain regulatory approval.  Investment therefore is predicated on the availability of patent protection that enables biotechnology businesses to attract capital and commercial partners in order to advance basic inventions -- including those based on naturally-occurring substances and processes -- from the laboratory to the marketplace and ultimately to generate an expected return on investment in the form of patent-protected products or services.

While suggesting that "[t]he use of naturally-occurring substances and the practical application of newly discovered biomarkers is playing out with equal importance in the area of diagnostics and personalized therapy," the group contends that:

The proposed Guidance, by its unfavorable treatment of these inventions, has the potential to seriously impair the scientific advances of U.S. universities over universities in e.g. Europe and Japan, which provide broader patent protection to inventors.  In the end, this could lead to the United States falling behind in this extremely important area of research, one that has significant implications on drug discovery and development.

Arguing that "it is extremely important that investment in biotechnological innovation is not discouraged by systematically erecting special hurdles to patent protection for all inventions that relate to naturally-derived substances and processes," the coalition expresses concern for the "investment-hostile extrapolation and expansion of nonstatutory U.S. patent law that was not required by the U.S. Supreme Court's decisions" as manifested in the Guidance.  The group explains that "[t]he Court's multiple cautionary statements about the narrowness of its holding and of all the questions it was explicitly not deciding, signal a narrow, incremental decision that should not compel broad changes in examination practice."  The group specifically takes issue with the way the Guidance handles combinations of naturally-occurring products, methods of treatment, and purified naturally-occurring substances, asserting that:

[T]he Supreme Court's decisions do not require the application of a heightened patent-eligibility test to inventions such as combination products (especially in instances where the claimed combination occurs neither in a natural state nor in the prior art); methods of drug administration or the use of medicinal molecules for the treatment of disease; or purified naturally-occurring substances (such as antibiotics or vaccine antigens) which, in the claimed purified state, are for the first time provided for real-world practical uses and having industrial applicability not possessed in their natural, impure state.

The group concludes its comments letter by noting the absence of "a policy justification for why the USPTO adopted such a far-reaching interpretation of judicial decisions and departed so profoundly from its own past policies and from internationally accepted practices."  The letter argues that "what is . . . needed is a public dialogue not just over what the law 'is,' but over what the right policies ought to be," adding that "there is a real risk of 'getting it wrong' when trying to extract generalizations and uniformly applicable principles from an unstable jurisprudence and from judicial decisions that stand in tension with each other," particularly "in light of consistent reminders by the U.S. Supreme Court that the statute is inclusive and the exceptions to it are narrow -- not the other way round."

Patent Docs will examine other Guidance comments in subsequent posts.

For additional information regarding this topic, please see:

• "Examination of Myriad-Mayo Guidance Comments -- ACLU," August 5, 2014
• "Guest Post: Overview of First Published Comments on Myriad-Mayo Patent Eligibility Guidance," July 13, 2014
• "Guest Post: USPTO Public Forum on Patent Guidance: My Thoughts as a Speaker and Attendee," June 11, 2014
• "USPTO Holds Forum on Subject Matter Eligibility -- Part IV," May 22, 2014
• "USPTO Holds Forum on Subject Matter Eligibility -- Part III," May 15, 2014
• "USPTO Holds Forum on Subject Matter Eligibility -- Part II," May 14, 2014
• "Guest Post: How to Patent Grapefruit Juice -- The New USPTO Guidance for Patent Eligible Subject Matter Is Both Sticky and Sour," May 13, 2014
• "USPTO Holds Forum on Subject Matter Eligibility -- Part I," May 12, 2014
• "USPTO Tries to Address Public Misunderstandings Regarding Myriad-Mayo Guidance," April 16, 2014
• "USPTO Issues Guidance for Analyzing Subject Matter Eligibility of Claims Reciting Laws of Nature/Natural Principles, Natural Phenomena or Natural Products," March 4, 2014

Comments

[Skeptical]

"the recent judicial and administrative expansion of nonstatutory patent law"

The introduction (implicitly?) captures well the legal playing field here: in the US, writing patent law is strictly the domain of the legislative branch, and yet in this modern era the battle of 101 continues to have the other branches of the government expressing themselves in the writing of patent law.

The patent system is (largely) purposefully blind to particular art field, and that is a good thing, as the basic drivers of innovation are the same across the wide variety of art fields, and what makes for strong innovation - a strong patent system - also works the same across the wide variety of art fields.

To the extent that the group tries to separate itself out from the larger trend, such is a misstep.

As I have posted previously, NIMBYism is afoot and the arguments afflicting the bio world have mirror image arguments directed at the software and computer world. It is no accident that the jihad against software patents will yield such anti-bio fruits.

I see cold humor in the phrase quoted here: "a real risk of 'getting it wrong' when trying to extract generalizations and uniformly applicable principles from an unstable jurisprudence and from judicial decisions that stand in tension with each other,..."

As this describes the very action of the Court itself - the extraction process mirrors the "gist of the invention" process step the Court uses in its Prometheus analysis.

We have seen the Court walk this "gist of the invention" path before. Unstable jurisprudence then, one may ask, how does one set controls for that? How does one provide a systematic check on a branch of the government that has the power to 'go rogue' when the existing checks and balances system (congressional over rides) works so slowly and so poorly? There is a reason why the power to shape policy was kept from the smaller numbered judicial body. And yet, we are - yet again - at the point in patent law where that small numbered judicial body is setting patent policy.

As Dr. Noonan and I have discussed, 1) no matter what actions are taken now - either by practitioners or by Congress, 2) if the Court can do whatever it wants later, then 3) one must consider if we are wasting our clients money even attempting to obtain patents. It is a serious matter. Throwing in the towel does not seem like an attractive option. But letting the Court dictate policy (de facto) when that is the role of Congress seems an even less attractive policy - a "peace for our time" option, to borrow a phrase.

Instead, it is time - like in 1952 - to take a stand. It is time to at least attempt to draw the line against the other branches of the government writing patent law. This is a time for Congress NOT to succumb to the lure of "peace for our time."

Is our Congress up to this challenge? Sadly, I am...

[Grodsky]

Thanks for the post--what a great letter. I wonder who actually wrote it? I think they should get credit for an excellent piece of work.

[Skeptical]

I do not often find cause to cross-post from Patently-O, but this is a worthwhile exception:

http://patentlyo.com/patent/2014/08/update-patent-rates.html#comment-237266

[Jim Dunn]

There's an ancient U.S. legal principle... Judicial review. Take it up with Justice Marshall.

[Skeptical]

Jim,

Do not confuse judicial review with judicial law writing (as in common law development).

One should recognize the difference.

[Jim Dunn]

One should, you don't.
Don't confuse skepticism for ignorance.

[Skeptical]

Sorry Jim, but your post is the one exhibiting ignorance. Judicial review does not involve rewriting the law. That's called judicial activism.

Your claim that "I don't" is unsupported by any notion of fact. If you want to play the game of AOOTWMD (TM) you are on the wrong blog.

I will ask (with minimum intended snark): do you recognized the difference between a statutory law regime and a common law regime?

[Jim Dunn]

"Judicial activism" is a political term used to deride the perfectly legal and legitimate use of the courts to oversee the administration of laws through interpretation. Your term has been used by southern racists, for instance, to describe the application of equal protection to undo Jim Crow statutes, for instance. It isn't a legal thing, Skep., it's just sour grapes from people who aren't happy with how the courts have interpreted laws. Judicial review, however, is an actual legal process employed by the courts, legitimated and employed for nearly two centuries. We have a balanced, three-part republic with the executive, legislative, and judiciary branches all sharing power equally. If you don't like how the courts interpret a law, you petition your legislature to change the law. In fact, I think that's how you have argued yourself. Well, go ahead, but don't suggest that the courts aren't entitled to do what they do, interpret laws as they do, perfectly within their role and rights. You'd be happier in Europe, perhaps, where the courts can't interpret vague laws, and legislatures write laws for everything. Of course, they are constantly revising them because ambiguity and vagueness are unavoidable in the real world.

[MaxDrei]

Jim, if it's any comfort to you, the poster "Skeptical" with whom you are here engaged in exasperated intercourse bears a striking resemblance to "anon" on Patently-O and "Anon" on the Patent Watchdog blog.

On Patently-O, anon's favourite retort has long been "AOOTWMD". Here, Skeptical even annoints it with his proud suffix "(TM)". Googling AOOTWMD is revealing.

[Jim Dunn]

Thanks for the tip, Max. It's no comfort, but it certainly means I'm spinning my wheels trying to explain, apparently.... BTW, here's what Justice Kennedy had to say about so-called "judicial activism"

"An activist court is a court that makes a decision you don't like." - Matt Sedensky, "Justice questions way court nominees are grilled," Associated Press, May 14, 2010, accessed May 14, 2010

all I can say is.... yup.

[Skeptical]

Don't let the exchange of denigrations fool you Jim. While Justice Kennedy is correct in that sometimes the label is misused, this is not one of those times.

Lochnerian and Activist are indeed labels that are thrown about far too easily.

However, when it comes to applying law that is explicitly within the domain of the legislature to write, the judiciary does not have its typical common law power. In such situations, the label of activist is more than just a denigrating label. In such situations, the action of the Court is NOT as you portray: such action is simply not "perfectly legal and legitimate." You must understand the context of the particular type of law in play and the context of the grant of power concerning the ability to write that type of law.

Look as well to the recently released presidential papers (Clinton, not Nixon). Independent third parties had raised concerns of judicial activism of three members of the Court in particular. It is no mistake that those three are the same that would attempt to carry on the torch of Justice Stevens, as exemplified in the Bilski case, in explicitly re-writing the words of Congress.

Do not be so concerned with "spinning your wheels trying to explain" when it is you that you should be listening. Humor me and take up the thoughts I have provided - if for no other reason than as an intellectual exercise.

I will ask AGAIN (with minimum intended snark): do you recognized the difference between a statutory law regime and a common law regime?

I noticed that you have chosen NOT to answer that question (yet).

As to MaxDrei, the TM was out of "respect" for another's coinage - and I cannot help but notice your being drawn to the anti-anon viewpoint on a consistent basis. I don't know why you seem drawn to locking horns, but perhaps it would help if you focused more on the issues rather than the messengers, as your posts also consistently come up short on the issues.

[Kevin E. Noonan]

In my view the problem is not with the Court per se but in how the Court addresses the problems before it, the vague language it uses, and the consequent expansion of the Court's holdings by administrative agencies and the lower courts.

Here, for example, the Court itself contains severely limiting language on the scope of its holding ("We decide merely that isolated human DNA is not patentable (sic) . . ."). The PTO has taken the rationale the Court used to arrive at this conclusion to extend it to other molecules. This is not a judicial problem but an interpretation problem.

There is a wealth of precedent for the idea that "DNA is different", including all the former "product of nature" patents that permit things like isolated proteins, antibiotics, vitamins, etc. to be patented when properly claimed. The extent to which the Office has taken the Court's decision far beyond the actual holding is illustrated by the reticence a PTO official had in acknowledging that a pharmaceutical formulation of a natural product drug and a pharmaceutical excipient would be patent eligible.

There is no need to stretch the Court's proscriptions against DNA patents to cover all natural products. Indeed, the saving grace we have is that the Court is reluctant to make broad, sweeping "thou shalt nots" in this area (or at least most of them are, and if news reports are true two of the Justices who agree with Justice Sotomayor that business method patents should be per se patent ineligible may be leaving the Court in the next two years).

I would also remind everyone about our civility policies - not accusing anyone, just providing a reminder. As much as I respect Dennis, this is not Patently-O.

[Jan Herber]

Kevin's analysis seems sound, but then it looks like overreach by the bureaucracy rather than an "activist" judiciary, which apparently did its best to keep their ruling narrow.

[Jan Herber]

Curious as to Skeptical's disagreement with Jim, above, I did a bit of looking and could find no limiting clause in the Constitution or anywhere else for that matter restricting the Supreme Court from ruling on any matter before it. They can rule however they please, and perhaps as Justice Kennedy states if you don't like it you call it activism. All federal statutes are open to interpretations by the federal courts, with the final say coming from the Supremes. Now if more clarity is needed, then the legislature can always step in to re-write the law. This is the beauty of the three branches being coequal. As Kevin pointed out, the overreach appears to be coming from an administrative agency more than the court, in this instance.

[Skeptical]

Jan,

There is a difference between "ruling" and writing law through the mechanism of common law.

It really is as simple as that.

[Jim Dunn]

So then the PTO is writing law now, Skep? Your beef's with them, I think... well, among pretty much everyone else, apparently.

[Skeptical]

Jim,

Are you surprised that the PTO is "writing law now?"

Have the events around the Tafas case and the Appeals Rules writing debacle so quickly faded from your memory? Do you not think the ownership rules are effectively new law? Don't get me wrong - administrative agencies have a spectrum of law-writing capabilites based on their initial charters and any changes to those charters, but as far as I am aware, the AIA did not give substantive law writing capability to the executive branch PTO.

As to whom I have a beef with, please read what I have written. I may ALSO have a beef with the PTO, but the thoughts that I have shared are cogently delivered for the entity to which those thoughts are directed. If the Supreme Court is not going to respect the separation of powers doctrine, why should the executive branch who are attempting to merely follow the lead (and yes, perhaps err in going too far)?

As to the "pretty much everyone else" comment, please do not mistake my cynical tone as directed to anyone personally. One can be quite civil to other posters and maintain cynicism to the system (to which the content of the comments are directed). You started with the personal attacks when I differentiated an aspect of law making. Not sure why, but my being cynical bothers you. It is evident that my being correct in my views of the law then did not sit too well with you on top of that. As I have agreed with you that labels of the Supreme Court are often used more for philosophical attack than for accuracy in themselves (and these attacks have been made by members of the Court themselves - an interesting note on civility), I have also pointed out that sometimes, as here, the labels are being accurately used. Did you bother with the reading of the Clinton papers? Do you note that even Dr. Noonan notes the activist trio? Do you note the hope in his post, hinting that two of the the activists - who happen to be most anti-patent - may be retiring shortly?

You post above to not mistake cynicism for ignorance. I would kindly rejoin you not to mistake cynicism for what it is. If you truly think I am "ignorant" - then show me WHY with law and facts - not ad hominem labels.

Thanks.

[Jan Herber]

Having looked back at Alice, Myriad, and the other recent 101 decisions, looks to me that the supreme court has cited cases as far back as the mid-1800s for the exceptions it has drawn (abstract ideas, natural phenomena, and laws of nature). These seems like well-established boundaries on 101 based upon the notion that these exceptions are not "creations". I'd say given the long established nature of the exceptions, there is nothing particularly "activist" about our current court, especially given the narrow nature of their ruling as pointed out by Kevin. Finally, administrative agencies cannot make law, they can promulgate regulations, but the way regulations are enforced differs obviously from law and is also further subject to judicial review, thankfully.

[Skeptical]

Jan,

I think that you are missing a critical point. Some administrative agencies CAN make law - it depends on their charters. May I recommend a refresher course in administrative law?

The Tafas case takeaway was that the USPTO (which lacks that particular power under its charter) had attempted to make substantive law. As I noted - I do not think the AIA changed this charter.

Yes, there was judicial review there and yes, judicial review prevented the Office from making such law.

But such judicial review will only stop such law making that cuts against the grain of what those monitoring the "judicial review process" want, and if those monitoring want to write law themselves (through the common law evolution law-writing model), then "judicial review" is NOT what is in play, but in truth, judicial activism is. I am reminded of the line from the Will Smith movie: "But is who monitoring those monitoring the monitors?"

In fact, your reference to the age of some of the Court's thinking belies this "activism," and ignores that fact that prior to 1952, Congress had written the law to invite the Judiciary to set the meaning of the term "invention" through the common law evolution tool.

You ignore the fact that this power was rescinded in the 1952 Act by a Congress that was upset with the repeated anti-patent decisions of the Court in that the Congress explicitly carved out of what became Section 101 the new Section 103, purposefully using the word "obviousness" as opposed to the word "invention."

Judge Rich wrote extensively on this topic.

These are historical facts that should be known to anyone engaging in the 35 USC 101 debate.