Genetic Technologies Ltd. v. Laboratory Corp. of America Holdings (D. Del. 2014)

By Kevin E. Noonan --

In Genetic Technologies Ltd. v. Laboratory Corp. of America Holdings, yet another district court (actually, a magistrate judge) has succumbed to the siren song, or drank the Kool-Aid, or (fill in your favorite Apocalyptic metaphor here) of applying the Supreme Court's Mayo v. Prometheus decision in ways not required by the decision, that produce an entirely subjective standard for patent eligibility, and that are arguably contrary to how the Court itself explained its earlier decision in the CLS Bank v. Alice case.

The case concerned U.S. Patent No. 7,615,342, wherein Genetic Technologies asserted claim 1:

1.  A method to predict potential sprinting, strength, or power performance in a human comprising:
    a)  analyzing a sample obtained from the human for the presence of one or more genetic variations in α-actinin-3 (ACTN3) gene;
    b)  detecting the presence of two 577R alleles at the loci encoding amino acid number 577 of the α-actinin-3 (ACTN3) protein; and
    c)  predicting the potential sprinting, strength, or power performance of the human, wherein the presence of two copies of the 577R allele is positively associated with potential sprinting, strength, or power performance.

Defendants include LabCorp Holdings, LabCorp America, and 23andMe, and Magistrate Judge Christopher J. Burke rendered his decision on a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), alleging failure to state a claim because the '342 patent claims were invalid as claiming patent ineligible subject matter.  Within days of the Magistrate Judge's Report and Recommendation, the parties filed a joint stipulation of dismissal with prejudice.

The Magistrate Judge's Report and Recommendation contains an interesting procedural background, wherein Chief Judge Leonard P. Stark referred the case to the Magistrate for pretrial matters "including the resolution of case-dispositive motions."  Instead of filing an Answer to the complaint, the defendants submitted their motion, which was followed by ten "supplemental letters . . . appris[ing] the Court of recent opinions -- including a number of important decisions by the Supreme Court -- that might impact review of the Section 101-related issues" before the Court.  This authority included Uniloc USA Inc. v. Rackspace Hosting Inc. (E.D. Tex. Mar. 27, 2013) (directed, according to defendants, to "a method for processing certain types of numbers in a computer"); Ultramercial Inc. v. Hulu LLC (Fed. Cir. June 21, 2013) (related, according to plaintiff, to "methods for distributing copyrighted materials over the Internet where the end user would receive the copyrighted product for free after viewing an advertisement"); Association for Molecular Pathology v. Myriad Genetics (2013) (which defendants asserted "bears more closely on [the] motion than does Ultramercial" and is related to the question of patent eligibility of natural phenomena, which the Court set forth the "contours of the doctrine" in Mayo); Ubicom, LLC v. Zappos IP Inc. (D. Del. Nov. 13, 2013) (which defendants assert "demonstrates that even after Ultramercial [], it is permissible to grant motions to dismiss on patentable subject matter in appropriate cases"); Cyberfone Systems, LLC v. CNN Interactive Group (Fed. Cir. Feb. 26, 2014) (wherein defendants assert that there is no requirement for claim construction before deciding subject matter eligibility); Alice Corp. v. CLS Bank Int'l (2014) (a case defendants assert "is central to the resolution of [the] motion") and plaintiff's response; defendant's notice of the Supreme Court's decision to vacate the Federal Circuit's Ultramercial decision and plaintiff's response and defendants' reply, a total of ten citations of authority from March 25, 2013 through July 7, 2014.

Arriving at the merits, the Magistrate Judge set out what he characterized as "the general framework for Section 101 analyses," and then applied it to the facts and allegations in Genetic Technologies' complaint.  This analysis encompasses the familiar litany that Congress intended the scope of patent eligibility to be broad, but that this breadth was circumscribed by the Supreme Court's "exceptions" related to natural laws, abstract ideas, and natural phenomenon.  The Magistrate Judge also noted that the Supreme Court has recognized that too broad an application of these judicial exceptions would "eviscerate" patent law because "all inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena or abstract ideas," citing Mayo.

The Magistrate Judge then cited the Federal Circuit, Accenture Global Servs., GmbH v. Guidewire Software, Inc. (Fed. Cir. 2013), and District of Delaware precedent, Comcast IP Holdings L LLC v. Sprint Commc'ns Co. L.P. (D. Del. July 16, 2014), for the appropriate test.  The two-prong test used by the Magistrate Judge is first, to identify whether the invention recited by the claims "fits within one of the four statutory classes."  Second, the court must determine whether, despite satisfying the first prong the claims recite subject matter falling within the scope of one of the judicial exceptions.  The Magistrate Judge then cited portions of the Supreme Court's decision in CLS Bank v. Alice directed towards "the search for an inventive concept."

The decision set forth in the Report and Recommendation begins by holding that the motion was not premature.  In doing so, the Magistrate faulted plaintiffs for not "articulat[ing] why there are any disputed areas of fact relevant to the resolution of the Motion" (emphasis in report).  The Magistrate also cited the Federal Circuit's CyberFone and Bancorp decisions, and Judge Mayer's concurring opinion in I/P Engine Inc. v. AOL Inc. (Fed. Cir. Aug. 15, 2014) for the proposition that claim construction is not always necessary for a § 101 patent eligibility determination.  In a footnote, the Magistrate also noted that the Supreme Court has held that the "clear and convincing evidence" standard "does not apply to pure questions of law," citing Microsoft Corp. v. i4i Ltd Partnership (2011).  In those cases where a plaintiff asserts a need for claim construction, the Magistrate states that the matter can be resolved simply by adopting plaintiff's claim construction, citing UbiComm and Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat'/ Assoc. (D.N.J. July 31, 2013).  In addition, the Magistrate noted that the only claim term at issue was "predicting," and the Judge adopted Genetic Technologies' construction for this term.

The Magistrate then set forth the basis for his decision that claim 1 does not satisfy the patent eligibility standard of § 101, relying on Myriad, Mayo and Perkin Elmer, Inc. v. Intema Ltd. (Fed. Cir. 2012), and setting forth his understanding of these decisions.  While entirely conventional, the Magistrate's analysis focused on the preemptive effects of the claims in Mayo and Perkin Elmer and the risk of "tying up future innovation premised on laws of nature," characterizing the Mayo claims as being of "sweeping nature" and the Perkin Elmer claims as encompassing any known measuring method.  From this assessment it was a short step to including in the definition of "known methods" those that are "routine, conventional and well-understood."

The Magistrate then concluded that claim 1 of the '342 patent "contains" a law of nature, based on the "broad manner" that the Mayo Court defined a law of nature ("[A] patent that ... describes [a relationship that is the consequence of entirely natural processes] sets forth a natural law").  The "correlation" between athletic performance and inheritance of particular alleles of genes encoding α-actinin-3 is "the handiwork of nature," according to the Magistrate, something that "man did not do anything to bring about this relationship."  The Magistrate concluded that the claim did not "amount[] to a patent-eligible application of" that natural law.  In answering in the negative, the Magistrate applied the now-common practice of assessing the nature of each of the steps of the claim individually, which it identified as an "analyzing" step, a "detecting" step, and a "predicting" step.  Because the "analyzing step does not recite a novel analyzing method this step does not provide the needed "something more," with the Court citing (out of context) Justice Thomas's statement that "[had] Myriad created an innovative method of manipulating genes while searching for the BRCA1 and BRCA2 genes, it could possibly have sought a method patent" (inapposite here because the question before the Magistrate was not the question before the Supreme Court in Myriad).  The Magistrate also cited the District Court's decision in Ariosa v. Sequenom that arrived at a similar (erroneous) conclusion.  As in the Ariosa case, the Magistrate cites patentee's own specification for the breadth of analytical methods that can be employed in this step.

The Magistrate applied this same reasoning to the detecting step, using patentee's statements in the specification to support his conclusion.  And the "predicting" step suffers from the same fate as the "wherein" causes in the claims at issue in Mayo, as being merely an "instruction [to] apply the [natural] law" or, alternatively, "insignificant post-solution activity" (rendering the actual invention, the ability to predict a phenotype from a detectable phenotype, into insignificance).  In this regard the Report also cites the distinctions set forth by the Federal Circuit in the two claim types suffering different invalidating fates in Classen Immunotherapies, Inc. v. Biogen IDEC, wherein claims to "reviewing effects of known immunization schedules" were not patent eligible, but that claims that "required the 'further act of immunization'" "moved the claim from 'abstract scientific principle to specific application.'"

Having disassembled the claim and analyzed its component recited limitations individually, it is not surprising that the Magistrate could not discern subject matter eligibility in the claims considered "as a whole," because inter alia the claim did not "recite an application that amounts to significantly more than a patent upon the natural law itself,'" citing Mayo and Ariosa.  Finally, as in Mayo the Magistrate concluded that the general nature of the claim language raises the possibility that the claims could "inhibit the development of new processes that make use in some way of the claimed method for analyzing and detecting the particular genetic variation" and stifle future innovation.

The case presents two troublesome trends.  First, patentees are now at risk of not even getting their day in court, and not getting the statutory presumption of validity, because courts are empowered by decisions such as these to render decisions without claim construction, or production of clear and convincing evidence of patent ineligibility.  The second trend is for courts to require novel methods for obtaining, analyzing, or detecting evidence of anything that can be cast as a natural law, over-interpreting Justice Breyer's proscription against what is routine, conventional or well-understood.   Extended to its logical conclusion assessing the patent eligibility of any diagnostic method claim as the Magistrate Judge does in this case, or the District Court judge did in Ariosa (or, arguably, how the Federal Circuit panel did in the Perkin Elmer case) will preclude patent eligibility for all such claims.  It is possible that the Supreme Court intended this result.  But considering the damaging effects this would have on future innovation, and the disruption of settled expectations that the Court itself has warned should be avoided, it seems only prudent for the lower courts (and the PTO) to give the Court the prerogative of saying so itself.

Comments

[EG]

Hey Kevin,

Another sad story of Mayo causing nonsensical subjective determinations of patent-eligibility under 35 USC 101. What's even worse is that Prometheus' claimed subject matter didn't even involve a so-called "law of nature" as the drug whose dosage was calibrated by the claimed method didn't even exist in "nature."

[BG]

It looks like Genetic Technologies dropped the case. Will anyone stand up to this nonsense?

[Skeptical]

Here, too, Mr. Cole, shall I be at pains to say "I told you so"...?

[Paul Cole]

Interestingly there is a granted European equivalent to this US patent.

However, claim 1 is very difficult to distinguish from what was held ineligible in Mayo. So I fear I will have to defer to Skeptical.

[Kevin E. Noonan]

Dear Paul:

Except that everything in Mayo was in the prior art, and nothing in this claim is.

Even if viewed as a small difference, one of great significance I think.

Thanks for the comment.

[Paul Cole]

@ Kevin

I completely agree that if this was a wholly new analysis, never done before, then the fact matrix differs from Mayo where the analysis had been done before (amongst other things by the inventors who had published it) and only the interpretation was novel. In their published paper the Prometheus inventors had gone so far as to recommend carrying out the very research that resulted in the patent in issue.

In particular, if a new and useful analysis never done before is discovered by the inventor then it should be possible to claim it. The Hartranft indicia of hand of man and new utility are satisfied.

The claim calls for detecting the presence of two 577R alleles at the loci encoding amino acid number 577 of the α-actinin-3 (ACTN3) protein. If that was not being done before then there is clearly a new process and eligibility should not be foregone by mere recitation of how the results should be interpreted. It all depends on the facts, and I recall that in Ultramercial the Federal Circuit pointed out how fact-sensitive these cases are.

But if that is the case that the analysis was novel, why did the patentees here fold their tents and stipulate dismissal rather than appealing?

[mmm]

Am I the only sane person? How is this not the right conclusion? The claim quoted above seems to have two fatal flaws:
1. it's a method of predicting and it doesn't even claim how to DO the prediction.
2. And, at best, its merely calling out the correlation.

This is nothing more than an a bad attempt at patenting the scientific discovery not an actual thing. It's not a test. It's not a machine. It's not even really a process that results in a tangible anything: not even a numerical value.

We patent folks need to get over ourselves. Courts are doing a darn good job applying Alice. Even if there's something subjective about the analysis, the results make much more sense than rewarding patent attorneys for crafty words.

[Kevin E. Noonan]

Dear mmm:

I doubt it. But your comment does illustrate nicely the problems with having a completely subjective test. You say tomAto and I say tomAHto and without some standards (location, historical era, nationality) there is no way of saying who is right. So it is now with the Section 101 standardless standard.

Would you be happier with this claim (or something like it):

1. A method to select individuals having potential sprinting, strength, or power performance in a human population comprising:
a) analyzing a sample obtained from the human for the presence of one or more genetic variations in a-actinin-3 (ACTN3) gene;
b) detecting the presence of two 577R alleles at the loci encoding amino acid number 577 of the a-actinin-3 (ACTN3) protein;
c) predicting the potential sprinting, strength, or power performance of the human, wherein the presence of two copies of the 577R allele is positively associated with potential sprinting, strength, or power performance; and
d) selecting said individuals for athletic training?

But this just begs the question: why should it not be patentable to discover a natural correlation and then determine a way to use that for human benefit? Because while the correlation preexists the discoverer, turning that discovery into something useful does not.

As a historical example of why that is so, assume that the method was directed to predicting who can dunk a basketball. If that test was performed on Michael Jordan, and he and the test were developed in 1856 and not today, would there still be any usefulness in the test? But the correlation would certainly still exist, and then I might concede that it was not patentable because it did nothing anyone knew enough to care about.

Thanks for the comment. HappyThanksgiving.

[Nelson]

I wonder if it would be useful in these cases to argue that the pulling apart of a claim does violence to the interpretation by applying the technique to a composition claim, for example, to the first bicycle, assuming that the prior art was horse-drawn wagons and carts (this may not be a good example, but it sprang to mind). Once one disassembles the bicycle into its components--wheels, brakes, handles, and a support frame--one could see they were all in the prior art, yet of course the particular combination was new and useful. I just think the framework for analysis of method claims is broken and maybe there would be a way to get the court to think about that.