Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: Bioindustry Association

By Kevin E. Noonan --

Earlier this summer, in Ariosa Diagnostics, Inc. v. Sequenom, Inc., the Federal Circuit affirmed a decision by the District Court for the Northern District of California granting summary judgment of invalidity of the asserted claims of U.S. Patent No. 6,258,540 (see "Ariosa Diagnostics, Inc. v. Sequenom, Inc. (Fed. Cir. 2015)").  Last month, Sequenom filed a petition for rehearing en banc, arguing that the panel's decision in June was inconsistent with the Supreme Court's decisions in Diamond v. Diehr, 450 U.S. 175 (1981), Mayo v. Prometheus Laboratories, 132 S. Ct. 1289 (2012), and Association for Molecular Pathology v. Myriad Genetics, 133 S. Ct. 2107 (2013), and that the panel's decision poses a threat to patent protection in multiple fields of invention.  On August 27, twelve amicus curiae briefs were filed in support of Sequenom's petition for rehearing en banc.  Over the next few weeks, Patent Docs will examine these amicus briefs. Today, we review the brief submitted by the Bioindustry Association.

In the brief's Statement of Interest, the amicus states that it is a "United Kingdom trade association of over 300 member organizations working in research and development ("R&D") and manufacturing in the bioscience sector."  The association's members "include emerging and established biotechnology companies, pharmaceutical companies, academic research and philanthropic organizations," which are "responsible for over ninety per cent of biotechnology-based medicines currently in clinical development in the UK; they are at the forefront of innovative scientific developments targeting areas of unmet medical need."  The amicus asserts that the issues in this case are of "great importance" because "[t]he majority of BIA's members are small and medium size enterprises" and thus "the ability to raise R&D funding or attract larger companies to collaborate heavily depends on the strength of their intellectual property, primarily patents."  Without patent protection, the ability of BIA members to bring to life new and improved treatments" is "severely hinder[ed] and, in many cases, [is] impossible."  Unique to the amicus briefs that have been filed, this brief makes the point that the U.S. represents 47% of the biotech market globally and that about 50% of U.S. biotech applications are filed by foreign companies (putatively to inform the Court of why a foreign trade association is concerned with the panel's interpretation of U.S. law).

The brief cites stark facts:  that the panel decision is at odds with patent eligibility standards throughout the rest of the world and is contrary to (and harms) efforts to harmonize patent law among industrialized nations.  The panel's interpretation of U.S. law also disadvantages foreign and multinational companies because inventions not patentable in the U.S. under the unique standards applied by the panel forces these companies to choose between getting patent protection abroad or keeping the technology as a trade secret globally.  The brief counsels that "the unintended consequence of the Sequenom decision may be an exodus of investment and businesses from the US market or the life science industry in general."

The brief then sets forth its evidence and arguments regarding how outside the bounds of accepted patent eligibility standards the panel decision is, beginning with the statement that "[t]he Supreme Court could not have intended a general exclusion denying patent protection to meritorious inventions merely because they are based on a discovery of something that occurs in nature."  What is "critical," according to this amicus, is "to delineate with clarity when a patent-ineligible discovery becomes sufficiently transformed" to become patent eligible.  Too broad an interpretation of Supreme Court precedent leads to the "unfortunate result[]" that "even an acknowledged ground-breaking meritorious invention is denied patent protection merely because it originates from a discovery of a natural phenomenon."  The brief then provides a concrete example for comparison:  European Patent No. EP 994 963, which is the counterpart of the Sequenom patent at issue in this case (U.S. Patent No. 6,258,540) which was granted having claims almost identical to the one invalidated by the District Court.  The brief notes that this patent was opposed in the EPO but survived, and cites decisions of the EPO Board of Appeals affirming the patentability of these claims (which were not challenged in eligibility grounds in Europe).  And the brief sets for the EPO Guidelines for comparison:

If a new property of a known material or article is found out, that is mere discovery and unpatentable because discovery as such has no technical effect and is therefore not an invention within the meaning of Art. 52(1).  If, however, that property is put to practical use, then this constitutes an invention which may be patentable.  For example, the discovery that a particular known material is able to withstand mechanical shock would not be patentable, but a railway sleeper made from that material could well be patentable.  To find a previously unrecognized substance occurring in nature is also mere discovery and therefore unpatentable.  However, if a substance found in nature can be shown to produce a technical effect, it may be patentable.  An example of such a case is that of a substance occurring in nature which is found to have an antibiotic effect.

EPO Guidelines for Examination (emphasis added).

Specifically, the brief identifies the "significantly more" requirement enunciated by Mayo as having "no equivalent in the patent laws of other industrialized countries."

Using these discrepancies as context, the brief then argues that the decision "frustrates" efforts to harmonize patent law globally.  More importantly, the brief also asserts that the panel's application of the Supreme Court's Mayo/Alice precedent is also contrary to U.S. treaty obligations (and, of course, contrary to the constitutional basis of Congress's exercise of the patent power).  With regard to the treaty aspects, the brief goes back to the Paris Convention of 1883 as the beginning of harmonization efforts, and includes the creation of WIPO (1967), the Patent Cooperation Treaty (1970), and GATT/TRIPS (1995) to illustrate these harmonization efforts, evidenced by the overwhelming majority of countries that have acceded to these treaties.  The brief than takes a short detour to argue that the panel decision is also inconsistent with provisions of the Leahy-Smith American Invents Act, insofar as the Act was directed at harmonizing U.S. patent law with the rest of the world and in particular how the AIA did not change § 101 (except for expressly precluding claims to a human organism in superposition to the 13th Amendment).  Insofar as the panel decision has effects contrary to this push towards harmonization, the brief argues that "the panel decision threatens the innovativeness and competitiveness of the US economy," something the Supreme Court could not have contended.

Finally, the amicus argues that the traditional alternative to eschewing patent protection, trade secret, is not available to foreign and multinational companies because of the disjunction between U.S. patent eligibility standards the rest of the world.  Such companies face the choice of filing only in the U.S. and requesting no publication, and then keeping the invention as a trade secret if unsuccessful, or filing everywhere and having patent protection globally but no protection (patent or trade secret) in the U.S.  The result:  "a consequence of the panel's decision in Sequenom is the de facto abolition of intellectual property protection in the United States for many foreign and multinational companies who were able to procure patents abroad."

The thrust of the arguments made by this amicus may be more persuasive to Justice Breyer than they will be to the Federal Circuit; the Justice has received a fair amount of press (both good and bad) over his assertions in a recent book (The Court and the World: American Law and the New Global Realities, Knopf, 2015) that the Court should look to the laws of other nations in making its decisions.

This amicus were represented by Konstantin Linnik, Lana Gladstein and Isaac Hubner of Nutter McClennen & Fish.

For additional information regarding this topic, please see:

• "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: WARF, Marshfield Clinic, and MCIS, Inc.," September 17, 2015
• "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: BIO and PhRMA," September 16, 2015
• "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: Amarantus Bioscience Holdings, Personalis, Inc., and Population Diagnostics, Inc.," September 15, 2015
• "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: Coalition for 21st Century Medicine," September 14, 2015
• "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: IPO," September 8, 2015
• "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: Professors Lefstin and Menell," September 6, 2015
• "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: 23 Law Professors," September 3, 2015
• "Amici Support Sequenom's Petition for Rehearing En Banc," August 28, 2015
• "Sequenom Requests Rehearing En Banc," August 18, 2015
• "Ariosa Diagnostics, Inc. v. Sequenom, Inc. (Fed. Cir. 2015), June 22, 2015

Comments

[The Memory Motel]

Justice Breyer is a sharp dude. I don't suppose that appealing to his worldliness can hurt although I don't think it'll make much a difference in this particular case. I also don't believe it helps much to pretend that the patent system is somehow necessary or even helpful (on balance) for promoting "innovations" like the one that Sequenom *claimed* and is working feverishly to resurrect.

Here's a hypothetical for the defenders of this claim to consider:

Biologist uses PCR to identify a new uncultured bacteria that lives in soil. Biologist claims "use PCR to detect [insert name of new species here]".

Question: Is that claim eligible? If so, why? If the claim is eligible, could the claim be made any simpler (i.e., broader?) including specific reference to all additional known methods?

If the claim isn't eligible, why is that the case and how does it differ from Sequenom's claim? What could/should be added to the claim to make it eligible?

These are the sort of immediate and obvious questions everybody should be asking rather than running around spouting hysterical nonsense like "diagnostic claims are dead!"

Oh, and here's a non-hypothetical situation for the defenders of this claim (and the unnecessary expansion of patent right generally) to consider:

http://www.nytimes.com/2015/09/21/business/a-huge-overnight-increase-in-a-drugs-price-raises-protests.html?smid=tw-share&_r=0

.... just a friendly reminder about the totally awesome people out there who'll be taking advantage of every opportunity that you hand them. Biotech trolling was dealt a serious blow by the Supreme Court (because identifying a "correlation" is quite possible the lowest form of innovation that a kindergartner can engage in). Let's not dig that corpse up if we can avoid it, mkay?

[Skeptical]

You do realized that the story you post was posted in that other blog against you, right? That the items therein are NOT a product of your obsessed against patent system, right?

Get well soon, Patent Docs.

[Kevin E. Noonan]

Your citation of the Daraprim situation would be more germane, MM, if it wasn't the case that the drug has been off patent for about 50 years and the reason (for now) that the price can be raised so much is that there is no generic version (because the market is to small to make it worth a generic company's while to spend the money to file an ANDA). Manipulating the FDA regulatory regime in this case at least has nothing to so with the patent system, and nothing to do with the issues in this case.

[Paul Cole]

Your proposition is too general.

PCR is not magic. It uses a specific pair of primers to amplify a specific sequence.

What is the procedure for testing for these bacteria in a sample of soil? What is the skilled person actually doing?

And what of economic or practical value flows from the detection of these bacteria?

Incidentally, there has been proposed a factual matrix, but no specific claim for us to consider. A claim is made of words, and the words are needed before the proposition can be properly considered.

[The Memory Motel]

Paul, those are interesting questions you asked. It's unclear whether they are part of your eligibility analysis. Does the "importance" of the "new" fact affect the eligibility of that fact?

As for this: "A claim is made of words, and the words are needed before the proposition can be properly considered"

Riiiiiight. I gave you the claim, Paul. Of course, I could use more words and end up with a claim of the exact same scope (which is pretty much what Sequenom did). Does the number of words in the claim affect your eligibility analysis?

Here's my advice to you, Paul, and others who wish to defend Sequenom's claim: answer the questions I asked. They aren't going away and if you keep running from them like you ran away from similar obvious questions about the claims at issue in Prometheus, it makes your "position" with respect to the law even more transparent -- and weak -- than it already is.

In short: please face the issue and address it. The tiresome "argument" that "this claim must be eligible or else nobody will patent anything anymore" is going to find any more traction this time around then it did when the exact same "argument" was floated in "defense" of Prometheus' claims.

[Paul Cole]

@MM

Regrettably detailed facts are important because cases are won or lost on detailed facts.

use of PCR to detect streptococcus charcoalis.

Might be patentable. Might not. All depends on the surrounding facts which we don't know.

So please show us your genius by setting out a detailed claim for us to consider. If it is a method claim, it has a starting point, a set of intermediate human activities and an end point. So what are they in the claim we should consider?

[The Memory Motel]

"Might be patentable. Might not. All depends on the surrounding facts "

What "facts" did you have in mind, Paul? That's exactly what I'm trying to get you to articulate. It's like pulling teeth. And -- yes -- this reticence is familiar, as I've already noted.

I gave you a simple, straighforward hypothetical claim and factual scenario for two reasons: (1) so you don't wander off into the weeds obsessing about some sideshow issue; and (2) because it's very similar if not identical to the equally simple "I-claim-the-detection-of-the-fact-I-detected" claim that Sequenom is trying to resurrect.

Just answer the questions, man. They're important.

[Paul Cole]

@MM

Why should I answer your questions when you don't answer mine? And yours are insufficiently complete for an answer to be given.

[EG]

Paul,

Don't bother to ask, as MM (aka "Malcolm") will never bother to answer your questions, only repeat (over and over) his same old refrain. I learned that long ago.

[The Memory Motel]

Paul Cole "Why should I answer your questions when you don't answer mine? "

Last time I checked I asked my questions first, Paul.

But go ahead and avoid the issues, Paul. After all, that strategy has been so successful for you lately.