A Modest Proposal Redux

By Kevin E. Noonan --

Motivation is an important factor in any policy-based decision.  Understanding motivation -- whether considering legislation, programs by administrative agencies, or judicial decisions -- can go a long way towards creating strategies to support or counteract a policymaker's activities.

The Supreme Court is not supposed to be a policy-making institution, but to deny the role of motivation in its decisions would be to miss the Justices' humanity.  It is evident in many of the Court's recent patent eligibility decisions that, in addition to their concern that overbroad eligibility standards "would risk disproportionately tying up the use of the underlying natural laws, inhibiting their use in the making of further discoveries," (see "Mayo Collaborative Services v. Prometheus Laboratories, Inc. (2012)"), there is a particular concern regarding interfering with the practice of medicine.  This is evidenced by dicta from the dissent from the Court's decision to dismiss certiorari as being improvidently granted in the Laboratory Corp. v. Metabolite Labs., Inc. decision:

As construed by the Federal Circuit, claim 13 provides those researchers with control over doctors' efforts to use that correlation to diagnose vitamin deficiencies in a patient.  Does the law permit such protection or does claim 13, in the circumstances, amount to an invalid effort to patent a 'phenomenon of nature'?

and from Mayo itself:

They tell a treating doctor to measure metabolite levels and to consider the resulting measurements in light of the statistical relationships they describe.  In doing so, they tie up the doctor's subsequent treatment decision whether that treatment does, or does not, change in light of the inference he has drawn using the correlations.  And they threaten to inhibit the development of more refined treatment recommendations (like that embodied in Mayo's test), that combine Prometheus' correlations with later discovered features of metabolites, human physiology or individual patient characteristics.

This is not the first instance of patent practices being considered overzealous and a threat to the practice of medicine.  And a remedy to this concern has been found before, to address patent claims directed to methods for performing eye surgery.  The patent, U.S. Patent No. 5,080,111 to Dr. Pallin, was being asserted (Pallin v. Singer, 1996 WL 274407 (D. Vt., Mar. 28, 1996)) against medical doctors and eye clinics in the mid-1990's and prompted swift Congressional action.  The measure that ultimately passed, introduced by Senator Bill Frist of Tennessee (himself a physician), was codified as 35 U.S.C. § 287(c):

35 U.S.C. 287 Limitation on damages and other remedies; marking and notice.

                                                                   * * *

(c)(1) With respect to a medical practitioner's performance of a medical activity that constitutes an infringement under section 271(a) or (b) of this title, the provisions of sections 281, 283, 284, and 285 of this title shall not apply against the medical practitioner or against a related health care entity with respect to such medical activity.
    (2) For the purposes of this subsection:
        (A) the term "medical activity" means the performance of a medical or surgical procedure on a body, but shall not include (i) the use of a patented machine, manufacture, or composition of matter in violation of such patent, (ii) the practice of a patented use of a composition of matter in violation of such patent, or (iii) the practice of a process in violation of a biotechnology patent.
        (B) the term "medical practitioner" means any natural person who is licensed by a State to provide the medical activity described in subsection (c)(1) or who is acting under the direction of such person in the performance of the medical activity.
        (C) the term "related health care entity" shall mean an entity with which a medical practitioner has a professional affiliation under which the medical practitioner performs the medical activity, including but not limited to a nursing home, hospital, university, medical school, health maintenance organization, group medical practice, or a medical clinic.
        (D) the term "professional affiliation" shall mean staff privileges, medical staff membership, employment or contractual relationship, partnership or ownership interest, academic appointment, or other affiliation under which a medical practitioner pro- vides the medical activity on behalf of, or in association with, the health care entity.
        (E) the term "body" shall mean a human body, organ or cadaver, or a nonhuman animal used in medical research or instruction directly relating to the treatment of humans.
        (F) the term "patented use of a composition of matter" does not include a claim for a method of performing a medical or surgical procedure on a body that recites the use of a composition of matter where the use of that composition of matter does not directly contribute to achievement of the objective of the claimed method.
        (G) the term "State" shall mean any state or territory of the United States, the District of Columbia, and the Commonwealth of Puerto Rico.
    (3) This subsection does not apply to the activities of any person, or employee or agent of such person (regardless of whether such person is a tax exempt organization under section 501(c) of the Internal Revenue Code), who is engaged in the commercial development, manufacture, sale, importation, or distribution of a machine, manufacture, or composition of matter or the provision of pharmacy or clinical laboratory services (other than clinical laboratory services provided in a physician's office), where such activities are:
        (A) directly related to the commercial development, manufacture, sale, importation, or distribution of a machine, manufacture, or composition of matter or the provision of pharmacy or clinical laboratory services (other than clinical laboratory services provided in a physician's office), and
        (B) regulated under the Federal Food, Drug, and Cosmetic Act, the Public Health Service Act, or the Clinical Laboratories Improvement Act.
    (4) This subsection shall not apply to any patent issued based on an application the earliest effective filing date of which is prior to September 30, 1996.

The policy justification for the bill was, as eloquently expressed by Senator Frist, because "innovations in surgical and medical procedures do not require the midwifery of patent law."  As enacted into law, the bill reflects a carefully crafted ("narrowly tailored") balance between the concerns of the medical community and the patent community, particularly the biotechnology community.  For example, "biotechnology patents" are expressly excluded from the exemption; such patents are defined (under 35 U.S.C. § 103(b)) as "a process of genetically altering of inducing a single or multi-celled organism" or "cell fusion procedures yielding a cell line that expresses a specific protein" or "methods of using a product produced" by the above processes.  Also not exempt are individuals involved in the commercialization of "a machine, manufacture, or composition of matter" related to a medical activity.  Importantly, the provision does not exempt commercial clinical labs, including ones regulated under CLIA, who perform medical diagnostic methods.

Expressly and by implication, these exclusions to the exemption do not include clinical laboratory services provided in a physician's office, and the statute is expressly directed to the "performance of a medical activity," which is defined as "a medical or surgical procedure on a body."  The statute does not include "diagnostic methods" within this definition of a "medical activity," but this is not an instance where the absence can be used to read anything into the legislative history, because the excluded provision was in fact in a different bill that was not considered by Congress.  But (perhaps) significantly, the exclusions to the exemption eschew mention of only one category of patent-eligible subject matter, methods.

Including diagnostic methods (limited to those performed in a physician's office) to the exemption might address the policy concerns raised by Justice Breyer in Mayo (and before that in Laboratory Corp. v. Metabolite Labs., Inc.).  Such balancing of policy concerns has been done in other patent law provisions, such as the safe harbor provisions of 35 U.S.C. § 271(e)(1); there, the policy purpose was to permit generic drug makers to prepare for market entry upon innovator drug patent expiration (ignoring for the moment the real effect of providing strong incentives for generic companies to utilize the provisions of § 271(e)(2) to challenge those patents rather than waiting for them to expire).  It is thus possible to read the law as containing (sub silentio, to be sure) diagnostic methods within the scope of the safe harbor.

Commentators are almost uniform in rejecting this interpretation, however, believing that Congress must more expressly enunciate the exemption in order for it to be effective.  See Sirjani & Keyhani, "35 U.S.C. 287(C): Language Slightly Beyond Intent," 3 Buffalo Intellect. Prop. Law J. 13 (Fall 2005); Rundle, "The Physician's Immunity Statute: A Botched Operation or a Model Procedure?" 34 Iowa J. Corp. L. 943 (Spring 2009); and Hu and Mallin, "Medical Method Patents: Treating 'The Physicians' Immunity Statute,'" 23 Syr. Sci Technol. Law Reporter 63 (Fall 2010).  In part, this conclusion is based on the phrase "medical or surgical procedure on a body," which is interpreted to exclude assays of blood, urine, tissue, or other biological samples that are taken from a body.

There has been one effort along these lines, in the crafting of the Leahy-Smith America Invents Act, related to "second opinion" genetic diagnostic testing:

Proposed 35 U.S.C. § 287(d):

(1) With respect to a genetic diagnostic test provider's performance of, or offering to perform, a confirming genetic diagnostic test activity that constitutes infringement of a patent under section 271(a) or (b) of this title, the provisions of section 281, 283, 284 and 285 of this title shall not apply against the genetic diagnostic test provider with respect to such confirming genetic diagnostic test activity.

This proposed section was withdrawn and converted to Section 27 of the AIA (calling for the U.S. Patent and Trademark Office to produce a study on the need for protection from patenting of second opinion genetic diagnostic tests) in response to lobbying by ACLU and others that the bill reflects a supposition that patents on genetic testing are valid (this being prior to the Supreme Court's decision in Association for Molecular Pathology v. Myriad Genetics, Inc.).  It is clear that deleting the limiting words "genetic" and "confirming genetic" from this proposed statute could include diagnostic testing within the scope of the "practice of medicine" safe harbor.

Should Congress deign to make inclusion of medical diagnostic methods within the scope of the exemption, such an action would comport with Justice Breyer's invitation at the end of the Mayo opinion ("we must recognize the role of Congress in crafting more finely tailored rules where necessary").  Such a legislative scheme might reduce the temperature of those whose concern over the possibility that patent protection might inhibit medical services delivery has created the greater likelihood that innovation will be harmed by a lack of patent protection (or worse, that disclosure will decline, reducing the pace of innovation).

Comments

[skeptical]

This "Oh NO, may affect the future" is nothing more than a mis-perception of part of what makes a STRONG patent system.

A strong patent system operates from both a carrot approach (those things that benefit innovators directly), as well as a stick approach (those things that make infringers cringe).

The adage of "Necessity is the mother of invention" is borne out when that very same "feared" aspect of "Oh NO" is presented, and man's innovations flow to explore heretofore unthunk paths.

Another adage: spare the rod and spoil the child.

By hearkening to the nigh constant lament that patents "are B A D," and ever seeking to weaken patents, we have not only weakened the actual ability to innovate, we have induced a large sub-culture of those who spurn the nature of innovation, and we have strengthened the Efficient Infringers who would much rather compete on non-innovation terms (large, established Big Corp's who have a war chest of other means on which to compete).

We also are presented with ALL THREE branches acting to weaken what instead should be strengthened.

A last adage, the Pogoism of: We have met the enemy and he is us.

(the Royal "We," of course, as some of that "We" have been actively voicing concerns as the current trajectory has unfolded)

[EG]

Hey Kevin,

A very thoughtful and reasoned discussion on this issue. If only SCOTUS would consider your post here too. But as one of the commentators on this blog would say, "I remain skeptical."

[Allen]

Very Insightful! The Supreme Court is not an administrative agency for Constitutional/statutory issues. I would guess that SCOTUS has humanist concerns that outweigh any technical policy conflicts.

[Skeptical]

Allen,

SCOTUS will do what it can get away with.

This stems in no small matter to attorneys who refuse to understand their oath of Office** and place the Supreme Court ABOVE the Constitution.

**one recognized outlier is the Commonwealth of Massachusetts which appears to kowtow to the Supreme Court as a client first, and the Constitution merely secondary.

[Martin H Snyder]

It's the process category that seems to be the nexus of almost every eligibility controversy.

[skeptical]

Mr. Snyder,

That is merely a perception.

This is due - in no small part - to the limitations of the English language, coupled with the fact that innovation in the "Fourth Wave" most easily lends itself to words of action.

Others (patent attorneys) have confused software with the EXECUTION OF software.

Software is not the execution of software.

Software is a "ware," a computer component that by design choice can take the form of any other "ware" (hardware or firmware, for example).

If one were to enforce a certain degree of inte11etual honesty across all debates on the eligibility question, the purposeful obfuscation and dissembling would gut that anti-software movement.

We would return to a rather simple exercise for evaluations under 35 USC 101.

The "two step" would mirror the two steps intended by Congress (and not the Court):

1) Is it roughly (See the Court's closest to the mark views on this in Chakrabarty) fitting into at least one of the statutory categories.

2) Does it meet the decidely low bar for having utility (within the Useful Arts).

THAT IS IT.

All else is muckery.

[Martin H Snyder]

You can try to keep pounding your square peg anon, but the word software appeared exactly zero times in this article. Medical diagnostic methods may or may not be software based.

It's not about software, it's about what a "process" implicates. To me, it implicates a result, and the nature of that result is where the analysis of eligibility needs to be focused.

[skeptical]

Mr.Snyder, it should go without saying (but apparently needs to be six to you), that my comment applies to the same TYPE of argument that is levied against software patents.

Yes, here in the instant case, software is not mentioned.

Can you follow though how the reply addressing software speaks to your noted concern over the statutory category of “process?”

Since you talk about statutory processes I presumed that you were at least familiar with them. I also provided a relevant legal point (Chakrabarty) that you should look into as regards the “at least one” notion of fitting a statutory category

The point I present still inures. If you want to have a dialogue on that point, may I suggest that you gear your reply to some substantive element?