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July 21, 2024

Loper Bright Enterprises v. Raimondo -- Justice Gorsuch's Triumphant Concurrence

It has been one of Justice Gorsuch's signature judicial goals to overturn the Court's Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. decision and while it has taken seven years for a case to arise giving him the opportunity to persuade his colleagues to do so, the Loper case provided that opportunity (regardless of the amount of effort or lack of it required to accomplish the goal).

The concurrence sets out the issue not as one between the co-equal branches of our government but as "between individuals and the government," providing a populist gloss otherwise not mentioned in either the majority opinion or dissent (and perhaps providing a glimpse into the philosophical underpinnings of the Justice's passion for overturning Chevron). Terming the Chevron approach to be a "radically different approach" the Justice's opines that over time "the error of this approach became widely appreciated" and uses as evidence the Court's refusal to apply the doctrine since 2016 (nicely illustrating the judicial maneuver decried by Justice Kagan in her dissenting opinion of "overruling-through-enfeeblement"). As stated right at the outset, the Justice has penned his concurrence to "address why the proper application of the doctrine of stare decisis supports that course" (something the dissent vigorously opposes and the majority opinion discussed more cursorily).

The Justice begins his concurrence with his history of judicial norms, including stare decisis over time, seeking to clarify what in his view is the proper role of judges and to what extent they are (or should be) bound by prior decisions. In England, the judge's role was limited to specifically not make law (which was restricted to the King and Parliament) but to interpret it in the context of the historical consolidation of England into a single kingdom. But a judge's opinion and "the law" were not considered "one and the same thing," the Justice providing his own citation to Blackstone (1 W. Blackstone, Commentaries on the Laws of England 71 (1765)). Rather than bind later judges, an earlier judge's decision was considered to be "evidence" of what the law was which varied with the weight later judges gave them. These distinctions were also considered regarding the effect on later cases of "[d]icta, stray remarks, and digressions" (given less weight but were not considered entirely worthless) as opposed to "[a]n opinion's holding and the reasoning essential to it."

The relevance of this historical/rhetorical sojourn, according to the concurrence, is that "there are good reasons to think that the common law's understandings of judges and precedent outlined [herein] crossed the Atlantic and informed the nature of the 'judicial Power' the Constitution vests in federal courts" under Article III. These include that in addition to being drafted and adopted "against the backdrop of these understandings" there are specific passages in our Constitution that support the Justice's insight and interpretations (in his view, of course) throughout that document (which are set out in the concurring opinion). In this context is the important principle that the judiciary is a "neutral party" [that can] 'interpret and apply' the law without fear or favor in a dispute between others," citing Osborn v. Bank of United States, 9 Wheat. 738, 866 (1824) (the need thereof being consistent with the rather adversarial view of "citizens and their government" espoused at the beginning of the concurrence, rather than mere allocation of the capacity to decide between different branches of those citizens' government). And the concurrence suggests that the limited power of stare decisis in England was transported to this country due to these similarities (suggesting darkly a broader attack on established legal principles that could lead to unbridled judicial hegemony over established law). "Plucking" (or at least cherry picking) from numerous 19th Century decisions and extrajudicial statements by past statesmen (Including Abraham Lincoln) the concurrence weaves a tapestry swathed in apparent reasonableness diminishing the power of stare decisis as never being binding on future courts but rather providing evidence or guidance regarding what the later law should or could be. The Justice's conclusion from these assessments are summarized in the opinion as three "lessons":

First, "a past decision may bind the parties to a dispute, but it provides this Court no authority in future cases to depart from what the Constitution or laws of the United States ordain." This principle is supported by consideration of "flawed" decisions and when that flaw is constitutional or related to particular statutes and the Court's capacity for correction (and thus not bound by stare decisis).

Second, "[w]hile judicial decisions may not supersede or revise the Constitution or federal statutory law, they merit our 'respect as embodying the considered views of those who have come before,'" citing Ramos v. Louisiana, 590 U. S. 83, 105 (2020). A judge must "weigh his view of what the law demands against the thoughtful views of his predecessors" which are "a font of established wisdom richer than what can be found in any single judge or panel of judges." Precedent's primary power is the power to persuade later judges, the concurrence maintains. (Ironically, the principles of workability and reliance, the first of which was used by the majority to support their decision to overturn Chevron, "do not often supply reason enough on their own to abide a flawed decision" but do they provide sufficient motivation to overturn it?).

Third, "it would be a mistake to read judicial opinions like statutes" because judicial decisions "render a judgment based only on the factual record and legal arguments the parties at hand have chosen to develop" (those decisions being made before a backdrop of earlier decisions and settled law being unmentioned). The concurrence properly notes that judges must "appreciate the possibility that different facts and different legal arguments may dictate a different outcome (but unspoken is the principle that this does not imply that these differences mandate or permit changes in settled law). The concurrence, placing the blame on the innately digressive characteristic of judges, asserts that many decisions are infused with "vapours and fumes of law" (citing 2 The Works of Francis Bacon 478 (B. Montagued. 1887)) (apparently meaning dicta) that "cannot 'control the judgment in a subsequent suit,'" citing Cohens v. Virginia, 6 Wheat. 264, 399 (1821).

The upshot of these considerations in the concurrence is the judicial Goldilocks principle that there is a "just right" amount and degree of precedential authority that such earlier decisions can be given (that "sweet spot" being defined only by the decision maker to which the issue is posed). Citing Brown v. Davenport, 596 U. S. 118, 141 (2022), the Justice asserts that over reliance on stare decisis can "turn stare decisis from a tool of judicial humility into one of judicial hubris."

The concurrence applies these "lessons" to Chevron as follows:

Lesson 1, because Chevron deference contravenes the law Congress prescribed in the Administrative Procedure Act.

Lesson 2, because Chevron deference runs against mainstream currents in our law regarding the separation of powers, due process, and centuries-old interpretive rules that fortify those constitutional commitments.

Lesson 3, because to hold otherwise would effectively require us to endow stray statements in Chevron with the authority of statutory language, all while ignoring more considered language in that same decision and the teachings of experience.

The concurrence's explication of these conclusions mirror the analysis in the majority opinion (and won't be repeated here; see "Loper Bright Enterprises v. Raimondo (2024)") except to the extent they do not. Regarding the APA in Lesson 1 the concurrence is concerned that an agency can interpret a statute outside the scope of what a court has, can, or would do, and such interpretations can be changed at any time by the agency that could "effectively overrule not only their own past interpretations of a law but a court's past interpretation as well." Lesson 2 "cannot rescue Chevron deference in Justice Gorsuch's opinion because "[i]f stare decisis calls for judicial humility in the face of the written law, it also cautions us to test our present conclusions carefully against the work of our predecessors" (reiterating the arguments here and in the majority opinion regarding "how our predecessors traditionally understood the judicial role in disputes over a law's meaning"; these arguments include citations to Marbury v Madison, The Federalist, and United States v. Dickson, 15 Pet. 141, 162 (1841) (Story, J.). And again raising the possibility that a court would need to defer insofar as "the government could propound a 'reasonable' view of the law's meaning one day, a different one the next, and bind the judiciary always to its latest word" or that the Executive could override judicial precedent. Giving the Executive branch due respect does not require courts to defer wherein "by no means [can the Executive's decisions] control the action or the opinion of this court in expounding the law with reference to the rights of parties litigant before them," citing Irvine v. Marshall, 20 How. 558, 567 (1858). Justice Gorsuch's assessment of the Chevron regime is that "it did not merely depart from our precedents. More nearly, Chevron defied them."

The concurrence also sees a parallel between King George's efforts to dominate the colonial judiciary and Chevron, and the American response to the King's effort by making "considered judgment to build judicial independence into the Constitution's design [by] vest[ing] the judicial power in decisionmakers with life tenure" under Article III (as well as other bases for judicial independence). In the Justice's view, Chevron deference undermines all that (citing many of the aspects of the Chevron regime recited in the majority opinion's grounds for overturning Chevron). The opinion sees Chevron as enabling the Executive branch to "effectively judge the scope of their own lawful powers," citing Arlington v. FCC, 569 U. S. 290, 296–297 (2013). And citing Blackstone the interpretive powers granted the Executive bureaucracy echoes the capacity Blackstone warned about should "magistrates" be permitted to "discard an old meaning and assign a new one to a law's terms, all without any legislative revision" under circumstances where a "reasonable bureaucrat may change his mind year-to-year and election-to-election," thereby reducing or destroying public certainty (wherein "the people are left to guess about their legal rights and responsibilities" as a result).

Justice Gorsuch's analysis of the Chevron regime is frankly disparaging, terming the determinations of ambiguity to be something of a "Snark hunt" (some judges see it everywhere, some judges never see it) but in any case where these decisions always inure to the "benefit" of the Federal government (and the courts' assessment of whether the agency's interpretation of the statute is also fraught with ""wildly different" approaches and reached wildly different conclusions" even in similar cases, citing Kavanaugh, Fixing Statutory Interpretation, 129 Harv. L. Rev. 2118, 2152 (2016) (the cases before the Court on appeal illustrating this situation in the Justice's view).

The concurrence also has little use for claims that allegiance to Chevron involves reliance interests, asserting that "the whole point of Chevron deference is to upset [reliance interests]," ostensibly because "executive officials can replace one 'reasonable' interpretation with another at any time, all without any change in the law itself" (citing National Cable & Telecommunications Assn. v. Brand X Internet Services, 545 U. S. 967, 982–983 (2005), as an example of such changes in how agencies interpret the law; tellingly that decision arose prior to any of these changes). The concurrence purports to be concerned with the effects of such changes on "ordinary people" because "sophisticated entities" (and, ominously, "their lawyers") can take steps (from "keeping up" with such changes to lobbying), illustrating the "ordinary people" example with Buffington v. McDonough involving an Air Force veteran injured in the line of duty that fell afoul of regulations ("self-serving," according to the Justice) involving disability benefits. The concurrence asserts that the government used Chevron to convince a court that the Department of Defense's interpretation of the statute resulting in the loss of those benefits was reasonable (it was not sufficiently unreasonable for the Court to grant certiorari, apparently). The Justice also includes the story of a case in which he presided at the appellate court in which the Board of Immigration Appeals overturned an earlier interpretation of a rule to the detriment of immigrants who had relied on it (other examples among the "so many" are further cited in the opinion). The concurrence pits "the Constitution, the APA, and our longstanding precedents" against government claims that Chevron deference "has become a 'fundamenta[l] . . . ground rul[e] for how all three branches of the government are operating together,'" further illustrating the fundamentally adversarial tone of the concurrence (and to a lesser degree the majority opinion).

The concurrence also characterizes Chevron as "a counter-Marbury revolution, one at war with the APA, time honored precedents, and so much surrounding law" that is the result of "endow[ing] a stray passage in a judicial decision with extraordinary authority." In Chevron, a "bare quorum" of the Chevron Court (the same quorum reaching the majority's decision) affirmed the Environmental Protection Agency's definition of the term "stationary sources." According to the concurrence, from "bits and pieces" of this decision arose the Chevron analytical regime that the concurrence and majority opinions so mightily complain about, wherein much of these bits and pieces of legal analysis not arising from positions taken by the government (and of course not taking into account the majority's and concurrence's concerns regarding contrary considerations under the APA).

The concurrence attempts to normalize the disregard for stare decisis in the Court's overthrow of Chevron by first "blaming" deceased former Justice Scalia for promoting the Chevron regime in NLRB v. Food & Commercial Workers, 484 U.S. 112, 133–134 (1987), and then, acting like a repentant apostate losing faith with its consequences and arguing for the Court to reconsider it in Northwest Environmental Defense Center, 568 U.S. 597, 617–618, 621 (2013), and Perez v. Mortgage Bankers Assn., 575 U.S. 92, 109–110 (2015). The concurrence notes that several current members of the Court began to show similar reservations, so much so that the Chevron decision was effectively ended (by what Justice Kagan's dissent terms "overruling-through-enfeeblement") until this case raised the opportunity to, in Justice Gorsuch's words, "place[] a tombstone on Chevron no one can miss."

Ultimately, the concurrence bases its justification for overturning Chevron as an opportunity to correct mistakes, and certainly there is an argument to be made that if there is a Court where it can be inappropriate to use stare decisis as a guiding principle (insofar as it prevents mistake correction) it is the Supreme Court (see "Alternative Reasoning for Supreme Court's Life Sciences Subject Matter Eligibility Jurisprudence"). But that aspect of the Court's power under Article III comes with the need for due consideration of the consequences, something apparently understood by the dissent more readily than either the majority or the concurrence, for whom it appears that correcting doctrinal error is more important that (potentially) throwing into chaos how the laws enacted by Congress are executed (and inflating the powers of unelected judges to counter the policies of their elected officials). This decision creates another governance experiment in a system whose very existence is an experiment. If it fails during the tenure of any of the Justices who concurred with this decision it can be hoped that in their turn they will have the "judicial humility" to admit their mistakes.

Posted at 10:50 PM in Supreme Court | Permalink | Comments (0)

July 07, 2024

Loper Bright Enterprises v. Raimondo -- Views of the Dissenting Justices

By Kevin E. Noonan --

In addition to Justice Gorsuch's concurrence (to be discussed in a later post), the three "liberal" Justices on the Court differed from their colleagues and thought overturning the Chevron precedent to be both erroneous and unnecessary. Their dissent, written by Justice Kagan and joined by Justices Sotomayor and Jackson, took a dim view of the majority's legal reasoning and the consequences of their decision.

Instead of looking into the Court's distant past for support, the dissent begins by reminding the majority (and us) that "[f]or 40 years, Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc. . . . has served as a cornerstone of administrative law." Unlike the majority, who apparently believe that the Chevron precedent renders judges unable to judge, the dissent apprehends that under this precedent "a court uses all its normal interpretive tools to determine whether Congress has spoken to an issue" (and if so "the agency's views make no difference"). It is in the instances where Congress has not spoken clearly, and "if the court finds, at the end of its interpretive work, that Congress has left an ambiguity or gap" that the issue is joined whether the agency or the courts, in the first instance decides how the law will be interpreted and applied. The dissenting Justices believe that the agencies, not the courts, are (usually, but not exclusively) best equipped to make these choices and that this allocation of decision-making is the right choice ("the rule is right") and (inherently at least) consistent with Congressional intent. This is because such decisions can involve "scientific or technical subject matter," or require an understanding of "complex and interdependent regulatory programs," neither of which are usually within a court's skill (or knowledge) set. The current regime also accommodates the "chain of command" between the agencies and the President, "who in turn answers to the public for his policy calls" (and is accountable thereto; this, after all was the line of reasoning used by the Chief Justice in upholding the constitutional validity of the Affordable Care Act in National Federation of Independent Business v. Sebelius).

The dissent accuses the majority of "flipping the script" on this "almost obvious choice," with "[a] rule of judicial humility giv[ing] way to a rule of judicial hubris." This is the most recent of a pattern of the Court "too often tak[ing] for itself decision-making authority Congress assigned to agencies," the dissent citing National Federation of Independent Business v. OSHA, 595 U.S. 109 (2022), West Virginia v. EPA, 597 U.S. 697 (2022), and Biden v. Nebraska, 600 U.S. 477 (2023), in support of this allegation. As a consequence, the majority has turned the Court "into the country's administrative czar" "[i]n one fell swoop." And in doing so, the majority has made a "laughing-stock" of stare decisis, which the dissenting Justices assert "remind judges that wisdom often lies in what prior judges have done" and provide "a brake on the urge to convert 'every new judge's opinion' into a new legal rule or regime," Justice Kagan reciting the dissent in Dobbs v. Jackson Women's Health Organization, 597 U.S. 215, 388 (2022), quoting 1 W. Blackstone, Commentaries on the Laws of England 69 (7th ed. 1775) (trumping the majority's basis on our history with legal opinion contemporaneous with the Founders). And paralleling the majority's suggestion that Congress could overrule their decision by statute (a false assertion based on the legal grounds for that decision), here the dissent asserts as one basis for considering erroneous the majority's dismissal of stare decisis in this case is that Congress, for the past forty years, has not done so by overruling Chevron (making the application of stare decisis "supercharged" in this instance). The dissent characterizes the majority's opinion as "a bald assertion of judicial authority" that "disdains restraint, and grasps for power."

The dissent also provides its own explication of the origins of the Chevron doctrine and consequences it has had on administrative law for the past four decades. That origin is the unavoidable ambiguities that arise when Congress enacts laws and sometimes where those ambiguities are intentional; see, e.g., the Biologics Price Control and Innovation Act (the subject of a later post), where Congress could not have unintentionally delegated to the Food and Drug Administration responsibility for developing a biosimilar approval pathway (the statute is replete with instructions that "the Secretary" shall act to implement the specific provisions recited therein). In addition, the dissent sets forth the myriad ways Congress through intent or mistake could so delegate, or for which the issue addressed by the agency could not have been anticipated by the drafters (indeed, at its core the issue is the extent to which Congress passes to the Executive branch the responsibility to execute and enforce the laws; for example, once Congress has declared war legislators do not then micromanage how the President or Secretary of Defense, much less military commanders prosecute the war on the battlefield). The dissent discusses instances from the case law developed over the past four decades to illustrate the point, including Teva Pharmaceuticals USA, Inc. v. FDA, 514 F. Supp. 3d 66, 79–80, 93–106 (DC 2020) (regarding the definition of a protein under 42 U.S.C. § 262(i)(1); Northwest Ecosystem Alliance v. United States Fish and Wildlife Serv., 475 F. 3d 1136, 1140–1145, 1149 (CA9 2007) (defining "distinct populations" of certain species of squirrels); Bellevue Hospital Center v. Leavitt, 443 F. 3d 163, 174–176 (CA2 2006) (defining "geographic areas" related to hospital reimbursement); Grand Canyon Air Tour Coalition v. FAA, 154 F. 3d 455, 466–467, 474–475 (CADC 1998) (defining noise levels permissible by aircraft over the Grand Canyon); and Chevron itself, regarding "stationary sources" of air pollution). The dissent recognizes that in each case the statutory language had more than one reading that would be "reasonable" and that the question that thus arises is "Who decides which of the possible readings should govern?"

The answer over the past forty years has been that the agencies should decide, and courts defer in instances where there isn't a "single right answer" (otherwise neither the courts nor the agencies decide, because Congress has spoken; see Kisor v. Wilkie, 588 U. S. 558, 588 (2019)). And under Chevron when a court, "after using its whole legal toolkit" finds that there is no unambiguous definition by Congress, the Court has (and should) defer to the agency tasked with implementing the law and (presumably) having the technical and experiential knowledge and expertise to be in the best position to do so, the dissent stating that "the court must cede the primary interpretive role"). The role of the courts, as the dissenting Justices see it, should be (and has been) "only as a backstop to make sure the agency makes a reasonable choice among the possible readings." (In a footnote, the dissent explicates several routine instances and circumstances where what Congress intended is presumed, including ones against extraterritoriality of U.S. laws, prospective (rather than retrospective) application of the laws, and against repeal by implication.) The rationale for agencies rather than courts to resolve ambiguities (the "why" the dissent provides) set forth in the dissenting opinion include the idea that "agencies often know things about a statute's subject matter that courts could not hope to" know (particularly when the statute implicates scientific or technical questions, illustrated by Justice Kagan by the portion of the biosimilar statute regarding when an amino acid polymer is considered a protein, the Justice posing that the first question facing a court trying to resolve the ambiguity would be "What even is an alphaamino acid polymer?"). Another example is the decision regarding distinct vel non species of squirrels; in this case, the dissent speculates that "[a] court could, if forced to, muddle through that issue and announce a result" but reasons that the specialized expertise of the Fish and Wildlife Service would "do a better job of the task."

The dissent next addresses a different scenario, wherein the ambiguity arises from "a complex regulatory regime" and how it functions effectively. Taking the squirrel example again, the dissent cites instances where prior decisions can be understood by the agency (but perhaps slightly less effectively, seeing as the cited earlier case law might be effectively understood by a court). The dissent's better point is that an agency makes these distinctions all the time as part of its operations as an agency, while courts address these issues much more sporadically. A similar scenario, and an agency's superior ability to reasonably interpret the law, cited in the dissent involves the Medicare reimbursement issue involving the term "geographic area" mentioned above, the dissent positing:

It would make sense to gather hard information about what reimbursement levels each approach will produce, to explore the ease of administering each on a nationwide basis, to survey how regulators have dealt with similar questions in the past, and to confer with the hospitals themselves about what makes sense[,]

and suggesting that the Department of Health and Human Services is better equipped to make these assessments. (In this regard, the majority's suggestion that evidence from the parties and amici can substitute seems particular jerry-rigged in comparison.)

Turning to the policy rationale, the dissent minimizes the legal basis for the decisions the majority's decision shifts from the agency to the courts. Using the regulation of noise levels over the Grand Canyon as an example, the dissent recognizes that the question of "How many flights, in what places and at what times, are consistent with restoring enough natural quiet on the ground?" is "a policy trade-off of a kind familiar to agencies—but peculiarly unsuited to judges." In addition to expertise and familiarity, the dissent asserts that because Federal agencies are "subject to the supervision of the President, who in turn answers to the public," citing Kisor, Congress may rely on the "accountable actor" to better use "wise policy to inform its judgements" rather than an independent judiciary (turning on its head the majority's argument of the historical antecedents and necessity of judicial primacy).

The dissent recognizes that deference is not always the answer, stating that the Chevron regime had been "fine-tuned" over time in recognition of this reality. The majority's disparagement of these refinements as evincing flaws in the system "are anything but" according to the dissent, citing Epic Systems Corp. v. Lewis, 584 U.S. 497, 519–520 (2018) (which precludes an agency from interpreting a statute it does not implement); United States v. Mead Corp., 533 U.S. 218, 226–227 (2001); and Encino Motorcars, LLC v. Navarro, 579 U. S. 211, 220 (2016) (for instances where the agency fails to use, or use properly, its "rulemaking or adjudicatory authority"). The dissent notes that the Court has even fashioned an "extraordinary cases" exception to Chevron's general rule of deference, in instances where questions of vast "economic and political significance" are involved, citing King v. Burwell, 576 U.S. 473, 485-486 (2015).

The result of Chevron and its forty years of application has been a "carefully calibrated framework [that] 'reflects a sensitivity to the proper roles of the political and judicial branches'" according to the dissenting Justices' assessment, citing Pauley v. Beth Energy Mines, Inc., 501 U.S. 680, 696 (1991). That framework is expressly set forth in the dissent:

Where Congress has spoken, Congress has spoken; only its judgments matter. And courts alone determine when that has happened: Using all their normal interpretive tools, they decide whether Congress has addressed a given issue. But when courts have decided that Congress has not done so, a choice arises. Absent a legislative directive, either the administering agency or a court must take the lead. And the matter is more fit for the agency. The decision is likely to involve the agency's subject-matter expertise; to fall within its sphere of regulatory experience; and to involve policy choices, including cost-benefit assessments and trade-offs between conflicting values. So a court without relevant expertise or experience, and without warrant to make policy calls, appropriately steps back. The court still has a role to play: It polices the agency to ensure that it acts within the zone of reasonable options. But the court does not insert itself into an agency's expertise-driven, policy-laden functions. That is the arrangement best suited to keep every actor in its proper lane. And it is the one best suited to ensure that Congress's statutes work in the way Congress intended.

The dissent then addresses and rejects the majority's "points in reply." First is the assertion that courts, not agencies, have any "specialized competence" in resolving the ambiguities that raise the questions before the Court. The dissent responds, "Score one for self-confidence; maybe not so high for self-reflection or -knowledge" (and later calling the majority's position "malarkey") and while acknowledging a court's capacity to "construe legal texts, hopefully well" credits the first step of the Chevron test to "take full advantage of that talent." The reason for deference under Chevron, the dissent asserts, is when a "court must admit that standard legal tools will not avail to fill a statutory silence or give content to an ambiguous term." The question is not one of legal acumen but rather "one or more of: subject-matter expertise, long engagement with a regulatory scheme, and policy choice," in which courts "'have no special competence'—or even legitimacy."

The majority's second argument is that the existence of an ambiguity or gap in statutory language does not "necessarily reflect a congressional intent that an agency" have "primary interpretive authority." The dissent concedes the premise, but the basis for the Chevron regime is a presumption that is applied in a case-by-case basis because while it "does not maintain that Congress in every case wants the agency, rather than a court, to fill in gaps" there needs to be a "default rule" regarding which would be the best source of the best resolution of the ambiguity or gap. The majority's contention that ambiguities and gaps are unintentional is an insufficient justification for the dissent, first because many are not unintentional (in the sense of being unforeseen) and second (the dissent asks) why should that matter, if it is merely an inherent consequence of the legislative process and execution of the statutes by the appropriate agency? (And the dissent's rejoinder, as in the majority on the converse position is that if Congress doesn't want the agency to take this role "all it needs to do is say [so]"). Which Congress has never done (being "the proof . . . in the [legislative] pudding") and has in fact rejected proposed legislation that would have abolished the Chevron regime "across the board," citing S. 909, 116th Cong., 1st Sess., §2 (2019) (still a bill, not a law); H. R. 5, 115th Cong., 1st Sess., §202 (2017) (same).

Turning to the majority's reliance on the Administrative Procedures Act (APA) and its putative incompatibility with Chevron purported in the majority opinion, the dissent asserts that Chevron and the APA are "perfectly compatible." In the dissent's view, Section 706 (cited extensively in the majority opinion) merely provides for judicial review of agency actions. Citing academic legal authorities, the dissent says that the text itself "does not resolve the Chevron question" as the majority interprets it to do. As the dissent sees it, the deficiency is that Section 706 does not set forth any standard for judicial review, either deferential under Chevron or de novo as the majority opinion would have it. The dissent notes that Section 706 does specify standards of review, for example deference to agency factfinding (substantial evidence) and policymaking (abuse of discretion). The dissent differs with the majority's conclusion that Congress would have included similarly deferential review standards for legal questions if that was its intent; there are other portions of the Section where a de novo standard of review is set forth (resulting in references to standards of review "running around Section 706"). The dissent also notes that most "respected commentators" (including contemporaneous writers such as Professor Kenneth Culp Davis) agree with the preference in the Section for deferential review ("They did not see in their own time what the majority finds there today"), citing examples (perhaps not the commentators that the majority Justices read or respect) and conceding in a footnote that at least one such "respected commentator" took the contrary view agreeing with the majority. But this is a new interpretation of the APA by the Supreme Court, which until this decision did not appreciate the invalidating contradictions between Chevron and the APA asserted by the majority (although this is a feature of most instances where the Court reverses longstanding precedent, perhaps accounting for the rarity thereof). And history is not on the majority's side, either according to the dissent, insofar as courts had become more deferential to administrative agencies during the New Deal (and to be fair, World War II), citing Justice Breyer's contribution to an administrative law treatise for this information and Supreme Court decisions, Gray v. Powell, 314 U. S. 402 (1941) and NLRB v. Hearst Publications, Inc., 322 U.S. 111 (1944), as examples of deferential judicial review of agencies' statutory interpretation. The dissent asserts additional cases (to counter the majority's allegation that these Justices "plucked" these two cases as exceptions) and dismisses the majority's reliance on purportedly inconsistent instances of deference pre-APA as making the majority's further argument that Section 706 prohibits deference "fall[] flat."

Finally, the dissent addresses the abandonment of stare decisis by the majority on the basis that while not intended to be an "inexorable command" to do so requires "far more" than the majority provides in its opinion. The extent of this "far more" for the dissent is "above and beyond thinking it wrong." This is particularly the case where, as here, the decision "will cause a massive shock to the legal system, 'cast[ing] doubt on many settled constructions' of statutes and threatening the interests of many parties who have relied on them for years," citing Kisor. Stare decisis is a doctrine of "judicial modesty" that, like Chevron itself, "tell judges that they do not know everything, and would do well to attend to the views of others." As a practical matter, the dissent asserts that the Court itself has upheld Chevron "at least 70 times" and the inferior courts have made decisions based on Chevron on "thousands and thousands of occasions" (more than 18,000 at last count). And the dissent criticizes the majority for "overruling-through-enfeeblement" of decisions a majority disagrees with by refusing to apply a precedent and disparaging it in those opinions as the basis to overrule (finding equally feeble the majority's argument/evidence that the Chevron regime is "unworkable" due to there being "no single 'answer' about what 'ambiguity' means," which seems to be a reasonable definition of ambiguity). Paradoxically, the dissent contends, Chevron promotes agreement between how judges interpret ambiguous statutes (as compared with de novo review) and thus does not deserve the majority's contention that it causes "too much judicial divergence." Perhaps equally paradoxically in the dissent's view the regime the majority impose to replace Chevron is itself problematic to implement, and these Justices see the deference to an agency's "body of experience and informed judgment" under Skidmore v. Swift & Co., 323 U. S. 134, 140 (1944), to be at future risk for judicial meddling (it would not take much to infer a similar judgment about the majority's opinion here).

"At its core," the dissent concludes, "Chevron is about respecting that allocation of responsibility—the conferral of primary authority over regulatory matters to agencies, not courts" coming from a time when "when we [the Court] knew what we are not." The majority, according to the dissent, does not respect that judgment, giving courts "power to make all manner of scientific and technical judgments," "the power to make all manner of policy calls, including about how to weigh competing goods and values," and "puts courts at the apex of the administrative process as to every conceivable subject—because there are always gaps and ambiguities in regulatory statutes." "In every sphere of current or future federal regulation," the dissent asserts, "expect courts from now on to play a commanding role" which "is not a role Congress has given to them" but "a role this Court has now claimed for itself, as well as for other judges."

Albeit easy to cast along conventional philosophical lines, both the majority and dissenting opinions were outcome-oriented, although the dissent was frankly so while the majority opinion dressed up this aspect with a patina of history and how the Founders would consider the question (in an age where the modern concept of an administrative agency was unknown). Indeed, the majority was almost disdainful toward the consequences of wiping out forty years of precedent to reach their outcome, showing somewhat flexible allegiance towards stare decisis and other legal principles. This attitude is fraught with at least some danger, insofar as the Court's institutional authority is intimately related to and dependent upon its institutional integrity. To the extent that the majority reject Chevron as being completely wrongly decided (even going so far as to dismiss the Court's judgment by six Justices in a decision supported by just as many (or few) here) both are brought into question.

Posted at 10:27 PM in Supreme Court | Permalink | Comments (0)

June 30, 2024

Loper Bright Enterprises v. Raimondo (2024)

The Demise of Chevron Deference

By Kevin E. Noonan --

Not surprisingly, the Supreme Court overturned the "Chevron deference" principle from its 1984 Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. decision in Loper Bright Enterprises v. Raimondo (and it did so expressly and with no equivocation, stating "Chevron is overruled").

This case (decided below on Chevron principles) arose over a dispute involving regulation on fishing (and the amount thereof) in an area within 200 nautical miles beyond the U.S. territorial sea (12 nautical miles from shore). The regulations were enacted under the Magnuson-Stevens Fishery Conservation and Management Act (16 U.S.C. § 1801 et seq.) and are administered by the National Marine Fisheries Service (NMFS). These regulations are intended to prevent overfishing and are promulgated by the NMFC based on recommendations by eight regional councils comprised of coastal state representatives, stakeholders (e.g., fishermen), and members of the NMFC. The NMFC, for its part, includes mandatory limitations on annual catch and specifies ("prohibit, limit, condition, or require") types and amount of fishing gear permitted to be used, as well as requiring a certain proportion of the catch to be used in scientific research. At issue in this case was the requirement that "one or more observers be carried on board" domestic vessels "for the purpose of collecting data necessary for the conservation and management of the fishery" under § 1853(b)(8), the cost of which to be borne by "(1) foreign fishing vessels operating within the exclusive economic zone (which must carry observers), [under] §§1821(h)(1)(A), (h)(4), (h)(6); (2) vessels participating in certain limited access privilege programs, which impose quotas permitting fishermen to harvest only specific quantities of a fishery's total allowable catch, [under] §§1802(26), 1853a(c)(1)(H), (e)(2), 1854(d)(2); and (3) vessels within the jurisdiction of the North Pacific Council, where many of the largest and most successful commercial fishing enterprises in the Nation operate, [under] §1862(a)," albeit capping the costs for the latter two categories, with parties in noncompliance being subject to sanctions imposed by the Secretary of Commerce. This case arose when the NMFC changed its practices to newly impose these fees on Atlantic herring fishermen (to which they objected because it could reduce their annual returns by up to 20%). (The circumstances under which some of the petitioners fished included having to pay observers in some instances where no herring were caught at all, due to vagaries in their catch on a particular fishing trip.)

Petitioners' argument was that while Congress provided the agency with "broad implicit authority" to impose this program it also expressly provided by statute a requirement for three industry funding programs that did not include herring fishing. The Court granted certiorari expressly to decide whether Chevron should be "overruled or clarified."

The opinion, written by the Chief Justice and joined by the five conservative Justices (with the three liberal Justices dissenting) first sets forth the relationships between the three branches of the federal government, starting with Article III, from which the Court recognizes that the judiciary is the final arbiter of the "interpretation of the law" (as the "the proper and peculiar province of the courts," citing Alexander Hamilton in The Federalist Papers No. 78). The opinion recited, from Marbury v, Madison to the present day, its consistent allegiance to the supremacy of the courts in interpreting the laws Congress enacts while "according due respect to Executive Branch interpretations of federal statutes." However, such respect cannot "supersede" the judiciary's judgment, "[o]therwise, judicial judgment would not be independent at all."

The opinion then presents a disquisition regarding the expansion of the Executive branches de facto powers under President Roosevelt's New Deal, maintaining that from that time until the Chevron decision "the Court continued to adhere to the traditional understanding that questions of law were for courts to decide, exercising independent judgment." The opinion notes that determinations of fact were a different matter (and it might be noted should remain so under Dickinson v. Zurko, at least with regard to factual matters before the Patent and Trademark Office), being binding on courts if there was "evidence to support the findings," citing St. Joseph Stock Yards Co. v. United States, 298 U.S. 38, 51 (1936), under the principle that Congress had the power to designate agencies for fact-finding within the ambit of their expertise. However, the opinion reminds, the Court did not extend agency deference to questions of law, citing United States v. American Trucking Assns., Inc., 310 U.S. 534, 544 (1940); Social Security Bd. v. Nierotko, 327 U.S. 358, 369 (1946); and Medo Photo Supply Corp. v. NLRB, 321 U.S. 678, 681–682, n. 1 (1944), as examples, while reiterating the principle that decisions of the Executive Branch were entitled to "great weight" under American Trucking Assns. In this regard, the opinion also assesses the Court's decision in Skidmore v. Swift & Co., 323 U.S. 134 (1944), having the effect that decisions by agencies based on their "specialized expertise" could be resorted to properly by litigants and courts for "guidance even on legal questions" under certain circumstances ("the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control").

The opinion also sets forth what it considers cases decided anomalously wherein agencies' legal interpretations were given deference. These include Gray v. Powell, 314 U.S. 402 (1941) (due to Congress having given the agency the authority to make the legal determination at issue), and NLRB v. Hearst Publications, Inc., 322 U.S. 111 (1944) (same). But the opinion particularly identifies these cases as exceptions "cabined to fact-bound determinations," and thus consistent with the Court majority's general theme of judicial supremacy, including in other (legal) aspects of these outlier decisions. Accordingly the opinion can place even these cases permitting agency legal determinations to be consistent with this general (and Constitutionally mandated) rule. And even regarding factual agency decisions the opinion terms the Court's treatment thereof to be "far from consistent," citing several learned treatises and Davies Warehouse Co. v. Bowles, 321 U.S. 144, 156 (1944), for this assessment.

Despite this history, the Court's judgment (leading to its overturning Chevron) of more recent judicial history is that the degree of deference to agencies' legal interpretation was departure from this earlier jurisprudence, contrary to the provisions for judicial review under the Administrative Procedures Act (APA) and particularly 5 U.S.C. § 706. The opinion cites as the political motivation for the APA Congress's appreciation for "a check upon administrators whose zeal might otherwise have carried them to excesses not contemplated in legislation creating their offices," albeit based on the Court's interpretation of that intent enunciated in United States v. Morton Salt Co., 338 U.S. 632 (1948); somewhat ironically the opinion also cites a decision, Bowen v. Michigan Academy of Family Physicians, 476 U.S. 667, 670–671 (1986), handed down only two years after Chevron that the APA was enacted as part of a "comprehensive rethinking of the place of administrative agencies in a regime of separate and divided powers" that impliedly did not impact the scope and reach of Chevron, at least at that time and that iteration of the Court. In reciting the majority's appreciation of the parsing of responsibilities between agencies and the courts by the APA (§ 706), the opinion finds codification of "the unremarkable, yet elemental proposition" of judicial primacy as set forth earlier in the opinion "dating back to Marbury" and thus finding a legislative imprimatur on this principle the enunciation of which should be unnecessary under the majority's interpretation of the Constitutional grounds therefor. The majority recognizes in contrast there are certain instances where Congress "mandate[s] that judicial review of agency policymaking and factfinding be deferential" under § 706(2)(A)(abuse of discretion) and § 706(2)(E)(lack of substantial evidence). But to the extent the APA was intended to be "the fundamental charter of the administrative state," Kisor v. Wilkie, 588 U.S. 558, 580 (2019), the opinion posits that "Congress surely would have articulated a similarly deferential standard applicable to questions of law had it intended to depart from the settled pre-APA understanding that deciding such questions was" reserved exclusively for the courts, which Congress in the majority's opinion did not do ("The text of the APA means what it says," an assertion supported to the majority's satisfaction by the legislative history and "various [contemporaneous] commentators").

In something of a rhetorical aside, the majority opinion recognizes that when expressly authorized by Congress (citing in footnotes 29 U.S.C. § 213(a)(15) of the Fair Labor Standards Act, 42 U.S.C. § 5846(a)(2) of the Atomic Energy Act, and 33 U.S.C. § 1312(a) of the Environmental Protection Act), agencies can exercise "a certain degree of discretion," such as in giving meaning to statutory terms, citing Batterton v. Francis, 432 U.S. 416, 425 (1977), or to "'fill up the details' in a statutory scheme," citing Wayman v. Southard, 10 Wheat. 1, 43 (1825), in a way that gives agencies some "flexibility" regarding the scope and meaning of terms like "appropriate" and "reasonable," citing Michigan v. EPA, 576 U.S. 743, 752 (2015). Nevertheless, the majority opinion asserts that "the best reading of a statute" is that even under these exceptional circumstances "the role of the reviewing court under the APA is, as always, to independently interpret the statute and effectuate the will of Congress subject to constitutional limits" (and of course, even recognizing these exceptions the majority's legal analysis, set forth below, precludes Congress from generally conferring broad interpretive powers on administrative agencies).

With this explication as prelude, the majority contends and bases the opinion on "[t]he deference that Chevron requires of courts reviewing agency action cannot be squared with the APA." In explaining their bases for this conclusion, the majority notes the history regarding legal review of agency decisions between enactment of the APA and Chevron as being on a "statute by statute" basis. Chevron (ironically noted as being "decided . . . by a bare quorum of six Justices") changed all that, or course, in a "marked departure from the traditional approach." In this regard, the opinion expressly setting forth the Chevron doctrine as it has been developed in the almost four decades since it was handed down by the Court. The threshold question is whether Congress evinced a clear intent regarding ("ha[d] directly spoken to") the legal issue in question; if so, "that is the end of the matter." If not, the Chevron Court enunciated (without "mentioning the APA, or acknowledging any doctrinal shift") a "two-step process": first, "whether Congress has directly spoken to the precise question at issue" and second, in instances where a reviewing court has determined Congress did not so speak (or is ambiguous) to decide whether the agency's interpretation is "based on a permissible construction of the statute" and defer thereto, ignoring "traditional interpretive tools." Asserting that, initially the Chevron decision "seemed destined to obscurity," citing a retrospective law review article, the majority characterizes subsequent reading and application of the two-step test as the "governing standard" within a few years of the decision. Moreover, this judicial metamorphosis was justified as being consistent with Congressional intent and based on agency expertise, citing in support Smiley v. Citibank (South Dakota), N. A., 517 U.S. 735, 740–741 (1996); Cuozzo Speed Technologies, LLC v. Lee, 579 U.S. 261, 276–277 (2016); Utility Air Regulatory Group v. EPA, 573 U.S. 302, 315 (2014); and National Cable & Telecommunications Assn. v. Brand X Internet Services, 545 U.S. 967, 982 (2005), raising at least some questions on the continued viability of these decisions.

The doctrinal issue in the majority's view is the failure of subsequent decisions (and the impossibility thereof in the majority's view) for reconciling the Chevron framework with the APA. The opinion sets forth the contradictions supporting the majority's view of that impossibility using the express statutory language of § 706. This amounts to courts "mechanically afford binding deference to agency interpretations, including those that have been inconsistent over time" (emphasis in opinion), "even when a pre-existing judicial precedent holds that the statute means something else." And in doing so the opinion asserts "Chevron turns the statutory scheme for judicial review of agency action upside down." Chevron (and the dissent, according to the majority opinion) confuse ambiguities in a statute with a delegation of statutory interpretation to the agency. It has been the role of the judiciary to "routinely confront statutory ambiguities in cases having nothing to do with Chevron—cases that do not involve agency interpretations or delegations of authority" according to the opinion, statutes often having ambiguities needing interpretation and this having always been the role of the judiciary to resolve. Recourse to "permissible" agency interpretation "makes no sense" unless it is an interpretation by a court according to the opinion. "Chevron gravely erred . . . in concluding that the inquiry [i.e., statutory construction] is fundamentally different just because an administrative interpretation is in play," the opinion states. And when the issue is an ambiguity regarding the proper scope of an agency's powers "abdication in favor of the agency is least appropriate" (emphasis in opinion).

The majority reject the government's justifications in favor of Chevron (being consistent with Congressional intent based on subject matter expertise, "uniform construction" of the law, and leaving policy decisions to political actors) based on the judiciary's greater expertise in deciding legal issues, as set forth in Kisor and here because the majority recognize that "[c]ourts . . . do not decide such questions blindly" and have the parties and amici to rely upon for such technical information. Thus the majority find unnecessary courts deferring to agency interpretation of the law under Chevron (and as often in questions of judicial interpretation the Court notes that "to the extent that Congress and the Executive Branch may disagree with how the courts have performed that job in a particular case, they are of course always free to act by revising the statute"). Regarding uniform construction, the majority reject this reasoning, inter alia, because "there is little value in imposing a uniform interpretation of a statute if that interpretation is wrong." And "[t]he view that interpretation of ambiguous statutory provisions amounts to policymaking suited for political actors rather than courts is especially mistaken" in the majority's view as misunderstanding ("a profound misconception") of the courts' role, if only because "the Framers crafted the Constitution to ensure that federal judges could exercise judgment free from the influence of the political branches." The opinion sets forth succinctly the majority's view of judges' role in the process, having the obligation "to independently identify and respect such delegations of authority, police the outer statutory boundaries of those delegations, and ensure that agencies exercise their discretion consistent with the APA."

Putting the final nail in Chevron's coffin, the opinion states that "Chevron's justifying presumption is . . . a fiction," citing judicial utterances from Justice Gorsuch and Justice Thomas and using a history of the Court's decisions "pruning its presumption[s]" underlying Chevron as evidence thereof "in an effort to match Chevron's presumption to reality," citing for procedural distinctions United States v. Mead Corp., 533 U.S. 218, 230 (2001), and Justice Breyer's quotation of Mead to that effect in Christensen v. Harris County, 529 U.S. 576, 597 (2000) (Breyer, J., dissenting), as well as the distinctions raised by the Court in Encino Motorcars, LLC v. Navarro, 579 U S. 211, 220 (2016), again relying on Mead, and for substantive applications (or refusal to apply Chevron) King v. Burwell, 576 U S. 473, 486 (2015). The Court has required express delegation, as in West Virginia v. EPA, 597 U.S. 697, 723 (2022) (quoting Whitman v. American Trucking Assns., Inc., 531 U.S. 457, 468 (2001), and refused to apply Chevron principles to judicial review questions, Adams Fruit Co. v. Barrett, 494 U.S. 638, 649 (1990); or schemes not administered by the agency, Epic Systems Corp. v. Lewis, 584 U.S. 497, 519–520 (2018) (there being "mixed signals" by the Court in criminal applications, comparing Abramski v. United States, 573 U.S. 169, 191 (2014), with Babbitt v. Sweet Home Chapter, Communities for Great Ore., 515 U.S. 687, 704, n. 18 (1995). These decisions amount to a "byzantine set of preconditions and exceptions, [wherein] some courts have simply bypassed Chevron, saying it makes no difference for one reason or another" (followed by a footnote setting forth six examples and a spate of scholarly assessments).

This analysis ends with the reality that the Supreme Court "has not deferred to an agency interpretation under Chevron since 2016," citing Cuozzo. And the majority's opinion that "[a]t best, our intricate Chevron doctrine has been nothing more than a distraction from the question that matters: Does the statute authorize the challenged agency action?" while "at worst, it has required courts to violate the APA."

The only remaining issue for the majority is the question of stare decisis, a doctrine whose relevance is fraught with ambiguity for the Supreme Court (see "Alternative Reasoning for Supreme Court's Life Sciences Subject Matter Eligibility Jurisprudence"). Here the majority rejects the contention that stare decisis requires the Court to uphold Chevron ("It does not"). Applying the stare decisis considerations ("the quality of [the precedent's] reasoning, the workability of the rule it established, . . . and reliance on the decision," citing Knick v. Township of Scott, 588 U.S. 180, 203 (2019) (quoting Janus v. State, County, and Municipal Employees, 585 U.S. 878, 917 (2018)) "all weigh in favor of letting Chevron go." This is because the majority believe the principles enunciated in Chevron have been "fundamentally misguided," primarily because none of the cases applying this precedent have "grappled with the APA" (at least not how these six Justices believe it needs to be grappled with). The opinion cites the efforts to "revise its foundations and continually limit its application" and the "cottage industry" of legal scholars "attempting to decipher its basis and meaning," as well as concurring and dissenting opinions in earlier decisions by the Court "questioning its premises," with citations supporting this assertion. With evident disdain, the majority assert that Chevron "[f]or its entire existence" was but a "rule in search of a justification," citing Knick, adding "if it was ever coherent enough to be called a rule at all." As a practical matter, the majority believe the Chevron rule is "unworkable," due in part to the ambiguous meaning(s) to the requirement that a statute is ambiguous to justify deference to an agency's legal interpretation(s). Legal principles that are "in the eye of the beholder" result in arbitrary decisions, the majority maintain, being "an impressionistic and malleable concept" (the majority citing the dissenting opinion here as "proving the point" insofar as the guidance for courts to "reach Chevron's second step when it finds, 'at the end of its interpretive work,' that 'Congress has left an ambiguity or gap'" as "being no guide at all"). "The statute still has a best meaning, necessarily discernible by a court deploying its full interpretive toolkit" is the majority's guiding principle and a case being an "agency case" does not relieve a court of its responsibility to interpret the statute (and excoriating the dissent's "test" as being "all the dissent can come up with, after four decades of judicial experience attempting to identify ambiguity under Chevron," as evidence of the "futility of the exercise"). The majority see nothing but failed attempts at clarifying the Chevron doctrine and in the process becoming "an impediment, rather than an aid, to accomplishing the basic judicial task of 'say[ing] what the law is'" under Marbury. "At this point, all that remains of Chevron is a decaying husk with bold pretensions" in the majority's opinion, not worthy of being retained on stare decisis principles.

Turning to reliance interests (which form another basis for retaining earlier decisions on stare decisis grounds), the majority do not find the characteristics of a "stable background rule" that would justify maintaining the Chevron precedent. In addition to courts ignoring or turning away from the rule, the doctrine does not provide "a clear or easily applicable standard," citing Janus. Indeed, the majority opine that Chevron "affirmatively destroys" reliance interests by granting "a license authorizing an agency to change positions as much as it likes, with '[u]nexplained inconsistency' being 'at most . . . a reason for holding an interpretation to be . . . arbitrary and capricious,'" citing Brand X Internet Services. And Chevron "allows agencies to change course even when Congress has given them no power to do so," according to the majority, which "fosters unwarranted instability in the law," and leaving "an eternal fog of uncertainty" as a result. It is the Court's responsibility to correct its mistakes and not an occasion for the law to change erratically; in order for the law to "develop in a principled and intelligible fashion," citing Vasquez v. Hillery, 474 U.S. 254, 265 (1986), the Court must "leave Chevron behind.

Finally, the majority disavows any interpretation that this decision should call into question earlier decisions relying on or invoking the Chevron standard, based on statutory stare decisis principles and because "[m]ere reliance on Chevron cannot constitute a "'special justification'" for overruling such a holding, because to say a precedent relied on Chevron is, at best, "just an argument that the precedent was wrongly decided," citing Halliburton Co. v. Erica P. John Fund, Inc., 573 U.S. 258, 266 (2014) (quoting Dickerson v. United States, 530 U.S. 428, 443 (2000)).

The closing paragraph provides Chevron's epitaph:

Chevron is overruled. Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority, as the APA requires. Careful attention to the judgment of the Executive Branch may help inform that inquiry. And when a particular statute delegates authority to an agency consistent with constitutional limits, courts must respect the delegation, while ensuring that the agency acts within it. But courts need not and under the APA may not defer to an agency interpretation of the law simply because a statute is ambiguous.

This decision has been met with predictions that it will result in release of an unbridled judiciary on the workings of the administrative state (the propensity for the judiciary to act in this fashion pre-Loper has been discussed; see "The Tyranny of the Judiciary"). That is not the only outcome, and alternatives and potential outcomes (as well as an explication of the dissent in Loper) will be the subject of future posts.

Loper Bright Enterprises v. Raimondo (2024)
Opinion by Chief Justice Roberts, joined by Justices Thomas, Alito, Gorsuch, Kavanaugh, and Barrett; concurring opinions by Justice Thomas and Justice Gorsuch; dissenting opinion by Justice Kagan, joined by Justice Sotomayor, joined by Justice Jackson as it applies to No. 22–1219; Justice Jackson took no part in the consideration or decision of the case in No. 22–451

Posted at 10:26 PM in Supreme Court | Permalink | Comments (0)

January 17, 2024

January 15, 2024

May 31, 2023

Can Judge Michel and John Duffy Convince the Supreme Court to Revisit Subject Matter Eligibility?

By Kevin E. Noonan --

Einstein's aphorism that doing the same thing over and over again and expecting a different outcome is a hallmark of madness (or at least an inability to learn from the past) inevitably comes to mind when perusing the recent history of attempts to persuade, cajole, or shame the Supreme Court to revisit its recent subject matter jurisprudence. While the many certiorari petitions have amply demonstrated the dysfunctional nature of the jurisprudence (at least in its application by the lower courts) it has seemed that no matter how the evidence was presented, or the outrageousness of the application (see "Supreme Court Denies Cert in American Axle"), or how many times the government joins the call in response to a request for the views of the Solicitor General (see, e.g., "Solicitor General Weighs In On Patent Eligibility Question"), the Court has been steadfast in denying cert.

But it is also the case that sometimes the way of getting a different outcome can be in how the question is presented to the Court (and it is certainly true that the arguments made in the over 60 cases where cert was denied have been similar to the point of repetitiveness). While it is too soon to tell (or to raise any hopes) in this regard, it may be significant that a recent amicus brief on behalf of former Federal Circuit Chief Judge Paul Michel and Professor John Duffy in CareDX v. Natera has prompted the Court to ask the Respondent (the prevailing party who espoused the Court's decisions and analytical structure to invalidate the patent on subject matter ineligibility grounds) to address their arguments. (It also may be significant that Professor Duffy was instrumental in convincing the Court to review the Federal Circuit's application of obviousness law in KSR Int'l v. Teleflex several years ago.) The resulting indication of the Court's interest, intellectual curiosity or belated sense of responsibility for the utter mess that is subject matter eligibility law (particularly with regard to diagnostic methods) certainly merits consideration of the arguments raised in this amicus brief.

The difference in the Michel/Duffy approach is to focus on what they characterize as a clear instance of Congress overruling "judge-made law" in enacting the 1952 Patent Act and the "continuing trend of uncertainty and inconsistency in patent-eligibility jurisprudence" engendered by how the lower courts have been implementing the Court's subject matter eligibility decisions to contradict those statutory commands. And of course this state of affairs resulting in an undermining of the "innovation-promoting goals of U.S. patent law."

The statute at issue has been codified under 35 U.S.C. § 100(b) which defines a subject matter eligible "process" to "include a new use of a known process." This definition was included in the 1952 Act, amici argue, to expressly overrule 19th Century judge-made law that held a new use of known technology was patent-ineligible, constituting a "clear example in which the judicial gloss on patentable subject matter has been legislatively rejected," citing John F. Duffy, Rules and Standards on the Forefront of Patentability, 51 Wm. & Mary L. Rev. 609, 632 (2009). The Federal Circuit erred, the brief argues, in its determination that the methods recited in the claims were "conventional" despite the fact that "none of [them] are found in nature (and many of which were not even possible within living memory)." (It will be recognized that if persuasive this argument would severely limit if not abolish the second step of the Mayo/Alice test as enunciated by Justice Breyer in Mayo Collaborative Services v. Prometheus Laboratories, Inc., that "inventiveness" was negated where the application of a natural law was "routine, well-understood or conventional.") Amici argue that this purported "conventionality" is "irrelevant to the patent-eligible inquiry when the process is directed to statutorily defined patent-eligible (rather than patent ineligible) subject matter."

The brief argues that the law of patent-eligibility needs "clarification," citing the litany of cases illustrating the disarray in this area of the law. This includes reminding the Court that the Justices themselves have asked for the Solicitor General's views in five recent cases (Tropp v. Travel Sentry, Inc., 143 S. Ct. 361 (2022); Interactive Wearables, LLC v. Polar Electro Oy, 143 S. Ct. 78 (2022); Am. Axle & Mfg., Inc. v. Neapco Holdings LLC, 142 S. Ct. 2902 (2022); Hikma Pharm. v. Vanda Pharm., Inc., 140 S. Ct. 911 (2020); and HP Inc. v. Berkheimer, 140 S. Ct. 911 (2020)). The brief also cites statements from Chief Judge Moore (in Am. Axle & Mfg., Inc. v. Neapco Holdings, LLC, dissenting), Judge Dyk (Ariosa Diagnostics, Inc. v. Sequenom, Inc.), and Judge Hughes (Athena Diagnostics, Inc. v. Mayo Collaborative Servs., LLC) in their opinions asserting the need for "further explication of eligibility standards" from the Court, as well as similar sentiments from the U.S. Patent and Trademark Office. The issue is framed as a conflict with the Executive Branch, which "continues to issue patents only to see them invalidated in the Federal Circuit." Outside the government, the brief cites observations from legal academics ("[t]he law of patentable subject matter is a mess," Mark Lemley, testifying before the Senate Judiciary Committee on June 4, 2019) and "[n]umerous others in the business and legal communities," citing testimony from those hearings.

Moreover, the brief argues, the decision is wrong for "overlook[ing] the Patent Act's text and conflict[ing] with th[e] Court's precedent." On the facts, the brief argues that the decision "disregarded the specific, technologically advanced steps of the claimed processes" as well as relying on "conventionality" of the recited methods, which (as has long been recognized even in the briefing by the government in Mayo) "conflat[ed] patent eligibility (under § 101) with the requirements for patentability (in §§ 102, 103, and 112)." In doing so, amici argue that the Federal Circuit acted contrary to the Court's mandates in Diamond v. Chakrabarty, 447 U.S. 303, 308 (1980) (quoting United States v. Dubilier Condenser Corp., 289 U.S. 178, 199 (1933)), that "courts should not read into the patent laws limitations and conditions which the legislature has not expressed" (while recognizing in other precedent that there are "implicit exceptions" to patent eligibility including the meaning of the term "process").

Starting with the text of the statute (which "must be the starting point") the standard is that a new and useful process or improvement thereof is recited in Section 101 and the term "process" defined in Section 100(b) as a "process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material." Taken together, amici argue, "a new process that is presented as an improvement on a known useful process is presumptively patent eligible." And in enacting this definition of "process" they argue that merely because a process was known or, in the Court's language, "conventional" was not enough to per se determine the process to be patent-ineligible subject matter. The brief recognizes that conventionality is a relevant consideration for novelty or obviousness but states that:

To interpret § 101 as imposing a strict "non-conventionality" standard for patentable subject matter—while not respecting the definition of§ 100(b) and the explicit roles of § 102 and § 103—is to wander so far from the words of the Patent Act as to end up in the wilderness of atextualism.

The brief cites the Court's decision in Diamond v. Diehr as "an instructive example" of how to reconcile the implicit judicial exceptions to subject matter eligibility with the statutory text. Even though the claimed rubber-curing process in Diehr was "conventional" that was not dispositive, because the improvement (using the Arrhenius equation) was an application of a scientific principle to improve a known process, producing a new process for curing rubber (a judicial principle also recognized in Cochrane v. Deener, 94 U.S. 780 (1876) according to the brief). None of these principles or considerations were cited or addressed in the Federal Circuit's opinion according to the brief, important due to the similarities between the claimed invention at issue and the patent-eligible claims in Diehr:

Both processes involve complex chemical transformations, not performed in nature, and they both utilize scientific principles to create "new and useful improvement[s]" of known processes. They both incorporate data analysis to yield a useful result. They both offer specific technological solutions to a problem that remained unsolved for many years.

The argument is presented as being capable of a narrow focus (albeit with broad implications), wherein the Court could "delineate when improvements of technological processes are patent eligible and to correct a decision that conflicts with the statutory text and this Court's precedent."

The brief further explicates reasons why the Federal Circuit erred in its decision, including that the claims "involve specific, complex biochemical reactions that do not occur in nature and occur only through the provision of human ingenuity" without preempting any "fundamental natural phenomenon" (extensively explicating these differences). The brief also notes that the recited "specific, complex biochemical reactions" in many instance have themselves been patented in "[t]oo any examples" to be listed in the brief. And the inclusion of conventional steps is not in itself enough to invalidate an "otherwise novel and nonobvious technological process" under Diehr, amici argue. The Federal Circuit's analytical error was in creating an "overly simplistic 'summary' of the claimed processes" that "present[ed] the invention at a level of abstraction that eviscerates key features of the claimed processes." The brief sets forth as an illustration of a better alternative by analogy methods for refining and analyzing precious metals and presents a detailed comparison with patented methods on this subject matter (for which the brief argues "there is no reasonable dispute about patent eligibility"). In doing so, the brief illustrates how these patent-eligible processes could themselves be presented at a sufficiently high level of abstraction so as to be deemed patent-ineligible. And this is something that the Federal Circuit has done consistently with regard to diagnostic method claims, amici argue, even in instances (such as Ariosa Diagnostics) where what is claimed is a "new diagnostic method [that] is novel and unforeseen, and is of profound public benefit— 'a significant contribution to the medical field,'" Newman, J., dissenting). The brief also contains argument regarding the doctrinal impropriety of conflating Section 101 requirements with those of Sections 102, 103, and 112, making reference to arguments by the Solicitor General in its Tropp brief. And the brief cites the consequences of holding to be patent-ineligible "biological and chemical processes that are designed to provide life-saving diagnostic results," that are "not products of nature" and do not claim "the fundamental, scientific principle" but instead "solve[] a technological problem."

It should be noted the care with which amici approach the imputed basis for the need for the Court to provide guidance, wherein the brief states that "[t]his reassessment [by the Court, requested by amici and others] need not overrule the Alice/Mayo test, but it would allow a more faithful application of this Court's precedent to achieve the objective of the Constitution's Patent Clause and would respect the text of the Patent Act." In this regard, the brief also notes the Court's reliance in Mayo and Alice on pre-1952 decisions and how those decisions were directed to "patentability" and not patent "eligibility," and that the citation in Mayo of Parker v. Flook with regard to an "inventive concept" was based on only two uses of the term and no reliance on any precedent for what the term meant. The brief also mentions that the term "inventive concept" was absent in Funk Brothers Seed Co. v. Kalo Co., 333 U.S. 127, 130 (1948), and Mackay Radio & Telegraph Co. v. Radio Corp. of America, 306 U.S. 86, 94 (1939), as well as Benson v. Gottschalk, and that in this regard the Court's decision in Diehr overruled Flook until it was rehabilitated (or resurrected) in Mayo. But "'inventive Concept' as a key requirement for patent eligibility finds little support in this Court's historical precedent," amici argue, and yet that is what the Federal Circuit relied upon in invalidating the claims below.

Finally, the brief argues that this case is "an excellent vehicle" for the Court's reconsideration and reassessment of the proper eligibility test for processes because it is directed to a diagnostic methods which are "critically important" to innovation and for consistency with the constitutional mandate that the patent laws "promote progress." According to a USPTO report, the current state of patent eligibility "has a direct [(negative)] impact on investment, research, and innovation," citing A. Sasha Hoyt, The Impact of Uncertainty Regarding Patent Eligible Subject Matter for Investment in U.S. Medical Diagnostic Technologies, 79 Wash. & L. Rev. 397, 398 (2022). These uncertainties are illustrated in the brief by citation of Federal Circuit decisions upholding or invalidating diagnostic method claims in different cases without any consistency, citing CardioNet, LLC v. InfoBionic, Inc., 955 F.3d 1358, 1367 (Fed. Cir. 2020); Exergen Corp. v. Kaz USA, Inc., 725 Fed. App'x 959, 966 (Fed. Cir. 2019); and Rapid Litig. Mgmt. Ltd. v. CellzDirect, Inc., 827 F.3d 1042, 1044 (Fed. Cir. 2016), that found eligibility versus Genetic Veterinary Scis., Inc. v. LABOKLIN GmbH & Co. KG, 933 F.3d 1302, 1319-20 (Fed. Cir. 2019); Roche Molecular Sys., Inc. v. CEPHEID, 905 F.3d 1363, 1381 (Fed. Cir. 2018); Cleveland Clinic Found. V. True Health Diagnostics LLC, 859 F.3d 1352, 1363 (Fed. Cir. 2017); Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1381 (Fed. Cir. 2015), that did not.

Whether this brief prompts the Court to address patent subject matter eligibility or not, the arguments therein could motivate Congress to exercise its authority to mandate application of Section 100(b) consistent with the basis for enactment of the statute to overrule "judge-made" ineligibility for broad classes of inventions (i.e., new uses for old methods). The Constitution gives Congress the power to grant patents (and to decide whether to have a patent system that does so), and so long as Congress does not exceed this authority the Court is subject to how Congress exercises this authority. Whether Congress can muster the will or intestinal fortitude to do so is another matter.

Posted at 11:11 PM in Patentable Subject Matter, Supreme Court | Permalink | Comments (2)

May 18, 2023

Supreme Court Decides Amgen v. Sanofi; Status Quo Extended

By Kevin E. Noonan --

The Supreme Court handed down its decision in Amgen v. Sanofi today, affirming the Federal Circuit's decision below in a unanimous opinion by Justice Gorsuch.

The opinion relies heavily on its own precedent that was heavily cited by both parties in their briefs and arguments, including O'Reilly v. Morse, 15 How. 62, The Incandescent Lamp Patent, 159 U. S. 465, and Holland Furniture Co. v. Perkins Glue Co., 277 U. S. 245. In the Court's view, the statute plainly requires that "[i]f a patent claims an entire class of processes, machines, manufactures, or compositions of matter, the patent's specification must enable a person skilled in the art to make and use the entire class." The Court is careful to address some of the concerns raised by Amgen and its amici regarding that the burdens the disclosure requirements would imposed taken to its extreme could inhibit innovation in the biotech and pharma arts. In this regard, the Court states "[a]ll this is not to say a specification always must describe with particularity how to make and use every single embodiment within a claimed class." But the enablement requirement requires, for example, that the specification also discloses "some general quality . . . running through" the class that gives it "a peculiar fitness for the particular purpose," as in Incandescent Lamp, and situations where there is some adaptation or testing is needed does not make the disclosure "necessarily inadequate," as in Wood v. Underhill, 5 How. 1, 4– 5. Under Minerals Separation, Ltd. v. Hyde, 242 U. S. 261, 270–271, the opinion states that "[a] specification may call for a reasonable amount of experimentation to make and use a claimed invention, and reasonableness in any case will depend on the nature of the invention and the underlying art."

Amgen's claims fail this test, the Court holding that the scope of the claims at issue were much broader than the 26 expressly disclosed antibodies. The Court sees these claims as being like ("bear more than a passing resemblance") the claims in Morse, Incandescent Lamp, and Holland Furniture that were held to be invalid. The Court understands Amgen's claims to attempt to "monopolize an entire class of things defined by their function" even though that class was much broader ("a vast number") of antibodies. Nor was Amgen's disclosure of a "roadmap" for obtaining other antibodies or reference to "conservative substitutions" persuasive, the Court considering these to "amount to little more than two research assignments."

The decision certainly solidifies the Federal Circuit's trend of limiting claim scope much more closely to what is expressly disclosed and the Court's affirmance of the insufficiency of relying on conservative substitutions will have consequences extending much more broadly than to antibody claims. Further discussions of the implications will be provided in later posts.

Posted at 11:28 AM in Enablement, Supreme Court | Permalink | Comments (0)

May 15, 2023

Solicitor General Files Brief Advocating Certiorari Grant in Teva Pharmaceuticals v. GlaxoSmithKline; Court Declines Invitation

By Kevin E. Noonan --

Today, the Supreme Court again disregarded the views of the Federal government regarding whether to grant certiorari, here in Teva Pharmaceuticals USA v. GlaxoSmithKline LLC, and in some ways the only positive outcome is that the Court has shown it is willing to refuse to take action is cases other than subject matter eligibility (although Justice Kavanaugh indicated he would have granted the petition). Perhaps the Justices felt that the Federal Circuit's backtracking in its second panel decision on the breadth of infringement inducement set forth in its first decision, in light of then Chief Judge Prost's strong dissent and the firestorm of protest (public and through amicus briefing regarding Teva's petition for rehearing), was enough to cabin the decision to the somewhat unique facts in this case. Nevertheless, consideration of the Solicitor General's arguments is sufficiently important to review them here despite the Court's decision not to do so.

The Federal Circuit's decisions, rendered separately (see "GlaxoSmithKline LLC v. Teva Pharmaceuticals USA, Inc. (Fed. Cir. 2020)" and "GlaxoSmithKline LLC v. Teva Pharmaceuticals USA (Fed. Cir. 2021)") over strong dissents by former Chief Judge Prost in both instances, regarding whether a generic applicant filing a "skinny label" ANDA could properly be found liable for inducing infringement under 35 U.S.C. § 271(b) led, not surprisingly, to a petition to the Supreme Court for certiorari. The Court issued an Order to the Solicitor General soliciting the government's views and that brief was filed in March, advocating that the Court grant cert.

The matter arose in litigation over GSK's Coreg^® product (carvedilol) for treatment of hypertension (the initial approved indication; U.S. Patent No. 4,503,067), congestive heart failure (CHF) (the subject of U.S. Patent No. 5,760,069), and left ventricular dysfunction following myocardial infarction (LVD-MI). The '069 patent recites a method of treating CHF with a combination of carvedilol and "one or more of an angiotensin-converting enzyme ("ACE") inhibitor, a diuretic, and digoxin."

Teva's ANDA was filed with a Paragraph III certification over the '067 patent and a Paragraph IV certification over the '069 patent. The FDA tentatively approved Teva's generic product for "treatment of hypertension and heart failure" which Teva launched on expiration of the '067 patent. Teva's label indicated that the product was approved for treatment of LVD-MI and hypertension and announced that the FDA had given its product an "AB rating" (which the opinion explained "allow[s] users to determine quickly whether the Agency has evaluated a particular approved product as therapeutically equivalent to other pharmaceutically equivalent products"). Thereafter, the FDA required Teva to amend its label to be identical to the GSK label for Coreg®, which introduced treatment of heart failure into the approved treatments recited in Teva's label.

GSK filed for reissue of the '069 patent which was duly granted by the U.S. Patent and Trademark Office as Reissue Patent No. RE40,000; claim 1 is representative of the invention as claimed in the '000 reissue patent:

1. A method of decreasing mortality caused by congestive heart failure in a patient in need thereof which comprises administering a therapeutically acceptable amount of carvedilol in conjunction with one or more other therapeutic agents, said agents being selected from the group consisting of an angiotensin converting enzyme inhibitor (ACE), a diuretic, and digoxin,
wherein the administering comprises administering to said patient daily maintenance dosages for a maintenance period to decrease a risk of mortality caused by congestive heart failure, and said maintenance period is greater than six months.

(where the italicized portion of the claim represents the modifications introduced in prosecution of the reissue application.)

GSK filed suit against Teva for inducement of infringement in light of the Teva label, based on direct infringement by physicians prescribing the drug for the label indications. Teva argued that it had "carved out" the indication for CHF pursuant to 21 U.S.C. § 355(j)(2)(A)(viii), resulting in a "skinny label" with regard to this indication. Thereafter, the FDA compelled Teva to amend its label to include that indication. In addition, Teva argued that it could be liable for inducement only if GSK could show that Teva had "directly communicated with the direct infringers and 'caused' them to directly infringe the method in the '000 patent." In an instruction, the District Court informed the jury that circumstantial evidence could be used to satisfy this burden.

The jury found that Teva induced infringement of the '000 reissue patent both before and after the label amendment (albeit infringing several claims after but not before that change). The District Court granted Teva's motion for judgment as a matter of law (JMOL) on the basis that GSK had not "caused" physicians to prescribe their product for the infringing uses. Because proof of such causation was required, according to the District Court, its absence precluded the jury from having substantial evidence in support of its decision. The Court relied on the "many sources of information available to prescribing physicians" other than Teva's label (including paradoxically GSK's label and promotion of its Coreg® product) in finding this evidentiary deficiency. Also, the Court based its decision on physician testimony that their prescribing behavior relied on "guidelines and research, as well as their own experience" and not Teva's label. "In sum," the Court said, "substantial evidence [did] not support the jury's finding on causation, and therefore [did] not support its verdict that Teva is liable for induced infringement, during both the skinny and full label periods."

In a first appeal, the Federal Circuit reversed, in an opinion by Judge Newman joined by Judge Moore; Chief Judge Prost provided a lengthy, comprehensive dissent. The panel majority relied on the Supreme Court's decision in Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754 (2011), that copying is evidence of inducement, and also found compelling evidence from Teva's website regarding its product's AB rating with GSK's Coreg® product and other promotional content, as well as testimony from GSK's witnesses regarding physician reliance on information from generic drug makers.

The panel majority opined that the District Court erred in applying the incorrect legal standard, stating that "precedent makes clear that when the provider of an identical product knows of and markets the same product for intended direct infringing activity, the criteria of induced infringement are met." Considering this precedent, the majority held that "[t]here was ample record evidence of promotional materials, press releases, product catalogs, the FDA labels, and testimony of witnesses from both sides, to support the jury verdict of inducement to infringe the designated claims for the period of the '000 reissue patent."

Then-Chief Judge Prost dissented based on her objections to the quanta of evidence adduced and policy consequences should the majority's position be sustained. In the then-Chief's view, the majority's decision undermined the policy goals, embodied in the provisions of the law regarding skinny labels, for balance between the incentives patents provide for pharmaceutical innovation and the public's need for access to that innovation once the patent term has expired. In her view, the majority's decision undermined these policy goals by finding Teva induced infringement by marketing its generic drug produce for unpatented uses (emphasis in dissent) using its skinny label. The dissent not only disagreed with the majority's decision, but apprehended it to "nullify[y] Congress's statutory provision for skinny labels—creating liability for inducement where there should be none," contrary to Congressional intent and "slowing, rather than speeding, the introduction of low-cost generics."

The original majority opinion occasioned an outpouring of outrage from industry groups (particularly generic ones) who latched onto the then-Chief Judge's rhetoric in her dissent to the effect that the opinion eviscerated the congressional sanctioning of skinny labels. The Court granted panel rehearing that resulted in the second opinion (that was later the subject of the Court's denial of en banc review).

The outcome did not change in the second opinion, which recited with approval behavioral distinctions underpinning the majority's decision based on the law with regard to skinny labels:

Generics could be held liable for actively inducing infringement if they marketed a drug with a label describing a patented therapeutic use or if they took active steps to encourage doctors or patients to use the drug in an infringing manner. But generics could not be held liable for merely marketing and selling under a 'skinny' label omitting all patented indications, or for merely noting (without mentioning any infringing uses) that FDA had rated a product as therapeutically equivalent to a brand-name drug [emphasis in original].

Stating that the panel (or at least the majority) agreed to rehear arguments "to make clear how the facts of this case place it clearly outside the boundaries of the concerns expressed by amici," the opinion stated that the basis for their decision that the jury correctly found Teva liable for inducing infringement was "by marketing a drug with a label encouraging a patented therapeutic use" (emphasis in opinion). The opinion also stated more precisely the procedural basis for their opinion: "[t]his is a case in which substantial evidence supports a jury finding that the patented use was on the generic label at all relevant times and that, therefore, Teva failed to carve out all patented indications." The majority also emphasized that their decision was a "narrow, case-specific review of substantial evidence [that] does not upset the careful balance struck by the Hatch-Waxman Act regarding section viii carve-outs." The remainder of the majority opinion set forth (extensively) the evidentiary basis for their opinion that there was sufficient evidence (including expert testimony and marketing efforts occurring both before and after FDA-mandated changes to Teva's label) to satisfy the substantiality standard, and that the District Court erred in granting Teva JMOL to the contrary (inter alia including specific errors in treating factual questions as legal ones that the majority state were "not this court or the district court, to resolve").

Former Chief Judge Prost remained unconvinced, in large part because this outcome (in her view) undermined the congressionally sanctioned skinny label regime (if only by rendering it much more case- and fact-specific than she perceived Congress intended). The skinny label regime was Congress's solution to a "problem" it "saw coming" in Judge Prost's view, specifically that "[b]ecause the FDA cannot authorize a generic version of a drug that would infringe a patent, this one remaining patented use could have prevented a less-expensive, generic carvedilol from coming to market altogether—even though the drug itself and other uses of it were unpatented." The majority's decision thwarted this intent, according to Judge Prost, based on evidence of inducement that was "thin to nonexistent." The District Court had properly exercised its supervisory role in remedying a situation where a jury came to the wrong conclusion, Judge Prost concluded, based on her evaluation of the evidence before it. The Judge set forth her motivation for writing (once again) in dissent (and that the majority's attempt to provide a comforting standard falls short in her opinion):

I write in this case because far from being a disagreement among reasonable minds about the individual facts, this case signals that our law on this issue has gone awry. I am particularly concerned with three aspects of the majority's analysis. First, even setting aside the majority's willingness to glean intentional encouragement from a label specifically designed to avoid encouragement, the majority further weakens the intentional-encouragement prong of inducement by effectively eliminating the demarcation between describing an infringing use and encouraging that use in a label. Second, the majority defies basic tort law by eviscerating the causation prong of inducement. The upshot of these two moves is that a plaintiff now has to show very little for a jury to speculate as to the rest. Third, the majority creates confusion for generics, leaving them in the dark about what might expose them to liability. These missteps throw a wrench into Congress's design for enabling quick public access to generic versions of unpatented drugs with unpatented uses.

The decision by the full Court not to rehear the case en banc was announced in a simple Order to that effect, and was accompanied by three written dissents: one by Judge Prost, joined by Judges Dyk and Reyna; another by Judge Dyk writing alone, and the third by Judge Reyna.

The Solicitor General's brief recites most of this history as an introduction to the government's views on whether the Court should grant cert on this Question Presented:

Whether the court of appeals erred in holding that the FDA-approved labeling for petitioner's generic drug could provide evidence of intent to induce infringement of respondents' method-of-use patent, where that labeling carved out the portions of the brand-name reference drug's labeling that the brand-name manufacturer and FDA had identified as corresponding to the patented method.

The Solicitor General recognizes and extends the concerns and arguments raised by former Chief Judge Prost in her dissents below. According to the brief,

[A] jury may conclude that a generic manufacturer's engagement in the precise conduct that the Hatch-Waxman Amendments contemplate—namely, marketing an FDA-approved generic version of a brand-name drug with labeling that carves out those indications that the brand-name manufacturer has identified to FDA as claimed by a method-of-use patent—is itself evidence of intent to induce infringement of the patented method.

Under these circumstances, the government argues that uncertainty produced by the majority's decision below is "likely to deter generic manufacturers from invoking that mechanism, thereby threatening the availability of lower-cost generic drugs, in contravention of the statutory design." The brief frankly asserts that the decision below is "incorrect" because "[n]o reasonable jury could have concluded that the carved-out labeling for petitioner's generic carvedilol from 2007-2011 was itself evidence of intent to induce infringement." Reciting the requirement of intent embedded in assessment of inducement under § 271(b), the Solicitor General contends that submission of a skinny label carveout as here cannot satisfy this intent requirement in the face of Congress's intent that "one patented use will not foreclose marketing a generic drug for other unpatented ones." Any other interpretation of the statute will "substantially deter[]" use of Section viii of the statute, the brief asserts. The Solicitor General reserves from this avoidance of inducement liability situations where a generic manufacturer "actively promotes direct infringement of a brand-name manufacturer's method-of-use patent through communications other than the carved-out labeling" or when a brand name manufacturer "timely objects to the generic drug's labeling as failing to carve out a still patented method of use and puts the generic manufacturer on notice that the labeling teaches the method." In the Solicitor General's view, a generic manufacturer submitting a Section viii carveout is better understood to be evidence of an intent "not to encourage infringement" (emphasis in brief).

The brief argues that the inference of an intent to induce infringement by the Federal Circuit was erroneous inter alia because the carveout "was driven by FDA regulatory requirements and GSK's own identification of the indication that should be excised." While the brief hypothesizes that there could be circumstances where a generic manufacturer could take advantage of a branded drugmaker's failure to "identify all the language in its labeling that corresponds to a patented method of use," that was not the case here.

Like former Chief Judge Prost, the Solicitor General appreciates that the Federal Circuit's decisions below "subverts the balance struck by Congress, creates significant uncertainty for FDA and generic manufacturers, and invites gamesmanship by brand-name manufacturers" (and the FDA does not have the expertise or responsibility for reviewing patent claims to address these concerns). The structure of how the FDA has implemented this Congressional intent (by producing use codes obtained from the branded drugmakers) is ministerial, providing the needed information regarding use codes entered in the Orange Book and not independently vetting them. But in this role it is the brand-name drug manufacturers that submit the use codes, and the Solicitor General exhorts the Court that "[t]he section viii pathway cannot function as designed unless FDA and generic manufacturers can rely on brand-name manufacturers' representations to the agency" regarding, inter alia, what parts of the brand-name indications are omitted in the carveout. The continuing responsibility resides in the brand-name drugmaker to ensure that the indications in its label accurately reflect those protected by Orange Book-listed patents and any inaccuracies found in the label can be corrected by the NDA holder (none of which GSK did in this case, the Solicitor General reminds the Court).

The Solicitor General's brief also sets forth its apprehension of the harm to "competition and consumers" that could be occasioned by deigning not to grant certiorari. These include that the Section viii carveout procedural pathway is "an integral component of a complex statutory scheme designed to encourage market entry by generic-drug manufacturers 'as soon as patents allow,'" citing Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S, 566 U.S. 399, 405 (2012). The brief also cites economic statistics, including savings of more than $50 million during the first 12 months of generic sales (at over 75% price reductions) and that "first generic" approvals "often" have carved-out labels. Another aspect is time -- the brief notes that Section viii carve-outs have "permitted generic drugs to be approved for sale an average of three years before the relevant method-of-use patents expired." The Federal Circuit's decisions below threaten to reduce such benefits, the Solicitor General argues in this brief.

Finally, the government asserts that this case is a "suitable vehicle" for the Court to consider the proper relationship between the skinny label pathway, generic drug maker behavior, and inducement of infringement liability. The Solicitor General contends that the "interlocutory" nature of the decision below, being on remand to consider whether equitable estoppel provides a defense, will not diminish the broader harm to competition posed by the Federal Circuit's decisions. And the government disagrees with Respondent GlaxoSmithKline that changes to the statute have made the Court's review unwarranted because those "clarifying revisions" did not "fundamentally alter the regulatory scheme, which has always placed the onus on the brand-name manufacturer—not FDA or generic competitors—to identify accurately any methods of use claimed by a patent." Finally, the relatively specific factual bases for the Federal Circuit's decisions below should not alter the fundamental issue, the government asserts, that "the potential for inducement liability in these circumstances may significantly deter use of the section viii pathway, even if such liability is rarely imposed" (emphasis in brief). Agreeing again with former Chief Judge Prost, in future "[i]f petitioner's carved-out labeling supports a finding of intent to induce infringement [in this case], the section viii pathway will be seriously jeopardized."

Posted at 10:13 AM in Food and Drug Administration, Infringement - Contributory or Induced, Supreme Court | Permalink | Comments (2)

May 14, 2023

Amicus Briefing in Amgen v. Sanofi: The Rest of the Story - Part III

By Kevin E. Noonan --

The Supreme Court's consideration of the standards for satisfying the enablement provisions of 35 U.S.C. § 112(a) has been occasioned for the first time in over a century by the Court's granting certiorari in Amgen v. Sanofi. This has not surprisingly generated a great deal of interest and amicus briefing. While some of these briefs, for both Petitioners (see "Patent Law Academics File Amicus Brief in Amgen v. Sanofi"; "AbbVie Files Amicus Brief in Amgen v. Sanofi"; "GlaxoSmithKline Files Amicus Brief in Amgen v. Sanofi") and Respondents (see "Esteemed Scientists File Amicus Brief in Amgen v. Sanofi on Respondents' Behalf"; "Another Group of Law Professors File Amicus Brief in Amgen v. Sanofi"; "U.S. Government Files Amicus Brief in Amgen v. Sanofi") have been the subject of earlier posts prior to oral argument last month, in the interest of completeness and because there were interesting positions taken and arguments raised in the remaining briefs, a more succinct but not cursory review of these briefs is warranted. Amicus briefs in support of the Petitioner are the subject of this post.

Amicus briefs in support of Petitioner

These briefs share many arguments in common, which is due noting but not belaboring. These include that broad patent protection is necessary for innovation in biotech/pharma; the Federal Circuit's "full scope" test is unduly burdensome and will impede innovation in particular by on small companies and "start-ups" that are prevalent in biotechnology and pharma; and that the Supreme Court's decision in Materials Separation v. Hyde is the proper test for enablement.

The amicus brief filed by Fynder Group d/b/a Nature's Find (a small company that "produces foods from a high-protein fungi-based biomass material grown by a novel fermentation process"; novel food producer) argued that broad patent protection is necessary to support innovation and consistent with the constitution, the Patent Act, and prior precedent ("broad patent protection for pioneering inventions encourages further innovation and accelerates follow-on research and development"). The brief cited "Alexander Graham Bell's telephone, Samuel Morse's telegraph, Robert Noyce's monolithic integrated circuit chip, and Herbert Boyer and Stanley Cohen's recombinant-DNA technology" regarding such broadly claimed innovation. The Federal Circuit's "full scope" test is characterized as being unduly burdensome and will impede innovation because the test requires innovators to "devote substantial time and resources to produce routine examples premised on their invention—merely to satisfy the Federal Circuit's concern about the "time and effort" needed to "reach the full scope of the claimed embodiments" which "will impede further innovation and will delay the disclosure of key technological improvements that are critically needed in the sustainability space." And the alternative (trade secret protection) may impede innovation through non-disclosure.

A brief by Instil Bio Inc. (a self-described "clinical-stage biopharmaceutical company focused on developing tumor infiltrating lymphocyte ('TIL') therapies for treating cancer patients," specifically "for the treatment of lung cancer, ovarian cancer, and kidney cancer") argued that companies like theirs are particularly vulnerable to the consequences of the Federal Circuit's decision, because as an early-stage company they rely on investors and not "substantial revenues from existing products" (they have none on the market at present). The brief also recites three benefits of genus claims (also found in other amicus briefs), of patent protection for innovators, incentives for competitors to "design around," and reducing incentives for innovators to rely on trade secret protection. This brief is also one of several that include policy arguments made by other small company amici regarding economic burdens on providing the additional disclosure they believe the Federal Circuit's standard requires. The brief also sets out a Catch-22 dichotomy:

The full-scope enablement requirement discourages innovation by creating an obstacle to meaningful patent protection. This is especially a problem for clinical-stage pharmaceutical companies that lack the revenues of larger, more mature, pharmaceutical companies. Unlike those more-mature companies, smaller companies must rely on outside investors to fund their research-and-development and clinical trial efforts. Due to limited resources, smaller companies are frequently unable to perform the research necessary to identify an exhaustive number of embodiments in a claimed genus so that their patents meet the full-scope requirement. And without robust and predictable patent protection for their products, these companies are less likely to be able to attract outside investments. Decreased investments necessarily result in a smaller pipeline of new, life-saving therapies for patients. Worse, a lack of robust patent protection might incentivize companies to pursue less challenging therapeutics that are less risky, but also less innovative.

To ensure adequate patent protection under the Federal Circuit's full-scope enablement requirement, biotech and pharmaceutical companies are perversely incentivized to invest in unnecessary research to identify innumerable embodiments within a claimed genus that might never be therapeutically important.

A brief from the National Association of Patent Practitioners makes a simple argument: the Federal Circuit's "full-scope" test is unworkable, and the Court's "reasonableness" standard from Materials Separation v Hyde is the proper enablement test. To the extent that enablement is not enough to police overbroad claims, other provisions of the Patent Act (such as 112(f), 102, and 103) can achieve the necessary scope restrictions just as well or better than enablement can. But the consequence of Federal Circuit's recent decisions is to "leave patent practitioners guessing about how to advise client-inventors regarding the extent of disclosure required in patent applications to satisfy the court-established standards for enablement under 35 U.S.C. § 112(a)."

Where they don't incorporate the reasoning set forth in the law professors' brief (discussed previously), and while the brief voices concerns regarding biotechnology and pharmacology-directed patents, these amici believe the Federal Circuit's decisions are harmful to patent law more broadly and affect many other technologies, indeed any technology that seeks genus claims. On a practical note the brief expresses fears that infringers will attack patents by proposing a hypothetical species that would be allegedly not enabled, stating that "non-enablement of phantom species" creates a "risk of mischief" because "a patent challenger can always conjure a hypothetical species that is arguably not enabled," leading amici to contend that "[a]n enablement standard that always permits an infringer to attack an asserted patent based on hypothetical and imagined species is unworkable." Further the brief cites Tilghman v. Proctor, 102 U.S. 707, 728-29 (1880) for the precedent that "The standard for enablement should not be overly burdensome and does not require the inventor to enumerate all species, particularly when the number of species is large. Instead, a standard of reasonableness should prevail," and reminds the Court that "[i]n response to more aggressive demands for enabling disclosure, the United States patent system upholds patent claims even though the claims cover (i) unforeseen future improvements, Catalina Marketing Intern. v. Coolsavings.com, 289 F.3d 801, 810 (Fed. Cir. 2002), (ii) inoperable embodiments, Atlas Powder Co. v. E.I. du Pont de Nemours & Co., 750 F.2d 1569, 1577 (Fed. Cir. 1984), or (iii) multiple species that are not fully disclosed or described, Regents of the Univ. of Cal. v. Eli Lilly, 119 F.3d 1559, 1568 (Fed. Cir. 1997)" (these citations suffering from their origins in the Federal Circuit, whose enablement jurisprudence is in fact at issue before the Court in this case).

The Chemistry & Law Division of the American Chemical Society (whose motion for participation at oral argument the Court denied) argues that Congress has the authority over requirements for patenting, not the courts, and that the Federal Circuit's "full scope" test is not supported by Congress, which did not change the statutory enablement standard under the patent law revisions enacted in the Leahy-Smith American Invents Act.

The heart of the argument these chemists make concerning for genus claims in biotech/pharma is that:

Those working in these fields often utilize genus claims, an important feature of patent law that allows patentees to protect their inventions where competitors could otherwise evade infringement liability by making minor changes that otherwise do not depart from the heart of the claimed invention.

Inventions in these arts require a robust and predictable patent system, they argument, based on "substantial investment" in research and development necessary in these fields. The brief illustrates this argument citing the statistics recited by Jeffrey Lampken that new drugs cost $2.6 billion on average to develop, that the origins of many therapeutic drugs are with finding a biological target, and the high failure rate occasioned by finding molecules that bind or interact with the target. As a result, finding a genus of chemical or biologic compounds is the first step in such discoveries and the genera produced thereby need reliable patent protection. "Pioneering fields that work on the cutting edge, like pharmaceuticals and biotech, are often in a first-to-file race with millions, if not billions, of dollars on the line. Complying with an overly burdensome enablement requirement diverts resources that could have gone toward developing entirely new therapies into making and testing additional and unnecessary individual embodiments," the brief tells the Court.

The brief asks the Court to restore the conventional balance (mandated by the plain meaning of the statute) between disclosure and undue experimentation and to strike down the full scope test (which "violates the canons of statutory construction and contradicts established judicial precedent" and is "an unworkable standard"), reminding the Court of instances where the Justices had reversed the Federal Circuit for imposing "additional rigid and mandatory formulas" that are "inconsistent with [the text of the Patent Act]." KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 407, 419, 428 (2007).

In a brief from the Alliance of US Startups and Inventors for Jobs (USIJ) and the Innovation Alliance (IA) (representing 22 startups, including AbbVie, Dolby Labs, and QUALCOMM) is the argument that some inventions can only be protected by genus claims. This brief takes the position that Amgen's claims are fully enabled and that lowered enforceability in genus claims will result in a "significant shift" in investment. The brief accuses the Federal Circuit of being "oblivious" to the consequences of its eligibility jurisprudence that render the patent system "a cruel hoax" (and in a footnote excoriates the Court for refusing to rehear cases in banc when important questions having "far-reaching implications well beyond the parties and the particular technology" are at issue).

The brief from Diversified Researchers and Innovators (which includes the Association of University Technology Managers (AUTM), Bavarian Nordic, Biogen, Bristol Myers Squibb, Corning, Merck, and 3M) relies on Materials Separation v. Hyde for the proper enablement standard and emphasizes the knowledge in the art in supporting the proper scope of enablement in genus claims. The brief characterizes the Federal Circuit's rule as being a "special, atextual rule for certain types of claims – called genus claims. . . " that turns the enablement requirement into a "counting exercise" and does not account for the skilled artisan's perspective. The brief also argues that the "full scope" standard engages in "prejudge[ment]" of these claims by recognizing them as "special" in the first place (something not in the statute), because some inventions are best claimed by functional language ("[c]laims should not start with a handicap simply because they contain functional language"). In addition, amici argue that the standard upsets the burden of proof between patentees and accused infringers by putting the burden on the patentee regarding whether the genus claim scope is supported by an enabling disclosure.

Considering the expected (negative) consequences of the Federal Circuit's test, the brief argues that the public loses when inventors/applicants delay in order to disclose further embodiments to bolster the scope of enablement; alternatively, if narrower protection is sought this stratagem "limit[s] innovation-adjacent insights that might otherwise benefit the public but are unnecessary to enable narrow patent claims." This behavior also diverts resources that could be used for further innovation to be used to produce "redundant examples." The brief also emphasizes the requirement that the disclosure be concise and that the "specification need not disclose what is well known in the art," citing Lindemann Maschinenfabrik v. Am. Hoist & Derrick Co., 730 F.2d 1452, 1463 (Fed. Cir. 1984).

The brief also argues that any test about drawing lines on what is needed to satisfy the enablement standard (whatever it may be) must take into account the judgment of the skilled artisan, illustrating the undue experimentation standard in Bene v. Jeantet, 129 U.S. 683, 686 (1889), a chemical case. "The Federal Circuit's apparent concern over unpredictability in the chemical arts in particular has led to an impossible-to-meet standard divorced from what is actually claimed," these amici assert, detecting an "overt hostility" from the Federal Circuit to use of functional language in claims. But, amici argue, the use of functional language does not turn these claims into "single-means claims" under circumstances where such language is used "in conjunction with other language anchoring the functional attributes to members of a genus sharing certain structural attributes (emphasis in brief)."

"The Federal Circuit's approach is backwards," amici argue, stating there should be a balance in the (any) enablement standard and how it is applied:

Extremes in either direction undermine the patent system's design. On the one hand, a disclosure that is nothing more than a research plan is unlikely to enable a yet-to-be identified species with desired properties, let alone a broad genus claim. Such patents improperly put the burden of inventive research and experimentation on other skilled artisans, particularly when it requires solving undisclosed challenges, developing new materials or methods, or engaging in significant experimental work whose results cannot be reasonably predicted.

On the other hand, it is equally improper to "limit[]" claims "to the 'concise and exact terms' in which the specifications ordinarily describe a single example of the invention" when the patent discloses a broader inventive contribution. Philip A. Hunt Co. v. Mallinckrodt Chem. Works, 177 F.2d 583, 585 (2d Cir. 1949). Doing the latter allows others to easily bypass the investments and efforts of the innovator through routine and non-inventive work, and "few, if any, patents[] would have value." Id.

Posted at 11:48 PM in Enablement, Supreme Court | Permalink | Comments (0)

May 11, 2023

Amicus Briefing in Amgen v. Sanofi: The Rest of the Story - Part II

By Kevin E. Noonan --

The Supreme Court's consideration of the standards for satisfying the enablement provisions of 35 U.S.C. § 112(a) has been occasioned for the first time in over a century by the Court's granting certiorari in Amgen v. Sanofi. This has not surprisingly generated a great deal of interest and amicus briefing. While some of these briefs, for both Petitioners (see "Patent Law Academics File Amicus Brief in Amgen v. Sanofi"; "AbbVie Files Amicus Brief in Amgen v. Sanofi"; "GlaxoSmithKline Files Amicus Brief in Amgen v. Sanofi") and Respondents (see "Esteemed Scientists File Amicus Brief in Amgen v. Sanofi on Respondents' Behalf"; "Another Group of Law Professors File Amicus Brief in Amgen v. Sanofi"; "U.S. Government Files Amicus Brief in Amgen v. Sanofi") have been the subject of earlier posts prior to oral argument last month, in the interest of completeness and because there were interesting positions taken and arguments raised in the remaining briefs, a more succinct but not cursory review of these briefs is warranted. Amicus briefs in support of neither Party are the subject of this post.

Amicus briefs in support of neither party

The amicus brief filed by the Intellectual Property Owners (IPO) argued that the enablement requirement "strikes a balance" on claim breadth with regard to the quid pro quo, from the perspective of the person of ordinary skill in the relevant art, and that it is important that the inquiry be based on the language of the statute. But even with these policy goals in mind, "an applicant is not required to describe in the specification every conceivable possible and future embodiment of his invention" they argue, citing Cordis Corp. v. Medtronic AVE, Inc., 339 F.3d 1352, 1365 (Fed. Cir. 2003), and In re Angstadt, 537 F.2d 498, 503 (C.C.P.A. 1976).

Undue experimentation is the proper standard which is a fact-intensive inquiry that is helped but not limited to the Wands factors. However the inquiry is made, it must be applied in a predictable and fair manner that is consistent with the statutory language and longstanding precedent and should not "disrupt the settled expectations of the inventing community." See Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722, 739 (2002), these amici argue. Also emphasized in their brief is the statutory presumption of validity that can only be overcome by clear and convincing evidence. When enablement does arise as an invalidity defense in federal district court, the burden always rests on the patent challenger to prove lack of enablement by clear and convincing evidence, under Microsoft Corp. v. i4i Limited P'ship, 564 U.S. 91, 100-03 (2011). On appellate review, courts " give due deference to the fact-finder's credibility determinations in weighing competing expert evidence," citing Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605, 611 (1950). All this to say is that the IPO's brief hews the course of its neutrality regarding either party in the dispute by sticking to these eternal verities of enablement law.

The Regenexbio, IGM Biosciences, and Adapative Phage Therapeutics brief was filed by a self-described group of "small to mid-sized biotech companies currently pursuing innovation across multiple platforms," wherein Regenexbio is developing gene therapy approaches for treating "retinal, metabolic, and neurodegenerative diseases"; IGM Biosciences is developing IgM-based immunotherapies against "cancer, infectious diseases, and autoimmune and inflammatory diseases"; and Adapative Phage Therapeutics is developing bacteriophage banks that "provide evergreen, broad spectrum, and polymicrobial coverage."

Their expressly asserted reason for filing their amicus brief is a concern that the Federal Circuit's application of the enablement standard "threatens innovation in the life sciences" by "shift[ing] the burden from the challenger to the patentee to prove enablement of its issued patents" and "makes the burden of proving enablement nearly insurmountable for innovative start-ups, small-to-medium-sized companies, universities, and other innovators with limited resources." This test will make innovators "waste precious resources by forcing them to reduce to practice not just instructive and illustrative examples but an undefined number of individual species that embody every 'corner' of the claims" they argue, which will be prejudicial to smaller companies. Accordingly, amici address the Court seeking "reasonable disclosure standards" for enablement.

Their arguments rely on the presumption of validity:

Amici rely on the statutory presumption of validity that adheres to every patent claim after the Patent Office examines and issues the patent. The presumption ensures that the innovative value captured by the claims will not be wiped away on a dubious or speculative case. It does so by placing the burden of proof on the patent challenger. And by requiring the challenger to meet that burden with clear-and-convincing evidence.

The reach-the-full-scope standard undermines that presumption. The Federal Circuit acknowledges this when it "raises the bar" or sets "high hurdles" for particular claims. These phrases lay the burden of proof on the patentee as soon as the court reads the claims. Further, they show that the court is adjusting the standard of proof to be higher for the patentee (or, more properly, lower for the patent challenger) than the standard codified in the statute.

Amici also argue that the Federal Circuit's full scope test is inconsistent with constructive reduction to practice.

The Intellectual Property Law Association of Chicago (IPLAC -- amici asserting that they are "the country's oldest bar association devoted exclusively to intellectual property matters") in their brief ask the Court to vacate and remand because the case can be settled by the application of the statute and stare decisis. "Enablement is not, because it never has been and never should be—but for decisions such as the reviewed one—a matter of whether the specification has catalogued all possible embodiments of invention and taught each of them; that is not the law" they assert. The brief relies heavily on the Karshtedt et al. law review article, and one by Jason Rantanen, The Doctrinal Structure of Patent Law's Enablement Requirement, 69 Vanderbilt L. Rev. 1679, 1680 (2019). Both stand for the proposition that the Federal Circuit has recently "varied greatly from deciding enablement in a proper manner and muddled their own jurisprudence on the issue." Their brief also criticizes In re Wands for leaving the definition of undue experimentation "amorphous"

The brief suggests that the Court's decision in Consol. Elec. Light Co. v. McKeesport Light Co. (Incandescent Lamp), 159 U.S. 465 (1895), sets the standard for undue experimentation (albeit it should be recognized that this takes the definition from the extreme, where >6,000 failed attempts constitute undue experimentation; while that is certainly the case it seems unlikely to be encountered routinely). The brief distinguishes the Consol. Elec. standard with the facts below, where Respondent did not identify any antibody that would/could not be obtained using Amgen's disclosure (the "roadmap").

And In a sad or amusing footnote (depending on your prejudices) the brief sets forth a "list of areas of patent law in which this Court has overturned the Court of Appeals [that] is long, and the frequency of the overrulings notorious"; with two exceptions these cases were all decided in this century and over 80% since 2010.

Another local intellectual property law group, the New York Intellectual Property Law Association (NY IPLA) argued in its brief that the Federal Circuit has gone beyond the requirements of the plain language of the statute, which has been the standard applied by the court since In re Hyatt, 708 F.2d 712, 714 (Fed. Cir. 1983). But as applied to biotechnology inventions amicus argues that genus claims have required "disclosure of every species in the genus," citing Wyeth v. Abbott Laboratories, 720 F.3d 1380, 1385 (2013), Enzo Life Sciences, Inc. v. Roche Molecular Systems, Inc., 928 F.3d 1340, 1345–48 (Fed. Cir. 2019), and Idenix Pharmaceuticals LLC v. Gilead Sciences Inc., 941 F.3d 1149, 1160–63, 1165 (Fed. Cir. 2019), based on the court's perceptions regarding "the uncertainty of the science and the required functionality." The NYIPLA contend that "the requirement for enablement of the full scope of the claimed invention is not supported by the plain language of the statute and is contrary to th[e] Court's holding as Minerals Separation v. Hyde, 242 U.S. 261, 270-71 (1916)."

Although the brief recognizes that there is a valid concern at issue, that an inventor not be "granted patent claim coverage that exceeds what the inventor has invented," amici predict a severe adverse impact that would arise should the Court affirm the Federal Circuit test, specifically that "could lead inventors to disclose less than what they discovered, such as a functional relationship at the heart of why the invention works. Although the amicus appreciates the potential inequities that could be occasioned by claims like Amgen's, on balance the consequences of affirming the Federal Circuit's "full scope" test are worse due to the inherent unpredictability of the chemical and biotechnological arts, amicus argues, citing In re Fisher, 427 F.2d 833, 839 (CCPA 1970), for the principle that "the scope of enablement obviously varies inversely with the degree of unpredictability of the factors involved.") Affirming the Federal Circuit would create a situation wherein "the inventor will have no incentive (or duty) to disclose the genus, which perhaps comprises the most important part of the discovery" and "[t]he rest will be kept from the public as a trade secret," until such time that the patentee develops another species that can be subject to its own 20-year term.

While amicus argues that the Federal Circuit's decisions "goes beyond the literal requirements of the statute's plain language," the brief also gives little credence to Amgen's arguments that the Federal Circuit had only recently imposed an unnecessarily stringent enablement standard, citing earlier precedent to the same effect, including In re Fisher, 427 F.2d 833, 839 (CCPA 1970); In re Hyatt, 708 F.2d 712, 714 (Fed. Cir. 1983); Amgen, Inc. v. Chugai Pharm. Co., 927 F.2d 1200, 1212, (Fed. Cir. 1991); In re Wright, 999 F.2d 1557, 1561 (Fed. Cir. 1993); and Genentech Inc. v. Novo Nordisk A/S, 108 F.3d 1361, 1365 (Fed. Cir. 1997).

Their solution: requiring disclosure of a "reasonable number of species" test for prosecution before the USPTO that could be limited at trial by claim construction and having undue experimentation be a defense against infringement species by species, the patentee being protected by the clear and convincing evidence standard (to the extent it is respected by district courts and the Federal Circuit in deciding JMOL motions).

As for disposition, the brief advises that "[i]n the present case, respectfully the Court should remand the case for a determination of whether the Sanofi antibody was obtainable from the disclosure in the Amgen patents with some — but not undue — experimentation at the time of the filing of the Amgen application."

Posted at 11:11 PM in Enablement, Supreme Court | Permalink | Comments (0)

May 08, 2023

Amicus Briefing in Amgen v. Sanofi: The Rest of the Story

By Kevin E. Noonan --

The Supreme Court's consideration of the standards for satisfying the enablement provisions of 35 U.S.C. 112(a) has been occasioned for the first time in over a century by the Court's granting certiorari in Amgen v. Sanofi. This has not surprisingly generated a great deal of interest and amicus briefing. While some of these briefs, for both Petitioners (see "Patent Law Academics File Amicus Brief in Amgen v. Sanofi"; "AbbVie Files Amicus Brief in Amgen v. Sanofi"; "GlaxoSmithKline Files Amicus Brief in Amgen v. Sanofi") and Respondents (see "Esteemed Scientists File Amicus Brief in Amgen v. Sanofi on Respondents' Behalf"; "Another Group of Law Professors File Amicus Brief in Amgen v. Sanofi"; "U.S. Government Files Amicus Brief in Amgen v. Sanofi") have been the subject of earlier posts prior to oral argument last month, in the interest of completeness and because there were interesting positions taken and arguments raised in the remaining briefs a more succinct but not cursory review of these briefs is warranted. The remaining amicus briefs in support of Respondents are the subject of this post.

Amicus briefs in support of Respondents

Like the amicus briefs in favor of the Petitioner, the briefs for Respondents recite some themes in common. These include that permitting patenting of Amgen's claims (and those like them) would upset the "balance" between disclosure and claim scope to the public's detriment. Many of the briefs discuss the history of the discovery of PCSK9, its biological activity and binding to the live LDL receptor, and how blocking this binding was effective in lowering serum cholesterol; Amgen did not invent or discover any of these relationships or uses for PCSK9 antibodies. Several briefs mentioned 35 U.S.C. 112(f) as an alternative for functional claiming of PCSK9 antibodies, and Consolidated Electric Light Co v. McKeesport Light Co., 159 U.S. 465, 472-76 (1895), was recognized as a seminal case supporting Respondent's position.

Fresenius Kabi ISA LLC's amicus brief argues that enablement provides balance to the public, and overbroad patents disrupt the balance to the public's detriment. The amicus is concerned about gamesmanship by which patentees will withhold disclosure in favor of broad, functionally claimed patents with staggered specific disclosures. Citing Consolidated Electric Light Co v. McKeesport Light Co., 159 U.S. 465, 472-76 (1895) (the lead case for respondent), amicus argues that there must be a robust enablement standard, and Petitioner's standard will "negatively affect competition" because patentees will use "broad, nonspecific patent disclosures to block entire fields of innovation."

The brief recites "tensions" between innovators and the public, accusing biopharma companies of disclosing a "drug peptide sequence" and holding back "details that are required by competitors to expand on and further innovate—or even actually use the peptide—based on the work of the initial application invention" (e.g., "details on physicochemical or functional properties of the drug" such as "glycan profile, charge profile, variants profile, impurity profile, immunochemical properties, and functional activities"), which amicus calls "gam[ing] the system." These allegations of claim shenanigans against biopharma companies extend to including claim language directed towards "therapeutically effective amount" and "excipients, adjuvants, or diluents" that may be capable of overextending patent protection inequitably (although such terminology certainly did not arise with biotechnology patents). Functional claiming is available, if desired, under 35 U.S.C. 112(f), says this amicus, which does not have the aforementioned negative impacts on innovation because it has consistently been construed to "limit the scope of the claim to only those specific structures described in the specification," citing Traxcell Techs., LLC v. Spring Commc'ns Co., 15 F.4th 1121, 1134 (Fed. Cir. 2021).

The brief contains a litany of opportunities for patentees to "control" patent prosecution and claim scope, including continuation applications (but warns of these being abused too, stating that "[w]ithout a robust enablement standard, continuation applications can be used to continually expand the scope of exclusionary patent rights unfairly by encompassing embodiments not appreciated or even discovered at the time of filing the original application") and suggests that continuation-in-part applications provide an avenue for any such desired (and deserved) protections (which might be at least a trifle unrealistic).

Finally, the brief uniquely argues that the change to a "first inventor to file" regime under the AIA has increased the risk of loosened enablement standards, because under the "first to invent" provisions of earlier U.S. patent law broadened claims could be challenged by earlier inventors but no more.

Eli Lilly & Co., Ipsen Bioscience, Inc., and Innovent Biologics, Inc. filed an amicus brief arguing that Amgen's claims violated the "letter, logic, and purpose" of the enablement requirement because they recited purely functional results. The patent bargain was raised as a basis for such claims to be invalid and amici accused Amgen of attempting to "control all antibody therapeutics to a particular target" which would be "indisputably detrimental to the public." The brief provides various calculations for the number of antibodies falling within the claim scope, noting the conventional "millions" in the argument but reciting in a footnote 20⁶⁰ (1 x 10⁷⁸) based on 6 CDRs and 10 amino acids/CDR and 20 amino acids.

Amici asserted that claims are "nothing more than a hunting license" contrary to Brenner v. Manson, 383 U.S. 519, 536 (1966), and that they are also not properly considered to be genus claims because they do not disclose a structural similarity between them, just their function in blocking PCSK9 binding to LDL receptor.

And amici countered Amgen's (actually GSK's) R&D efficiency argument with the hypothetical that a troll with Amgen's claims could "dramatically undermine resource allocation efficiency" and Amgen's airplane analogy to permit claiming all airplanes using the Bernoulli principle, saying that this illustrates the "perennial preemption problem" created by functional claims.

These amici also argue that the Federal Circuit's enablement jurisprudence comports with the legal tenets under Consol. Elec. and Holland Furniture Co. v. Perkins Glue Co., 277 U.S. 245, 256-257 (1928), that the boundaries of what is claimed should be clear, and distinguish Minerals Separation v. Hyde, based on Amgen not providing anything to optimize the claimed antibodies but rather encompassing "a virtually limitless universe of other, non-conservative antibodies," stating that "[t]o hold such paltry disclosure sufficient to enable claims preempting an entire technological field would turn the patent quid pro quo on its head," citing Ex parte Sloane, 22 U.S.P.Q. 222 (P.O.B.A. Jan. 18, 1934); In re Angstadt, 537 F.2d 498, 500, 503 (C.C.P.A. 1976); and Atlas Powder Co. v. E.I. du Pont De Nemours & Co., 750 F.2d 1569, 1576 (Fed. Cir. 1984).

This brief also argues regarding the use of 35 U.S.C. 112(f) for functional claims such as Amgen's, because that portion of the statute "creat[ed] a limited exception to this Court's prohibition against functional claiming," citing Warner-Jenkinson Co., Inc. v. Hilton Davis Chemical Co., 520 U.S. 17, 28 (1997) (but even that doesn't save Amgen's claims amici say because "none of Amgen's claims at issue are a combination of structural and functional elements" because reciting "monoclonal antibody" does not import sufficient structure).

Turning to patent policy, amici challenge Amgen and amici supporting Amgen's position with regard to the Federal Circuit's test harming the U.S. biotechnology and pharma industries, asserting that U.S. Biotech and pharma will continue global leadership using current interpretations of enablement law, based on assertions that the sector is "booming" and accuses Amgen of trying to "upend the legal regime that has empowered that growth, innovation, and undeniable benefit to the public" by upending the full-scope standard (!) "under the guise of an 'innovation' imperative." The brief sets forth as an example antibodies to cell surface marker CD20, wherein "four innovators developed six different antibody therapies for three different illnesses while targeting the same protein." They warn "if Amgen's interpretation of the Patent Act were the law of the land, the first party to obtain a functional claim to all antibodies that inhibit binding to a target could prevent market entry and/or extract rents from all future innovators for twenty years."

Pfizer filed a brief supporting Respondents, again reciting the quid pro quo patent bargain and that permitting claims such as Amgen's would preempt future research. While acknowledging that genus claims can provide important patent protection Amgen's claims went too far into purely functional claiming without sufficient structure to support them. "[I]t is the undue breadth of the claims and the exclusive rights [Amgen] seek['s] to encompass, rather than a heightened standard for enablement of genus claims, which led the district court and the Federal Circuit to conclude that the claims are invalid as a matter of law." The brief also calls these claims "a naked attempt to preempt future innovation and an unwarranted extension of the patent monopoly."

Another group of biotech and pharma companies, including Genentech, AstraZeneca Pharma, Bayer AG, Gilead Sciences, and Johnson & Johnson, filed an amicus brief where they argue that the Federal Circuit upholds genus claims that are supported by disclosure having appropriate scope using a flexible standard that is consistent with Supreme Court and its own precedent, including O'Reilly v. Morse, 56 U.S. 62, 120-21 (1853); Holland Furniture Co. v. Perkins Glue Co., 277 U.S. 245, 257-58 (1928); Consol. Elec. Light Co. v. McKeesport Light Co., 159 U.S. 465, 476 (1895). But that is not the case here, they argue, and the Federal Circuit properly invalidated the claims on enablement grounds. Their brief particularly decries arguments that merely showing how to make and use one embodiment could be enough, asserting that "[a] patentee who chooses to claim a broad functional genus, unlimited by claim language delineating the specific structures that achieve that function, will necessarily have to disclose more than a patentee claiming certain specified structures or species within that genus" (and that one of the Wands factors is claim breadth).

The brief states that "Amgen and its amici desire a regime where patentees can jump the gun, rushing to the patent office with broad functional genus claims before they have discovered and can explain how to make and use, without excessive brute-force experimentation, vast swaths of the genus claimed, including structurally dissimilar species which may vary substantially in how they perform the claimed function. But such unsupported broad claims "discourage rather than promote invention" by allowing a patentee to "foreclose efforts to discover other and better types" within the genus. Holland Furniture, 277 U.S. at 257; accord Consolidated Elec., 159 U.S. at 476."

Curiously, most of the scholarly works cited in support of the arguments made by amici are at least 10 years old and some are significantly older.

Another collection of industries, the Small and Medium Biotechnology Companies (which includes ABL Bio (USP 11,261,259), Kiniksa, OPKO Health, and SK bioscience) say the Court should adopt an "if it ain't broke, don't fix it" principle and emphasized the reliance interest on the Federal Circuit's enablement jurisprudence, stating "[t]he longstanding enablement standard is consistent with text and precedent. The balance it strikes promotes innovation and saves lives. And departing from the status quo would unleash harmful consequences for industry participants like Amici, for patients, and for the public." The Wands factors "are drawn from, and reflect" a century and a half of Supreme Court case law on enablement, and have been applied "evenhandedly" "for decades" they assert. The brief cites a number of "incumbent and follow-on innovators," illustrated by Humira®, Remicade®, Cimzia®, and Simponi®, all of which are TNF-alpha inhibitors and Skyrizi®, Tremfya®, and Illumya®, which inhibit IL-23, for the purported benefits of permitting patent protection for both types of innovation.

The same curious reliance on scholarly works cited are at least 10 years old and some significantly older is the case here as in Pfizer's brief.

In addition to the legal academics' amicus briefs that were the subject of previous posts, a collection of IP Law Professors (including Sean Tu, Arti Rai, Oskar Litvak, Kevin Collins, and Bernard Chao) filed a brief and argued that claims should be limited to what is disclosed because that is what is invented. In their view, "[t]rial-and-error inventing" (like Amgen's here, in their view) is inherently narrow, as evidenced by Amgen's "roadmap" disclosure, and the professors draw a distinction between trial-and-error to find the invention and trial-and-error in making and using what has been invented. Countering some of the more heated rhetoric from Amgen and its amici (by asserting "[t]here is no paradox, no death of anything or otherwise a need for alarm"), the professors write that "[t]his case presents a classic example of a narrow invention that is coupled to overbroad claims," which are overbroad because a patent applicant "can claim broadly only when [they have] disclosed structural features that unify different species." The brief cites several examples of competing antibodies that (putatively) would be precluded by grant of broad genus claims as Amgen advocates and the professors make the case that narrow antibody claims are more conducive to innovation in this area.

Much of the argument is taken from S. Sean Tu and Christopher M. Holman, Antibody Patents: Use of the Written Description and Enablement Requirements at the Patent & Trademark Office, 38 Berkeley Tech. L. J. (Figure 8) (2023 forthcoming) (available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4025167).

In her brief, Professor Robin Feldman takes the extreme position that "[t]his Court's precedent holds that the correct standard here is not undue experimentation but rather any experimentation," based on Wood v. Underhill, 46 U.S. (5 How.) 1, 4 (1847), which can be read this way, and Consolidated Electric Light Co. v. McKeesport Light Co., 159 U.S. 465, 474-75 (1895). She writes that overbroad claiming "could bar scientists and competitors from those building blocks of invention" (notice conditional phrase) and that the certiorari grant was improvident because the Supreme Court could validate the undue experimentation standard.

The AIPLA (whose brief "suggest[s]" affirmance) argues that the Federal Circuit applied established law but that while enablement does not require disclosure of all embodiments Wands is the correct legsal and analytical framework. The brief cites as examples the seemingly settled principle that one non-enabled embodiment is not enough to be undue experimentation and states that Amgen's argument that the Federal Circuit had developed a new "full scope" test is a "facile strawman."

The Association for Accessible Medicines filed an amicus brief wherein they argued that the Federal Circuit's decision aligns with statutory text and with the structure and purpose of the Patent Act, and that Amgen's theory will inhibit competition in the pharma industry. As in other briefs discussed above this brief emphasizes the patent bargain, the dangers of permitting overbroad claiming, and the availability of Section 112(f) for such claims (consistent with its enactment in response to the Supreme Court's Halliburton Oil Well Cementing Co. v. Walker decision, 329 U.S. 1 (1946). The brief focuses on the interplay between Sections 112(a) and 112(b) (wherein the latter defines the invention) and that the existence of the "using" requirement in Section 112(a) mandates disclosing how to use the invention, i.e., which species are operable.

The brief cites the usual litany of prior Supreme Court cases, such as O'Reilly v. Morse, Consolidated Electric, and Holland Furniture, and distinguishes cases Amgen cites by stating that "the issue in each case was that an operator seeking to use the invention would need to fill in some gaps in the patent's instructions to achieve the invention's desired outcome. This Court held in each case that the specification contained sufficient information for a skilled artisan to fill in those gaps." Which is not the case here, they argue.

The brief concludes by exhorting the Court to restrict "therapeutically effective amount" language and excipient claims (also argued by Fresenius Kabi ISA LLC, see above), citing biologic drugs with "secondary" characteristics not disclosed or claimed in protein composition of matter-claiming patents based on failure to disclose how to use a claimed biologic drug.

A sole generic drugmaker, Viatris Inc. filed an amicus brief making many of these same arguments, for example about the quid pro quo and the patent bargain, and asserts that deviating from the Wands precedent would destabilize U.S. patent law and innovation. Uniquely this brief also argues that changes in the enablement standard would have a "major ripple effect" into other areas of patent law including obviousness. This brief also ties enablement under 112(a) with the statutory requirements of defining an invention by claims in 112(b) as the basis for the scope of the claim be commensurate with the "full scope" of the invention as claimed. Asserting the crux of their argument the brief recites:

Accordingly, this Court has long held that the specification—"[a]ddressed as it is to those skilled in the art"—"may leave something to their skill in applying the invention" (Mowry v. Whitney, 81 U.S. 620, 644 (1872)), provided the requisite experimentation is routine rather than "painstaking" (Consol. Elec. Light Co. v. McKeesport Light Co., 159 U.S. 465, 475 (1895)) or "elaborate" (Holland Furniture Co. v. Perkins Glue Co., 277 U.S. 245, 256-257 (1928)).

A group of medical doctors and affiliated groups, styled in the caption as Arnold Ventures, National Centers for Health Research, and Certain Medical Doctors, filed an amicus brief whose arguments are directed to perceived negative consequences on innovation and competition in pharma, citing reports about high drug costs, many by the "certain medical doctors" themselves. They argue (as have others) that functional genus claims would permit pharma companies to use such claims to prevent other companies from developing different drugs to the same target. The brief cites four ways that adopting Amgen's position would hurt patients:

1) "multiple treatment options will be delayed in development and approval, or not available at all" (e.g., if the claimed drug fails in the clinic);
2) "patients will be forced to take medicine that may be either more risky or less efficacious—or both—than an alternative." (when first-to-market drugs are not the most efficacious);
3) "patients may not have the treatment option that works best for their specific circumstances" (when humans have differential responses to different drugs to the same target); and
4) "competition between innovators, under the right circumstances, can lower spending on brand-name drugs," stating that "[h]igh drug prices are a major cause of lack of patient access, or of long-term non-adherence to treatments, which contributes to thousands of excess hospitalizations and deaths annually."

The brief provides an informative schematic showing the timeline of PCSK9 research, which throws shade on Amgen's entitlement to a patent in view of what they contend Amgen did not invent:

and provides a series of tables showing "second to market" drugs that could have been precluded if Amgen's enablement position had been the standard:

The amicus filed by Unified Patents illustrated the concerns the enablement issue raised for patentees outside the biotech and pharma industries. This brief argues that functional claims impede innovation regardless of technology and that the "full scope" test is needed to prevent this negative outcome. In addition, the brief argues that the "full scope" test is not new but instead is supported by established precedent which Amgen's proposed test would overturn, citing Morse, Béné v. Jeantet, The Incandescent Lamp Patent, Corona Cord Tire Co. v. Dovan Chem. Corp., Holland Furniture and CCPA/Federal Circuit precedent and stating that:

The Court has identified three relevant factors: (1) whether the patent involves an area of invention where results are unpredictable; (2) whether the claim breadth vastly outstrips the disclosures in the specification; and (3) whether the patentee has demonstrated that the proven function of disclosed embodiments can be reliably extrapolated to non-disclosed embodiments within the claim scope.

For this amicus the greatest threat raised by Amgen's argument is the issuance of overbroad "high-tech" patents, devoting an entire section of the brief to this "problem" and stating that such broad functional claims would have an in terrorem effect on the public. The brief also provides a footnote asserting that a study of patent litigations estimated that 100% of NPE-asserted software patents and 50% of non-NPE asserted software patents utilized functional patent claiming. Colleen V. Chien and Aashish R. Karkhanis, Functional Claiming and Software Patents (Santa Clara Univ., Working Paper No. 06-13, 2013), https://ssrn.com/abstract=2215867).

The Court at oral argument and the parties cited amicus briefs they hoped would resonate with the Justices. It will be interesting to see if any of those briefs or the ones discussed herein have any influence on how the Court will rule.

Posted at 10:43 PM in Enablement, Supreme Court | Permalink | Comments (0)

May 03, 2023

Stanford Asks Supreme Court to Revisit Subject Matter Eligibility on Diagnostic Claims

By Kevin E. Noonan --

"Hope springs eternal [in the human breast]" (Alexander Pope) and "Insanity is doing the same thing over and over and expecting different results" (the latter attributed variably to Albert Einstein and Werner Erhart) are two aphorisms that irresistibly come to mind with the recent filing of a petition for certiorari by patentees in CareDX, Inc. v. Natera, Inc. and CareDx, Inc. v. Eurofins Viracor, Inc.

To recap, the case arose over CareDx's assertion of the claims in U.S. Patent Nos. 8,703,652, 9,845,497, and 10,329,607 directed to "methods to help predict the status or outcomes of transplant recipients through sequencing of cell-free nucleic acids ("cfDNA") found in the bodily fluids of a recipient." The rationale behind the invention was that rejection of a transplanted organ in a recipient is accompanied by cell death, which releases donor-specific DNA into the recipient's bodily fluids. Claim 1 of the '652 patent, claim 1 of the '497 patent, and claim 1 of the '607 patent were illustrative:

Claim 1 of the '652 patent recites:

1. A method for detecting transplant rejection, graft dysfunction, or organ failure, the method comprising:
    (a) providing a sample comprising cell-free nucleic acids from a subject who has received a transplant from a donor;
    (b) obtaining a genotype of donor-specific polymorphisms or a genotype of subject-specific polymorphisms, or obtaining both a genotype of donor-specific polymorphisms and subject-specific polymorphisms, to establish a polymorphism profile for detecting donor cell-free nucleic acids, wherein at least one single nucleotide polymorphism (SNP) is homozygous for the subject if the genotype comprises subject-specific polymorphisms comprising SNPs;
    (c) multiplex sequencing of the cell-free nucleic acids in the sample followed by analysis of the sequencing results using the polymorphism profile to detect donor cell-free nucleic acids and subject cell-free nucleic acids; and
    (d) diagnosing, predicting, or monitoring a transplant status or outcome of the subject who has received the transplant by determining a quantity of the donor cell-free nucleic acids based on the detection of the donor cell-free nucleic acids and subject cell-free nucleic acids by the multiplexed sequencing,
    wherein an increase in the quantity of the donor cell-free nucleic acids over time is indicative of transplant rejection, graft dysfunction or organ failure, and wherein sensitivity of the method is greater than 56% compared to sensitivity of current surveillance methods for cardiac allograft vasculopathy (CAV).

Claim 1 of the '497 patent recites:

1. A method of detecting donor-specific circulating cell-free nucleic acids in a solid organ transplant recipient, the method comprising:
    (a) genotyping a solid organ transplant donor to obtain a single nucleotide polymorphism (SNP) profile of the solid organ transplant donor;
    (b) genotyping a solid organ transplant recipient to obtain a SNP profile of the solid organ transplant recipient, wherein the solid organ transplant recipient is selected from the group consisting of: a kidney transplant, a heart transplant, a liver transplant, a pancreas transplant, a lung transplant, a skin transplant, and any combination thereof;
    (c) obtaining a biological sample from the solid organ transplant recipient after the solid organ transplant recipient has received the solid organ transplant from the solid organ transplant donor, wherein the biological sample is selected from the group consisting of blood, serum and plasma, and wherein the biological sample comprises circulating cell-free nucleic acids from the solid organ transplant; and
    (d) determining an amount of donor-specific circulating cell-free nucleic acids from the solid organ transplant in the biological sample by detecting a homozygous or a heterozygous SNP within the donor-specific circulating cell-free nucleic acids from the solid organ transplant in at least one assay,
    wherein the at least one assay comprises high-throughput sequencing or digital polymerase chain reaction (dPCR), and
    wherein the at least one assay detects the donor-specific circulating cell-free nucleic acids from the solid organ transplant when the donor-specific circulating cell-free nucleic acids make up at least 0.03% of the total circulating cell-free nucleic acids in the biological sample.

Claim 1 of the '607 patent recites:

1. A method of quantifying kidney transplant-derived circulating [cfDNA] in a human kidney transplant recipient, said method comprising:
    (a) providing a plasma sample from said human kidney transplant recipient, wherein said human kidney transplant recipient has received a kidney transplant from a kidney transplant donor, wherein said plasma sample from said human kidney transplant recipient comprises kidney transplant-derived circulating [cfDNA] and human kidney transplant recipient-derived circulating [cfDNA];
    (b) extracting circulating [cfDNA] from said plasma sample from said human kidney transplant recipient in order to obtain extracted circulating [cfDNA], wherein said extracted circulating [cfDNA] comprises said kidney transplant-derived circulating [cfDNA] and human kidney transplant recipient-derived circulating [cfDNA];
    (c) performing a selective amplification of target [DNA] sequences, wherein said selective amplification of said target [DNA] sequences is of said extracted circulating [cfDNA], wherein said selective amplification of said target [DNA] sequences amplifies a plurality of genomic regions comprising at least 1,000 single nucleotide polymorphisms, wherein said at least 1,000 single nucleotide polymorphisms comprise homozygous single nucleotide polymorphisms, heterozygous single nucleotide polymorphisms, or both homozygous single nucleotide polymorphisms and heterozygous single nucleotide polymorphisms, and wherein said selective amplification of said target deoxyribonucleic acid sequences is by polymerase chain reaction (PCR);
    (d) performing a high throughput sequencing reaction, wherein said high throughput sequencing reaction comprises performing a sequencing-by-synthesis reaction on said selectively-amplified target [DNA] sequences from said extracted circulating [cfDNA], wherein said sequencing-by-synthesis reaction has a sequencing error rate of less than 1.5%;
    (e) providing sequences from said high throughput sequencing reaction, wherein said provided sequences from said high throughput sequencing reaction comprise said at least 1,000 single nucleotide polymorphisms; and
    (f) quantifying an amount of said kidney transplant-derived circulating [cfDNA] in said plasma sample from said human kidney transplant recipient to obtain a quantified amount, wherein said quantifying said amount of said kidney transplant-derived circulating [cfDNA] in said plasma sample from said human kidney transplant recipient comprises using markers distinguishable between said human kidney transplant recipient and said kidney transplant donor, wherein said markers distinguishable between said human kidney transplant recipient and said kidney transplant donor comprises single nucleotide polymorphisms selected from said at least 1,000 single nucleotide polymorphisms identified in said provided sequences from said high throughput sequencing reaction, and wherein said quantified amount of said kidney transplant-derived circulating [cfDNA] in said plasma sample from said human kidney transplant recipient comprises at least 0.03% of the total circulating [cfDNA] from said plasma sample from said human kidney transplant recipient.

The District Court granted Natera's motion for summary judgment that the claims were invalid under Section 101 for lack of subject matter eligibility (the petition noting that the District Court characterized the state of Section 101 law as being "fraught, incoherent, unclear, inconsistent, and confusing, and indeterminate and often leading to arbitrary results"), and the Federal Circuit affirmed. The panel found that the claims failed the first prong of the Alice eligibility test for being directed to a natural phenomenon and failed the second prong of the test by reciting only conventional, well-understood, and routine methods that did not rise to the ineluctable "something more" required for eligibility. The Federal Circuit relied upon disclosure in the specification that was similar to the disclosure that supported the Court's affirmance of ineligibility in Ariosa v Sequenom, specifically that the disclosed methods applied to detect cfDNA specific for the transplanted organ were conventional, the panel citing the following disclosure from the '652 patent in support of their conclusions:

• col. 9 ll. 8–14, which stated that "[d]etection, identification and/or quantitation of the donor-specific markers (e.g.[,] polymorphic markers such as SNPs) can be performed using real-time PCR, chips (e.g., SNP chips), high throughput shotgun sequencing of circulating nucleic acids (e.g.[,] [cfDNA]), as well as other methods known in the art");

• col. 10 ll. 11–12, which stated that, to obtain cfDNA samples, "any technique known in the art may be used, e.g. a syringe or other vacuum suction device");

• col. 13 ll. 51–53, which stated that step 2 of claimed methods can be performed "using existing genotyping platforms know[n] in the art");

• col. 15 ll. 6–8, which stated that techniques recited in step 2 of claimed methods "can be accomplished through classic Sanger sequencing methods which are well known in the art");

• col. 13 ll. 58–61, which stated that "[c]ompanies (such as Applied Biosystems, Inc.) currently offer both standard and custom designed TaqMan probe sets for SNP genotyping that can in principle target any desired SNP position for a PCR based assay");

• col. 20 ll. 31–34 (stating that genotyping recited in claimed methods "may be performed by any suitable method known in the art including those described herein such as sequencing, nucleic acid array or PCR");

• col. 15 ll. 22–65 (discussing commercial high throughput sequencing products);

• col. 14 ll. 58–67 (citing articles from 2006 and 2007 as supporting the statement that "digital PCR is a much more accurate and reliable method to quantitate nucleic acid species");

• col. 18 l. 55–col. 19 l. 2 (stating that "[m]ethods for quantifying nucleic acids," including high throughput genotyping, "are known in the art"); and

• col. 21 ll. 5–9 (stating that "[t]he presence or absence of one or more nucleic acids from the transplant donor in the transplant recipient may be determined by any suitable method known in the art including those described herein such as sequencing, nucleic acid arrays or PCR").

(Despite this litany, the petition faults the District Court for relying on a sole statement in the specification that "the methods 'employ[], unless otherwise indicated, conventional techniques'" and disregarding the qualifier "unless otherwise indicated" in assessing the purported conventionality of the disclosed detection methods.) The opinion stated summarily that "[t]he claimed methods are indistinguishable from other diagnostic method claims the Supreme Court found ineligible in Mayo and that we found ineligible on multiple occasions," including Athena Diagnostics, Inc. v. Mayo Collaborative Servs., LLC, 915 F.3d 743 (Fed. Cir. 2019); Genetic Veterinary Scis., Inc. v. LABOKLIN GmbH & Co. KG, 933 F.3d 1302 (Fed. Cir. 2018); Roche Molecular Sys., Inc. v. Cepheid, 905 F.3d 1363 (Fed. Cir. 2018); Cleveland Clinic Found. v. True Health Diagnostics LLC, 859 F.3d 1352 (Fed. Cir. 2017); and Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371 (Fed. Cir. 2015).

The Federal Circuit's appreciation of the similarity to the Ariosa decision (which in some ways propelled the Court down this path of per se ineligibility) was express:

Here, as in Ariosa, the claims boil down to collecting a bodily sample, analyzing the cfDNA using conventional techniques, including PCR, identifying naturally occurring DNA from the donor organ, and then using the natural correlation between heightened cfDNA levels and transplant health to identify a potential rejection, none of which was inventive. The claims here are equally as ineligible as those in Ariosa.

Petitioner CareDx and Stanford argue in their certiorari petition that the District Court and the Federal Circuit erred in this conclusion of conventionality to distinguish this case from the earlier precedent, and assert as analytical error in the Federal Circuit's application of the Supreme Court test under Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66 (2012), and Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 573 U.S. 208, 217 (2014), consideration of conventionality (and thus Section 103 issues) in the first prong of the Mayo/Alice test.

The focus of Petitioner's argument is that the invention is an improvement on prior art methods that were ineffective, and that it is this improvement as expressly recited in the statute ("or any new and useful improvement thereof") that supports eligibility. According to this argument, this improvement distinguishes the invalidated claims from the natural phenomenon that cfDNA from a transplanted organ exist in a recipient's blood or that such cfDNA could be detected therein. The petition sets forth the history of efforts to detect organ rejection in transplant patients, from "invasive and expensive tissue biopsies from the organ" to detecting increased evidence of cfDNA in patients undergoing organ rejection, including cfDNA specific for Y chromosomes or human leukocyte antigen (HLA) gene fragments, none of which were effective "after ten year of unsuccessful attempts" and all of which were admitted prior art in the common specification of the patents-in-suit.

The petition emphasizes the specific technical solutions of "high-throughput" and "multiplex" sequencing coupled with digital polymerase chain reaction technology using single nucleotide polymorphism detection to identify transplanted organ-specific cfDNA in recipient blood. (These choices, the petition contends, are significant because the technologies were developed after the failed attempts by others and the targets, while not new, were not the targets used in earlier, failed attempts. It should not escape the reader's attention that these considerations are also ones relevant to non-obviousness.) The petition also notes that patentee disclaimed discovery of the natural phenomenon and preexisting methods for measuring it.

The petition's asserted reasons for the Court to grant certiorari frankly tell the Court that it "needs to take another Section 101 case" based on the Justices calling for the views of the Solicitor General five times in the past five years (citing Hikma Pharm. v. Vanda Pharm., Inc.; HP Inc. v. Berkheimer; Am. Axle & Mfg., Inc. v. Neapco Holdings LLC; and most recently in Tropp v. Travel Sentry, Inc. and Interactive Wearables, LLC v. Polar Electro Oy) and that the SG has counseled the Court that they should grant cert "in an appropriate Section 101 case." This, according to the petition, is that case, even more so that Interactive Wearables or Tropp. The reasons petitioner asserts in advocating for the Court to choose this case is that while it raises many of the same issues as in Tropp and Interactive Wearables, in this one "the problems are even worse." Those cases are abstract-idea cases which, the petition argues "have not been the source of considerable controversy." Not so application of the natural phenomenon eligibility exception in medical diagnostics claims, where the petition notes both the SG and the Federal Circuit have called for the Court's intervention (citing Athena Diagnostics, Inc. v. Mayo Collaborative Servs., LLC; Am. Axle & Mfg., Inc. v. Neapco Holdings LLC; Interval Licensing LLC v. AOL, Inc.). In those cases the circuit's judges have termed the subject matter eligibility question to be "baffling," leaving them "at a loss as to how to uniformly apply § 101," that it is "near impossible to know with any certainty whether [an] invention is or is not patent eligible," and that this situation "ha[s had] a serious effect on the innovation incentive in all fields of technology." Similar sentiments from district courts and the U.S. Patent and Trademark Office and former Directors of the agency are cited in support of this argument. The objective evidence for this state of affairs is the Federal Circuit's track record, wherein that Court has invalidated "every single diagnostic method patent it has encountered since Mayo[]." Moreover, the petition notes that the cumulative effect of the Federal Circuit's jurisprudence on subject matter eligibility for medical diagnostics claims is that these claims are virtually per se ineligible (including citations to Cleveland Clinic Found. v. True Health Diagnostics LLC and Roche Molecular Sys., Inc. v. CEPHEID along with those cases cited earlier in the petition). These decisions have "powerfully undercut[] the incentive to innovate and invest in life-saving medical diagnostics" consequently.

In addition, the petition argues that this case is one where the claimed invention was "on specific improved methods for measuring the relative proportion of the donor's DNA [that] ensures the absence of any preemption concerns" because "[p]atents that claim specific improvements upon preexisting processes for applying a previously known natural phenomenon cannot monopolize the underlying phenomenon itself, because other methods already exist to apply it and thus remain outside the scope of the patent." These circumstances, the petition states, provide the Court with an opportunity to "reinvigorate the role of Section 101's statutory text in a manner consonant with the preemption concerns that animate this Court's precedents." The petition notes in support for this argument that the Court has not considered the application of Section 101 to such improvements "upon a preexisting useful process" and that this case provides such an opportunity. The petition cites the Court's decision in Tilghman v. Proctor, 102 U.S. 707 (1880), as being consistent with these arguments by being "a particular mode of bringing about [a] desired result" (and perhaps being a basis for the Court to be persuaded by them). And petitioners emphasize that claims to such an improvement do not claim either a natural phenomenon nor preexisting methods which are expressly in the prior art.

Finally, the way the District Court and Federal Circuit considered issues of "conventionality" for both the first and second prongs of the Mayo/Alice test (the petition argues) was error needing Supreme Court correction. Concerns over the (im)proper application of conventionality in the Mayo/Alice test was voiced by the Solicitor General in Interactive Wearables with regard to Step 2 but is arguably more erroneous here according to the petition, where the lower courts relied on conventionality in both Step 1 and Step 2 (the Federal Circuit going so far as to state that it had "repeatedly analyzed conventionality at step one," citing Athena Diagnostics, Inc. v. Mayo Collaborative Servs., LLC and Universal Secure Registry LLC v. Apple Inc. in support of this practice). (This argument has greater force than the corresponding argument regarding Step 2, where considerations of conventionality go hand in hand with the Supreme Court's instruction for courts to search for an "inventive concept," although the petition bravely argues that such conflation of Section 103 issues in a Section 101 determination is equally improper.) The petition contends that the Federal Circuit's practice in this regard "collapses the entire Section 101 inquiry into 'a search for an inventive concept'" and "effectively conflat[es] Section 101 with the statutory requirements of novelty, 35 U.S.C. 102, nonobviousness, 35 U.S.C. 103, and enablement, 35 U.S.C. 112" (which while a persuasive argument for much of the patent bar may be less so for the Court, which has tended in earlier decisions to consider patent law with much less granularity; see Mayo). And petitioners assert that in doing so the Federal Circuit "circumvented important protections guaranteed by this Court's obviousness precedents under Section 103," citing Graham v. John Deere and KSR Int'l Co. v. Teleflex Inc. The petition characterizes the invention at issue here as being closer to an application of a law of nature as sanctioned by the Court's decision in Diamond v. Diehr than the invention in Mayo and notes that the Court held in Ass'n for Molecular Pathology v. Myriad Genetics, Inc. that "new applications of knowledge about" natural phenomena are patent-eligible.

Finally, the petition asks the Court "at a minimum" to hold the case until the Court has decided the outcome of the Interactive Wearables and Tropp cases.

The arguments in the petition thus thread a very narrow needle in giving the Court a reason to grant certiorari and emphasize (as has been emphasized before) the need to do so. Earlier in the petition the Court's attention is directed albeit somewhat obliquely to the "heav[y] investment CareDx made in bringing this technology to market" and the frankly infringing behavior of both Natera and Eurofin in bringing their own "copycat" products to market. Those hoping for a certiorari grant (and positive outcome) have reason for such hopes if the Court is listening to these circumstances and the importance and negative consequences to innovation in the medical diagnostic arts that the lower courts' interpretations of their subject matter eligibility jurisprudence has produced over the past decade.

Posted at 11:59 PM in Patentable Subject Matter, Supreme Court | Permalink | Comments (0)

April 06, 2023

Petition for Writ of Certiorari filed in DABUS AI-as-Inventor Case

By Aaron Gin --

Dr. Stephen Thaler, Ph.D., a computer scientist and inventor, has petitioned the Supreme Court of the United States to consider the question of whether the Patent Act restricts the definition of an "inventor" to human beings. The petition represents an opportunity for the Court to clarify whether an artificial intelligence (AI) can be an inventor under U.S. patent law.

The primary reasons provided by Thaler for the Court to grant certiorari include: 1) describing a conflict between the lower court decisions and the text of the Patent Act; 2) pointing out conflicts with prior Supreme Court jurisprudence; and 3) a policy argument highlighting the importance of patentability of AI-generated inventions in the U.S. and worldwide.

Thaler is the creator of DABUS (Device for the Autonomous Bootstrapping of Unified Sentience), which is a combination of multiple artificial neural networks. The various neural networks of the DABUS system were each programmed to represent discrete concepts such as "temperature", "enjoyment", or "survival." DABUS was then trained under external supervision from a human trainer to form short consequence chains, such as taking a drink at an appropriate temperature results in enjoyment. Subsequently, during an unsupervised activity, DABUS autonomously extended the consequence chains into longer, more-complex chains that resulted in positive outcomes.

Based on this architecture and training, Thaler claimed that DABUS autonomously developed two novel concepts: "Neural Flame," an emergency beacon that flashes in a desired pattern to attract the attention of rescuers, and "Fractal Container," a beverage container that improves grip and better regulates heat transfer to increase user enjoyment. These concepts formed the basis of two patent applications U.S. Application Nos. 16/524,350 and 16/524,532. Thaler filed the patent applications with the USPTO, listing the sole inventor as "DABUS" under "given name" and "Invention generated by artificial intelligence" under "family name" in an Application Data Sheet. Thaler also included a "Statement on Inventorship," which described some of the functional aspects of DABUS and argued why the AI should be considered as an inventor under the Patent Act.

The USPTO issued a Notice to File Missing Parts to amend the ADS. Through several rounds of petitions, Thaler asked the USPTO to vacate the Notice and provided further arguments. However, the USPTO pointed to numerous references to an inventor as a "person" in Title 37 of the Code of Federal Regulations and the MPEP definition of "conception" as "the complete performance of the mental part of the inventive act," and dismissed Thaler's request for reconsideration in a final written decision.

Thaler challenged the USPTO's decision in a suit filed against the USPTO in the Eastern District of Virginia. The District Court judge granted summary judgment for the defendant based on the plain statutory language of the Patent Act (35 U.S.C. §§ 100 and 115) and Federal Circuit (Univ. of Utah v. Max-Planck-Gesellschaft, 734 F.3d 1315 (Fed. Cir. 2013)) authority. Thaler appealed to the Federal Circuit, which affirmed the District Court in an August 2022 decision. In brief, the CAFC agreed that an inventor must be a human being, barring AIs from inventorship.

Through his counsel, Thaler filed the Petition on March 17, 2023. The case was docketed on March 21, 2023 as Supreme Court No. 22-919 and captioned "Stephen Thaler, Petitioner v. Katherine K. Vidal, Under Secretary of Commerce for Intellectual Property and Director, United States Patent and Trademark Office, et al." A response from the Director of the USPTO is due by April 20, 2023.

For additional information, please see:

• Supreme Court Docket No. 22-919
• Stephen Thaler v. Vidal; Petition for Writ of Certiorari

Posted at 11:59 PM in Inventorship, Supreme Court | Permalink | Comments (2)

April 03, 2023

The Supreme Court Grapples with Patent Enablement

By Kevin E. Noonan --

The Supreme Court heard oral argument in Amgen v. Sanofi last week in an extended session with argument from the parties and the U.S. government. Petitioner was represented by Jeffrey Lamken, Respondents by Paul Clement, and the Government by Colleen Sindak.

The Justices showed a great deal of interest, albeit with some difficulty, in making sure that they properly understood the complexity of the genus at issue. Justice Thomas, for example, began the Court's questioning by asking how many antibodies were invented, suggesting it was 26 and after Mr. Lamken explained that Amgen contended the actual number was about 400, the Justice said, "in other words, you can't say how many." Justice Thomas later returned to the question at the end of Petitioner's counsel's time requesting clarification. Justice Jackson also queried Mr. Lamken, who expanded on his answer to Justice Thomas by saying "we got 3,000 [antibodies], which were filtered down to 384 [antibodies]. The 26 [antibodies] are something different. The 26 are the ones where we went through and figured out the exact amino acid sequence and then listed them in the patent." He then drew the distinction that "there's a reason why you don't go and do 384 amino acid sequences for every one of them in the patent. Patent law has never required it, you go from the 3,000 to the 384 that bind the sweet spot and stop."

The answers to the question (depending on who was answering) was the 26 expressly disclosed (Respondent) to ~400 (Petitioner) based on the number Amgen isolated, with Respondent emphasizing the "millions and millions" allegedly falling within the scope of the claims (saying "the numbers don't lie"). Petitioner reminded the Court that these estimates included antibodies having "conservative substitutions" in the amino acid sequence expected to yield equivalent antibodies in structure and claimed function (calling them the "swapped amino acid species," Mr. Lamken said they were "99.99% identical and routine to make"). Regarding the conservative substitution species, Mr. Clement challenged the assertion that antibodies differing from the disclosed sequences by any amino acid sequence change could be assumed to be functional, saying "You have to go through that whole experimental process again to confirm that it binds in the right place" and referring the Court to Sir Gregory Winter's amicus brief in this regard. When asked by Justice Gorsuch, Mr. Clement stated that only the 26 identified antibodies were enabled. The Government agreed, stating that the only antibodies that were enabled were those for which Amgen had provided the amino acid sequence (indeed, when asked by Justice Gorsuch whether there was anything in Mr. Clement's argument the government disagreed with, Ms. Sindzak said there wasn't).

Missing from the argument was a reminder that, to the extent Amgen's genus claims can be analogized to a conventional pharmaceutical genus claim any particular, undisclosed antibody that is patentably distinct from the genus can be independently patentable and Amgen does not "own" those antibodies (although their patent may be a dominating patent).

The Justices asked both parties' counsel whether this was at root a factual issue, Justice Gorsuch specifically asking Mr. Lamken whether there were any disagreements of law other than the appropriateness of the cumulative effort test, and if not "why isn't this just a fact-bound dispute?" (Mr. Lamken responded in the negative, based on the Federal Circuit's "full scope" test wherein "it would be necessary to first generate and then screen each candidate antibody to determine whether it meets the double function limitations, that's a statement saying you've [sic] got to be able to make them all. That can't be right"). The Justice asked Mr. Clement whether there was any dispute on the law (as opposed to how the law had been applied to the facts at the Federal Circuit). Justice Kagan asked, "do you understand the parties now all to agree on the appropriate legal test, and are we simply arguing now about how that test applies in this case?" to which Mr. Lamken replied, "I think the parties all agree that the cumulative effort, the idea of reach the full scope, that that cannot be sustained." Mr. Clement was less sanguine on the scope of the parties' agreement, telling Justice Kagan that "there must be" disagreement on the law because Amgen's assessment is that it is enough to "consign people skilled in the art to Sisyphean tasks forever" in making the antibodies falling within the scope of the claim and "what skilled artisans want is not to randomly generate something within the broad range that's claimed, but they want to be able to pick a specific embodiment, not a hypothetical one, but a specific one" contrary to Petitioner's position.

As often happens in arguments before the Court, analogies abounded, with Petitioner arguing that James Watt did not need to disclose every possible embodiment of a steam engine to enable claims to one. Mr. Lamken's argument motivated Justice Thomas to remark that this case was perhaps more akin to claiming using steam pressure to produce mechanical work, much like Claim 8 in the Morse patent invalidated in O'Reilly v. Morse (i.e., using electricity to produce "writing at a distance"). Mr. Clement used as an analogy claims to paints of different colors, where if robin's egg blue paint was disclosed it would be enabled whereas it would not if the public needed to make mixtures of different dyes and wait to find one that produced that color. Even the Court (Justice Kavanaugh) raised the government's analogies in its brief to recipes for cake, bread, and stew. And later Ms. Sindzak analogized to knowledge by the skilled artisan that pine was not a suitable type of wood from which to make a baseball bat and thus a claim to making bats from wood would not be invalidated due to this one, art-recognized exception.

Two amicus briefs were discussed, one by Professor Lemley and the other by Sir Gregory Winter, the latter brief being sufficiently (potentially) persuasive on the underlying scientific facts that Mr. Lamken characterized it as "the functional equivalent of an expert report," while the Ms. Sindzak noted that in footnotes to two recent papers Professor Lemley had suggested that Amgen's claims could be invalid for non-enablement. Mr. Clement dismissed the Lemley brief by telling the Court the Federal Circuit had not invalidated all biotechnology claims on enablement grounds (citing Bayer Healthcare LLC v. Baxalta Inc.) and said the Justices should rely on the Winter brief "for the science." Mr. Clement posited that "it may be that in this particular area of antibody science given the current state of the science that you may not have an ability to functionally claim a genus, and that's kind of at some level nobody's fault, it's just the way the science works."

Mr. Clement also reiterated a line of argument from the Winter brief in suggesting to the Court that these claims could be considered an effort to make an "end run" around the Court's precedent in Assoc. Molec. Pathol. v. Myriad Genetics, insofar as the "sweet spot" in PCSK9 could not itself be patented under that precedent because it was naturally occurring (a clever way of persuading the Court against the claims outside the strict bounds of enablement law itself). Mr. Clement also took from the Winter brief the argument that the "roadmap" does not facilitate identifying antibodies falling within the scope of the claim because in addition to the routine experiments required to produce them it then "adds additional steps that somebody skilled in the art wouldn't want to do and are just basically an additional step, additional test they have to run to see whether they infringe, because the people skilled in the art don't really care where it binds. They care that it blocks." These steps "slow down others in the field" accordingly.

In his only engagement at any length, Justice Alito asked Mr. Lamken whether there was "something unique in this decision or has the CAFC been doing this all along? And if so, why now?" The response was that the Federal Circuit has shown a "basic hostility to the breadth of claims, and I think that this is basically the apogee, we've reached an endpoint where, frankly, the industry can't take it any longer because you can't invest $2.6 billion if the breadth of your claims is such that it means you can't get adequate protection because, if you cover everything you invented, then it's invalid because it's too hard to make them all." The Justice challenged this answer by asking whether the Federal Circuit's decisions had been inhibiting research for antibody-based pharmaceuticals and Mr. Lamken cited Professor Lemley's article (Dmitry Karshtedt, Mark A. Lemley & Sean B. Seymore, The Death of the Genus Claim, 35 HARV. J. L. & TECH. 1, 23-35 (2021)) in support of the assertion. Justice Alito also inquired whether the "roadmap" disclosed in the patents was not (just) a research plan to which Mr. Lamken responded the patent disclosed "these two new antibodies that didn't exist before our invention" and "they allow you to find everything that will bind to the sweet spot in PCSK9 because they cover it completely."

Justice Jackson evinced an appreciation regarding the burdens of proof below and the issue of whether the District Court and the Federal Circuit had properly overruled the jury determination that respondents had not satisfied the clear and convincing evidence standard. Mr. Lamken stated that the Respondents had not shown even one antibody falling within the scope of the claim that could not have been made using the "roadmap" in Amgen's specification. In reply Mr. Clement relied on the "millions and millions" of antibodies that fall within the scope of Amgen's claims and the amount of trial-and-error experimentation needed to produce them. In this regard Justice Gorsuch expressed agreement with Mr. Clement that the cumulative effort needed to produce all species in a claimed genus is not dispositive but a relevant consideration.

With regard to the relevance of the amount of effort it takes to practice the invention, Justice Sotomayor asked whether Mr. Lamken agreed with the statement in the Federal Circuit opinion that "It was 'appropriate' to look at the amount of effort needed to obtain embodiments outside the scope of the disclosed examples." The eventual answer from Mr. Lamken was that "if it said an embodiment, that would be correct. Embodiments means that you're looking at . . . what [the Federal Circuit] called reaching the full scope, and I think that is incorrect" and "the effort to make every single embodiment within the invention simply means that if you have an invention of any scope, it's not going to be enabled. There may be millions of ways to make the James Watts steam engine, but you're not invalidated simply because it would take a long time to make all of those different variants of the steam engine."

Several of the Justices asked what remedy the parties wanted (Justice Jackson frankly asking "what is the one thing we can do?") and how the Court would provide clarification in the law, the Chief Justice inquiring on the amount of disclosure that would be considered reasonable under the Court's Minerals Separation, Ltd. v. Hyde decision, Justice Gorsuch asking counsel about the continuing relevance of the Wands factors, and Justices Jackson, Alito, and Barrett inquiring on what could be considered undue experimentation. Mr. Lamken's responded to Justice Gorsuch that "at the very least, we should have a remand so that we try again under the proper standard without the reach the full scope standard or try to hypothesize how long it takes to make millions of antibodies and then test each of them." Justice Barrett asked "why" and Mr. Lamken stated that "the Federal Circuit could not possibly have gotten it right because of what I just read to you from [the record], where it looks at the effort to make each and every antibody of the potential millions" [and] "somebody who's trying to overturn a PTO-issued patent and two jury verdicts should at least say here's an actual antibody, an actual embodiment, that is difficult to make. It requires undue experimentation to get there." Justice Kavanaugh in a similar vein asked Mr. Lamken whether there was disagreement with any of the Court's precedent (counsel wisely responding "no").

Regarding the question of the undue experimentation standard, Justice Gorsuch asked Mr. Lamken whether he agreed that "a patent fails the enablement test if it would force a person skilled in the art to undertake undue experiment to produce the claimed invention?" (answer: "yes") and if the Wands factors were valuable in making an undue experimentation assessment. To this latter question Mr. Lamken responded that "the Wands factors can be useful in particular cases when properly applied" [but they have] "become something of a checklist that's abstracted and therefore replaces the ultimate statutory standard." To the Justice's question "do you agree that the broader the patent the more difficult it is to prove enablement" Mr. Lamken responded, "not necessarily" because "'harder' and 'broader' are not necessarily synonymous." And to Justice Jackson's question on finding undue experimentation as to a species, Mr. Lamken responded "if you just have a one-off that doesn't mean anything to skilled artisans, you're not going to invalidate the patent." The Justice then asked, "How many of these 'one-offs' can you have?" to which Mr. Lamken stated, "if you have so many that it means that you're searching for a needle in a haystack and you don't have instructions on how to do it so that it's --it is that trial and error for years on end, it's Edison and Consolidated Electric."

In his responses Mr. Clement gave full-throated voice to the opinion that "functional claims are terrible because the retard science," using Morse claim 8 and the patentee's position in Consolidated Electric v. Edison, but he also said he did not think the test should be "zero-tolerance" regarding at least "some" experimentation. In responding to Justice Alito, he stated that both "time and effort" and the nature of the effort were relevant and that if the claims had recited the amino acid sequences of the disclosed sequences there would have been no need for experimentation.

Ms. Sindzak spoke at considerable length compared with the brief expository remarks both Mr. Lamken and Mr. Clement made in their presentations. While the government's argument paralleled the respondent's, the assistant solicitor general emphasized the amino acid sequence as the "recipe" for an antibody, without which a claim is not properly enabled ("it really is that simple"). Ms. Sindzak asserted that it was dangerous to relax the enablement rules because the antibody field is unpredictable and there may be other unknown antibodies that "work[] better than everything else, or the one that's going to be tolerated by more patients or the one that's going to be cheaper to manufacture" (not considering independently patentable species). The government also referred to the doctrine of equivalents as the proper way under the statute to protect antibodies structurally indistinct enough from the expressly recited antibodies to be deemed infringing (a position advocated by at least one amicus brief). The Chief Justice posited that the doctrine might be less protective (something Mr. Lamken asserted in rebuttal) to which Ms. Sindzak responded that to the extent a patentee hasn't invented something "I don't think the doctrine of equivalents is going to get them things they haven't invented yet."

With regard to In re Wands, Ms. Sindzak stated that precedent cannot be relied upon because at the time antibodies were not defined by amino acid sequence but by functional properties and satisfied the enablement requirement by deposit. (Unmentioned was the fact that had Amgen deposited the 384 antibodies they would have been enabled at least those antibodies.) The government also agreed with Justice Kavanaugh that an affirmance would quell arguments that the Federal Circuit had erred and leave any further remedy to Congress. In response to Justice Gorsuch asking if you could, for example, every single time get a winner, then the fact that it would require a long time to get them all wouldn't -- wouldn't necessarily defeat a patent, would it?" Ms. Sindzak said "it can be relevant, and I think it can particularly be relevant if, for example, you figure out that . . . there's a million types of ammonia in the world and 10 of them . . . can be used instead of gasoline to run superefficient cars, right? But you don't know which 10, so you just claim the genus of ammonia that can be used to run cars, and then what you're saying is you have to go out there and try them. And you may actually have to try all a million of them so -- to get to those 10. And so there the cumulative effort is relevant because you're going to be there testing and testing and testing."

On rebuttal Mr. Lamken reasserted Petitioner's most straightforward argument, that "The key fact in this case is that Sanofi has not identified one antibody that would require undue experimentation to make."

Both the respondent's counsel (jokingly) and the assistant solicitor general (more earnestly) suggested that the Court dismiss the certiorari writ as having been improvidently granted (which the Petitioner's counsel warned would have the same consequence as an affirmance, mentioning that the PTAB had relied on the Federal Circuit's decision in two recent cases). The Justices' focus on the factual predicates of the case makes this outcome not as unlikely as it might otherwise be.

In view of the argument, if the Court does rule, it is likely to provide "guidance" (as requested by the petitioner) on the proper scope of the inquiry (without rejecting the "full scope" test per se) and send the matter back to the Federal Circuit on remand for reconsideration on that basis. This would be consistent with the Court's stance in other cases (Arthrex v. U.S. and Minerva Surgical v. Hologic, for example) and generally with its exercise of its role in supervising and where necessary (in the Court's estimation) correcting the Federal Circuit's application of U.S. patent law.

Posted at 11:24 PM in Enablement, Supreme Court | Permalink | Comments (1)

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