Light at the End of the Tunnel? Expanding Concepts of What is Patentable Subject MatterDecember 26, 2018

Justice Warren Burger in the seminal case of Diamond v. Chakrabarty found that Congress had intended patentable subject matter to “include anything under the sun that is made by man,” holding that an engineered bacterium used in treating oil spills was patentable. Diamond v. Chakrabarty, 447 US 303 (1980). Yet interpretation of subsequent decisions on what is patentable by the US Patent Office has been criticized as overly restricting what can be patented and crimping innovation. Just this year court decisions and actions by the US Patent Office have offered hope for improved predictability and clarity especially as it relates to products of nature and abstract ideas and offers guidance on how to craft claims to avoid a section 101 rejection.

The issue is whether a claim attempts to patent an abstract idea that could be wholly performed in a person’s head or a law or phenomena of nature, which cannot be patented. 35 U.S.C. §101. In Mayo v. Prometheus Labs, 566 US 66 (2012) a method for optimizing dosage of drugs by measuring the level of metabolites in blood was found invalid. In Alice Corp. v. CLS Bank Int’l, 573 US ___ 134 S. Ct. 2347 (2014) a two-step analysis was presented.

As modified since Alice the steps are as follows.

Step 1:  are the claims directed to a process, machine, manufacture or composition of matter?

If no, it is not patentable.

If yes, Step 2a asks: is it an abstract idea, law of nature or product of nature? If the answer is yes, Step 2b asks if the claim recites something “significantly different” or “significantly more” than the judicial exception to patentability.

The 2b step is by its nature fraught with subjectivity and faced varying analysis as to whether the standard is met. In 2014, new US Patent Office guidelines presented gunpowder as an example of non-patentable subject matter. Among the organizations calling for legislation to address subject matter eligibility interpretation is the American Bar Association Intellectual Property Law Section (Letter of March 28, 2017), the Intellectual Property Owners group (IPO Daily News, January 2017) and the American Intellectual Property Law Association AIPLA (May 2017).

While these efforts continue, court decisions and recent efforts by the USPTO Director have provided tools to combat such rejections and a hint of relief to come.

In a decision this year, the Federal Circuit held that a diagnosing method was patentable in reciting an administration step. The patent in question was to a method of treating schizophrenia patients with iloperidone. The dosage is adjusted to avoid adverse cardiac impact by determining if the patient has lower activity of a gene called CYP23D6. Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals Int’l, 887 F.3d 1117 (Fed. Cir. 2018). It distinguished the diagnosis claim of Mayo, saying that claim was not directed to a new method of treating a disease but to a diagnostic method. Here, the claims do not “tie up the doctor’s subsequent treatment decision” but recite a dosage regimen. Id .at 1135. It also noted that in the Myriad decision, which found naturally occurring DNA to be unpatentable products of nature, even if isolated, the Supreme Court was careful to state method claims were not implicated in its decision (citing Ass’n for Molecular Pathology v. Myriad Genetics, Inc. 569 U.S. 569, 580 (2012)). Also this year, the Federal Circuit stated that simply because steps are known does not necessarily mean they are conventional. Exergen Corp. v. Kaz USA, Inc. 2016-2315, 2016-2341 (Fed Cir. 2018) (nonprecedential). It upheld in part, reversed in part and remanded a lower court decision that a body temperature detector calculating core temperature by applying an algorithm to temporal artery readings from swiping across the forehead was not eligible. While it applied laws of nature, the Court found the combination to meet the “significantly more” needed to be patentable. Importantly, the Court observed the steps were known but never combined in this matter, adding, “Something is not well-understood, routine and conventional merely because it is disclosed in a prior art reference.” Id. at 10. It confirmed its earlier holding in Bascom that a method of filtering internet content was not conventional or generic. Bascom Glob. Internet Srvs., 827 F. 3d , 1341, 1350 (Fed Cir. 2016). The Court there found unconventional applications of known concepts overcame a finding of subject matter ineligibility. Further changes are ahead in how patent examiners analyze eligible subject matter issues as revealed by the US Patent Office Director Iancu in September address. He says the Office is working on revised patent eligibility guidelines and his comments reflect he aims to keep subject matter analysis separate from obviousness. Recognizing that there is a need for more predictability, he says the guidelines will list exceptions to patentability and if the claims do not fall within that list, the section 101 analysis ends. His basic concerns are abstract ideas, such as mathematical concepts; methods of organizing human interaction; pure mental processes (such as an observation) and pure discoveries of nature (such as gravity, etc.).

If the claims fall within the exceptions, claims are reviewed to determine if in addition to the exempted matter, claims are directed to “significantly more” and refers to the Berkheimer memo.

This critical 2018 memo from the Office represented a change in what examiners can rely upon when finding that the “significantly more” standard is not met. Previously, an examiner could rely upon his or her own expertise in the art to find the significantly more addition is routine and conventional and fails step 2b. Instead, the Office said evidence may be required from the examiner to support the conclusion and that evidence is limited to: 1) a statement in the application specification or made during prosecution; 2) a court decision; 3) a publication; or 4) by the examiner taking “official notice” of a fact. However, the memo continues, simply finding elements in a single patent or publication is insufficient absent demonstration that such elements are widely prevalent or in common use in the field. Further, if the examiner is challenged on taking official notice, the examiner must present evidence.

New case law, Patent Office memos and promises of new guidelines hold hope that predictability may return to section 101 analysis. Indeed, in the Berkheimer memo, the Office made note that, “The USPTO recognizes that unless careful consideration is given to the particular contours of subject matter eligibility…it could ‘swallow all of patent law.’” By putting the burden on the examiner to demonstrate a significant addition has not been made, the Patent Office returns to the roots of patent law, that “anything under the sun” made by the hand of man is patentable.

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