Guest post by Paul Cole, European Patent Attorney, Partner, Lucas & Co; Visiting Professor, Bournemouth University, UK.
New patent eligibility guidance issued by the USPTO (Andrew Hirshfeld, 4th March) will be the subject of a discussion forum this Friday 9th May.
Since the Kalo case, 333 U.S. 127 (1948) has been discussed in recent Supreme Court opinions including Chakrabarty, Myriad, and Mayo and is proposed to form the subject of an example forming part of that guidance, reflection on the true legal basis of the opinion is timely. Despite dicta in Chakrabarty and Myriad it is arguable that when viewed in its timeframe Funk concerned unobviousness not eligibility. If that view is correct, then the Kalo fact pattern should not be used as an eligibility example under current law.
The Kalo appeal was from a lengthy and careful opinion by Judge Walter C. Lindley in the Court of Appeals for the 7th circuit, 161 F.2d 981 (1947). At first instance the claimed subject matter which related to a composite culture of mutually non-inhibitive bacteria for inoculation of leguminous plants was held to be a product of nature and hence not patent-eligible. Judge Lindley reversed this finding in the following terms:
The mistake of the District Court, we think, lay in its conclusion that this did not amount to patentable invention within the meaning of the statute. Though the court recognized the value of Bond’s work, it thought that he had merely discovered a law of nature, whereas in fact the evidence is clear that what he discovered was that certain existing bacteria do not possess the mutually inhibitive characteristics which had previously prevented a successful commercial composite inoculant and that those uninhibitive species may be successfully combined. It was this contribution of noninhibitive strains which successfully combine that brought about a new patentable composition. This was application of scientific knowledge to things existing in nature and the utilization of them in a desirable composite product which had not been previously achieved but which he did achieve and of which the public now has the benefit.
We think this is clearly within the decisive definitions of patentable invention… Bond taught the method by which the composite is to be made and claims the product composed by that method, namely, a composite inoculant, comprised of different species of bacteria in sufficient numbers of each species. The noninhibitive property of bacteria was not previously known and when Bond discovered it and taught a successful composition of noninhibitive strains in combination of elements in one inoculant operating successfully on several different groups of legumes, he did much more than discover a law of nature. He made a new and different composition, one contributing utility and economy to the manufacture and distribution of commercial inoculants.”
A reader of Lindley is bound to wonder why such a conventional and straightforward opinion should have been selected for certiorari. An explanation of the significance of new effect in established patent law can be found as long ago as 1822 in Evans v Eaton 20 U.S. 356 (1822) and its evidential nature was explained by Justice Bradley in Webster Loom v Higgins
105 US 580 (1881), subsequently approved e.g. by Justice Brown in Carnegie Steel v Cambria Iron Co 185 US 402 (1902):
It may be laid down as a general rule, though perhaps not an invariable one, that if a new combination and arrangement of known elements produce a new and beneficial result, never attained before, it is evidence of invention.
The majority opinion of the Supreme Court Kalo decision was authored by Justice William O. Douglas.
His starting position was that a law of nature cannot be monopolised and he recognised the existence of the relevant non-inhibitory bacterial strains as an example of such a law. He went on to hold that invention must come from the application of the law of nature to a new and useful end and that the aggregation of select strains of the several species into one product was an application of the newly discovered natural principle. He acknowledged that there was advantage in the combination because the farmer need not buy six different packages for six different crops. He could buy one package and use it for any or all of his crops. The packages of mixed inoculants held advantages for dealers and manufacturers by reducing inventory problems, and the claimed subject-matter provided an important commercial advance.
Against this strong evidential background what was the basis for his reversal? A key to his reasoning may be found in his earlier opinion in Cuno Engineering Corp. v. Automatic Devices Corp., 314 U.S. 84 (1941) that (as the law then stood) novelty and utility were necessary but not sufficient requirements for patentability. In addition the claimed subject-matter had to reach the level of inventive genius that the Constitution authorized Congress to reward.
Several reasons supported the conclusion that the Kalo invention did not meet the standard of inventive genius. Each of the species of root nodule bacteria contained in the package infected the same group of leguminous plants that it always infected. No species acquired a different use. The combination of species produced no new bacteria, no change in the six species of bacteria, and no enlargement of the range of their utility. Each species had the same effect it always had. The bacteria performed in their natural way. Their use in combination did not improve in any way their natural function. They served the ends nature originally provided, and acted quite independently of any effort of the patentee. The claimed inoculant was not the product of invention unless invention borrowed from the discovery of the natural principle itself. It was hardly more than an advance in the packaging of the inoculants. Packaging was a simple step once the discovery had been made and all that remained were the advantages of the mixed inoculants themselves which were not enough.
The Funk opinion, amongst others, was relied on in Chakrabarty for the proposition that laws of nature, physical phenomena, and abstract ideas are not patent-eligible. As to the patentability of the Chakrabarty microorganism it was distinguished on the facts.
In Myriad Justice Thomas treated Funk as a patent-eligibility case, observing that the Bond composition fell squarely within the law of nature exception because the patent holder did not alter the bacteria in any way. Arguably such a position is inconsistent with the finding of Justice Douglas that the claimed product was an application of the principle discovered by Bond and hence implicitly patent-eligible. Classification of Funk as an unobviousness opinion accords with the reasoning of Justice Douglas whereas classification as an eligibility opinion is difficult to reconcile with his reasoning, especially against the background of his explicit reference to Cuno.
The USPTO example takes the position that the bacteria in Funk were not changed in any way, but that position is factually untrue. The naturally occurring bacteria have been the subject of a selection process to identify those strains that do not interfere, and the non-interfering strains have been cultivated and mixed. The claimed composition does not occur in nature, is produced by human intervention and has new utility. It is far from clear that the decision that was reached in 1948 would have been reached under the law as it exists post-1952 since the “flash of genius” test was rejected by Congress in favour of § 103.
For the above reasons it is submitted that the wiser course would be to delete Example D from the USPTO guidance.