Federal Circuit Oral Argument Addresses Utility for EST Patents
In re Fisher, Fed. Cir., No. 04-1465, 5/3/05 oral argument.
The patentability of genetic markers, known as “expressed sequence tags” or ESTs, was argued before the Federal Circuit at a May 3, 2005, oral argument lasting more than two hours. Reviewing a conclusion by the Board of Patent Appeals and Interferences that the patent applications failed to satisfy the utility requirement of 35 U.S.C. §101, the court struggled with the argument that the application must disclose the utility of thing marked, as opposed to the utility of the markers themselves.
Former Solicitor General Seth Waxman, of Wilmer, Cutler, Pickering, Hale & Dorr, appeared for Monsanto Corp., the real party in interest. He acknowledged that under Brenner v. Manson, 383 U.S. 519, 148 USPQ 689 (1966), proof of utility requires that the claimed subject matter must provide a specific benefit in currently available form. He argued, however, that this standard is met with disclosures of specific and practical uses of the markers, unrelated to the function of the genes to which they correspond. In this case, the claimed ESTs can be used as maize chromosome markers to produce statistical associations between the chromosome map and plant traits developed by traditional cross breeding techniques.
Judge Randall Rader observed that the claimed subject matter is simply code and the applicant can’t say what it does. Waxman replied that the tagging results have great importance, independent of knowledge of the genes themselves, for the discoveries that they make possible. But the statute refers to the utility of the claimed invention, not the utility of something the invention makes possible, Judge Rader answered. Why isn’t this matter determined by the PTO’s instruction in its Utility Guidelines as to when an invention is useful enough for patentability, he asked.
The PTO’s error is its focus on the function of the gene being marked, which is not relevant to the utility of the invention, i.e., the marker itself, according to Waxman. In addition, the PTO improperly interpreted the Brenner phrase “specific utility” to mean “unique utility.” On that basis, Waxman explained, it held that the asserted useful characteristics of the ESTs failed to satisfy the utility requirement because the claimed marking function is carried out by all other ESTs.
Isn’t this the equivalent of claiming a single page of a book in the middle of a library, Judge Rader asked. The library as a whole will be very valuable once it’s complete, but one page out of the library would not seem to be enough for a patentable invention, he observed. Replying to the metaphor, Waxman argued that the ESTs here can be used in ways having nothing to do with the library. The mapping is desired to establish a statistical correlation between identified sequences and plant traits identified by cross breeding, he explained.
But that means that every tag is patentable, Judge Paul Michel observed. Waxman agreed, explaining that the utility requirement is satisfied for every tag that is properly disclosed. What about the tags that are identified by computer with randomly generated code combinations, he asked, pointing out that the 32,000 sequences identified in this case is but a small subset of all that could be found in the maize genome.
Judge Rader followed up by asking how much weight to give administrative convenience in view of the fact that the PTO could be required to examine an avalanche of claims. Notwithstanding such factual circumstances, Waxman replied, the PTO is required to apply the correct rule of law. But the issue here is whether the claimed invention is useful, Judge Michel pointed out, which is a fact question, not a legal question; shouldn’t the decision on review for that reason be very deferential to the PTO’s determination? The error asserted here is legal error, Waxman replied. The term used by the Supreme Court is “specific utility,” which means “identifiable utility,” not simply “unique utility,” he argued. The PTO committed legal error by making its utility decision based on the fact that all other ESTs have the same use, and on the fact that the application disclosed nothing about the function of the marked gene, he explained. This was the wrong criterion for judging patentability, he concluded.
Appearing for the PTO, Associate Solicitor Stephen Walsh argued that the EST claims here fail to satisfy the utility requirement because they amount to little more that a starting point for future research rather than disclosing a specific, immediate and “substantial” utility.
But what about the argument that the utility requirement for marker inventions requires no knowledge about the marked gene or protein, Judge Michel asked? Walsh answered that Brenner may not require complete knowledge of everything about the gene, but it requires more than no knowledge at all. Why isn’t knowledge of a gene promoter sufficient, Judge Michel persisted. Fisher’s application disclosed no information about a specific promoter, according to Walsh, explaining that the promoter is only discovered upon use of the marker as a starting point.
Won’t the PTO’s test in this case discourage the disclosure that comes with patenting and drive inventors to trade secret protection, Judge Rader asked. That would essentially cut off later innovators from using that technology to make other important and valuable discoveries, he observed. Disclosures are important, Walsh responded, but the utility condition of patentability requires that the invention confer an immediate benefit. That may be, Judge Rader replied, but the PTO made its decision without knowing whether or not the invention provides a public benefit. The decision under these circumstances suggests that the driving factor was the administrative convenience related to the difficulty of examining the many marker claims, he observed. The decision was only an attempt to follow the Supreme Court’s utility rule, Walsh insisted.
Why can’t there be utility simply in the knowledge that the compound is present without respect to knowing anything about the benefit of the compound itself, Judge Bryson asked. Doesn’t the PTO argument mean that there must be an end product or end use to satisfy the utility requirement, Judge Michel added. Under Brenner, according to Walsh, a mere statement that a compound exists is no substitute for a disclosure of the compound’s benefit. The PTO has issued patents on probes where some things about the tagged microorganism were unknown, Walsh explained. However, those were cases where the probe was derived from the target microorganism, he said, and its features were reflected in the probe itself.
But where is the tilting point for showing sufficient utility, Judge Michel followed up. Is this an issue like pornography where you know it when you see it? Is something inherently unpatentable because it can only be used in a laboratory? Why isn’t the production of information useful in itself, Judge Rader added. Why isn’t evidence of a commercial demand for an EST sufficient to satisfy the utility requirement, Judge Bryson asked. Trying to respond to all of these questions, Walsh insisted that, even though they can be sold,
the tagged items are still only objects for study without any identified immediate benefit. Something does not become patentable merely because someone may want to buy it, he said, making a comparison to selling raffle tickets with no information about which ticket will pan out.
Does that mean that commercial success is utterly irrelevant to proof of utility, Judge Michel asked. Isn’t there anything about utility that can be inferred from a high selling price, Judge Bryson said. The selling price of a product is not relevant to the required immediacy of its benefit to prove utility, according to Walsh. It may not prove everything about utility, Judge Michel observed, but it may be relevant to show that markers are in demand to establish correlation of the marked gene and traits derived by cross-breeding.
Issues Not Addressed
Although the parties and the court explored the application of the Brenner utility decision, no one at the oral argument commented on the fact that Brenner reviewed a process claim to produce a known product (steroids), rather than a product claim as in this case. Brenner held that the utility of a claimed process is not proved without a showing of the utility of the produced compound. Justice Abe Fortas wrote as follows:
Until the process claim has been reduced to production of a product shown to be useful, the metes and bounds of that monopoly are not capable of precise delineation. It may engross a vast, unknown, and perhaps unknowable area. Such a patent may confer power to block off whole areas of scientific development, without compensating benefit to the public. The basic quid pro quo contemplated by the Constitution and the Congress for granting a patent monopoly is the benefit derived by the public from an invention with substantial utility. Unless and until a process is refined and developed to this point—where specific benefit exists in currently available form—there is insufficient justification for permitting an applicant to engross what may prove to be a broad field.
Neither party commented on whether the policy considerations articulated by Justice Fortas for process claims apply equally to product claims. In addition, the Brenner opinion directly addresses Judge Rader’s questions about the non-disclosure risks of disallowing patents and driving inventor’s to trade secret protection. Justice Fortas wrote as follows:
It is true, of course, that one of the purposes of the patent system is to encourage dissemination of information concerning discoveries and inventions. And it may be that inability to patent a process to some extent discourages disclosure and leads to greater secrecy than would otherwise be the case. The inventor of the process, or the corporate organization by which he is employed, has some incentive to keep the invention secret while uses for the product are searched out. However, in light of the highly developed art of drafting patent claims so that they disclose as little useful information as possible—while broadening the scope of the claim as widely as possible—the argument based upon the virtue of disclosure must be warily evaluated. Moreover, the pressure for secrecy is easily exaggerated, for if the inventor of a process cannot himself ascertain a “use” for that which his process yields, he has every incentive to make his invention known to those able to do so. Finally, how likely is disclosure of a patented process to spur research by others into the uses to which the product may be put? To the extent that the patentee has power to enforce his patent, there is little incentive for others to undertake a search for uses.