By Chris Holman
A couple days ago Dennis posted a nice review of the Federal Circuit’s recent decision in CareDx v. Natera, in which he emphasized the fact that the court characterized a number of boilerplate statements in the patent document as “admissions” that the various DNA analysis technologies recited in the claims, e.g., next-generation sequencing (“NGS”) and digital PCR, were “conventional” for purposes of step two of the Alice/Mayo framework. I decided to write this follow-up post to explain why, in my view, these “admissions” in the patent document did not affect the outcome in the case, and that these claims were doomed irrespective of the patent’s characterization of the technologies.
The reason these claims were deemed patent ineligible, in my view, is that they are directed towards a molecular diagnostic method, and, as Judge Moore bemoaned in her dissent from the Federal Circuit’s denial of en banc rehearing of Athena Diagnostics v. Mayo, 927 F.3d 1333 (Fed. Cir. 2019), the Federal Circuit’s current interpretation of the Supreme Court’s decision in Mayo v. Prometheus has “resulted in a per se rule that excludes all diagnostics from eligibility.” She notes that ‘[s]ince Mayo, we have held every single diagnostic claim in every case before us ineligible.” As such, the outcome in CareDx was, in my opinion, preordained. In fact, it would have been quite unexpected if the Federal Circuit had upheld the eligibility of the claims, given that in Athena Diagnostics all 12 of the judges that heard the case appeared to agree with Judge Moore’s assessment of the current state of affairs at the Federal Circuit regarding the eligibility of diagnostic claims of this type.
Athena Diagnostics is a very interesting decision for those of us concerned about the patent eligibility of molecular diagnostics. It resulted in eight separate opinions, in which all 12 of the judges who decided the case joined, in various combinations. Interestingly, as Judge Moore pointed out, ‘”[n]one of [her] colleagues defend[ed] the conclusion that claims to diagnostic kits and diagnostic techniques, like those at issue, should be ineligible.” In fact, my reading of the decisions is that all of the judges agreed that molecular diagnostics should generally be eligible for patent protection, and that the fact that they currently are not is a significant cause for concern.
There is a split of the court, however, with respect to whether the Federal Circuit has the ability to address the problem without an intervention by the Supreme Court or Congress. A seven judge majority (Lourie, Reyna, Chen, Hughes, Prost, Taranto, and Dyk) believes that the court’s hands are tied, and that Mayo dictates that diagnostic methods are patent ineligible. Judge Lourie, for example, wrote that the court could “accomplish little in [rehearing this case], as we are bound by the Supreme Court’s decision in Mayo.” Judge Hughes “agree[d] that the language in Mayo, as later reinforced in Alice, forecloses this court from adopting an approach or reaching a result different from the panel majority’s.”
In light of this interpretation of Supreme Court precedent, these judges thought it would be futile to take up the case en banc. For example, Judge Hughes wrote that, while he “agree[d] that the bottom line for diagnostics patents is problematic[,] this is not a problem that we can solve. As an inferior appellate court, we are bound by the Supreme Court.”
The five dissenting judges (Moore, O’Malley, Wallach, Stoll, and Newman), on the other hand, expressed the view that, in fact, Mayo had not rendered all molecular diagnostics patent ineligible per se, and that the Federal Circuit had erred in interpreting Mayo in this restrictive manner. Judge Newman, for example, found the “majority’s position [to be] a flawed interpretation of the Court’s decision in [Mayo]. The Court did not hold that methods of diagnosis are subject to unique patent-eligibility rules. We have mistakenly enlarged the Court’s holding, in substance and in application.” These five judges would have reheard the case en banc, allowing the Federal Circuit an opportunity to correct this perceived error, and opening up the door for the patenting of at least some molecular diagnostics.
Notably, two of the judges that decided CareDx, Lourie and Hughes, were part of the Athena Diagnostics majority that interpreted Mayo as requiring a finding of patent ineligibility for diagnostic claims of this type. The third judge on the CareDx panel, Judge Bryson, was a senior judge at the time Athena Diagnostics was decided, and did not participate in that decision.
In CareDx, the patent owner tried unsuccessfully to convince the court that the DNA analysis techniques specifically recited in the claims were “unconventional” enough to avoid the strictures of Mayo. While implicitly acknowledging that techniques such as PCR and DNA sequencing are conventional, CareDx basically argued that digital PCR and next-generation sequencing were sufficiently cutting edge at the time of the purported invention as to be not “conventional” for purposes of the Mayo two-part framework. But these techniques were apparently known to those of skill in the art at the time, and under the Federal Circuit’s current interpretation of Mayo I think the court would have found the use of any known method of DNA analysis to be lacking in the “inventiveness” required to meet the standard. While the “admissions” in the patent document provided a convenient route for the court to conclude that the methods were conventional, I think it would have arrived at the same conclusion regardless of any statements made in the patent, given that these techniques were presumably not novel at the time of invention.