I thought I would send out this holiday greeting before everyone escapes from the office. Let us hope that next year is filled with love, good friends and beneficial inventions. – Dennis Crouch
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By Jason Rantanen
Some of the most touted changes of the America Invents Act are its modifications to ex parte and inter partes reexaminations, modifications that are intended to fine tune these post-grant review mechanisms. Both ex parte and inter partes reexam requests have been on the rise for the past decade, as shown by the following two graphs:
Inter partes reexaminations, in particular, saw a dramatic increase in popularity over the last few years.
The above data may paint an overly rosy picture of reexams, however. Especially with respect to inter partes reexams, I am dubious that their rapid growth will continue. One of the AIA's most significant changes to inter partes reexams (inter partes review starting on September 16, 2012) is to raise the standard for successfully initiating a reexam from "a substantial new question of patentability" to "a reasonable likelihood that the requester would prevail." This change took effect when the AIA was enacted, and may lead to a decrease in the number of inter partes reexam requests filed – or at least, a slowing down of the rapid growth in this area.
Inter partes reexam requests may also plateau for another reason. The PTO reports that 70% of the patents involved in inter partes reexams are known to be in litigation. If the initiation of re-exams is largely a function of litigation, there is a soft cap on the number of potential reexams that will be initiated. In addition, AIA limitations on inter partes reexam requests involving patents that are the subject of infringement litigation, although easily avoided with foresight, may have a depressing impact on the number of requests filed.
Source data for reexams: http://www.uspto.gov/patents/stats/Reexamination_Information.jsp
The above graphs are corrected from an earlier version. The original graphs treated the PTO's fiscal year as running from January to December. It runs from October of the preceding year to September of the identified year.
As the following chart demonstrates, provisional patent applications are increasingly relied upon by US patent applicants. More than 1/3 of recently issued utility patents of US-origin claim priority to at least one provisional application. (Here, I defined US-origin as patents that do not claim priority to any prior foreign or international applications). Of applications that claim provisional priority, most (~80%) claim priority to only one provisional application.
I have written previously that provisional applications are serving their intended role of adding 1-year delay to the prosecution process. By design, the US 20-year patent term does not begin until the filing of a subsequent non-provisional application. Thus, a provisional application has the dual benefit of (1) establishing an early priority date for patentability while (2) shifting the patent term one-year later.
For the cumulative frequency chart below, I created a dataset of about 165,000 patents that have issued since January 2005 and that claim priority to at least one provisional patent application. For each patent, I identified the number of days between the filing of the earliest provisional application and the subsequent non-provisional application. According to the Patent Statute, a non-provisional application must be filed by the 12-month deadline or else be deemed abandoned. About 40% of the non-provisional applications were filed within one day of the 12-month deadline. About 70% were filed within two-weeks of that deadline.
The following excerpt comes from Professor Robin Feldman's forthcoming Harvard University Press book Rethinking Patent Law which will be released in 2012. The excerpt is reproduced with permission from Harvard and Professor Feldman.
Looking from the perspective of preemption can be helpful in developing an approach to many of the questions generated by the emerging field of personalized medicine. Personalized medicine is an area of applied research devoted to developing tests that operate on biological and clinical data from a patient (e.g., protein levels, genetic mutations, medical history) to provide diagnoses, prognoses, and treatment regimens specific to the patient. Cases arising in this field include LabCorp, which concerned correlating elevated homocysteine levels with certain deficiencies, and Prometheus, which concerned determining metabolite levels after administering a particular class of drugs for gastrointestinal disorders and adjusting the dosage of the drug based on the metabolite levels.
As discussed earlier, the Federal Circuit's decision in Prometheus seemed to suggest that most life science inventions would satisfy the requirements of patentable subject matter, while the PTO's application of Prometheus could lead to the rejection of numerous inventions in this arena. Neither extreme is necessary if one focuses on preemption of laws of nature and natural phenomena as the primary concern.
For example, LabCorp was a relatively simple application of personalized medicine. It involved one biomarker and a reasonably straightforward correlation for treatment. In contrast, most personalized-medicine diagnostics are developed using whole genome expression or sequencing arrays to identify hundreds or even thousands of biomarkers that can be used to diagnose a specific disease state. The machine learning algorithms used to identify these markers do not operate on statistical concepts as simple as linear correlation, which for some of us is complicated enough. Machine learning algorithms employ statistical models to identify different combinations or "patterns" of markers that correlate with a specific disease state. Usually these markers are selected and statistically modeled to compensate for human genetic and environmental variation.
Thus, most personalized-medicine programs are tremendously complex compared even to logistic regression and other simple forms of statistical analysis. They are not simply a reflection of a natural phenomenon; they are an interpretive model of nature. Nor are they analogous to or preemptive of human thought. It would be quite improbable for a physician to be able to sit down with a pen and paper and work out a diagnostic by applying a machine learning algorithm or logistic regression to hundreds of biomarker levels.i
Consider the first person who discovered that human chorionic gonadotropin (hCG) levels indicate pregnancy when they are elevated above a certain level, and assume that the inventor also created a home pregnancy test for measuring the hCG. One could think of this as a simplistic personalized diagnostic device in which a particular nongenetic marker is measured to identify a state of health. The inventor could certainly patent the kit, which would consist of the physical device with its particular components. The inventor should not, however, be allowed to patent the process of testing human urine for an elevated level of hCG and correlating that level with the state of pregnancy. The core of the invention, the fact that hCG above a particular level confirms pregnancy, is a simple reflection of nature rather than an interpretive model. To understand the difference, compare the process of measuring one marker by looking for a simple level to the average personalized invention. The modern personalized invention may utilize hundreds of biomarkers analyzed by means of statistical patterns. Even if the complex process involved in identifying the relevant biomarkers yields a limited number of biomarkers to consider for a relevant patient, that information does not relate directly to anything. For example, with a personalized medicine invention involving only a few biomarkers, each of those markers generally has confidence intervals assigned to indicate the likelihood that the presence or absence of a factor or the particular level of that marker will translate into a particular diagnosis or successful treatment. Once biomarkers are collected from a relevant patient, they must be processed by statistical modeling to determine how the various factors and confidence levels for this particular patient should be interpreted. The complexity and variability of individual humans ensures that a model like this can never be a simple reflection of nature. Rather, it is no more than an interpretation of nature, albeit one that is extremely important in the treatment of a specific disease.
In contrast, the inventor of the method of measuring hCG is looking at only one marker, and it is a marker that is elevated in the same range for pregnant women in general. Thus, it requires no complex modeling and is a direct reflection of a phenomenon of nature. As a result, it would not be patentable subject matter on the grounds that the core of the invention is no more than the discovery of a natural phenomenon.
The hCG invention should also fail on the grounds that performing the test is no more than a mental step. The method does not require complex computer analysis to interpret the data; it requires observing a particular level of a substance and reaching a conclusion from that level. Preventing human beings from looking at information and concluding something threatens to preempt simple thought.
Personalized medicine, with its marriage of biology and computer technology, provides a wonderful opportunity to understand and tease out some of the threads of patentable subject matter. These inventions demonstrate how early misconceptions about the nature of computer programs and the nature of mathematics are causing problems in modern case law.ii
Part of the difficulty can be traced to confusion between the content of something that is being expressed and the language in which it is expressed. For example, we know that laws of nature are not patentable. Some of these laws are familiar to us in the formulaic language in which we normally see them expressed. Most people, for example, would recognize one of Einstein's laws of physics expressed as E = MC2. One could express that same law in prose, however, rather than formulaic language by explaining the way in which matter and energy are interchangeable.
The choice of language is irrelevant.iii We disallow patenting of E = MC2 not because it is expressed in mathematical form but because it represents one of the building blocks of scientific exploration and endeavor. Patenting that law would preempt scientific exploration by occupying a basic concept.
In addition to laws of physics, other things can be expressed in formulaic language. Expressing something in formulaic language, however, does not mean that what is being expressed is a law of nature. Thus, the fact that computer programs are expressed in a formulaic language that looks somewhat like math to the layperson does not mean that the concepts underlying a particular program are analogous to math, let alone analogous to a law of nature. Two things expressed in the same language or the type of same language are not necessarily analogous. Comic books and the Constitution are both expressed in the English Language, but they are hardly analogous. Our focus should remain on the content of what is being expressed and on the preemptive effect that might result from patenting that type of content.
Some unfortunate language in the Supreme Court's Diehr opinion, which flows from this misperception, makes it more difficult to properly separate software claims that should be patentable from ones that should not. In searching for logic to explain why the rubber-molding invention at issue was patentable while other apparently similar inventions had failed, the Court made the following comment: "A mathematical formula as such is not accorded the protection of our patent laws, and this principle cannot be circumvented by attempting to limit the use of the formula to a particular technological environment."iv
Other courts have jumped on the language to declare that so-called field of use restrictions cannot save software patents.v Even the recent Supreme Court opinion in Bilski wandered into the same territory when referencing its earlier decision in Flook:
Flook established that limiting an abstract idea to one field of use . . . did not make the concept patentable. That is exactly what the remaining claims in petitioners' application do. These claims attempt to patent the use of the abstract idea of hedging risk in the energy market and then instruct the use of well-known random analysis techniques to help establish some of the inputs into the equation. Indeed, these claims add even less to the underlying abstract principle than the invention in Flook did, for the Flook invention was at least directed to the narrower domain of signaling dangers in operating a catalytic converter.vi
It is true, as a general matter, that if one were to claim a law of nature, the claim would not be rendered patentable by limiting use of that law of nature to a particular field. Thus, for example, an inventor could not save a claim to all uses of E = MC2 by limiting the claim to "all uses of E = MC2 in the construction field."
Sliding the analogy over to software, however, involves logical errors. The logic that appears to have been used is the following. Computer programs are mathematical formulas, and mathematical formulas are laws of nature. We know that laws of nature cannot be rendered patentable by limiting their application to a particular field of use. Computer programs, therefore, cannot be rendered patentable by limiting their application to a particular field of use.
This sequence contains a number of logical errors. Computer programs may be expressed in a language that looks like math, and some do involve calculations, but they are not necessarily analogous to mathematical formulas. Most important, they are not analogous to natural laws just because both are expressed in formulaic languages. One must look to the content of the computer program and its potentially preemptive effect to determine patentability.
As described earlier, the term "algorithm" in computer science means a series of steps performed on input data by a computer. This process may or may not raise preemption concerns. Some computer "algorithms" are based on properties inherent in types of input and output data. Such broad, generic algorithms, which can be used on a variety of types of input data, may raise threats of preemption. In other words, if an inventor asks for a patent on a software program that works with whole sets of numbers or entire types of data, such a patent would not be patentable subject matter. Particularly in light of the bargaining potential that would come with such a grant, the patent would risk tying up entire types of data rather than constituting something applied.
This does not mean that all software is unpatentable. Claims to programs that are applied to a specific type of data in the pursuit of particular types of outputs do not present the same level of preemption threat. For example, a personalized medicine algorithm (i.e., series of steps) that employs a specific type of statistical model using a fixed set of markers to produce a very specific diagnosis would not threaten to preempt other methods of performing the same diagnosis that use different markers or novel types of statistical models. Such an invention should be patentable.
Computer programs may be many things, including methods of creating useful models of the world around us, methods of providing interpretations of information, and methods of sorting information. When methods of creating a particular type of model are described at a very general level, they may threaten to preempt the broad activity of exploration. However, when claimed at the level of a specific method of sorting a particular type of information for a particular pursuit, they should constitute an applied invention. Such specificity is the hallmark of what separates unpatentable abstractions from applications of those abstractions in the useful arts in a way that is worthy of patent protection.
* * * * *
i One scholar has suggested that even LabCorp could have survived as patentable subject matter if the claims drafter had chosen a narrower description. See Patricia Dyck, "Post-Bilski Personalized Medicine: At Home on the Range" (forthcoming) (manuscript on file with author) (presenting an empirical survey of the most frequently claimed biomarkers in personalized medicine and discussing problems in allowing claims for sets of biomarkers that are small and not limited to the diagnosis of a specific disease state or condition).
ii I have discussed some of the misconceptions described here in the context of patenting genes. See Feldman, "Whose Body Is It Anyway?" 1400–1402.
iii One could easily argue that all math is invented. It is a human-made method of imposing order and structure on the natural world. For an interesting and accessible discussion of Wittgenstein's view that all mathematics is a human invention and various responses to that argument, see Ludwig Wittgenstein, Wittgenstein's Philosophy of Mathematics §3.1, http://plato.stanford.edu/entries/wittgenstein-mathematics.
iv Diamond v. Diehr, p. 191 (citation omitted).
v See, e.g., In re Bilski, p. 957 (noting that mere field-of-use limitations are generally insufficient to render an otherwise ineligible process claim patent eligible).
vi Bilski v. Kappos, p. 3231.
The prosecution timeline for design patents continues to be relatively fast. For both 2010 and 2011, the majority (54%) of design patents issued within one year of the application filing date. The most common delay in issuance is due to some error in the drawings leading to a 31 U.S.C. 112 issue. Very few design patent applications are ever rejected on prior art grounds. Apple's design patents have been at the center of its lawsuit against Samsung. As I wrote in an article a few years ago, design patents are really being used as an overlay for trade dress protection.
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Guest Post by Megan M. La Belle, Assistant Professor at Catholic University of America, Columbus School of Law.
Last Wednesday was an eventful day for patent cases at the Supreme Court. In addition to oral arguments in Mayo v. Prometheus, the plaintiffs in Ass’n for Molecular Pathology v. USPTO (Myriad Genetics) – another high-profile case concerning patentable subject matter – filed their petition for a writ of certiorari. The petition presents two questions. Predictably, the first question addresses the limits of patentable subject matter and asks the Court to decide whether human genes are patentable. The second and less obvious question focuses on plaintiffs’ standing to sue. Specifically, the petition asks: “Did the court of appeals err in adopting a new and inflexible rule, contrary to normal standing rules and this Court’s decision in MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007)….?” Some might be surprised that plaintiffs are challenging standing, since the Federal Circuit held the Myriad case justiciable and decided it on the merits. Yet, as I argue in Standing to Sue in the Myriad Genetics Case, 2 Cal. L. Rev. Circuit 68 (2011), the Federal Circuit’s decision in Myriad raises compelling questions about standing in patent declaratory judgment actions that warrant the Court’s attention.
In MedImmune, the Supreme Court held that there is standing to bring a patent declaratory judgment action if “the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” In announcing this all the circumstances standard, the Court criticized the Federal Circuit’s longstanding bright line test for standing, which required plaintiffs to show that: (1) the alleged infringer had a reasonable apprehension of suit at the time it filed the action; and (2) the alleged infringer is conducting infringing activity or has made meaningful preparations toward conducting infringing activity.
Initially, the Federal Circuit responded to MedImmune by abandoning its bright line test and announcing that it would use the all the circumstances standard instead. More recently, however, the Federal Circuit has backpedaled. In Prasco, LLC v. Medicis Pharm. Corp., 537 F.3d 1329 (Fed. Cir. 2008), the Federal Circuit held that “proving a reasonable apprehension of suit is one of multiple ways that a declaratory judgment plaintiff can satisfy the more general all-the-circumstances test.” Similarly, in Cat Tech LLC v. Tubemater, Inc., the court concluded that plaintiffs still must satisfy the second prong of the old test – i.e., the “meaningful preparations” prong – to establish standing. And finally, with its decision in Myriad, the Federal Circuit has come full circle and is evaluating standing in patent declaratory judgment actions according to a bright line test that is strikingly similar to the one utilized before MedImmune.
In Myriad, twenty plaintiffs filed a declaratory judgment action asking the court to declare certain gene patents invalid. The trial court held that all twenty plaintiffs had standing. On appeal, the Federal Circuit affirmed there was standing to sue, but only as to one plaintiff – Dr. Harry Ostrer – and on far narrower grounds. The Federal Circuit concluded that Dr. Ostrer was the only plaintiff who had suffered an injury-in-fact, a prerequisite for standing in federal court. In reaching this conclusion, the Federal Circuit claimed to be following MedImmune, yet in reality it had applied a bright line rule:
[T]o establish an injury in fact traceable to the patentee, a declaratory judgment plaintiff must allege both (1) an affirmative act by the patentee related to the enforcement of his patent rights, and (2) meaningful preparation to conduct potentially infringing activity….
Myriad, 653 F.3d at 1344. The Federal Circuit then found that none of the other plaintiffs had standing, either because they failed to allege “affirmative patent enforcement actions directed at them by Myriad,” or because they had not made “meaningful preparation to conduct potentially infringing activity.”
This return to a formalistic test for standing in patent declaratory judgment actions not only violates the letter and spirit of MedImmune, but it is problematic because it makes it more difficult for plaintiffs to challenge potentially bad patents. For years, the Supreme Court has adopted flexible legal standards that facilitate lawsuits brought by parties challenging patent validity, in view of the public benefit created when bad patents are eliminated. More recently, Congress and the President have signaled their intent to encourage patent validity challenges by enacting the America Invents Act, which provides for certain post-grant review proceedings. Yet, despite these strong messages, the Federal Circuit has heightened the standing requirements and created a procedural bar for many alleged patent infringers. Although the Supreme Court addressed this standing question just a few terms ago in MedImmune, it seems the Court needs to remind the Federal Circuit of the purpose of declaratory relief and its essentiality to a well-functioning patent system.
Guest post by Paul Morgan
Recent patent legislation has removed almost all of the prior dangers of miss-marking products with patent numbers, including fully removing any risk of leaving expired patent numbers on products. (The new 35 U.S.C. § 292 is reproduced below). Yet the significant potential advantages for infringement damages recovery by marking products under 35 U.S.C. § 287, etc., remain. Patent owners who do not mark their products are prevented by §287 from recovering any damages for any of the infringements occurring prior to serving an actual, specific, notice of infringement, or bringing suit. (As a caveat, products that only “use” a patented process need not be marked under §287).
Also, marking can aid assertions of “willful” infringement – resulting in enhanced damages. Likewise, marking has the potential of aiding in establishing “inducing” infringement assertions.
Under the new statute, “virtual” marking can now be used which is easily maintained or changed and does not require product mold or tooling changes.
So, now is the time for client counseling on the reconsideration of patent marking policies by many companies. Especially those companies that had previously marked some of their products but had stopped due to the recent plague of costly mass-marking-trolls-litigation, now ended by the AIA.
Note: Of course deliberately or recklessly marking a product with a patent number that does not apply to any part of that product is still unwise. It can be potentially indirectly prejudicial for patent enforcement, FTC complaints, etc., even if competitors, or the government, cannot prove any actual damages occurred from that kind of deliberate miss-marking.
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35 U.S.C. 292
(a) Whoever, without the consent of the patentee, marks upon, or affixes to, or uses in advertising in connection with anything made, used, offered for sale, or sold by such person within the United States, or imported by the person into the United States, the name or any imitation of the name of the patentee, the patent number, or the words “patent,” “patentee,” or the like, with the intent of counterfeiting or imitating the mark of the patentee, or of deceiving the public and inducing them to believe that the thing was made, offered for sale, sold, or imported into the United States by or with the consent of the patentee; or Whoever marks upon, or affixes to, or uses in advertising in connection with any unpatented article the word “patent” or any word or number importing the same is patented, for the purpose of deceiving the public; or Whoever marks upon, or affixes to, or uses in advertising in connection with any article the words “patent applied for,” “patent pending,” or any word importing that an application for patent has been made, when no application for patent has been made, or if made, is not pending, for the purpose of deceiving the public – Shall be fined not more than $500 for every such offense. Only the United States may sue for the penalty authorized by this subsection.
(b) A person who has suffered a competitive injury as a result of a violation of this section may file a civil action in a district court of the United States for recovery of damages adequate to compensate for the injury.
(c) The marking of a product, in a manner described in subsection (a), with matter relating to a patent that covered that product but has expired is not a violation of this section.
In its annual Performance and Accountability Reports, the USPTO publishes a statistic identified as the "Pendency time of average patent application." The reports describe the figure as the "average time (in months) between filing and issuance or abandonment of utility, plant, and reissue applications. This average does not include design patents." I have charted the PTO's reported average pendency below in the first chart. The chart shows that for 2011, the PTO was successful in keeping average pendency under three years.
Unfortunately, the PTO's numbers are somewhat misleading. The main technical problem with the USPTO numbers is that any request for continued examination (RCE) is counted as an abandonment of an application and a refilling of a new application. Thus, an application that remains pending for four years before issuance and that includes an RCE filing will be counted in the PTO calculations as two applications with an average two-year pendency. The PTO reporting also includes other application "reworkings" such as continuation applications and divisional applications that tend to be processed somewhat faster than original non-provisional applications.
The chart below adds two additional pendency calculations: One calculation ignores RCEs in the pendency calculation – looking instead at the time from non-provisional filing to issuance. Thus, under my calculation, an application that remains pending for four years before issuance and that includes an RCE filing will be counted as one application with a four-year pendency. The second calculation also ignores RCE filings and additionally limits the data set to only original non-provisional applications (excluding continuations, divisionals, and CIPs). As expected removing the RCE artifact from the data adds considerably to the average pendency. (Note here that my chart is lacking because it does not include statistics for pendency of abandoned applications.)
The final chart shows a pendency histogram for patents issued in October and November of 2011 (again ignoring RCE filings). The median pendency is 3-4 years. 98% issued within nine years of filing.
By Denise W. DeFranco of Finnegan, Henderson, Farabow, Garrett & Dunner, LLP.
The decision in Mayo v. Prometheus is sure to be a close one, perhaps even a 5-4 decision, like many other Supreme Court's decisions concerning patent eligibility under section 101 of the patent statute. The outcome of the case will probably turn on two fundamental issues about which the justices wrestled throughout the oral argument.
1) After recognizing the "hornbook law" that a law of nature is not eligible for patent protection, but that the application of a law of nature is, Justice Breyer inquired as to how much needs to be added to a claim to transform it from an unpatentable law of nature to a patent-eligible application of a law of nature. Justice Breyer and others seemed concerned that Prometheus's patent claim simply recites an "observation" of a law of nature, which may not be enough. In response, Prometheus's counsel argued that Prometheus's claims include limitations beyond the mere observation of the natural phenomenon, namely that a particular drug be administered to a patient and that the level of metabolites in the patient's bloodstream be measured. The Supreme Court's decision may ultimately turn on whether limitations like those are adequate to transform a law of nature into an application of a law of nature.
2) Many of the justices wrestled with the question of whether an analysis under section 101 of the patent statute should involve at least a "quick peek" at the issues of novelty and non-obviousness under section 102 and 103, respectively. Mayo's counsel argued that the Supreme Court took such a quick peek in the Bilski case and that such a quick peek is appropriate to provide some measure of protection to the medical community from overbroad patents. In response to an observation by Justice Kennedy that its "hard to resist the temptation to peek," the Solicitor General stated that "taking up the temptation to import a look into novelty and nonobviousness in the 101 inquiry [would] be very destabilizing." He further added that the Court in Bilski made clear that patent eligibility under section 101 is a threshold test that turns simply on "whether there is a process."
As in the Bilski case, the justices — across the board — seemed leery of the patentability of Prometheus's claim. In Bilski, though, both the U.S. Patent & Trademark Office ("PTO") and the U.S. Court of Appeals for the Federal Circuit had already concluded that the claims were patent ineligible under section 101. Here, both the PTO and the Federal Circuit found the claims patent eligible. Perhaps that difference will weigh on the minds of some of the justices as they determine whether their leeriness in fact arises not from issues of eligibility under section 101 but patentability under sections 102 and 103.
Denise W. DeFranco is a partner at Finnegan, Henderson, Farabow, Garrett & Dunner, LLP. She has been representing companies in patent infringement litigation in both trial and appellate courts for almost two decades. She can be reached at denise.defranco@finnegan.com or 617.452.1670.
I made this graph by examining the oral argument transcript and counting the number of lines occupied by questions from each judge.
I made this graph by examining the oral argument transcript and counting the number of lines occupied by questions from each judge.
I made this graph by examining the oral argument transcript and counting the number of lines occupied by questions from each judge.
The USPTO is seeking input on where to locate two more offices in addition to the DC Metro office (Alexandria, Virginia) and the planned Detroit Office. The chart below shows the distribution of patent attorneys and agents distributed by state. Does this map help us pinpoint the next two spots?: Fayetteville, Arkansas and Boise, Idaho? In this analysis, folks should consider that the new patent offices are likely to be quite small in comparison to the HQ.
Notes:
Don Chisum was already a leader in the patent field when his multi-volume treatise – Chisum on Patents – was first published in 1978. His authoritative explanation of the law has been cited by hundreds of court opinions and thousands of law review articles. Mr. Chisum has recently turned his attention to the Leahy-Smith America Invents Act and penned a new article titled Priority Among Competing Patent Applicants Under the American Invents Act. Although he had hoped to produce a straightforward explanation of the new priority rules, Chisum found a series of ambiguities and gaps in the new law that will be important for patent strategists. In a message to Congress, he concluded the paper as follows:
If the America Invents Act were a term paper submitted by a student in a patent law seminar, an instructor would, undoubtedly, send it back with a note: SOME GOOD IDEAS, SOME MUDDLED AND UNSUPPORTED IDEAS, POOR GRAMMAR: PLEASE REVISE AND CLARIFY.
Download the article here.
This is an updated version of a chart that I made a few years ago — this time using utility patents issued 1/2009 through 11/2011. To create the chart, I grouped patents according to the number of claims in the issued patent and then calculated the average number of claims for each group. As usual, the 20-count claims is an anomaly.
Guest Post by Jonas Anderson, Assistant Professor at American University Washington College of Law
Yesterday morning I attended the highly anticipated oral argument in Mayo v. Prometheus at the Supreme Court. The case raises the question of whether a patent claim that covers correlations between blood tests and patient health is 'patentable' under 35 U.S.C. § 101.
I assume most PatentlyO readers are familiar with this case, but will provide a very brief background before diving into today's argument. Prometheus is the owner of a patent that covers a method of analyzing the effectiveness of thiopurine drugs for treating gastrointestinal disorders. Claim 1 of the relevant patent reads as follows:
(1) A method of optimizing therapeutic efficacy for treatment of an immune-mediated gastrointestinal disorder, comprising:
(a) administering a drug providing 6-thioguanine to a subject having said immune-mediated gastrointestinal disorder; and
(b) determining the level of 6-thioguanine in said subject having said immune-mediated gastrointestinal disorder,
wherein the level of 6-thioguanine less than about 230 pmol per 8×10^8 red blood cells indicates a need to increase the amount of said drug subsequently administered to said subject and
wherein the level of 6-thioguanine greater than about 400 pmol per 8×10^8 red blood cells indicates a need to decrease the amount of said drug subsequently administered to said subject.
Prometheus offers a blood test which analyzes metabolite levels in patients. Mayo sought to offer a competing blood test at a lower price. Prometheus promptly sued Mayo for infringement.
I have divided my review into 7 topics. The topics are ranked based on my impression of the importance that the justices appeared to give to each topic. Although I have tried to transcribe the key statements made by the justices and advocates as accurately as possible, all quotations are approximate.
1. The preemption question
The justices and the parties focused much of their discussion on the issue of preemption. One of Mayo's principal arguments in its brief and at oral argument is that Prometheus's patent preempts the use of a law of nature — namely, the relationship between metabolite levels and patient health.
Justice Kennedy began the preemption questioning by asking whether a system of measurements that continually monitor drug retention would be patentable. Mayo's counsel responded that it would depend on the breadth of the claims. "Claim specificity is key." According to Mayo, if Prometheus's patent had provided competitors room to develop different, more accurate metabolite levels it may have passed the 101 test. But, in this case Prometheus's patent preempted any reduction in dosage if a patient's metabolite levels were above 400 pmol. In Mayo's view, "incidental" steps added to a natural phenomenon were insufficient to avoid preemption. Thus, any patent consisting only of a natural phenomenon and "incidental steps" would be preempted under Mayo's test.
Justice Breyer, the author of the famous LabCorp dissent, focused nearly all of his questions on the issue of differentiating between a patentable application of a law of nature and an unpatentable law of nature. He pressed both parties to identify a process by which the court could discern the difference. Mayo's counsel first suggested that a preemption test could be used to ferret out unpatentable laws of nature. Later, he suggested that Bilski suggests that courts can determine if the non-novel elements of a claim are "incidental." "You're getting warmer," Justice Breyer quipped.
Justice Scalia interrupted the exchange and scoffed "I'm not comfortable with that. It depends on how broad it is? Is up to 700 [pmol]? Is that OK? 550? 830? How are we supposed to apply that kind of rule? It just seems to me not a patent rule that we could apply." It seems fair to say that Scalia was not convinced by either party that a 101 standard based on preemption could be reliably applied by courts.
Despite Scalia's concerns, preemption seemed to carry the day — with both sides. Justice Breyer continued the preemption line of questioning with Prometheus's counsel. "What has to be added to a law of nature to make it a patentable process? If you put too little to the answer to that question, I believe I can take things like e=mc2 and make them patentable, and if you put too much in you'll wreck your case." Prometheus's counsel also advocated a preemption test, but its test would be much more limited than Mayo's. Whereas Mayo would consider any natural phenomenon with "incidental" transformational steps as preempted subject matter, Prometheus would only find preemption when no applicative steps were added. Prometheus repeatedly cited to the Morse telegraph case as a classic example of preemption under 101.
Of course, Prometheus's suggested application of the preemption test has an obvious problem: Bilski. The patented hedging method in Bilski was not a naked claim to an abstract idea; the claim was limited by both industry and analysis techniques. Prometheus's counsel acknowledged this difficulty, but argued that Bilski's abstract idea was merely coupled with other abstract ideas.
2. The 'creep' of novelty and obviousness
Many of the Justices, but primarily the Chief Justice, expressed concern about the blurred relationship between novelty, non-obviousness and the 101 inquiry. Chief Justice Roberts wanted to know what efficiencies would be gained, if any, by relying on Section 101 instead of obviousness or novelty to reject invalid patents. Mayo made the case that 101 is a much more manageable and predictable doctrine than 102 or 103. Prometheus countered by reference to the very case before the court — clearly Section 101 had not led to a quick resolution of this long-running case.
The Chief Justice asked Prometheus's counsel whether he was advocating for the elimination of a Section 101 limitation on patentability. In response, counsel conceded that he was urging that courts rely on other patent doctrines in most cases, but that there would be some instances, such as the Morse case, in which 101 would be the proper vehicle for rejecting or invalidating a patent.
3. The impact (or lack thereof) of LabCorp
In my view, one of the most surprising statements of the day came about as a result of Mayo's suggestion—in response to a question from Justice Scalia—that Justice Breyer's dissent in LabCorp could guide some of the analysis in this case. Justice Breyer quickly interrupted and seemed to distance himself from his dissent. Although he was convinced that the patent claims in the LabCorp case were merely directed to an observation of a law of nature, the dissenting opinion, he said, "lacked an explanation of why [the claims in that case were not] an application of the law of nature."
Throughout the argument, he was clearly wrestling with how much "extra" is needed in order to patent a newly discovered natural law. If, as many have predicted, Justice Breyer pens part of the Prometheus decision, I expect that he will attempt to give some guidance to this most difficult question.
4. The innovation question.
A healthy amount of discussion centered around the impact on innovation that a decision in this case will have. Justice Breyer, who had been extremely skeptical of diagnostic method patents in his dissent in LabCorp, noted that discovering laws of nature can be an incredibly expensive process. His search for a line between phenomenon and application seemed to center around balancing the incentive to discover new laws of nature with a desire to allow access to those laws to follow-on innovators.
Mayo repeatedly urged the court to overturn the patent at issue by arguing that Promtheus could limit others from developing new, improved, and cheaper alternatives to their blood test and was therefore preemptive. Mayo argued that if the claims incorrectly correlated metabolite levels and outcomes, "the public is stuck with the erroneous information." In response, Prometheus stated that there are ways that follow-on innovators can improve on Prometheus's patent; namely, by acquiring an improvement patent or by challenging Prometheus's patent under Section 101's utility requirement.
Finally, as any good appellate attorney would, Mayo's counsel attempted to limit the perceived impact of a reversal. When asked by Justice Sotomayor how many patents would be impacted by a ruling favoring Mayo, counsel responded "only a couple."
5. The scope of Prometheus's patent
The newest Justices, Sotomayor and Kagan, directed nearly all of their questions to the scope of the patent claims at issue. Although claim construction was no longer at issue, the Justices probed the extent to which Prometheus's patent foreclosed competitors. Justice Kagan wanted to know what, in Mayo's opinion, Prometheus's patent attorney could have done to make their invention patent-eligible. Mayo's counsel responded by saying that a claim with a more narrow range of relevant metabolite levels and a specified treatment protocol would satisfy 101. Justice Kagan followed-up by asking whether "the difference is the scope of the ranges, or the treatment protocol." "Both," Mayo responded.
Justice Kagan followed up with Prometheus. When asked why the patent drafter had failed to include a therapeutic step (which Mayo conceded would have made the claim patent-eligible), Prometheus's counsel responded that it was unnecessary. He pointed to numerous patents that merely claimed a method of gathering information: patents on identifying ore deposits (but not requiring removal); patents on navigating boats in fog (but not requiring redirecting the ship); patent to find leak in a water main (but not requiring repair).
6. Prior decisions: are they helpful?
Justice Scalia seemed genuinely dismissive of the Court's precedents that have held that laws of nature (or natural phenomenon) are not patentable. "Tell me why you can't patent nature?" he asked Mayo's counsel early in the proceeding. "Doesn't any medical patent rely on natural processes? Even if you invent a new drug, what that new drug does is natural. Whatís the difference [from this case]?" When Mayo's counsel responded that the specificity would be the key test for preemption, Justice Kennedy responded "I thought your answer to Justice Scalia would be…that [the claims here cover] the measurement of a result. That's how I would have answered the question. But that's obviously not the right way to do it."
In a related vein, Justice Breyer openly questioned whether the holdings in Flook and Diehr can be reconciled. "If you look at the Court's cases, they seem to say Flook, one thing, and Diehr another thing."
7. The transformation question
Almost no time was devoted to discussing whether the claims at issue meet the machine or transformation test. In fact, I can't recall hearing the words "Machine or Transformation" escape from the Justices. Perhaps the Court is going to distance itself from the MOT test — or at least give courts another "clue."
Conclusion
Predicting the outcome of Supreme Court rulings in patent cases is a treacherous hobby. If anything, the argument today revealed a Court troubled by the fact that both sides have urged an application of Section 101 that centers on preemption, but with little guidance on how to apply such a test. While I would expect a ruling to have some mention of preemption, none of the justices seemed comfortable with either side's suggested application of such a test, while Justice Scalia was dismissive of such an idea.
Perhaps most surprising was that the Court's most vocal critic of diagnostic patents, Justice Breyer, appeared to distance himself from LabCorp. I get the feeling that he is still troubled with the idea of granting patent rights covering natural phenomenon, he is genuinely concerned with the impact of the Court's decision in this case on the medical innovation community.
In Mayo v. Prometheus, the Supreme Court is again addressing patentable subject matter. During oral arguments, Justice Breyer came-up with a hypothetical invention to help him draw the line on patentable subject matter.
JUSTICE BREYER: Suppose I discover that if … someone takes aspirin … for a headache and, you know, I see an amazing thing: if you look at a person’s little finger, and you notice the color [indicates that] you need a little more, unless it’s a different color, you need a little less. Now, I’ve discovered a law of nature and I may have spent millions on that. And I can’t patent that law of nature, but I say: I didn’t; I said apply it. I said: Look at his little finger.
MR. SHAPIRO: Sure.
JUSTICE BREYER: Okay? Is that a good patent or isn’t it?
MR. SHAPIRO: No … Well, because you — you’ve added to a law of nature [to] just a simple observation of the man’s little finger.
How would you respond to Justice Breyer’s idea with respect to 35 U.S.C. §101?
The memorable line from the KSR oral arguments was Justice Scalia’s criticism of Federal Circuit precedent as “gobbledygook.”
The Court heard oral arguments today in Mayo v. Prometheus. The best one-liner from oral arguments comes from Justice Breyer. As you might expect, Justice Breyer’s statement is not as colorful as Justice Scalia’s, but it is likely more accurate.
JUSTICE BREYER: If you look at the Court’s cases, they seem to say Flook, one thing, and Diehr another thing.
Justice Breyer’s statement highlights a central problem of modern patentable subject matter doctrine — that the quartet of leading decisions contradict one another. The court failed to move the ball in its 2010 Bilski decision and instead simply stated that the proper path is to follow these cases.
