Is Your Patent Portfolio Safe from the Supreme Court?

In the recent patent case of Mayo vs. Prometheus Labs, the United States Supreme Court continued its pattern of restricting the scope of patentable subject matter under 35 US 101. Historically, patents had been strictly limited to processes, machines, compositions of matter and articles of manufacture. Excluded from eligibility were business methods, software, laws of nature, naturally occurring phenomena and mathematical formulas. Then the US Court of Appeals for the Federal Circuit began to expand the patent eligibility rules.

In Diamond v. Diehr, decided in 1981 by the United States Supreme Court, established that an un-patentable formula could be transformed into a process by the addition of method steps after the formula. Most would agree, however, that software did not widely become patent eligible until 1994 when the Federal Circuit in the Alappat case held that a programmed computer was essentially a machine and when that same computer was programmed differently, it became a second different machine – both patentable. The Alappat holding led to the acceptance of “software plus token hardware” as being patentable.  Ultimately, the Alappat ruling would give rise to the State Street Bank case, decided in 1998 by the Federal Circuit, which held that business methods were patentable.

In the aftermath of these cases large numbers of patents were issued on computer software and business methods. Some of these cases gained national prominence; for example, Amazon sued on its “one click” method of purchasing goods online. The patent office was unable to fully examine a barrage of new subject matter applications, since much of the relevant art was in non-patent form. Numerous patents were issued which probably shouldn’t have been.  In some instances patent attorneys and patent agents who were largely unfamiliar with computer technologies would write broad patent disclosures covering methods without much, if any, tangible being described.

The matter finally came to a head when the US Supreme Court began to clamp down on the free flow of easy patents.  The first indication of the high court’s attitude appeared in 2006 in a concurring opinion in eBay v. MercExchange when Justice Kennedy commented that some patents were of “potential vagueness and suspect validity.”  The next indication that the Supreme Court was growing tired of easy patents was when the Court threw out decades of Federal Circuit law relative to obviousness in KSR v. Teleflex, which lead to the rise of the “common sense” test.  Still further, in Bilski v. Kappos, decided in 2010, the Supreme Court held that processes which transform an article from one state to another are patent eligible regardless of whether their use requires a machine. However, processes involving transformation of abstract financial data , such as that claimed in machine format in State Street Bank, are probably patent-ineligible unless they are tied to a machine, thereby providing a tangible tether to the process.

Although the Supreme Court avoided the issue in Bilski, they did say as early as 1978 in Parker v. Flook, that the machine (such as in Alappat) itself would be required to be novel and unobvious in each instance. The point here is that for years the US Supreme Court has narrowed the permissible scope of patent claims, only once in recent memory giving an expansive view of what is patent eligible subject matter.  See Diamond v. Chakrabarty, which was decided by the Supreme Court in 1980 and found that living organisms can be patentable if they are the product of human creation.  But even this ruling may well become undone in the not to distant future.  After deciding Mayo v. Prometheus the Supreme Court remanded the Myriad Genetics case to the Federal Circuit for further consideration.  The fate of gene patents hangs in the balance.

In this latest case, the Prometheus patent practitioners (as well as many within the patent community) were surprised that the method for optimizing therapeutic efficacy for treatment of a disorder was not patentable.  The court held the claims merely provided for administering the drug to a patient having the disorder, determining the level of the drug in the patient and then setting forth the lower limit of effectiveness of the drug and the upper limit of the drug. In finding ineligibility, the court stated that “administering” the drug simply identifies a group of people who would be interested in the drug. And “determining” is a step which simply tells doctors to engage in an understood routine, and the setting limits clause is to simply tell the doctor about relevant, natural laws they should consider in the test results in making a decision.  Whether you agree or disagree with the Supreme Court’s decision in Prometheus, the case has added to the Supreme Court patent jurisprudence.  Once again the Supreme Court is curtailing patent rights and uprooting well established expectations within the industry.

The Prometheus decision shows that you can never know for sure what the outcome will be once you arrive at the Supreme Court.  We also know that the Supreme Court is taking more patent cases now than ever, and those decisions have significant implications for the entire industry above and beyond the patent claims at issue and the parties involved.  Your patent portfolio may be at risk because some other company obtained poorly written claims and the Supreme Court has taken the opportunity to decide not only the issues before them but to make decisions based on overarching concerns about the entire patent system, such as indicated by the statement of Justice Kennedy in eBay about potential large numbers of invalid patents.

IP exposure can be one of the biggest threats to a company’s survival, and particularly now given the shifting foundation of patent law and what is considered patent eligible. As the Prometheus case has once again proven, just because a patent is issued, it is not necessarily valid. Bottom line- a patent is a ticket to the court room, and is nothing more than a piece of paper on the wall if the patent holder does not have the funds to vigorously defend and enforce a patent’s valid rights. In view of the constant change in number, scope and strength of patents in this era, patent enforcement and defense insurance must be a high priority among patent owners and manufacturers. IP insurance enables companies to get through the lawsuit based solely on the merits, not the depth of their pockets.

So ask yourself this: Is your patent portfolio safe? In this time and place where the sands are shifting can you afford to fight difficult, protracted litigation in order to defend your patents?  If you are like most start-up companies the answer is no, yet in many industries the entirety of the value of the company is in the patent portfolio.  On this point, Jim Greenwood (former Congressman and current President & CEO of BIO) told IPWatchdog.com in April 2010:

For most of these companies the only thing that they have is intellectual property. They may have a folder with their IP portfolio in it and not a place to file it. They start off with that and then they have to raise money to even begin to have microscopes and bricks and mortar and staff. It is on the strength of that intellectual property that they have to raise all of those dollars for a very long time.

Intellectual property insurance is a most logical and economic choice for companies who find their entire value in “a folder.”

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5 comments so far.

  • [Avatar for EG]
    EG
    April 2, 2012 01:12 pm

    “ending the claim with a ‘comparison’ element without more doesn’t pass § 101 under Prometheus.”

    West Coast Guy,

    I disagree. What I propose is more than just a “comparison” and certainly more than the “comparison step” that is problematic in LabCorp. v. Metabolite. My “comparison step” tells whoever is adjusting the drug dosage when to do it (is the measured metabolite too low or too high) and how to do it (increase or decrease by a specific amount how much drug is administered depending upon whether the measued metabolite level is too low or too high). I’m not asking the drug administrator to “guess” what that “comparison step” involves or requires. In particular, no “thought” is required (and “thought” alone doesn’t infringe).

    What you propose is also what Promethues did in Claims 1 and13 of its U.S. Pat No. 6,987,097. I would agree that such claims should pass muster in Mayo, or frankly I don’t know what method or process claims will.

  • [Avatar for West Coast Guy]
    West Coast Guy
    April 2, 2012 12:07 pm

    EG,

    I’m sorry, but I’m not seeing it. In my view, ending the claim with a “comparison” element without more doesn’t pass § 101 under Prometheus. I would add an “adjusting” element shown below as (c). Here’s what I would add to your claim to pass § 101 only:

    A method comprising the following steps:

    (a) measuring the level of 6-thioguanine or 6-methylmercaptopurine in a [blood sample] taken from a subject administered a 6-thiopurine drug selected from the group consisting of 6-mercaptopurine, azathiopurine, 6-thioguanine, and 6-methyl-mercaptoriboside, wherein the subject has an immune-mediated gastrointestinal disorder being treated by administration of the 6-thiopurine drug;

    (b) comparing the level of 6-thioguanine or 6-methylmercaptopurine measured in the [blood sample] to a [drug dosage calibration schedule] for optimizing therapeutic efficacy and reducing toxicity associated with treatment of the subject with the 6-thiopurine drug; and

    (c) adjusting the level of said 6-thiopurine drug as a function of said drug dosage calibration schedulre, wherein a measured level of 6-thioguanine of less than about 230 pmol per 8 x 10 [to the eight power] red blood cells according to the [drug dosage calibration schedule] indicates a need to increase the dosage of the 6-thiopurine drug [by a certain amount] to optimize therapeutic efficacy, and wherein a measured level of 6-thioguanine greater than about 400 pmol per 8 x 10 [to the eight power] red blood cells or a measured level of 6-methylmercaptopurine greater than about 7000 pmol per 8 x 10 [to the eight power] red blood cells according to the [drug dosage calibration schedule] indicates a need to decrease the dosage of the 6-thiopurine drug [by a certain amount] to reduce toxicity.

  • [Avatar for EG]
    EG
    April 2, 2012 11:47 am

    West Coast Guy,

    You might be able to get away with a “comparing step,” but not in the manner of LabCorp v. Metabolite. Here’s the rewrite of the Prometheus claim that I proposed on my latest article thread:

    A method comprising the following steps:

    (a) measuring the level of 6-thioguanine or 6-methylmercaptopurine in a [blood sample] taken from a subject administered a 6-thiopurine drug selected from the group consisting of 6-mercaptopurine, azathiopurine, 6-thioguanine, and 6-methyl-mercaptoriboside, wherein the subject has an immune-mediated gastrointestinal disorder being treated by administration of the 6-thiopurine drug; and

    (b) comparing the level of 6-thioguanine or 6-methylmercaptopurine measured in the [blood sample] to a [drug dosage calibration schedule] for optimizing therapeutic efficacy and reducing toxicity associated with treatment of the subject with the 6-thiopurine drug, wherein a measured level of 6-thioguanine of less than about 230 pmol per 8 x 10 [to the eight power] red blood cells according to the [drug dosage calibration schedule] indicates a need to increase the dosage of the 6-thiopurine drug [by a certain amount] to optimize therapeutic efficacy, and wherein a measured level of 6-thioguanine greater than about 400 pmol per 8 x 10 [to the eight power] red blood cells or a measured level of 6-methylmercaptopurine greater than about 7000 pmol per 8 x 10 [to the eight power] red blood cells according to the [drug dosage calibration schedule] indicates a need to decrease the dosage of the 6-thiopurine drug [by a certain amount] to reduce toxicity.

    The bracketed language in my proposed claim indicates a suggested descriptor (i.e., for “blood sample” or “drug dosage calibration schedule”), an amount of the drug (i.e., “a certain amount”) to be increased or decreased that I can’t currently specify, and denoting the power (i.e., “10 to the eighth”) that the formatting doesn’t allow me to do in this comment. On key rewrite I’ve done is to move the preamble langugage to the body of the claim: that’s very important so that this preamble language becomes part of the claimed method (the comparing step) and doesn’t get simply treated as an irrelevant statement of “intended use.” By noting that we’re basing the measurements on a “blood sample,” we’ve taken this measurement out of the theoretical and into the “real world”; the same goes for the “comparing step” which takes the “real world” measured metabolite values, compares them to a predetermined “drug dosage calibration schedule” that tells you, based on the measured metabolites, to increase the drug dosage by a “certain amount” if the metabolite level is below that specified by the “drug dosage calibration schedule” to optimize therapeutic efficacy of the drug treatment, and to decrease the drug dosage by a “certain amount” if the metabolite level is above that specified by the “drug dosage calibration schedule” to reduce toxicity of the drug treatment. In other words, the measured metabolite levels are directly tied to the “drug dosage calibration schedule” to achieve a “real world” useful result, namely how to optimize therapeutic efficacy of the drug treatment without causing undesired toxicity (and avoids the potential weakness in the LabCorp v Metabolite claim where the “comparision step” simply leaves you hanging as to what to do with that comparison or even what it means). If my proposed claim or something similar can’t pass muster in view of Mayo Collaborative Services, it’s hard to imagine how such subject matter can be claimed to make the grade under 35 USC 101.

  • [Avatar for West Coast Guy]
    West Coast Guy
    April 2, 2012 10:28 am

    Is the take-away of Prometheus for we patent pratitioners that you don’t recite the final element of a claim as “determining,” “computing,” “calculating,” or some other verb which employs a formula? That there needs to be at least one element afterwards which acts upon the result of the “determining,” “computing,” or “calculating”?

    Breyer does state that applying the results of a formula is patentable subject matter, but the problem here was the recitation of the claim’s final element.

    In my opinion, this is the take-away of Prometheus.

  • [Avatar for West Coast Guy]
    West Coast Guy
    April 2, 2012 10:09 am

    “then setting forth the lower limit of effectiveness of the drug and the upper limit of the drug”

    Nope, no sir. The method claim did not recite the “setting” of any limit. Instead, information about limits — the formula of limits — were provided. In the claim shown below, there is simply no “setting” requirement (had there been an additional element of an affirmative action of “setting” or “adjusting” or a “subsequent administration of the drug so that the dosage falls within the determined limits), I am certain that the claim would have passed § 101 muster):

    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 8×108 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 8×108 red blood cells indicates a need to decrease the amount of said drug subsequently administered to said subject.