Posts Tagged: "Diamond v. Chakrabarty"

I recently visited Egypt as part of a team led by the Departments of State and Agriculture, supported by the good folks at the AUTM Foundation. Egypt, like many countries, is looking at our model for integrating research universities into their economy. I was asked to speak about the Bayh-Dole Act and thought it was important to emphasize that there were many factors required beyond enacting a law to reverse an entrenched national policy. On returning, I was struck by Gene Quinn’s article “It May Be Time to Abolish the Federal Circuit.” After leaving the Senate staff, I became Executive Director of the Intellectual Property Owners Association (IPO). Our highest priority was creating the Court of Appeals for the Federal Circuit (CAFC) to restore confidence in the U.S. patent system. Framed in my office is a very gracious thank you note from Judge Howard Markey, who inspired this effort and went on to become the first Chief Judge of the new court. Judge Markey was the only person I ever met with an unending supply of funny patent jokes, but that’s another story. Unlike Bayh-Dole, that effort appears to have gone off track. So why did one change stick and one not?

With more dissents than any other Federal Circuit Judge in history,  Judge Pauline Newman is driven by a need to safeguard our national system of innovation. Judge Newman has argued throughout the years that the Federal Circuit was created to rebuild and renew the patent system to encourage and incentivize industry, which is precisely the purpose both the Carter and Reagan Administrations had in mind when advocating for the creation of the Federal Circuit, which ultimately took form in 1982. Judge Newman has no qualms about speaking out in dissents when the objective of the Federal Circuit to bring certainty to U.S. patent laws is being hindered, in her view, by the majority, regardless of the complexities or dollar-values at stake in the case. In fact, in one interview she declared, “I have not hesitated to comment when I think that a panel isn’t going in quite [the] appropriate direction. Others have felt that perhaps I haven’t gone in quite the appropriate direction . . . . [A]ll in all it seems to me that it’s quite healthy to present a certain amount of turmoil to practitioners in the short run. But in the long-run I think the law is better for it.” George C. Beighley, Jr., “The Court of Appeals for the Federal Circuit: Has It Fulfilled Congressional Expectations?,” 21 FORDHAM INTELL. PROP. MEDIA & ENT. L.J. 671, 675–76 (2011). Clearly, she is interested in getting the law right for the greater good as she sees it, regardless of the impact her dissent may have on relationships or status quo.

Earlier this year, the Supreme Court of India set aside an order of the division bench of the Delhi High Court that revoked a patent granted on genetically modified cotton, holding that the single bench of the High Court should assess the patentability of the invention after hearing arguments from both sides. The Indian Patent Office granted Patent No. 214436 to Monsanto Technology LLP on genetically modified cotton. In 2016, Monsanto filed a suit before the single judge bench of the Delhi High Court [Civil Suit (Comm) No. 132 of 2016] alleging infringement by Nuziveedu Seeds Ltd., which responded with a counterclaim for invalidity of the patent, among other claims. The single judge ruled in favor of the petitioner and granted an injunction. On appeal, the division bench of the Delhi High Court vacated the injunction and invalidated the patent. That decision was set aside by the Supreme Court, which held that the matter at hand was the injunction and that patentability issues must be dealt with separately by the High Court. This suggests a changing mindset by the Indian courts regarding patentability of genetically modified living organisms. India may now be set to join the league of various other nations that respect biotechnological inventions.

Just as the drug pricing debate on Capitol Hill is heating up, an important new study, “The Bayh-Dole Act’s Vital Importance to the U.S. Life-Sciences Innovation System,” published by the Information Technology & Innovation Foundation (ITIF), underscores the law’s contribution to the United States’ lead in the life sciences. The report warns that attempts to misuse the march-in rights provision of the law to control drug prices would have serious consequences to our competitiveness and our health. Predictably, the critics condemned the report as “A lot of myth and propaganda.” Despite being repeatedly rebuffed, they continue to argue the law authorizes the government to license competitors if a resulting product isn’t “reasonably priced.” That debate spilled over to the Capitol Hill unveiling of the study, in which I participated. What happened there sheds a lot of light on the nature of the argument.

contrary to popular notion, U.S. Patent No. 4,344,142 to James Diehr was not the first attempt to patent the idea of performing a real-time simulation of the Arrhenius equation using periodic temperature measurements of a rubber mold in order to cure rubber.  In fact, nearly two years prior to Diehr’s filing, Thomas Smith filed for a device that performed the very same algorithm using dedicated logic, which was granted as U.S. Patent No. 3,819,915. Smith was also granted U.S. Patent No. 4,022,555 for another rubber-curing device based on discrete logic. Similarly, William Claxton filed for patent protection in 1974 for an Arrhenius-based rubber-curing device using analog components, which issued as U.S. Patent No. 4,044,600.  

Three events boosted our economic turnaround in the 1980’s: the passage of Bayh-Dole, which injected the incentives of patent ownership into the federal R&D system; the enactment of the Court of Appeals for the Federal Circuit, which insured the courts would apply the patent law consistently; and the Supreme Court’s ruling in Diamond v Chakraberty that living organisms could be patented. That decision stated that patents could “include anything under the sun that is made by man.” Today that quote is only ironic.

The old arguments that patents inhibit innovation, and non-exclusivity with compulsory licensing leads to a brave new world are now in vogue. We’ve stood at this fork in the road before. It requires courage to reject the easy path downward and restore the system which created our prosperity. If we lack the will, we have no one else to blame as we plunge deeper into the mire. That’s the last place anyone wanting to drain the swamp while growing the economy should go.

Sections 101 and 112 provide their own separate limitations to the scope of patent protection in ways that are sometimes complimentary and sometimes contradictory… Inventors are motivated to maximize the breadth of their claims. But they may seek to do so by employing imprecise claim language. Both §§ 101 and 112 corral this behavior, although in slightly different ways. Section 101 safeguards against claims that are too abstract or overbroad to be patentable, being concerned with claims that would “wholly pre-empt” any other use of an inventive concept, thereby foreclosing independent innovations or application. Bilski, 561 U.S. at 610 (quotation omitted). Section 112 protects against claims that are not completely and functionally disclosed within the patent specification ensuring that patentees cannot claim more than what they have invented – and shared with the public.

Removing section 101 would remove the language granting patents only to processes, machines, manufactures, compositions of matter, or new and useful improvements thereof. These categories however have only rarely been used to limit patentablity. The Court has in fact described these terms as expansive. Their removal would not suddenly make the inventions found unpatentable by the Court as abstract ideas or articles of nature patentable. As shown by the discussion above, the judicial exceptions do not rest on a legal interpretation of section 101 in any of its forms. They come from Supreme Court precedent established BEFORE section 101 existed.

3D printed human organs are coming increasingly close to being a reality according to several reports. In addition to potentially saving thousands of lives every year, this ground-breaking technology raises issues related to patent law that cannot be ignored. Are human organs and/or tissues that are created through 3D printing process that use naturally-occurring cells eligible for patenting? Or are such organs and tissues considered to be products of nature and therefore ineligible for patenting? The America Invents Act (AIA) creates serious questions, as do some recent Supreme Court ruling on patent eligibility.

Our Judicial Mount Olympus pays, at best, lip-service to Chakrabarty’s observation that, in enacting 35 U.S.C. § 101 in 1952, Congress chose the statutory classes (in Chakrabarty, referring specifically to “composition” and “manufacture” but which would be equally applicable to “apparatus” (i.e., machines) and “process”) to be given an “expansive” and “broad” construction. That command in Chakrabarty would suggest that rulings of patent-ineligibility under 35 U.S.C. § 101 would be the exception, not the rule. By contrast, this unending stream of patent-ineligibility rulings from the lower courts after Alice suggests a serious disconnect, showing no adherence to, or even observance of this command by Chakrabarty to construe 35 U.S.C. § 101 to be “expansively” and “broadly” inclusive, but to be instead very restrictive. As former Chief Judge Rader might characterize it, this restrictive two-part test of Alice has made 35 U.S.C. § 101 not a “coarse screen,” but instead an extremely “narrow funnel.” In other words, the draconian two-part test of Alice was broken from the start.