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.

Many of us in the patent world (me included) have pounded our heads against the reasoning (not result) expressed in Mayo Collaborative Services v. Prometheus Laboratories, Inc.  See A Matter of Patent Law Despotism: The Nonsensical Reasoning in the Supreme Court’s Mayo Collaborative Services Decision Part 2*.  The reasoning in Mayo Collaborative Services makes no patent law logical sense on numerous grounds, including disregarding an important paragraph in the Supreme Court’s 1981 case of Diamond v. Diehr that is not only binding precedent, but also tells us that Breyer’s opinion repeatedly does what this paragraph from Diehr says not to do in an analysis of method or process claims under 35 U.S.C. § 101.

But the question now becomes what do we do to keep the reasoning in Mayo Collaborative Services from exploding into completely irrational, as well as patent law insane doctrine?  The way forward to patent-eligibility rationality, as well as sanity, is through the remand decision in Classen Immunotherapies, Inc. v. Biogen IDEC.  See CAFC on Patent-Eligibility:  A Firestorm of Opinions in Classen.  Put differently, there may yet be “light” in this currently “dark” patent-eligibility tunnel.

The biotech community has been chattering ever since the Mayo Collaborative Services v. Prometheus Laboratories (“Prometheus”) ruling was issued by the U.S. Supreme Court March 20, 2012.  Biotech folks, unaccustomed to the flurry of appellate activity surrounding some recent biotech cases, including the July 2011 Federal Circuit decision, Assoc. for Molecular Pathology et al. v. U.S.P.T.O. and Myriad Genetics, 2010-1406 (2011), are understandably nervous and have been engaged in a parlor game of guessing the effects of the decision on the biotech industry.  The dinner discussions in my own household have centered on the subject (my kids think their parents are total nerds).  Several posts and the many comments on this august blog and on other blogs are indicators that the biotech patent bar has found itself thrust into the legal limelight in a series of decisions which many fear may seriously harm the biotechnology industry, still struggling in a slow economy.  In fact, the stock prices of several prominent biotech companies fell at the news of the Prometheus ruling, including Myriad’s stocks, which had fallen 9% at one point.  As many of my esteemed colleagues have and will continue to dissect the case, I will instead focus on the effect of the decision on the future of biotech patents.

Unlike many in the biotech community I do not think the Prometheus decision will break the biotech industry or even seriously affect it .  Much like the car mechanic in a small Caribbean island told me when my engine light came on in my rental car, “no worries, no problem!” (our car, in fact, never broke down, even on a mountain road with no shoulders).   I believe the holding in Prometheus prevents what could be a future legal quagmire, where overly-broad patents could serve to block entire fields of practice and create an enforcement nightmare in which ghosts of legal uncertainty and licensing ambiguities would haunt hospital hallways, R&D labs, boardrooms,  and investment entities throughout the country.  If the Prometheus decision would have gone the other way, it would not have been status quo, but rather been fairly harmful to future innovation.

As many of you now understand, I’ve got many bones to pick with the reasoning in Breyer’s opinion in Mayo Collaborative Services v. Prometheus Laboratories, Inc.  See Eviscerating Patent-Eligibility of Drug Testing Methods: The Nonsensical Reasoning in the SCOTUS Prometheus Decision*.  See also A Matter of Patent Law Despotism: The Nonsensical Reasoning in the Supreme Court’s Mayo Collaborative Services Decision Part 2*.  But I may have found the ultimate “doozy” for why Breyer’s reasoning in the Mayo Collaborative Services opinion should be “hung, drawn, and quartered.”  (And I wished I had discovered this faux pas earlier.)

For lack of a better word, I call this faux pas “selective precedent amnesia.”  What I’m referring to is a paragraph from the Supreme Court’s 1981 case of Diamond v. Diehr (which held that a claimed rubber molding method using an Arrhenius equation was patent-eligible under 35 U.S.C. § 101).  Or more appropriately, Breyer’s opinion in Mayo Collaborative Services repeatedly doing what this paragraph from Diehr says not to do in an analysis of method or process claims under 35 U.S.C. § 101.

The Prometheus decision reflects that Supreme Court is obviously concerned about the possibility that a patent claim might preempt a law of nature and thereby broadly restrict use and application of the underlying principles.  Perhaps the concern is heightened by the fact that the claimed method relates to treatment of disease, and the prospect of preempting such treatment is troubling.  The reasoning set forth in the opinion, however, is anything but helpful.

The court dismisses a suggestion that virtually any step beyond a law of nature should transform an unpatentable law of nature into a potentially patentable application, sufficient to satisfy §101 whereby patentability could be determined under applicable novelty and obviousness analyses pursuant to 35 U.S.C. §102 and 103, saying that such an approach would render the “law of nature” exception to §101 a “dead letter.” The court, never the less, decides the status of the claimed subject matter under §101 under a point of novelty approach, leaving the reader to puzzle about which part of the opinion should be considered as determinative of what is proper under the law.

Our patent world was fairly “rocked” last week by the Supreme Court’s decision in Mayo Collaborative Services v. Prometheus Laboratories, Inc.  See Eviscerating Patent-Eligibility of Drug Testing Methods: The Nonsensical Reasoning in the SCOTUS Prometheus Decision* .  Now that the dust is starting to settle (and hopefully the “verbal vitriol” being thrown is starting to subside), I’ve reflected more on what this decision means for the patent-eligibility of analytical and diagnostic method specifically, and the informed interpretation of patent law generally.  What I see expressed by Breyer’s opinion in this case is both ominous and alarming.  Frankly, for the past 5 or 6 years, I’ve witnessed “patent law despotism” and “patent hostility” being expressed by the Supreme Court like I haven’t seen since the 1970’s.

For those who have “cheered” Breyer’s opinion in Mayo Collaborative Services, the end result, the invalidation of Prometheus’ claimed drug dosage calibration method as patent-ineligible under 35 U.S.C. § 101, is the least bothersome to me.  That Prometheus’ claimed method would satisfy 35 U.S.C. § 101 was problematical to me after the Supreme Court’s decision in Bilski v. Kappos based on the final “determining step” and the “wherein clauses” which inform you (indirectly) when the dosage of the administered thiopurine drug  is too high or too low.  What Prometheus’ claimed method needed to do was use the measured metabolite levels gained by the “determining step” and, as guided by the “wherein clauses,” to achieve a useful result.  As Steve Hansen has kindly pointed out on this blog, Claims 1 and 13, respectively, of Prometheus’ related U.S. Pat. No. 6,987,097 do exactly that by stating that the drug dosage should be increased (if the metabolite levels measured are too low) or should be decreased (if the metabolite levels measured are too high).  If Claims 1 and 13 of the ’097 patent can’t pass the “patent-eligibility” bar under 35 U.S.C. § 101, then I don’t know what method or process claim can.

Well, Justice Breyer, the writer of the dissenting opinion in Laboratory Corp. v. Metabolite Laboratories, Inc., finally got his wish.  Writing the opinion for a unanimous Supreme Court in Mayo Collaborative Services v. Prometheus Laboratories, Inc., Breyer ruled that a claimed drug dosage calibration method based on previously unknown “precise correlations between metabolite levels [of administered thiopurine drugs] and likely harm or ineffectiveness” was patent-ineligible under 35 U.S.C. § 101 because it “adds nothing to the laws of nature that is not already present when the steps [of the claimed method] are considered separately.”  While I’m not surprised that Breyer ruled the claimed method patent-ineligible, his reasoning in Mayo Collaborative Services is, in my view, often nonsensical, and is fraught with unfortunate statements that could potentially eviscerate the patent-eligibility of drug testing methods (as well as related medical diagnostic methods) generally under 35 U.S.C. § 101.

Briefly, the claimed method in Mayo Collaborative Services determined (calibrated) the proper dosage of thiopurine drugs to treat both gastrointestinal and non-gastrointestinal autoimmune diseases.  What the claimed method sought to do was optimize therapeutic efficacy while minimizing toxic side effects.  The claimed method had essentially only two steps:  (1) administering a thiopurine drug to a patient; and (2) determining the level of metabolites of the drug in the patient after administration.  The claimed method also concluded with some “wherein clauses” that, if certain drug metabolites were below a certain level, that would indicate a need to increase the amount of the drug administered.  Conversely, if those drug metabolites were above a certain level, that would indicate a need to decrease the amount of the drug administered.  See CAFC: Method for Calibrating Drug Dosage Is Transformative.

The sky is falling!  Those who feel the Supreme Court’s decision in Mayo Collaborative Services v. Prometheus Laboratories, Inc. is terrible are right, although many won’t likely fully apprehend the gravity of the situation at first.  Those in the biotech, medical diagnostics and pharmaceutical industries have just been taken out behind the woodshed and summarily executed by the Supreme Court this morning.  An enormous number of patents will now have no enforceable claims.  Hundreds of billions of dollars in corporate value has been erased.  But that might be a good thing.  Immediate attention now must turn to Congress.  Thank goodness that the technical amendments to the America Invents Act are outstanding.  This will provide a perfect opportunity for Congress to save an industry that employs many millions of people, while at the same time undoing a pathetic, narrow-minded decision of the Supreme Court.

What is all the fuss about?  Earlier today the United States Supreme Court issued its decision in Mayo v. Prometheus, holding that the process claims at issue in the case are not patent eligible subject matter. To make matters worse,  Justice Breyer, writing for a unanimous Court, continually acknowledged that the claims at issue did not specifically cover a law of nature because there were “administering” and “determining” steps.  Yet, he and the other Justices determined that those “administering” and “determining” steps were well known and conventional, thus meaning that the claims lacked patent eligible subject matter.  Come again?  Did all nine of the Supreme Court Justices just conflate patent eligibility with novelty and non-obviousness?  Yes they did!  But it gets worse — they explicitly admitted doing so!  The Supreme Court also further specifically ignored the Government’s objective, reasonable and until today correct assertion that any step beyond a statement of a law of nature transforms the claim into one that displays patent eligible subject matter, with issues of whether those steps are known to be properly resolved by 102 and 103.

One of the most common questions I receive, dating back to the very beginning of IPWatchdog.com, is whether recipes can be protected by any form of intellectual property.  Typically the question presents specifically by a reader asking whether a recipe can be patented, or how once can patent a recipe.

In most cases the typical recipe for a “killer Margarita” or “the best barbeque sauce ever” will not be patentable because they won’t be unique enough, typically failing on the non-obviousness requirement.  Of course,  the only way to know for sure is to understand how the Patent Office reaches its conclusions relating to what can and cannot be patented.  It is certainly possible to obtain a patent on a recipe or food item if there is a unique aspect, perhaps if there is something counter-intuitive or a problem (such as self live or freshness) is being addressed.  The trick will be identifying a uniqueness that is not something one would typically think to try.

Yesterday in Mayo Collaborative Services v. Prometheus Laboratories the Supreme Court addressed the question of patent eligible subject matter under 35 U.S.C. §101 for the first time since the Bilski decision last year.

Briefly, one of the claims in issue recites a method of optimizing treatment for an immune-mediated gastrointestinal disorder where a specific drug is administered to a patient, the level of a specific metabolite is determined in the patient’s blood, and a particular high metabolite level of a particular value indicates a need to reduce the dosage and a particular low metabolite level at a particular value indicates a need to increase the dosage. Another claim recites the same method, except excluding the administering step. Administering the drug was known in the art. Detection of the metabolites was known in the art. However, the correlation between specific metabolite levels and effectiveness or toxicity of the drug was not known.

Earlier today, at 10:05 am precisely, the United States Supreme Court heard oral arguments in the case styled Mayo Collaborative Services v. Prometheus Laboratories.  A press release issued by the AIPLA sums the cautious optimism of many: the Supreme Court “appeared to move closer to the Federal Circuit’s understanding of patent eligible subject matter.”  Of course, no one will really know for some time, and there is certainly enough reason to worry after the oral argument.  Predictably Justice Breyer seems ready to rule virtually all process claims unpatentable, and surprisingly Chief Justice Roberts seemed more in agreement with Breyer than anyone else.

In all likelihood it will be at least a couple months before we know the outcome of this case, which holds in the balance the future of medical treatment claims.  In fact, the average length of time for the Supreme Court to decide patent cases since Markman in 1996 is about 3 months.  The most recent Supreme Court cases have lingered on average over 5 months.  How the Supreme Court operates is one of the better mysteries in our form of government, and there will be absolutely no signaling of when to expect a decision.  The Supreme Court will just one day announce a decision.  Notwithstanding, I’m going to hazard a guess that we will have a decision between the end of March 2012 and the end of May 2012.  I don’t see this as an end of the term opinion.

Yesterday The Hartford announced via press release that it had invented a faster way to deliver life insurance, which is now patent pending.  Can you that be true?  As with many things associated with the law, particularly patent law, a simple, straightforward answer is not possible.  In a nutshell, it is possible that one could patent a method of more quickly delivering life insurance if the process is new and non-obvious.  However, given the law that the United States Patent and Trademark Office is required to apply there will need to be much more than a real world business method, or “pure business method” as they are sometimes referred to.

“Today’s consumers are used to buying products online and receiving them at home within 48 hours,” said Brian Murphy, who heads The Hartford’s life insurance business. “We see no reason why they should have to wait more than a month to receive a new life insurance policy. By creating a new way of assessing a person’s risk factors and reordering the underwriting process, we can now provide consumers with life insurance coverage in a fraction of the time it used to take.”  But surely a reordering of the underwriting process isn’t enough for a patent, is it?

In Ultramercial, the patentee (Ultramercial) asserted that U.S. Pat. No. 7,346,545 (the ‘545 patent) was  infringed by Hulu, LLC (“Hulu”), YouTube, LLC (“YouTube”), and WildTangent,  Inc. (“WildTangent”).  The ‘545 patent,relates to a method for distributing copyrighted products (e.g., songs, movies,  books, etc.) over the Internet for free in exchange for viewing an advertisement with the advertiser paying for the copyrighted content.  What is interesting in this case is that Claim 1 of the ‘545 patent that is allegedly infringed by Hulu, YouTube, and  WildTangent recites a method having not one, not two, but eleven total steps.  (Side note:  One might wonder how anyone can infringe an eleven step method.)  WildTangent’s motion to dismiss for failure to state a claim was granted by the district  court based on the claimed method being patent-ineligible under 35 U.S.C. § 101.  (Hulu and YouTube were dismissed from the  case apparently for other reasons.)

Just as all of us have slowly started to absorb the implications of the remand in Prometheus Laboratories, Inc. v. Mayo Collaborative Services, as well as the triumvirate of opinions in Association for Molecular Pathology (AMP) v. USPTO, on the standard for patent-eligibility under 35 U.S.C. §101, the Federal Circuit (finally) issued its long awaited (by some of us) remand decision in Classen Immunotherapies, Inc. v. Biogen IDEC. That there was a majority (and a dissenting) opinion in the remand of Classen wasn’t surprising. But that there was yet a third “additional views” opinion would likely not have been predicted by anyone. And it is that “additional views” opinion, along with the majority and dissenting opinions, that will certainly generate a “firestorm” through the Federal Circuit, and which may eventually reach the Supreme Court. The judicial donnybrook on the question of what the standard is (or should be) for patent-eligibility under 35 U.S.C. §101 is about to begin in earnest.

As my fellow patent attorney, Kevin Noonan, poignantly says on Patent Docs, the Classen remand decision “[couldn’t] be more different from the Federal Circuit’s earlier decision.” That earlier decision (with Judges Moore and Newman on the panel), which came out not long after the Federal Circuit’s famous (and some would say “infamous”) en banc Bilski decision, is astounding for its brevity (one paragraph of 69 words), or as Kevin also poignantly observed, the claimed method was longer than the opinion by 20 words. As I also commented when that earlier opinion came out, it was ghastly for completely failing to explain how the “new” Bilski “machine or transformation” test was applied to the claimed method. See CAFC: Method for Calibrating Drug Dosage is Transformative.

A little over a year ago the United States Supreme Court issued its decision in Bilski v. Kappos. The critical question presented to the Court for consideration was whether the Federal Circuit erred by creating the so-called “machine or transformation” test, which requires a process to be tied to a particular machine or apparatus, or transform an article into a different state or thing, in order to be patentable subject matter. The Supreme Court held that the machine-or-transformation test is not the sole test for patent eligibility under §101, but rather that it was an important clue, thereby overruling the Federal Circuit who had earlier ruled that the machine or transformation test was the singular test to determine whether an invention is patentable subject matter.

But what practical effect did the Supreme Court ruling in Bilski v. Kappos have? Truthfully, not much at least in terms of the day to day approach of patent attorneys and the U.S. Patent and Trademark Office.  Certainly, the decision was important in that it preserved the patentability of at least some business methods and preserved the patentability of software, both of which continue to remain patentable in the United States.  What has transpired since the Supreme Court’s decision, however, is not much different, if at all different, than what happened day-to-day prior to the decision.