The law as it relates to software has been in flux over the last 10 years. Many older patent applications simply do not have enough detail to satisfy the current requirements to obtain a patent, although when drafted they would have been sufficient to satisfy the requirements then in place. Describing software as a pure method claim has not worked for a long time despite the fact that in reality software is really a method. Much more than a cursory description of software as a series of steps is required in order to have hope of obtaining patent protection for software.

Indeed, ever since the Federal Circuit en banc decision in Bilski, claims have been required to be tethered to tangible components, such as data storage devices, processors, databases, controllers, servers and the like. Unfortunately, however, the Patent Trial and Appeals Board at the United States Patent and Trademark Office now has taken the position that they will ignore the tangible components within a computer implemented method claim and then look to see what remains before determining whether the claim is patent eligible. See PTAB Kills Software.

Of course, after you remove or ignore the tangible components what remains is a naked process, which is patent ineligible. Thus, deciding to ignore tangible components leads to the inescapable conclusion that no software is patent eligible. Such disingenuous reasoning has the effect of punishing applicants for writing claims as the Patent Office has mandated ever since the machine-or-transformation test was first announced by the Federal Circuit in Bilski. The test announced in SAP/Versata, which was the first covered business method review decision announced by the PTAB, cannot be the correct test, and ultimately the decision (or at least the rationale) will be reversed. Any test that has the net effect of rendering all software patent ineligible, like the SAP/Versata test, is simply not correct as I will explain more clearly below.

There are a great many people inside the patent industry that are working hard to convince themselves that the Supreme Court decision in Association of Molecular Pathology v. Myriad Genetics is not so bad. The argument goes that the Supreme Court explicitly stated that cDNA is patent eligible and that Chakrabarty remains good law. The trouble with both rationales is that they are incorrect.

It seems to me that anyone who tries to convince themselves that Myriad is anything other than a disaster is just fooling themselves. It does no good to put our heads in the sand and ignore what the Supreme Court said as if by doing so it will make a difference. Anyone who is honest with themselves knows how the district courts will interpret Myriad, and it will not be in a patentee friendly manner.

But before going to far, let me conclusively demonstrate with the Supreme Court’s own explicit language why those who are trying to convince themselves, and others, that the decision is workable are wrong.

The Supreme Court unanimously ruled yesterday that isolated DNA is not patent eligible under 35 U.S.C. §101. See  Association of Molecular Pathology v. Myriad Genetics. Or, put more precisely, the Court ruled that Myriad’s isolated DNA claims as written are not patent eligible.  The Court further ruled that similar cDNA claims are for the most part patent eligible, seemingly because the information underlying the claimed molecule omits some content of the information which underlies the full gene.

Spoiler alert: If you are the type of person who enjoys reading about convoluted analogies to baseball bats, plucked leaves, mined gold and surgically removed livers, you are out of luck.  Mercifully, and quite amazingly, the Court managed to avoid that morass.

A pivotal point is the question of whether Myriad was claiming information or a chemical compound.  Of course, the unique thing about DNA is that it is both (i) a chemical compound comprised of carbon, oxygen, nitrogen, phosphorus and hydrogen, and can be bound to cellular proteins, and (ii) an informational blueprint for proteins which form the building blocks of every living thing.

The Supreme Court on May 20, 2013, agreed to review a Federal Circuit decision that a patent licensee bears the burden of proof in its action for a declaratory judgment of noninfringement where the license remains in effect to preclude the defendant patentee’s infringement counterclaim.  Medtronic Inc. v. Boston Scientific Corp., U.S., No. 12-1128, 5/20/2013.

The question presented in the petition for certiorari is as follows:

In Medlmmune, Inc. v. Genentech, Inc., 549 U.S. 118, 137 (2007), this Court ruled that a patent licensee that believes that its products do not infringe the patent and accordingly are not subject to royalty payments is “not required … to break or terminate its … license agreement before seeking a declaratory judgment in federal court that the underlying patent is … not infringed.”

The question presented is whether, in such a declaratory judgment action brought by a licensee under MedImmune, the licensee has the burden to prove that its products do not infringe the patent, or whether (as is the case in all other patent litigation, including other declaratory judgment actions), the patentee must prove infringement.

Vernon Bowman is a 75-year-old, recently bankrupt small farmer in Indiana. Monsanto is a multinational corporation that is revered in the industry for its innovations in the field of genetically modified seed technologies, but equally reviled in the American heartland for its staunch protection and ruthless enforcement of its patent rights against small farmers. In a unanimous decision, the Supreme Court sided with Monsanto in finding that Bowman had infringed Monsanto’s patents on genetically altered soybean seeds. This would translate into tens of thousands of dollars in liability for the small farmer. Those reacting purely emotionally to the story will be inclined to sympathize with the small farmer. And recalling Steinbeck’s Grapes of Wrath, they would lament, “The small farmer was weary and frightened because he had gone against a system he did not understand and it had beaten him.” However, the Court’s decision is merely a classical application of basic patent principles.

For years, Vernon Bowman purchased Roundup Ready® soybean seeds from a Monsanto affiliate each year for his main crop of the season. The purchase required Bowman’s assent to a licensing agreement, which prohibited Bowman from saving any of the seeds for replanting. For his late-season second crop, however, Bowman would attempt to skirt Monsanto’s licensing agreement and instead purchase commodity soybean seeds from a grain elevator. The commodity soybean seeds are normally tagged for human or animal consumption only. Anticipating that a batch of commodity soybean seeds would surely contain some Roundup Ready® seeds, Bowman planted the seeds, applied Roundup herbicide to his fields, selectively recovered soybeans exhibiting the Roundup Ready® trait, and saved those seeds for further plantings. Bowman harvested eight late-season crops in this way.

Since my last article here on IPWatchdog.com, the pharmaceutical industry has been simply overflowing with interesting developments, including the US Supreme Court hearing arguments concerning three significant cases.

The first case argued at the Supreme Court will determine whether generic drugmakers can be sued for alleged flaws in the design of their medications. At issue is whether federal law preempts such claims from proceeding in state court and if drugmakers can be held liable if they decline to withdraw their medicines from the marketplace.

Of course, the same concept could be applied to brand-name drugmakers, which is why the entire pharmaceutical industry is on edge. In fact, the Obama administration filed a brief in support of drugmakers over concerns the FDA regulatory review process could be undermine if medicines deemd safe and effective could later by considered ‘unreasonably dangerous.’

The court reviewed an appeal by Mutual Pharmaceutical to overturn a $21 million jury award to a New Hampshire woman who in 2004 had taken a generic painkiller called sulindac, but developed Stevens-Johnson Syndrome and toxic epidermal necrolysis. She’s nearly permnanetly blind and suffered burn-like lesions over most of her body, underwent numerous surgeries, and is now unable to read, drive or work, and must use a feeding tube, her lawsuit says.

Yesterday the United States Supreme Court heard oral arguments in Association for Molecular Pathology v. Myriad Genetics, Inc. While the Association for Molecular Pathology (AMP) is the named party in the case, it is really a case brought and forwarded by the American Civil Liberties Union (ACLU).

Myriad Genetics is the patent holder on various innovations relating to isolated DNA comprising an altered BRCA1 DNA and various methods of screening for cancer built upon various observations of the altered BRCA1 DNA. Essentially, AMP and the ACLU, along with researchers, competitors of Myriad Genetics and consumers filed a lawsuit challenging the constitutionality of a number of gene patents owned by Myriad and argued that gene patents should not be granted because patenting a gene is the same as patenting something that exists in nature.

This argument succeeded at the district court, but has twice failed at the Federal Circuit. The Federal Circuit initially reversed the district court, but appeal was made to the Supreme Court by AMP/ACLU. See As Predicted, Federal Circuit Rules Isolated DNA Patentable. In the meantime the Supreme Court issued a decision in Mayo v. Prometheus and remanded this case to the Federal Circuit for further consideration in light of the Court’s decision in Mayo v. Prometheus. The Federal Circuit again sided with Myriad Genetics. See AMP v. USPTO Remand Déjà Vu. Appeal was taken to the Supreme Court, which accepted certiorari. See Supreme Court Grants Cert in Amp v. Myriad. The only issue accepted by the Supreme Court was the broadest issue: are human genes patent eligible?