Bilski Tea Leaves: Remembering the Lab Corp. Non-decision

By Gene Quinn
January 18, 2010

It has been just over two months since the Supreme Court heard oral arguments in Bilski v. Kappos, and we likely have at least several more months to wait for a ruling. Notwithstanding, pundits and commentators are certainly trying to figure out what the Supreme Court will do, engaging in thought exercises and gazing into crystal balls. The crystal ball of preference is history, tied together with a healthy bit of speculation based on how similar cases and issues were previously addressed by the Court. No single case could be more telling with respect to how the Supreme Court may rule than a case in which they did not rule — Laboratory Corporation of America v. Metabolite Laboratories. In this case the United States Supreme Court decided not to issue a ruling, which may not seem noteworthy at first glance. After all, approximately 8,000 petitions are filed with the Supreme Court each year, and an additional 1,200 applications of various kinds are filed per year that can be acted upon by a single Justice. There is simply not enough time to consider each case where Supreme Court review is sought, so the Court has historically been very selective in choosing cases, normally only issuing full opinions in roughly 80 to 100 cases each year. But, as is frequently the situation with the Supreme Court, there is more than meets they eye with respect to Lab Corp.

The real story behind Laboratory Corporation of America v. Metabolife Laboratories is that the Supreme Court did decide to hear this case as a part of the 2005 Term, which begins in October and runs through the following summer, usually ending at the end of June or the beginning of July. Notwithstanding the Court’s decision to hear the case, and notwithstanding the fact that it was fully briefed by both sides, on June 22, 2006, the Court, without explanation, issued an order explaining that no decision would be forthcoming because the appeal was improvidently granted.

So what does this mean? Well, this case would have likely required the Supreme Court to visit a topic that is becoming something of a thorny issue in patent law, namely what is patentable subject matter? While this may seem to be a trivial question, and indeed has been largely settled for many years, but the question is back in the national spotlight (at least for patent afecionados) because of scientific advances, various rulings of the United States Court of Appeals for the Federal Circuit and a United States Patent Office that seems to grant patents on virtually anything, no matter how broad.

The patent in question, U.S. Patent No. 4,940,658, claimed a method for detecting cobalamin or folate deficiency. Because these B vitamins assist in metabolizing the amino acid homocysteine, scientists directly assayed homocysteine to screen for cobalamin and folate deficiency. These direct homocysteine assays were unreliable. Then researchers at University Patents Inc. (UPI) discovered a relationship between elevated levels of total homocysteine and a deficiency in either cobalamin or folate. As a result, the UPI inventors ultimately received a patent on a process for determining cobalamin or folate deficiencies. The only claim at issue before the failed Supreme Court appeal was claim 13, which claimed: “A method for detecting a deficiency of cobalamin or folate in warm-blooded animals comprising the steps of: assaying a body fluid for an elevated level of total homocysteine; and correlating an elevated level of total homocysteine in said body fluid with a deficiency of cobalamin or folate.”

On appeal to the Supreme Court Laboratory Corporation of America argued a method patent directing a party simply to ‘correlate’ test results could not be valid because it would violate the requirement that patents be issued to inventions displaying patentable subject matter. Specifically, they argued that if such patents are allowed the patentee would be granted exclusive rights over basic scientific facts. Whether this would be true or not, the fact is that Laboratory Corporation of America never raised the patentable subject matter argument before the district court, nor did they raise the argument at the Federal Circuit. This admittedly did not stop the Supreme Court from originally accepting the case, but well established appellate principles dictate that an argument not raised below is waived on appeal. Perhaps after Chief Justice Roberts and Justice Alito arrived the Supreme Court felt that Laboratory Corporation did not preserve the issue and the appeal should not have been granted in the first place.

Nevertheless, Justice Breyer issued a dissenting opinion, joined by Justices Stevens (still on the Court) and Souter (retired and replaced by Justice Sotomayor). These three Justices, not only wanted to hear the case, but explained that there is no doubt in their mind that the claim in question, claim 13, was unpatentable because it merely recited a law of nature. In so voicing their opinion on the merits in a case where the key issues were not preserved for appeal, Just Breyer summarily dismissed the patent owners argument that the correlation is patentable because claim 13 packages it in the form of a “process” for detecting vitamin deficiency, with discrete testing and correlating steps. In so dismissing the patent owner’s argument, Justice Breyer merely explained that he did not accept their interpretation of prior case law. Justice Breyer did, however, acknowledge the Supreme Court’s previous rulings clearly indicating that a process is not unpatentable simply because it contains a law of nature, but did not address this point in a coherent manner.

Essentially, it seems that Justice Breyer was upset by the fact that such a broad claim could be allowed period. He acknowledged that the claim at issue does recite a series of steps, but was deeply troubled by the fact that any process can be reduced to a series of steps, which seems exceptionally curious given that in order to obtain method claims the overall process is required to be explained in a series of steps.

In truth, the dissent of Justice Breyer seems short-sighted. As is the case with many inventions that are foundationally important, many judges seem extraordinarily willing to find such pioneering inventions invalid for one reason or another. Indeed, Justice Breyer even glowingly referred to the Supreme Court’s decision in Gottschalk v. Benson, the Supreme Court case that originally prevented the patenting of software. Today, the ruling in Gottschalk universally believed to be wrong by those in the patent community, yet to some it still seems to remain the seminal case showing that pioneering inventions should not be patented. In Gottschalk the Supreme Court determined that an invention that manipulated decimal numbers into binary code could not be patented because its only use would be to enable digital computers to operate. This ruling has lead one leading patent text to note: “With much of the world economy controlled by digital computers, it seems almost nonsensical to suggest that the invention has no substantial application except in connection with a digital computer.”

It seems clear that patentable subject matter still allows for useful processes to be patented, even if those processes incorporate scientific principles or discoveries. This has been the law since the beginning, it is ingrained in well established case law from the Supreme Court and the Federal Circuit, and is actually explicitly authorized by 35 U.S.C. § 101. Nevertheless, as we await a decision in Bilski, and the Southern District of New York is confronted with a lawsuit challenging the constitutionality of the US patent system, and in particular the granting of gene patents, it seems ever more clear that with every new, fundamentally important invention there is a cry for a cut back in what is considered patentable subject matter.

For now, we can rest easy given the appreciated and unexpected dismissal of Laboratory Corporation of America v. Metabolife Laboratories, and the fact that even Justice Breyer during oral arguments in Bilski said that he was uncomfortable with just how far the Federal Circuit went.  Furthermore, with Justice Souter is no longer on the Court and replaced by Justice Sotomayor, who repeatedly referred to the CAFC Bilski decision as “extreme,” there is real reason for optimism for those who prefer an expansive view of patentable subject matter.  But what does that mean for the Bilski patent application?  While it is impossible to know for sure, it seems likely that the Supreme Court will significantly retreat from the CAFC Bilski decision, but probably find the purely mental process in Bilski to be unpatentable subject matter.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and President & CEO ofIPWatchdog, Inc.. Gene founded IPWatchdog.com in 1999. Gene is also a principal lecturer in the PLI Patent Bar Review Course and Of Counsel to the law firm of Berenato & White, LLC. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

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Discuss this

There are currently 8 Comments comments.

  1. EG January 19, 2010 7:50 am

    “In truth, the dissent of Justice Breyer seems short-sighted.”

    Gene,

    That’s an understatement. Yes, Justice Breyer, the one who denigrated our area of law with comments about “racoon inventions” during oral argument in KSR International. You can also count amongst those who view Gottschalk as a travesty, written by the most anti-patent Justice of all time, William O. Douglas. Parker v. Flook after it was even worse “gobbledygook” to use the phrase of another Justice who also frequently denigrates patnt law.

    But with Justice Sotomayor, there may be hope for us. We’ll just have to wait and see how Bilski turns out (and hope we don’t cringe).

  2. EG January 19, 2010 7:52 am

    Gene,

    Sorry, add “me” after “count.” Too early in the morning yet for me.

  3. pop January 20, 2010 10:37 am

    I actually like the machine or transformation test so my fingers are crossed for the Bilski decision to be upheld. Some people want software patents thrown out all together, a very unlikely scenario, which I wouldn’t be unhappy with, but is not my ideal solution. To me that feels like killing a fly with a sledge hammer.

    Nobody is ever going to be happy with any test that is put in place and patent lawyers will always find new ways to write around those tests. I just want to see abuse of all kinds stop. People greedily file patents for things just because they know they will probably get it and it means they can use it to sue or avoid being sued, and not because they are trying to protect some great invention of theirs. Patent examiners do not have the time, resources, or expertise to correctly identify bad software patents. Who can blame them with so many being filed each day.

    Everybody is being hurt and the whole thing has degenerated into a big snowball fight. Grab the nearest snow, form it into a patent and start tossing. Small businesses get crushed and run out of business before they ever get a chance to succeed and anything new or novel they may have brought to the table gets lost over protecting the status quo, which is why things have been stagnant for so long. We have to wait for the serious patent portfolio players to innovate because they can stop anybody else who tries to compete with them. Even if a small business owner has a patent or two it may not help him against his attack if they aren’t threatened by it. Big business isn’t safe either because small business and parasite companies are always trying to sue them for their money, taking away money from real R&D and wasting a lot of time in court.

    A lot of time, resources, and opportunities are being squandered by people who are ‘protecting’ themselves.

  4. Gene Quinn January 20, 2010 11:42 am

    POP-

    Well said.

    -Gene