The Final Plea for 101 Sanity? Athena Amici Ask Supreme Court to Clean Up U.S. Patent Eligibility Mess

By Steve Brachmann
November 5, 2019

“CIPA notes that the Federal Circuit’s en banc denial in Athena and its focus on the judicial exception rather than substantial eligibility conflicts with patent eligibility standards under both the Patent Cooperation Treaty and the European Patent Convention, both of which consider diagnostic methods to be patentable subject matter.”

https://depositphotos.com/4379673/stock-photo-road-sign-order-chaos.htmlNovember 1 was the deadline for filing amicus briefs to the U.S. Supreme Court, which is considering whether to grant a petition for writ of certiorari to take up Athena Diagnostics v. Mayo Collaborative Services on appeal from the U.S. Court of Appeals for the Federal Circuit. Almost every amicus filing to the Supreme Court in this case supported granting the petition or backed up the position of petitioner Athena, who is asking the Supreme Court to clarify its patent-eligibility doctrine under the Alice/Mayo framework on the subject of medical diagnostic patent claims. The appeal to the Supreme Court follows a hotly contested denial of an en banc rehearing of the Federal Circuit’s original panel decision in Athena, which produced eight opinions, including four dissents, with many judges agreeing that Athena’s invention should be patent eligible even while they disagreed over whether Supreme Court precedent allowed for patent protection of diagnostic methods.

The Chartered Institute of Patent Attorneys in Support of Petitioners

The Chartered Institute of Patent Attorneys (CIPA), which is the professional and examining body for patent attorneys in the United Kingdom, filed this amicus brief based on their concerns that the Supreme Court’s decision in Mayo has affected many members of the UK who have patent applications undergoing examination at the U.S. Patent and Trademark Office (USPTO). CIPA notes that the Federal Circuit’s en banc denial in Athena and its focus on the judicial exception rather than substantial eligibility conflicts with patent eligibility standards under both the Patent Cooperation Treaty (PCT) and the European Patent Convention (EPC), both of which consider diagnostic methods to be patentable subject matter. Further, the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), to which the U.S. is a signatory, provides a code for patent eligibility which doesn’t exclude laws of nature or processes involving natural products. Patent rights for Athena’s patent-in-suit here have been granted in both Europe and Canada. Australia has also upheld the eligibility of diagnostic method patents in infringement cases. Citing to the Supreme Court’s 1804 decision in Murray v. Schooner Charming Betsy, CIPA states that Section 101 “ought never to be construed to violate the law of nations if any other possible construction remains.”

CIPA contends that clarification is needed to determine the relationship between the positive eligibility provisions of Section 101 with the judicial exceptions identified by the Supreme Court. Further, CIPA argues that the fact pattern of this case is consistent with substantive patent eligibility as the claims-at-issue touch upon three of four types of inventions that are patent-eligible under the statute. While the majority panel at the Federal Circuit properly identified a natural law, in this case the correlation between the presence of muscle specific tyrosine kinase (MuSK) autoantibodies and MuSK-related neurological diseases, CIPA argues that the majority should have identified the focus of the claims in terms of the procedural steps to be carried out and the new materials produced by the process. As well, these new materials are formed in vitro in a laboratory test procedure, rather than in vivo within the human body as was the case with the claims invalidated in Mayo. CIPA also cites to the Supreme Court’s 1981 decision in Diamond v. Diehr, arguing that no valid distinction can be drawn between the rubber molding process upheld in Diehr and the diagnostic method of Athena, which similarly transforms an initial material into a different state or thing.

The Honorable Paul R. Michel (Ret.) in Support of Petitioners

The Honorable Paul R. Michel, who served on the Federal Circuit for 22 years and was its Chief Judge from 2004 to 2010, begins his amicus brief, filed by Matthew Dowd of Dowd Scheffel, by pointing out that “[t]he Federal Circuit’s menagerie of patent-eligibility decisions over the past decade are devoid of any semblance of consistency.” This lack of consistency is underscored by his belief that the Athena en banc denial represents the greatest instance of disharmony on patent law at the Federal Circuit that he has ever seen.

“On one level, it is nearly impossible to overstate the level of judicial discordance in this case,” Judge Michel wrote, noting that the en banc denial produced eight separate opinions that resulted in the invalidation of Athena’s patent claims despite the fact that the majority of Federal Circuit judges thought the invention was patent-eligible. Not only was the decision highly splintered, but Judge Michel points out that nearly every opinion asked the Supreme Court for further guidance on its Section 101 patent-eligibility doctrine. The Federal Circuit’s doctrinal confusion was further underscored by its recent decision in American Axle & Manufacturing, Inc. v. Neapco Holdings LLC in which a Federal Circuit majority invalidated patent claims for a method of manufacturing a shaft assembly of a driveline system a law of nature was utilized by the method. This “gross misapplication of [Section] 101,” as Judge Michel calls that decision, expands the statutory function of Section 101 in a way that will continue to lead to troubling decisions from the courts.

The confusion over the patent-eligibility doctrine extends well beyond the Federal Circuit, Judge Michel notes, as all three branches of the federal government have adopted inconsistent positions on the subject. Congress, in enacting the Patent Act, has authorized broad patent protection as is evidenced by its use of the word “any” in Section 101, which authorizes patent-eligibility for “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” The Judicial Branch has given mixed treatment to medical diagnostics patents as the “natural law” and “abstract idea” judicial exceptions have worked to invalidate diagnostic claims in many cases while other cases have affirmed diagnostic claims without any clear method for delineating when a law of nature will be found. In the Executive Branch, the USPTO has issued guidelines on the patent eligibility of diagnostic inventions, but as the Federal Circuit’s 2019 decision in Cleveland Clinic Foundation v. True Health Diagnostics LLC makes clear, the Federal Circuit isn’t bound by the USPTO’s subject matter eligibility guidance.

This uncertainty over patent eligibility undermines investment in the U.S. biotech and medical diagnostics industries, investment which Judge Michel points out is incredibly costly. Judge Michel cites statistics showing that R&D and commercialization costs for a single diagnostic test average anywhere from $50 million to $75 million and can reach upwards of $100 million. The uncertainty posed by the Federal Circuit’s application of the Supreme Court’s patent-eligibility doctrine harms the ability of innovators to invest the money required to develop new diagnostic tests and are increasingly forcing innovators to seek patent protection in jurisdictions like China and Europe where eligibility doctrines are much more certain.

Intellectual Property Owners Association in Support of Petitioners

The Intellectual Property Owners Association (IPO), a trade association representing 175 companies and more than 12,000 individuals owning IP rights, argues in its amicus brief that the Supreme Court’s Alice/Mayo framework has been applied inconsistently, resulting in an undesirable lack of predictability in patent cases. This has undermined the Federal Circuit’s “raison d’être,” namely the development of uniform and consistent patent law. IPO leans heavily on Newman’s dissent in Athena’s en banc denial, which argued that uncertain legal regimes that disincentivize innovation harm the public, “for diagnostic methods that are not developed benefit no one.”

IPO contends that the inconsistency of results under Alice/Mayo is underscored by comparing the results of Athena with the Federal Circuit’s 2018 decision in Vanda Pharmaceuticals v. West-Ward Pharmaceuticals. In both Athena and Vanda, patent claims-at-issue were directed towards methods of treatment involving an examination of a patient’s ability to metabolize a drug and using that information to adjust the patient’s treatment plan accordingly. While claims directed at correlating a patient’s metabolism of a drug with a proper dosage treatment were invalid in Athena and Mayo, similar claims were upheld in Vanda.

Like Judge Michel, IPO discusses the USPTO’s subject matter eligibility guidance, although IPO notes that the recommendations within that guidance points out the unpredictability of the Alice/Mayo framework. Analysis of examples of eligible and ineligible diagnostic claims disseminated by the USPTO between 2014 and 2016 show that, while one claim includes an additional diagnosing limitation and is thus wholly encompassed by the other example claim which meets Section 101 eligibility under the guidance, the narrower claim is actually ineligible under the USPTO’s guidance because that diagnostic step is directed at a law of nature. “Common sense, and long-standing cannons of patent law, would dictate that if the broader claim is directed to patent eligible subject matter, so too should be the narrower claim,” IPO states.

This uncertainty in diagnostic method patent-eligibility is even more troubling given the rate at which the biotech industry has been growing in recent years. IPO argues that the biotech sector will reach a global market size of $775 billion by 2024 while the number of patent grants in the sector have increased by 25 percent between 2010 and 2015. IPO also cites a 2019 investor survey by SMU Dedman School of Law Professor David O. Taylor which found that nearly three-quarters of investor respondents agreed that patent-eligibility is an important consideration for investment decisions. Sixty-two percent of investors surveyed said that they’d be less likely to invest in a technology company if their developments couldn’t be patent-protected.

Pharmaceutical Research and Manufacturers of America in Support of the Petition

The Pharmaceutical Research and Manufacturers of America (PhRMA), which represents U.S. biopharmaceutical research companies that have invested $900 billion in R&D since 2000, argues in its amicus brief that the Federal Circuit, which has invalidated every diagnostic claim appealed to that court, has acknowledged that its application of Section 101 patent eligibility could eliminate all patent protection for diagnostics. While method-of-treatment claims have been largely upheld as valid, recent decisions like INO Therapeutics LLC v. Praxair Distribution Inc. have introduced the “natural phenomenon” exception into this area of biotech as well. In Athena, both the groundbreaking nature of the discovery about the association between biomarkers and neurological disease and the low preemption concerns caused by the narrow sequence of steps claimed by the patent gives the Supreme Court an ideal opportunity to clarify its precedent regarding diagnostic patent eligibility.

PhRMA notes that diagnostics play an important role in the public health system, guiding two-thirds of all clinical decisions in the U.S. while accounting for 2.3 percent of total healthcare expenses. Diagnostic tests are important for the growing field of personalized medicine, where diagnostic testing allows physicians to target treatments for optimal benefits and minimal side effects. Future innovation in diagnostics requires patent protections because of the cost of developing new tests, estimated at $100 million per new test as of 2011, and the relatively cheap way that those tests can be reproduced. PhRMA’s brief concludes by traveling much of the same ground regarding the effects of uncertain patentability on R&D investment in biotech and other fields.

Eleven amicus briefs were filed in all. Read them all here and read a summary of the brief filed by Sherry Knowles and Meredith Addy on behalf of Freenome Holdings and New Cures for Cancers here.

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The Author

Steve Brachmann

Steve Brachmann is a freelance journalist located in Buffalo, New York. He has worked professionally as a freelancer for more than a decade. He writes about technology and innovation. His work has been published by The Buffalo News, The Hamburg Sun, USAToday.com, Chron.com, Motley Fool and OpenLettersMonthly.com. Steve also provides website copy and documents for various business clients and is available for research projects and freelance work.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 5 Comments comments. Join the discussion.

  1. anonymous November 6, 2019 10:50 am

    Inventors are playing small ball. Efficient infringers like Google, Amazon, and Apple aren’t. It is time for innovators to think more broadly, beyond restoring 101 eligibility to what it has always been and beyond eliminating the PTAB. The pendulum must swing in favor of innovation. When it is easy to see that China’s intellectual property laws are becoming stronger than those of the United States, immediate fixes are needed. The AIA was the only major change to the Patent Act since 1952, and large parts of it didn’t work for innovators. It was an experiment gone wrong, unless you’re an efficient infringer looking to kill patents at the PTAB.

    First, Congress needs to restore its constitutional authority to determine patent eligibility. No more judicial exceptions and no more wasting of judicial resources with unjust results. We all know Senators Tillis and Coons are leading a bipartisan effort to get this done. We need to continue to encourage this legislation, without it being watered down by the efficient infringer lobby.

    Second, we need to start discussing patent incontestability. A patent is property. At some time, title must quiet, but when? I propose that after a period of 3 years, a patent’s validity should become incontestable.

    Third, we need to address the legal fiction of a person of ordinary skill in the art. This goes hand in hand with patent incontestability. The PTO conducts a diligent search for prior art. The applicant has a duty of candor and must disclose material prior art. The efficient infringer, though, does what NO POSITA COULD EVER DO – spend many months or years and hundreds of thousands of dollars with the hindsight of the patent disclosure to search for prior art. This ought not be what obviousness is. This process damages the system itself. It calls into disrepute the PTO’s ability to examine applications in the first place. It saps judicial resources. It turns an agency against itself and turns branches of the federal government against one another. It breeds uncertainty. It encourages efficient infringers to pay hundreds of thousands of dollars for prior art searches and attorneys fees, rather than paying reasonable royalties in the free market. I say post-issuance, give a would-be infringer 3 years to challenge validity, then all patents become incontestable. Voluntary licensing would flourish, as courts would only be using juries to determine infringement, willfulness, and damages.

    Fourth, we need to address serial willful infringers. Willful patent infringement is part of Apple’s business model. They, and other bad actors like Amazon, want long term market share, patent holders be damned. Without any serious disincentive, willful infringement will continue to crush real inventors while the modern-day robber barons flourish.

    Fifth, we need to seek more funding for the PTO. Ensure examiners perform the most thorough, reasonable search they can in a reasonable amount of time. If we can find $400M for Ukraine or Planned Parenthood or farm subsidies or a hundred other programs, we can find it for our own innovators and the integrity of our own legal system for innovators.

    Sixth, we need to restore the right to trial by jury. No inventor waives a right to trial by jury by the act of inventing. Juries handle the most complex commercial and technical issues every day, they put people in jail or sentence them to death, and they certainly can handle deciding patent infringement cases. Let them do it. If there is equity to be done for pioneering patents, or for so-called “weak” patents offering marginal improvements, juries can adjust damages awards accordingly.

  2. Pro Say November 6, 2019 2:51 pm

    Superb recommendations anonymous @ 1.

    Superb.

    Congress: Where are you with that eligibility restoration bill?

    The hearings are long gone.

    How much more of this innovation-killing can America take?

    How? Much? More?

  3. Anon November 6, 2019 3:58 pm

    Bravo anonymous – all fine points.

  4. The Republican Party is a Hate Group November 7, 2019 12:59 pm

    The main point of the AIA was to kneecap trolls and reduce the “strength” of junky “correlate this” and “do it on a computer” patents by making it easier to invalidate them.

    Flooding the system with more of those patents is a non-starter but y’all do like to listen to the sound of your own voices so carry on.

  5. Anon November 8, 2019 7:15 am

    TRPiaHG,

    Thank you for expressing your feelings (and the choice of moniker was an indicator of those feelings — just not in the way that you may have desired).

    You remind me of the blight on another blog, a poster who also cannot control his feelings.

    Your comment, like that blight, has been given its due weight.

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