CAFC Affirms Invalidation of Stanford Organ Transplant Rejection Test in Latest Patent-Eligibility Blow to Medical Diagnostics

On July 18, the U.S. Court of Appeals for the Federal Circuit issued a precedential decision in CareDx, Inc. v. Natera, Inc. affirming a summary judgment ruling of the District of Delaware, which invalidated claims from three Stanford University patents licensed by CareDx as patent  ineligible. The decision marks yet another blow to medical diagnostic testing, this time in the context of organ transplants, and the prospects of their developers for obtaining enforceable patent rights.

District Court Rejects Magistrate’s Recommendation that Claims Pass Section 101

There were three patents at issue before the Federal Circuit in this case, each sharing the title Non-Invasive Diagnosis of Graft Rejection in Organ Transplant Patients: U.S. Patent No. 8703652; U.S. Patent No. 9845497; and U.S. Patent No. 10329607. Each of these patents claims methods of detecting levels of donor cell-free DNA (cfDNA) in the blood of an organ transplant patient, as increased levels of donor cfDNA is an indicator that the patient’s body is rejecting the organ transplant. While each patent shares the same specification, the ‘652 patent claims multiplex sequencing to determine the amount of donor cfDNA in a transplant patients blood, the ‘497 patent recites high-throughput sequencing or digital polymerase chain reaction (PCR) diagnostic methods, and the ‘607 patent claims selective amplification of donor cfDNA by PCR before high-throughput sequencing.

As summarized by the Federal Circuit, the methods disclosed by representative Claim 1 from each patent include four separate steps for detecting donor cfDNA in a transplant patient:

     “1. ‘obtaining’ or ‘providing’ a ‘sample’ from the recipient that contains cfDNA;

1. 2. ‘genotyping’ the transplant donor and/or recipient to develop ‘polymorphism’ or ‘SNP’ ‘profiles’;
   3. ‘sequencing’ the cfDNA from the sample using ‘multiplex’ or ‘high-throughput’ sequencing; or performing ‘digital PCR’; and
   4. ‘determining’ or ‘quantifying’ the amount of donor cfDNA.”

CareDx, the exclusive licensee of the three Stanford patents, sued both Natera and Eurofins Viracor alleging that organ transplant rejection tests marketed by those firms infringed upon claims of the asserted patents. Both defendants moved to dismiss the case, arguing that the asserted claims were invalid as directed to subject matter unpatentable under Section 101.

While a magistrate judge recommended that the claims were directed to a new and unconventional combination of steps to detect a natural phenomenon and should pass Section 101 muster, the district court ruled that the specification for each patent raised doubts about validity. After limited expert discovery on the Section 101 issues at play, U.S. District Judge Colm F. Connolly granted Natera and Eurofins’ motion for summary judgment, ruling that the patent claims were directed to the detection of natural phenomena and that the shared specification included admissions that the claims only recited conventional techniques.

Federal Circuit: CareDx’s Patent Claims Are Analogous to Ariosa Diagnostics v. Sequenom

On appeal, CareDx argued to the Federal Circuit that the technological advance claimed by the patents is not the discovery of a natural correlation between transplant rejection and levels of donor cfDNA in a transplant patient’s blood, but rather improved measurement methods that are superior to the existing prior art. CareDx also contended that the district court improperly conflated steps one and two of the Alice/Mayo patent eligibility test, and that its claimed next-generation sequencing techniques to identify and measure donor-specific single nucleotide polymorphisms are inventive breakthroughs that should survive step two of Alice/Mayo.

In affirming the district court’s Section 101 summary judgment ruling in favor of Natera and Eurofins, the Federal Circuit opinion authored by Circuit Judge Alan D. Lourie noted that “[t]his is not a case involving a method of preparation or a new measurement technique.” The Federal Circuit drew several parallels between the Section 101 issues in CareDx’s appeal and the appellate court’s 2015 decision in Ariosa Diagnostics, Inc. v. Sequenom, Inc. In that ruling, the Federal Circuit invalidated patent claims covering methods of detecting paternally inherited levels of cell-free fetal DNA (cffDNA) in maternal blood. The Federal Circuit held that the claims in Ariosa were directed to a natural phenomenon despite the recitation of steps involving amplification of the ccfDNA with the use of PCR techniques:

“Here, as in Ariosa, the claims boil down to collecting a bodily sample, analyzing the cfDNA using conventional techniques, including PCR, identifying naturally occurring DNA from the donor organ, and then using the natural correlation between heightened cfDNA levels and transplant health to identify a potential rejection, none of which was inventive. The claims here are equally as ineligible as those in Ariosa.”

The Federal Circuit’s holding that the techniques involved in the patent claims asserted by CareDx were conventional techniques of immunology and molecular biology relied upon the Delaware district court’s findings regarding disclosures in the patents’ written description. Characterizations of the claimed techniques throughout the written description “confirm their conventionality,” the Federal Circuit found, citing several disclosures in the patents at issue noting that the steps of the claimed methods could be achieved with techniques that are well known in the art. The Federal Circuit also noted that CareDx’s appellate brief conceded that CareDx did not invent or discover the relationship between high concentrations of donor cfDNA and a higher likelihood of organ rejection by transplant patients.

No Procedural Issues with Alice/Mayo Application, Reconsideration of Summary Judgment

Further, the Federal Circuit disagreed with CareDx that there was any procedural impropriety as to how the Delaware district court conducted the two-step Alice/Mayo test. The district court’s discussion of claim language along with the conventionality of the claimed techniques, as conceded by CareDx, leading to the determination that the claims were directed to natural phenomenon, satisfied step one of Alice/Mayo, the Federal Circuit determined. The appellate court also disagreed with CareDx’s argument that determinations of conventionality are limited to step two of Alice/Mayo, citing several cases in which the Federal Circuit upheld invalidations under Alice/Mayo where the conventionality of the claimed techniques were assessed at step one of the test.

“We have repeatedly held that applying standard techniques in a standard way to observe natural phenomena does not provide an inventive concept,” Judge Lourie’s opinion reads. The Federal Circuit ruled that the methods in the recited steps of the patents at issue were already being performed by those in the art, and that nothing inventive results from the claimed combination of steps, a conclusion confirmed by the shared specification of the patents.

Finally, the Federal Circuit dismissed procedural arguments that CareDx raised regarding the district court’s decision to reject the magistrate judge’s opinion as well as the court’s decision to backtrack from an earlier ruling denying summary judgment to Natera and Eurofins. The appellate court found that the district court provided sufficient reasoning in its summary judgment ruling to diverge from the magistrate judge’s recommendation. Further, while the district court initially denied summary judgment prior to limited expert discovery, the court was entitled to reconsider this earlier ruling once it determined that contradictions between CareDx’s extrinsic evidence and “numerous admissions of conventionality in the intrinsic record” eliminated the purported factual dispute between the parties.

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