Federal Circuit decision again results in three-way split in reasoning in AMP v. USPTO; 2-1 ruling upholds DNA patents
On Thursday, 16 August 2012, the Court of Appeals for the Federal Circuit issued its opinion in the case Association for Molecular Pathology v. US Patent and Trademark Office, again rejecting the plaintiffs' contentions that isolated DNA is not eligible for patent protection. This case surrounds the patent eligibility of isolated DNA, particularly the BRCA1 and BRCA2 genes known to be associated with an individual's susceptibility to breast and ovarian cancer.
Although a longer summary and analysis of each of the three opinions is provided below, the short version is that the Federal Circuit decided the case the same way it did last year. Judge Lourie authored the majority opinion finding that isolated DNA is markedly different from native DNA and therefore eligible for patent protection. Judge Moore found that the markedly different characteristic plus its utility in its isolated form renders the claims eligible for patent protection. Again, though, Moore cautioned that if the case were being decided on a blank canvas, she may not have decided the case the same way. Because it was not a blank canvas, though, she deferred to the USPTO practice of granting the patents. Judge Bryson dissented in the case with respect to the issue of eligibility of isolated DNA, finding the isolation analogous to the isolation of an element such as lithium or an organ such as a kidney, both of which would be unpatentable. Only Bryson appeared to afford the Mayo opinion with much weight or relevance to the present case. Lourie and Moore both gave substantial deference to USPTO whereas Bryson again declined to do so citing "no collective right of adverse possession to intellectual property."
The case was originally decided in the district court for the Southern District of New York in 2010. On appeal in 2011, the Federal Circuit determined by a 2-1 vote that isolated DNA was eligible for patent protection. However, that opinion was a fragmented one and a three-way split in reasoning resulted. Notably, those three lines of legal reasoning were different from that of district court Judge Sweet. In early 2012, the plaintiffs in the case filed a petition for writ of certiorari to the Supreme Court of the United States. After the Supreme Court unanimously rejected the patents-at-issue in Mayo v. Prometheus, the Court granted writ, vacated the Federal Circuit decision and remanded the case back to the circuit court. On 20 July 2012, the Federal Circuit re-heard oral arguments in the case; Chris Hansen of the ACLU argued for plaintiffs, Melissa Patterson argued on behalf of the US and Gregory Castanias of Jones Day argued for the defendants. Additional background/coverage on the case is available here. The ACLU page for the case is available here.
Ultimately, the case will almost certainly be appealed to the Supreme Court again. Interestingly, the Mayo v. Prometheus case took a similar pathway before being unanimously decided by the Court earlier this year. The procedural history of Mayo v. Prometheus also involved the petition for writ of certiorari being granted, the case vacated and then remanded back to the Federal Circuit to be re-heard in light of the Supreme Court's decision in the Bilski case. The Federal Circuit in Mayo upon re-hearing reached the same holding it did the first time around and the case was then appealed to the Supreme Court again, where the decision was ultimately reversed. There are now essentially four different lines of reasoning (District Court Judge Sweet and Federal Circuit Judges Lourie, Moore and Bryson each wrote his or her own opinion, each relying on different reasoning) with respect to patent eligibility of DNA and genes and when this case was previously appealed to the Supreme Court, plaintiffs and amici noted that guidance is needed due to the clearly diverging legal opinions and reasoning in the case.
Lourie Majority Opinion: Isolated DNA patent eligible because markedly different from native DNA
With respect to the Federal Circuit opinion, as in the previous round, Judge Lourie, appointed by George H. W. Bush, authored the majority opinion. Judge Moore, appointed by George W. Bush, joined the majority opinion on the issues of standing, method claims, and cDNA, but wrote her own concurring opinion (as she did in the previous round) on the issue of isolated DNA. Although the defendant-appellants in the case again raised the issue of standing, the court declined the "suggestion of mootness" filed by counsel for Myriad Genetics. The court again relied on the standing of Dr. Ostrer.
In the majority opinion, Lourie first clarfies what the "appeal is not about." He notes that the question to be answered solely whether the patents-at-issue are eligible for patent protection under 35 USC 101. He further notes that the policy questions at issue in the case are better left to be determined by Congress. Interestingly, Lourie cites high amounts of investment in this field as supporting a system of incentive of exclusive rights; in doing so, Lourie seemingly ignores the evidence that much of the isolation and discovery of DNA is done through federal funds at public research institutions or universities and that the costs for developing diagnostic tests are several orders of magnitude lower than the costs for developing new drugs or other medical technologies.
Before reviewing the applicability of the Supreme Court's Mayo holding to the claims of the Myriad patents, however, it is important to state what this appeal is not about. It is not about whether individuals suspected of having an increased risk of developing breast cancer are entitled to second opinion. Nor is it about whether the University of Utah, the owner of the instant patents, or Myriad, the exclusive licensee, has acted improperly in its licensing or enforcement policies with respect to the patents. The question is also not whether is it desirable for one company to hold a patent or license covering a test that may save people's lives,e or for other companies to be excluded from the market encompassed by such a patent--that is the basic right provided by a patent, i.e., to exclude others from practicing the patented subject matter. It is also not whether the claims at issue are novel or nonobvious or too broad. Those questions are not before us. It is solely whether the claims to isolated BRCA DNA, to methods for comparing DNA sequences, and to a process for screening potential cancer therapeutics meet the threshold test for patent-eligible subject matter under 35 USC 101 in light of various Supreme Court holdings, particularly including Mayo. The issue is patent eligibility, not patentability.
We would further note, in the context of discussing what this case is not about, that patents on life-saving material and processes, involving large amounts of risky investment, would seem to be precisely the types of subject matter that should be subject to the incentives of exclusive rights. But disapproving of patents on medical methods and novel biological molecule are policy questions best left to Congress, and other general questions relating to patentability and use of patents are issues not before us.
Lourie's opinion essentially asserts that Mayo has no bearing on the question of whether isolated DNA molecules are eligible for patent protection. The majority opinion finds that "the isolated DNA molecules before us are not found in nature. They are obtained in the laboratory and are man-made, the product of human ingenuity. While they are prepared from products of nature, so is every other composition of matter."
In finding Myriad's patents eligible for protection, Lourie relies on what he believes is a "markedly different" characteristic between isolated DNA and that which is found in nature, a requirement for eligibility under Supreme Court jurisprudence. As in his prior decision, Lourie asserts that the breaking of covalent bonds in order to isolate the DNA and the shorter portion of the naturally occurring molecule render the BRCA1 and BRCA2 sequences different and therefore eligible for patent protection. He asserts that "isolated DNA is not just purified DNA" because it has been "manipulated chemically so as to produce a molecule that is markedly different from that which exists in the body." Lourie thus distinguishes the Myriad claims from cases such as Parke-Davis and In re Marden which involved purification of molecules or elements.
Lourie did not find persuasive the arguments by the plaintiffs that the isolated DNA has the same nucleuoutide sequence as native DNA. The majority opinion also found that the "physiological use or benefit" does not determine patent eligibility, though they may be relevant to cases of nonobviousness.
The majority opinion suggests that Congress is in a better position to determine whether the claims are deserving of patent protection, but that under the current patent laws, isolated DNA is eligible for patent protection:
Under the statutory rubric of 101, isolated DNA is a tangible, man-made composition of matter defined and distinguished by its objectively discernible chemical structure. Whether its unusual status as a chemical entity that conveys genetic information warrants singular treatment under the patent laws as the district court did is a policy question that we are not entitled to address. Cf. Nat'l Fed'n of Indep. Bus. v. Sebelius, 132 S. Ct. 2566, slip op. at 6 (2012) ("[W]e possess neither the expertise nor the prerogative to make policy judgments. Those decisons are entrusted to our Nation's elected leaders, who can be thrown out of office if the people disagree with them."). Congress is presumed to have been aware of the issue, having enacted a comprehensive patent reform act during the pendency of this case, and it is ultimately for Congress if it wishes to overturn case law and the long practice of the PTO to determine that isolated DNA must be treated differently from other compositons of matter to account for the perceived special function. We therefore reject the district court's unwarranted categorical exclusion of isolated DNA molecules.
Despite the fact that the US government did not resurrect its "magic microscope test" at oral arguments (noting only that they found it a helpful analogy in thinking about the case when directly questioned on this point by Judge Moore), the majority opinion heavily criticizes the test asserting that it "misunderstands the difference between science and invention and fails to take into account the existence of molecules as separate chemical entities."
The majority seems to find unpersuasive the preemption arguments made by the plaintiffs and amici (including those arguments made based on the Supreme Court's holding and dicta in Mayo). Additionally, Lourie's opinion found significant that the claims-at-issue will expire by December 2015 and "[a]ny preemption thus is limited, very limited in the case of the present patents. Moreover, patents are rarely enforced against scientific research, even during their terms."
Additionally, both the majority opinion and Moore's concurrence relies on the long-standing practice by USPTO of granting patents on DNA as a reason to uphold the patents. The majority suggests that because USPTO has a long history of granting these patents, Congress, and not the courts, should be the one to determine otherwise.
With respect to the method claims, the majority opinion again came to the same decisions, rejecting the majority of Myriad's method claims but upholding one which required the comparison of cell growth rates. Even in light of Mayo, the opinion came out the same way, upholding one method claim.
Moore Concurrence: Isolated DNA patent eligible because of markedly different characteristics and new utility
Judge Moore wrote a concurring opinion on the issue of isolated DNA. Although she agreed that isolated DNA is eligible for patent protection, her line of reasoning differs from Lourie's. Unlike Lourie, Moore would require more than merely "markedly different" characteristics, but whether these characteristics would lead to utility. She finds that they do and therefore upholds Myriad's patents-at-issue:
The shorter isolated DNA sequences have a variety of applications and uses in isolation that are new and distinct as compared to the sequence as it occurs in nature. For example, these sequences can be used as primers in a diagnostic screening process to detect gene mutations. These smaller isolated DNA sequences--including isolated radiolabeled sequences mirroring those on the chromosome--can also be used as the basis for probes. Naturally occurring DNA cannot do this. Unlike the isolated DNA, naturally occurring DNA simply does not have the requisite chemical and physical properties needed to perform these functions.
The ability to use isolated DNA molecules as the basis for diagnostic genetic testing is clearly an "enlargement of the range of . . . utility" as compared to nature . . .
[. . .]
The short isolated DNA sequences have markedly different properties which are directly responsible for their new and significant utility. It is not the chemical change alone, but that change combined with the different and beneficial utility that leads me to conclude that small isolated DNA fragments are patentable subject matter. (internal citations omitted).
With respect to the claims involving longer strands of isolated DNA that "include most or all of the gene," Judge Moore admittedly finds to be a "more difficult case" but nevertheless finds these claims patent eligible.
As she did in her opinion last year, Moore does caution that:
If I were deciding this case on a blank canvas, I might conclude that an isolated DNA sequence that includes most or all of a gene is not patentable subject matter. The scope of the law of nature/manifestation of nature exception was enlarged in Prometheus. But we do not decide this case on a blank canvas. Congress has, for centuries, authorized an expansive scope of patentable subject matter. Likewise, the United States Patent Office has allowed patents on isolated DNA sequences for decades, and, more generally, has allowed patents on purified natural products for centuries. There are now thousands of patents with claims to isolated DNA, and some unknown (but certainly large) number of patents to purified natural products or fragments thereof. As I explain below, I believe we must be particularly wary of expanding the judicial exception to patentable subject matter where both settled expectation and extensive property rights are involved.
Due to the long-standing practice of the USPTO in granting these patents, Moore felt that the "settled expectations of the biotechnology industry--not to mention the thousands of issued patents--cannot be taken lightly and deserve deference." However, Moore appeared more sympathetic to the policy concerns at issue. Although she ultimately upheld the claims and seemed to rely heavily on the history of USPTO granting these patents, she concludes:
It is tempting to use our judicial power in this fashion, especially when the patents in question raise substantial moral and ethical issues related to awarding a property right to isolated portions of human DNA--the very thing that makes us humans, and not chimpanzees.
The invitation is tempting, but I decline the opportunity to act where Congress has chosen not to.
The patents in this case might well deserve to be excluded from the patent system, but that is a debate for Congress to resolve. I will not strip an entire industry of the property rights it has invested in, earned, and owned for decades unchallenged under the facts of this case.
Bryson Dissent: Isolated DNA not markedly different and patent eligible
Judge Bryson, appointed by Bill Clinton, concurred in the majority opinion with respect to standing, patentability of cDNA and method claims. However, Bryson dissented with respect to isolated DNA and would have rejected these patent claims. In coming to his conclusion, Bryson cites the "broad consequences" and preemption concerns if patents on isolated DNA are permitted to stand. Although Bryson agrees with Moore that the test required by Supreme Court precedent involves two steps (first, whether the structure is markedly different from that found in nature and secondly, whether there is a difference in utility), he holds that there is not a markedly different structure between isolated DNA and native DNA.
Bryson begins his opinion by simplifying the question:
In its simplest form, the question in this case is whether an individual can obtain patent rights to a human gene. From a common-sense point of view, most observers would answer, "Of course not. Patents are for inventions. A human gene is not an invention."
Although Myriad argued, and the majority agreed, that isolated DNA differs from its native gene, Bryson found that the isolation does not render DNA patent eligible. Unlike Lourie, Bryson found significant the history of investment and contributions to the identification and isolation of the claims-at-issue. Bryson noted that a team of researchers, not Myriad, was the first to map the BRCA gene and that Myriad merely applied a known sequencing technique and did not invent a new method of nucleotide sequencing. Although Bryson recognizes that Myriad's discovery of the sequences involved work and had important applications,
the discovery of the sequences is unprotectable fact . . . Of course, Myriad is free to patent applications of its discovery. As the first party with knowledge of the sequences, Myriad was in an excellent position to claim applications of that knowledge. Many of its unchallenged claims are limited to such applications.
In rejecting Mryiad's claims, Bryson finds that the isolated DNA s not markedly different from that found in nature. Though extraction may involve work, this work does not change the characteristic of the DNA from its natural state. He analogizes isolation of DNA to isolation of minerals from the earth, which are not eligible from patent protection. Bryson rejects Lourie's emphasis on the breaking of covalent bonds:
Because the native BRCA genes are chemically bonded to other genes and histone proteins, the majority concludes that cleaving those bonds to isolate the BRCA genes turns the isolated genes into "different materials." Yet there is no magic to a chemical bond that requires us to recognize a new product when a chemical bond is crated or broken, but not when other atomic or molecular forces are altered. A chemical bond is merely a force between two atoms or groups of atoms strong enough "to make it convenient for the chemist to consider [the aggregate] as an independent molecular species." Weaker interatomic forces will be broken when, for example, a dirty diamond is cleaned with water or another solvent, but that does not make the clean diamond a human-made invention. . . .
If the changes in the DNA molecule that occur as part of the process of isolation render the gene claims patentable, the same analysis woud seem to apply to chemical elements that do not appear in their atomic form in nature. For example, isolated lithium does not occur naturally because it reacts with air and water and thus is found in nature only as part of a chemical compound ionically bound to other elements. Once isolated, lithium has many industrial applications, and in order to isolate lithium, it is necessary to break ionic bonds in the lithium compounds that are found in nature. But its seems plain that elemental lithium (like other elements) would not be patenable subject matter, even if it could only be extracte from nature through an isolation process.
The principles underlying that analysis apply to genetic material as well. (internal citations omitted)
Bryson notes several examples that could be analogous to the present case where the isolation of a product of nature would not be eligible for patent protection. Bryson uses the examples of "snapping a leaf from a tree" or kidney extraction to illustrate that mere isolation or separation from its native form is not enough to render something patent eligible. He states:
A human kidney is a product of nature; it does not become a patentable invention when it is removed from the body, even if the patentee has developed an improved procedure for extracting the kidney, and even if the improved procedure results in some physical or chemical changes to the kidney at the points where the kidney was attached to the host body. But if that is so, then why should an isolated gene be treated differently for purposes of section 101? While the isolation of a gene involves the alteration of a single molecule, it is difficult to accept that it should make a difference, for purposes of patentability, whether the isolated substance is part of a single molecule, as in the case of other BRCA genes, or part of a very large aggregation of molecules, as in the case of a kidney.
In concluding that mere isolation in these cases is not enough to earn patent protection, though, Bryson cautions that "it is oversimplification to say that something that can be characterized as 'isolated' or 'extracted' from its natural setting always remains a natural product and is not patentable." Taking the example of a baseball bat made from a tree, he distinguishes such a case by noting that the creation of a baseball bat requires man to define the parts to be retained and discarded, to mold the remaining portions and the resulting product "bears little resemblance to that which occurs naturally." By contrast, in the isolation or extraction of the BRCA genes, scientists are careful to preserve the structure and function of the genes as they occur in nature.
Bryson points out that the identity of the isolated DNA necessarily must be the same or very similar to that found in nature, otherwise it would lose its utility. He notes that "Indeed, that identity of function in the isolated gene is the key to its value. The naturally occurring genetic material thus has not been altered."
Unlike Judge Lourie and Judge Moore, Bryson places a heavier weight on the Supreme Court's decision in Mayo. Although he concedes that Mayo does not decide the present case, it is nonetheless "instructive." Citing the Supreme Court's opinion that the claims in Mayo did not do "enough" to natural laws, Bryson similarly finds that isolation of DNA was not "enough" to distinguish the BRCA genes from a product of nature. He also states that focusing on the similarity between isolated DNA and native DNA, that is, focusing on the fact that both exist as "informational content" is "appropriate" given the Mayo ruling because such content "is the critical aspect of these molecules." The differences in their structure are "merel ancillary to the breaking of covalent bonds, a process that is itself not inventive."
Finally, turning to the weight the other two judges gave to the practice of USPTO granting patents on isolated DNA, Bryson lists several reasons that he does not share the deference his colleagues give to USPTO. First, he notes that "PTO lacks substantial rulemaking authority" and is only entitled to deference "commensurate with 'the thoroughness of its consideration and validity of its reasoning.'" Second, Bryson states that the PTO's views were "substantially undermined" by the DOJ briefs in the case. While he acknowledges that the PTO did not sign on to the DOJ briefs, the DOJ "speaks for the Executive Branch, and the PTO is part of the Executive Branch." Finally, Bryson notes that prior to Chakrabarty, the PTO did not award patents to microorganisms but the Supreme Court gave "short shrift" to the Commissioner's position. He urges his colleagues "not to shy away from deciding the issues of law." Additionally, Bryson points out:
Although my colleagues believe our analysis of the legal question in this case should be influenced by purported expectations of the inventing community based on the PTO's past practice of issuing patents on human genes, that is in effect to give the PTO lawmaking authority that Congress has not accorded it. There is no collective right of adverse possession to intellectual property and we should not create one. Our role is to interpet the law that Congress has written in accordance with the governing precedents.
The full opinion can be downloaded here.
ACLU's press release on the opinion is available here.