On remand from the U.S. Supreme Court, the U.S. Court of Appeals for the Federal Circuit last month held in Akamai Tech. Inc. v. Limelight Networks Inc. that “direct infringement liability of a method claim under 35 U.S.C. Section 271(a) exists when all of the steps of the claim are performed by or attributed to a single entity.” In addition, the Federal Circuit ruled that direct infringement can be found in a multi-party situation that involves “a principal-agent relationship, a contractual relationship or in circumstances in which parties work together in a joint enterprise functioning as a form of mutual agency.” However, the Federal Circuit did not specifically address the scope of “joint enterprise” liability, as not being before it given the facts of the case.

The result of this holding is that, after a detour to the Supreme Court, the Federal Circuit has essentially restored the holding of Muniauction Inc. v. Thomson Corp., 532 F.3d 1318 (Fed. Cir. 2008). In that case, the Federal Circuit had held that a defendant is not liable for direct infringement if the defendant does not exercise control or direction over its customers’ performance of those steps of the claim the defendant does not itself perform. It follows that the value of drafting method claims that do not run afoul of the original Muniauction holding is once again greatly elevated and puts increased pressure on patent prosecutors and patent applicants to obtain such issued claims, assuming that such claims can be drafted and still meet the statutory requirements of patentability.

Within the personalized medicine space, method claims are oftentimes drafted in a manner that follows at least a two-step formula. The first step typically requires obtaining a dataset having data representing multiple biomarkers from a subject of interest. This step is generally expressed as either a digital step or a physical assay in a laboratory setting. Following the first step, the second step typically requires modifying the dataset in some manner via an algorithm to produce a score that is more informative of a particular subject state than any of the individual data points within the dataset. This sets up a situation with the potential for divided infringement challenges or loopholes in view of the recentAkamai holding as each step could be performed by different parties, neither of which exercises any direction or control over the other.

For example, if the first step of a method claim is a physical assay step, an independent laboratory could perform this physical assay independent of a distinct data analytics company that combines the dataset from the independent laboratory to produce a useful score, which is then reported to the patient, e.g., by a genetic counselor. As a result, the independent laboratory and data analytics company combine to perform the claimed method, but may not be held liable for claim infringement under Akamai. Because of this divided infringement loophole, the patent applicant in the above example would prefer to obtain an issued method claim that maintains the first step as a digital, rather than physical, step, since such a method claim is much less likely to involve more than one party performing its steps; avoiding the divided infringement problem entirely.

The impact of the Akamai holding on prosecution of personalized medicine patent applications at the U.S. Patent and Trademark Office will be particularly challenging given the recent Section 101 jurisprudence and related patent office guidance. This jurisprudence and guidance set out a two-step framework for analyzing patent claims for subject matter eligibility. The first step asks if a claim is directed to a process, machine, manufacture, or composition. Assuming it is, the second step has two parts. The first part asks if the claim is directed to a judicial exception (a law of nature, a natural phenomenon, or an abstract idea). Then, if it is, the second part asks whether any element or combination of elements, in the claim is sufficient to ensure that the claim amounts to significantly more than the judicial exception.

Included among the explicit examples of abstract ideas in the guidance offered by the patent office is an algorithm. Thus, it has become relatively commonplace for patent applicants to receive a Section 101 rejection in personalized medicine cases having method claims that include an algorithm or language that is equivalent to an algorithm.

Common avenues offered by patent examiners to overcome such Section 101 rejections include conversion of a first digital step to a physical assay step to make the method claim more concrete; or inclusion of a new third step directed to treatment of the subject using the score outputted from the algorithm of the second step, e.g., to direct the treatment regimen. However, as noted above, such limitations in method claims increase the risk that the patent claims will not be enforceable against a single entity if multiple, unrelated, parties perform the various steps separate from one another. This places patent applicants in a difficult situation of choosing between an issued patent claim that is currently patent eligible but vulnerable to the above noted divided infringement loophole versus appealing or continuing to prosecute the Section 101 rejection in hopes of obtaining a better claim scope in the pending patent application at some point in the future.

Available options for each personalized medicine patent application to deal with a challenging situation such as this will vary greatly depending on the technology area, the technology itself, and the particular uses of the technology. However, one option that should at least be considered in cases involving multiple biomarker-based assays is pursuit of an independent method claim to the physical assay alone, e.g., only to the combined detection of the multiple biomarkers in a laboratory-based assay. Removal of the second step directed to the algorithm from the typical personalized medicine method claim is likely to remove the Section 101 rejection as it will remove the abstract idea from the claim, thus obviating the Section 101 rejection entirely. As a result, such a method claim directed to just the physical assay step is likely to be considered patent eligible and avoid the divided infringement loophole created byAkamai; though it may be more vulnerable to novelty or obviousness challenges depending on the specific content of any relevant prior art references.

The recent Akamai holding together with the Section 101 jurisprudence and guidance has substantially increased the challenges faced by patent applicants in obtaining issued patent claims that are both patent eligible and adequately protect their inventions. However, technology-dependent options exist to mitigate these challenges and should be fully considered before deciding on a particular patent portfolio strategy within the personalized medicine space.​​​​​​