In 1980, the Supreme Court - in Diamond v. Chakrabarty, 100 S.Ct. 2204 (1980) in a 5-4 decision - held that a recombinant microorganism was patentable subject matter. The Court observed there that that Congress intended the statute establishing what can be patented to “include anything under the sun that is made by man.” For over thirty years, that case was the last word from the Supreme Court in the life sciences on the question of what is patent-eligible. Five years ago that changed with the first of two cases where the Supreme Court significantly expanded the “judicial exceptions” to patent-eligibility, such as laws of nature, natural phenomena or products, or abstract ideas. As a result, patents related to natural products and diagnostic methods have become more difficult to obtain and enforce.

In the first decision, Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S.Ct. 1289 (2012) (Mayo), the Supreme Court held that method claims for treating autoimmune diseases based on metabolite levels of drugs administered to the patient, are patent-ineligible, as merely reciting a natural law (correlation of metabolite level and drug dosage). The following year, in Association for Molecular Pathology v. Myriad Genetics, Inc., 133 S.Ct. 2107, (2013) (Myriad), the Supreme Court held that while claims directed specifically to cDNA for the BRCA1 and BRCA2 genes were patent-eligible, claims to an isolated nucleic acid encoding a BRCA1/2 gene were patent-ineligible as a natural product. In doing so, the Supreme Court reversed thirty years of U.S. Patent Office practice of granting patents for isolated nucleic acid sequences. The Supreme Court has established a two-prong test for patent-eligibility. First, is the claim directed to a judicial-exception? If yes, then is any element, or combination of elements, in the claim sufficient to ensure that it amounts to significantly more than the judicial exception?

After its Supreme Court loss, Myriad Genetics sued other BRCA1/2 test providers, and tried to obtain a preliminary injunction, for allegedly infringing other claims related to the BRCA1/2 genes, such as primers for those genes. The Federal Circuit (In re BRCA1- and BRCA2-Based Hereditary Cancer Test Patent Litigation, 774 F.3d 755 (Fed. Cir. 2014)) upheld the denial of a preliminary injunction, because the asserted claims were patent-ineligible. For example, the claimed primers were “not distinguishable from the isolated DNA found patent-ineligible in Myriad.” Shortly thereafter Myriad dropped the suits. Likewise, in Genetic Technologies Ltd. v. Merial LLC, 818 F. 3d 1369 (Fed. Cir. April 8, 2016), a Federal Circuit panel invalidated claims for detecting an allele in a coding region by amplifying and analyzing the sequence of a non-coding region. According to the Court, the claims “cover[] essentially all applications, via standard experimental techniques, of the law of linkage disequilibrium to the problem of detecting coding sequences of DNA.”

Similarly, in Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371 (Fed. Cir. 2015) (Ariosa), a Federal Circuit panel invalidated claims for non-invasive methods of detecting paternally inherited cell-free fetal DNA (“cffDNA”) from a blood sample of a pregnant woman. According to the Court, the “only subject matter new and useful” in the method “was the discovery of the presence of cffDNA in maternal plasma or serum.” Judge Linn concurred “only because” he was bound by the breadth of Mayo, as Ariosa “represents the consequence — perhaps unintended — of that broad language in [Mayo] excluding a meritorious invention from the patent protection it deserves.” When denying a request for the full Federal Circuit to rehear the case, several judges expressed concerns about the decision. For example, Judge Lourie stated that “it is unsound to have a rule that takes inventions of this nature out of the realm of patent-eligibility ... But I agree … under Supreme Court precedent it had no option other than to affirm” the claims’ patent-ineligibility. Similarly, Judge Dyk said, “we are bound by the language of Mayo, and any further guidance must come from the Supreme Court.” Sequenom petitioned the Supreme Court to review the case.

At the end of June 2016, the Supreme Court declined to review Ariosa.

Patent owners are likely to be more successful by addressing the first prong and show that a claim is not even directed to a judicial exception, rather than by addressing the second prong and show that the claim amounts to significantly more a judicial exception. For example, in McRO, Inc. v. Bandai Namco Games America Inc., 837 F. 3d 1299 (Fed. Cir. Sept. 13, 2016), the claims were directed to “generating automated lip-synchronization and associated facial expression for 3D animated characters” to improve computer animation. The district hold had held that the claims were directed to a patent-ineligible abstract idea. (An Amicus argued that they were directed to a natural phenomenon instead of an abstract idea, specifically “the movement of the mouth to articulate sounds.”) The Federal Circuit disagreed and held that the claims were not even directed to a judicial exception. According to the Court, the claims were “directed to a patentable, technological improvement over the existing … animation techniques … in a process specifically designed to achieve an improved technological result in conventional industry practice.”

Following the lead of these cases, district courts have invalidated many patents directed to diagnostic methods as ineligible. For example, in Endo Pharmaceuticals Inc. v. Actavis Inc. (D. Del. Dec. 2015), claims were invalidated that were directed to treating pain in patients with renal impairment by measuring the creatine clearance rate and administering an oxymorphone dosage based on the rate found. The judge in this case said: “[t]he only new aspect of the [] patent was to tell doctors to adjust the dosage of oxymorphone based upon their discovery of a natural law … No creative steps or inventive leaps aside from the discovery of a natural law are contemplated here. The patent merely tells doctors to apply the natural law.”

As a result of these developments, prior to suing an alleged patent infringer, a patent owner must consider whether the defense that the subject matter is patent-ineligible can be raised. A patent owner considering enforcing a patent must now also consider revised and expanded post-grant procedures in the USPTO established by the Leahy–Smith America Invents Act (AIA) of 2011 that could be used to invalidate the patent. One such procedure is Inter Partes Review (IPR), which replaces inter partes reexamination; IPR is a trial proceeding conducted by the USPTO Patent Trial and Appeal Board (PTAB). A third-party, such as an alleged infringer, can request an IPR to review whether a patent claim is invalid as lacking novelty or as obvious on the basis of published prior art. A final determination by the PTAB will be issued within 1 year to eighteen months after an IPR is instituted. Given its speed and lower cost relative to litigation, IPR is a powerful new tool to defend against or to preempt a claim of infringement.

These developments highlight the difficulties in obtaining and enforcing patents for medical diagnostics and personalized medicine. The Supreme Court has indicated that it will not provide further guidance in the near future. In Mayo, the Supreme Court “recognize[d] the role of Congress in crafting more finely tailored rules where necessary.”

Recently, at the Federal Circuit Judicial Conference in 2016, David Kappos, the USPTO Director from 2009 to 2013, called for Congress to repeal section 101 of the Patent Act (i.e., the statute establishing what is patent-eligible, and which has remained virtually unchanged since the founding of the Republic). And on January 31, 2017, the Intellectual Property Owners Association (IPO), adopted a resolution supporting legislation to amend the statute by adding two subsections. In the IPO statement, they said that the “proposed legislative language would address [patent-eligibility] concerns by reversing the Supreme Court decisions and restoring the scope of subject matter eligibility to that intended by Congress …; defining the scope of subject matter eligibility more clearly and in a technology-neutral manner; …; and simplifying the … eligibility analysis.” Also, notable is that Senator Chris Coons (D-DE) gave the keynote speech on December 7, 2016 at a conference entitled, “The Supreme Court’s Section 101 Jurisprudence: Dangers for the Innovation Economy.” Senator Coons said that subject matter eligibility is “an area where the jurisprudence is insufficiently clear, and which may necessitate congressional action to provide clarity and consistency.”