Three strikes and you're out? The Federal Circuit's per curiam denial of en bancrehearing of Ariosa v. Sequenom, is the third time that Sequenom has seen its diagnostic methods denied patent protection. But the company is likely to continue trying to change this outcome, particularly in view of the Federal Circuit’s tortured acknowledgment that its hands are tied by Supreme Court precedent. Since "it ain't over until it’s over," until the Supreme Court rules, there is hope for Sequenom’s patent and many other diagnostic patent applications currently being denied by the U.S. Patent and Trademark Office (USPTO). Hope has never been so justified, in view of some experienced judges explicitly agreeing to disagree with the Supreme Court.
The Federal Circuit has not accepted responsibility for the state of diagnostic patents and personalized medicine, instead attributing it to the Supreme Court because "applying Mayo, we are unfortunately obliged to divorce the additional steps from the asserted natural phenomenon to arrive at a conclusion that they add nothing innovative to the process" (Judge Lourie) or because "we are bound by the language of Mayo, and any further guidance must come from the Supreme Court, not this court" (Judge Dyk). But is that so—even if, as Judge Dyk stated, the "panel’s decision to withhold access to patenting . . . is devoid of support" and the "subject matter is notineligible under Section 101 . . ."? (emphasis added).
Not necessarily. "I do not share their view that this incorrect decision is required by Supreme Court precedent," wrote Judge Newman (emphasis added). The court is not bound by Mayo because "[t]he facts of this case diverge significantly from the facts and rulings in" that case. Judge Newman specifically points to the difference between Sequenom’s situation, where the natural law was newly discovered and at least the step involving the starting material was new, and the facts in Mayo, where "both the medicinal product and its metabolites were previously known, leaving sparse room for innovative advance in using this information as a diagnostic dosage tool." In Judge Dyk’s view, however, the Supreme Court has spoken:
The Mayo Court found that prior Supreme Court decisions "insist that a process that focuses upon the use of a natural law also contain other elements or a combination of elements, sometimes referred to as an 'inventive concept,’ sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the natural law itself."
On the other hand, Judges Lourie and Moore share the view that Sequenom's claims do not "merely recite a law of nature, a natural phenomenon, or an abstract idea." They agree that "[t]he claims rely on or operate by, but do not recite, a natural phenomenon or law" and instead recite steps that "are all physical, and not insignificant, steps requiring human intervention." They agree that the claims "recite innovative and practical uses for [cffDNA]" and that "it is undisputed that before [Sequenom’s] invention, the … use of these methods for prenatal diagnosis were notroutine and conventional" (emphasis in original). Yet in spite of this view, Judges Lourie and Moore found "no principled basis to distinguish this case from Mayo." One unexpected item in this decision was Judge Lourie’s proposal for a different way of claiming the invention through an improvement-based "Jepson claim," such as:
In a method of performing a prenatal diagnosis using techniques of fractionation and amplification, the improvement consisting of using the non-cellular fraction of a maternal blood sample.
The Judge saw Sequenom’s invention as an "improvement in the method of determining fetal genetic characteristics or diagnosing abnormalities of fetal DNA,consisting of use of the non-cellular fraction of fetal DNA obtained from a maternal blood sample." A claim of this general format may have been sufficient to protect Sequenom’s invention, but it is not clear whether this format would be applicable to all types of diagnostic inventions. Nevertheless, it is refreshing that a Federal Circuit judge would propose an alternative claim strategy in the face of "the accusation that such a claim to the invention might be considered mere draftsmanship and thus still ineligible under the seemingly expansive holding of Mayo . . . ." It is also inspirational to have two judges consider that "claim drafting is a laudable professional skill, not necessarily a devious device for avoiding prohibitions," encouraging practitioners to creatively revisit their claim strategies for alternative ways of claiming their Applicants’ diagnostic inventions.
But it is Judge Dyk’s opinion that offers the most helpful insight into how to meet the elusive "inventive concept" requirement of the Mayo framework. In fact, it would seem that at least some of Sequenom’s claims, untouched, might already meet this requirement. As Judge Dyk "see[s] it,"
[T]here is a problem with Mayo insofar as it concludes that inventive step cannot come from discovering something new in nature—e.g., identification of a previously unknown natural relationship or property. In my view, Mayo did not fully take into account the fact that an inventive concept can come not just from creative, unconventional application of a natural law, but also from the creativity and novelty of the discovery of the law itself.
Judge Dyk’s reasoning is consonant with the Supreme Court statement in Myriad that "an inventive concept can sometimes come from discovery of an unknown natural phenomenon, not just from unconventional application of a phenomenon." As Judge Dyk points out, it is very important to note that Myriad suggested that "'new applications of knowledge about the BRCA1 and BRCA2 [newly discovered genes]' could generally be eligible, with reference to claim 21 of U.S. Patent No. 5,753,441."
The difference between Myriad’s claim 21 (which, unfortunately, was not part of the case before the Supreme Court) and the claims that were found to be patent ineligible is that it is directed to detecting specific, newly discovered gene mutations (38 of them). Judge Dyk suggests that the Supreme Court's implication that Myriad’s claim 21 is patent eligible is due to the fact that it "is narrowly tailored to what the patent applicant has actually invented and reduced to practice." (emphasis added). In effect, Judge Dyk set forth a new "more permissive" measure of "inventive concept," one that renders patent eligible claims that are "both narrow in scope and actually reduced to practice, not merely 'constructively' reduced to practice by filing of a patent application replete with prophetic examples."
Judge Dyk describes his proposed approach as supported by Morse, a seminal patent eligibility case. This coalescence between claim scope and novelty of the discovery for purposes of establishing "inventive concept" is not only creative but perhaps workable. As Judge Dyk states:
The approach would, I think, ensure that only diagnostic and therapeutic method patents limited in their claim scope would survive. These patents would provide the world with disclosure and useful applications of previously unknown natural laws, and the opportunity to obtain such patents would help to restore the incentive to make those discoveries that the patent system has historically provided.
That might be so. From a pragmatic standpoint, this approach also provides a more exact test for patent eligibility than anything the courts have said so far, making it much more useful to practitioners, investors, and the industry in general. But it is likely that this approach would not always serve the needs of the community developing diagnostic tests for personalized medicine. First, as Judge Dyk warns, this test "could [still] present difficulties of definition and line drawing." Second, "representative examples" of the invention possessed by the inventor would no longer suffice. And it would be difficult, for example, to reduce to practice prior to filing all applications of the discovery of a natural correlation linking a certain marker to cancer. It is more likely that only a subset of cancers would have been actually tested prior to filing the application. And limiting the claims to that subset would leave unprotected obvious variations of the method, even when the subset of cancers disclosed is clearly representative and predictive of others.
Although at least some judges have taken positive steps by recognizing that "discoveries" are patent eligible (which many consider to be mandated by statute), the fact of the matter is that the per curiam denial rules. And, right or wrong, "method claims that apply newly discovered laws and phenomena in somewhat conventional ways are screened out by the Mayo test." (Judge Dyk). Even Judges Lourie and Moore recognize that, unfortunately, "a crisis of patent law and medical innovation may be upon us."
Will the Supreme Court take this case and provide the final (and hopefully more instructive) word on the patent eligibility of diagnostic-related claims? Sequenom has until early next year to petition for certiorari. If granted, the case would be argued in the Fall of 2016. Thus, the ball is in Sequenom’s court.