For the first time since the Mayo Supreme Court decision of 2012, the Court of Appeals for the Federal Circuit (CAFC) in Exergen vs Kaz has ruled in favor of the patent eligibility of a medical diagnostic invention. While nonprecedential, this 2-to-1 decision is noteworthy for the guidance it provides to patent professionals seeking to protect diagnostic inventions. Specifically, it instructs that diagnostic methods may be eligible for patent coverage so long as they use unconventional methods for detecting analytes. Additionally, the Exergen decision offers another endorsement of the view put forth recently by the CAFC in Berkheimer v. HP and Aatrix v. Green Shades, that the inventive concept analysis that can arise in step-2 of the Mayo/Alice test is at least in part a factual question and not just a question of law. This factual vs legal debate continues to have reverberations throughout the patent law field, affecting both the manner in which courts conduct 101 examinations as well as the conclusions they reach.

At stake in the case were two patents held by Exergen (U.S. patent No. 6,292,685 and 7,787,938) relating to a scanning device for measuring a patient’s internal body temperature. Exergen’s invention uses a radiation detector to first locate and measure the temperature of the temporal artery (as the name implies, the artery located near the temple). Using this measurement, in combination with air and skin temperature readings, the device then computes the patient’s internal body temperature using a mathematical equation that depends in part on a ‘constant coefficient’ that had been empirically determined after much effort by Exergen. Exergen accused three companies of infringing upon its patents; Brooklands, Thermomedics, and Kaz. For the sake of judicial efficiency, the same claim construction was used for all three trials, although the individual investigations proceeded independently. In the trials of Brooklands and Thermomedics, all infringement charges were ultimately dismissed on the grounds that the underlying patents covered a natural law and were therefore invalid under 35 U.S.C § 101. In Exergen, however, a jury held that the patents were both valid and infringed upon by Kaz, and awarded 15 million dollars in damages to Exergen.

In the majority decision penned by Judge Moore and joined by Judge Bryson, the Circuit Court begins with step one of Alice holding that “[t]here is not dispute in this case that the asserted claims employ a natural law to achieve their purpose” (emphasis added). Note that this is not the same as saying that the invention is directed towards a natural law. Surprisingly the Court never actually makes a definitive statement regarding step one of Alice. Rather, the Court jumps straight to step two – determining whether the invention contains any inventive concepts. The Court prefaces this analysis by stating that whether or not a particular feature of an invention qualifies as an inventive concept is a factual question, and as such, deference should be given to the court that performed the factual inquiry (in this case the District Court). In the eyes of the Circuit Court, their role is simply to review the analysis performed by the District Court, and to overturn the lower court decision only if obvious errors were made.

In large part, the Circuit Court concurs with the District Court’s conclusion that Exergen’s patents contain inventive concepts. To the Circuit Court, what distinguishes Exergen’s invention from the diagnostic methods that were invalidated in previous cases such as Mayo and Ariosa, is that those inventions depended on “well-known, existing methods … to determine the existence of a natural phenomenon.” Here, by contrast, “the measurement method . . . was not conventional, routine, and well-understood.” The incorporation of the constant coefficient to convert scanned temperatures into internal body temperatures was considered an inventive concept in light of the, “years and millions of dollars,” Exergen invested determining the coefficient. Even though inventions with similar features exist in the prior art, such devices have only previously been used to detect injuries and/or tumors — never internal body temperature. Applying the scanning device to measure internal body temperature was therefore considered an, “unconventional method of temperature measurement,” and inventive. Combined, these two factors are sufficient to “transform[] the process into an inventive application of the formula” (citing Diehr), leading the Circuit Court to, “conclude that the district

In contrast to the majority, in his dissent, Judge Hughes devotes a significant amount of time performing step one of Alice. In his analysis, Hughes begins with the ideas that, “[a]n invention is directed to a patent-ineligible concept when it ‘begins and ends’ with that concept” (quoting Ariosa), and that claims can also be considered to cover “patent-ineligible concepts ‘when they amount[] to nothing more than observing or identifying the ineligible concept itself’” (quoting Rapid Litig.). In Hughes’s view, Exergen’s patents are essentially directed towards a “heat balance equation,” which is nothing more than a mathematical description of the natural law that, “heat generated by a person’s body flows throughout the body, and, eventually, into the environment.” Hughes asserts that, “[t]he invention begins by detecting the equation’s inputs and ends by displaying its output. Thus, the asserted claims are directed toward a patent-ineligible law of nature.”

In performing step two of Alice, Hughes finds nothing inventive about the temperature measuring device itself, because, “[t]emperature-detecting products that make use of these elements have existed for decades.” To Hughes, the idea of applying the device to tackle a new problem should not be considered an inventive concept, as, “[w]e rejected identical reasoning in Ariosa.” Likewise, Hughes thought it inappropriate to consider the incorporation of the constant coefficient to be an inventive concept as it is a natural law. Being directed towards ineligible subject matter and lacking an inventive concept, Hughes concludes that Exergen’s patents cover a natural law and should therefore be invalid.

It is important to note that while the court is split over whether Exergen’s patents contain an inventive concept, all three judges are in consensus that had such a concept been found the invention would have been patent eligible. In Mayo and Ariosa, patents covering diagnostic methods were overturned because they relied on conventional methods for measuring analytes. While this decision is nonprecedential, it suggests that diagnostic methods are eligible for patent coverage so long as they use unconventional methods to measure analytes. Additionally, Exergen vs Kaz offers another endorsement of the idea put forth recently in Berkheimer and Aatrix (also penned by Judge Moore) that disputes over the ‘inventiveness’ of particular steps should be resolved by a factual inquiry. Note how this view point affects the manner in which the court performs its 101 inquiry, transforming the investigation into a mere review of the District Court’s analysis.