On July 2, 2013, Consumer Watchdog (formerly The Foundation for Taxpayer and Consumer Rights) asked the Court of Appeals for the Federal Circuit to apply the product of nature analysis from Association for Molecular Pathology, et. al. v. Myriad Genetics, Inc., et. al. to claims covering human embryonic stem cells. This appeal arises from the Patent Trial and Appeal Board’s decision in Consumer Watchdog v. Wisconsin Alumni Research Foundation (WARF) confirming the patent eligibility of claims in WARF’s U.S. Patent No. 7,209,913 covering a “replicating in vitro cell culture of human embryonic stem cells.” This appeal could be the first to apply Myriad’s ‘product of nature’ analysis to claims covering products derived from natural materials other than isolated DNA.

In Myriad, the U.S. Supreme Court held that the claimed naturally occurring DNA segments were not patent eligible subject matter even though they had been ‘isolated.’ In the unanimous June 13, 2013 decision written by Justice Clarence Thomas, the Court drew a line between different forms of DNA and explained that while cDNA, a non-naturally occurring genetic sequence, is patent eligible, isolated DNA falls into the ‘product of nature’ exception, and is not. The Court emphasized, however, that its decision does not address Myriad’s method claims, claims covering new applications of knowledge about specific DNA sequences, or claims covering DNA in which the order of the naturally occurring nucleotides has been altered.

In reaching its decision, the Court also addressed prior cases involving bacteria, such as the bacterium containing lab-added plasmids at issue in Diamond v. Chakrabarty and the mixture of naturally occurring bacteria strains at issue in Funk Brothers Seed Co. v. Kalo Inoculant Co. The Court stated that the former was patent eligible because it had “markedly different characteristics” from the natural bacterium, while the latter was not because the bacteria in the mixture had not been altered in any way. The Court, however, did not discuss how the Myriad decision would apply to claims covering subject matter derived from other natural sources.

The sole independent claim of the WARF patent recites “[a] replicating in vitro cell culture of human embryonic stem cells comprising cells which (i) are capable of proliferation in in vitro culture for over one year without the application of exogenous leukemia inhibitory factor, (ii) maintain a karyotype in which the chromosomes are euploid through prolonged culture, (iii) maintain the potential to differentiate to derivatives of endoderm, mesoderm, and ectoderm tissues throughout the culture, and (iv) are inhibited from differentiation when cultured on a fibroblast feeder layer.” The dependent claims of the patent describe additional characteristics of these cells. Consumer Watchdog argues that the claimed stem cells are analogous to the isolated DNA segments in Myriad because their enumerated properties are inherent in all embryonic stem cells, including naturally existing ones. Because “WARF did not create or alter the properties inherent in stem cells any more than Myriad created or altered the genetic information encoded in the DNA it claimed,” Consumer Watchdog asks the Federal Circuit to overturn the PTAB’s decision and cancel the claims in the WARF patent.

Public Patent Foundation, the organization that represented the plaintiff in Myriad, is representing Consumer Watchdog in this suit. Although it was successful in Myriad, it faces challenges in this case which were not present in Myriad. For example, Consumer Watchdog raised the issue of patent eligibility for the first time on appeal. In the underlying reexamination and on appeal to the PTAB, it had only argued anticipation and obviousness. Hence, the Federal Circuit is not required to rule on the eligibility question.

Regardless of the result, companies operating in the biotechnology industry will want to closely watch this case. In addition to stem cell research and development, other areas which may be impacted by the decision could include natural products drug discovery, agricultural biotech, tissue engineering, and biofuels. In the meantime, consideration may be given to claim limitations which serve to distinguish the claimed subject matter from its natural state (including modifications resulting from culturing or other preparation steps), pharmaceutical formulations, as well as methods of use or manufacture. Kenyon & Kenyon LLP’s team of experienced attorneys is prepared to assist you in developing a strategic plan for your patent portfolio and your patent-related business activities in light of these and future developments.

Nitya Anand