Federal Circuit Panel Decides That Its Previous Ruling Is Unaffected by Subsequent Supreme Court Opinion

SUMMARY

On August 16, 2012, a divided three-judge panel of the United States Court of Appeals for the Federal Circuit held for the second time that isolated DNA molecules are patentable subject matter under § 101 of the Patent Act.1 The opinion reaffirms the Federal Circuit’s previous holding in the same matter,2 after the Supreme Court had vacated the initial opinion and remanded for further consideration in light of the Supreme Court’s decision in Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (March 20, 2012) (“Mayo”).3 The Federal Circuit case concerns the patent eligibility of isolated human genes called BRCA1 and BRCA2, mutations of which are associated with a predisposition to breast and ovarian cancer.

BACKGROUND

The Patent Act provides patent protection to four independent categories of inventions or discoveries: “process[es],” “machine[s],” “manufacture[s]” and “composition[s] of matter.”4 The Supreme Court has long excluded from patent eligibility, however, “laws of nature, physical phenomena, and abstract ideas.” Diamond v. Chakrabarty, 447 U.S. 303 (1980).

In 2009, a group of various organizations, scientists, doctors and patients filed suit against Myriad Genetics, Inc. in the United States District Court for the Southern District of New York seeking declaratory judgment that certain claims of Myriad’s patents directed to BRCA1 and BRCA2 were invalid. The district court held that isolated BRCA1 and BRCA2 genes were not “markedly different from native DNA as it exists in nature,” and were thus not patentable subject matter.5 The district court also held that Myriad’s method claims for “‘comparing’ the growth rates of cells in the presence or absence of a potential cancer therapeutic” and for “‘analyzing’ a BRCA1 sequence and noting whether or not the specified naturally-occurring mutations exist” were unpatentable subject matter.6

On July 29, 2011, in a 2-1 split decision reversing the district court, the Federal Circuit held that “isolated DNA” “has a markedly different chemical nature from the native DNA” due to the “human intervention in cleaving or synthesizing a portion of a native chromosomal DNA.”7 The three-three judge panel was unanimous in its opinion on Myriad’s method claims. The Federal Circuit held that Myriad’s method claims for screening cancer treatments by growing host cells transformed with a permutation of the BRCA1 gene and comparing “growth rates of cells” in the presence of cancer therapeutics were patentable because they included several steps that went beyond abstract ideas.8 The court, however, ruled Myriad’s claims for comparing or analyzing BRCA sequences were unpatentable mental processes that “can be accomplished by mere inspection alone.”9

Subsequent to the Federal Circuit’s 2011 decision, the Supreme Court issued an opinion in Mayo that held that two method patents for “administering” an autoimmune drug and “determining” the levels of drug-related metabolic byproducts in the patient were ineligible for patent protection.10 The Supreme Court ruled that “to transform an unpatentable law of nature into a patent-eligible application of such a law, one must do more than simply state the law of nature, while adding the words ‘apply it.’”11 The Supreme Court held that the claims at issue in Mayo described a natural phenomenon, supplemented by a “well-understood, routine, conventional activity, previously engaged by those in the field,”12 and were thus unpatentable.

On March 26, 2012, the Supreme Court granted certiorari in Association for Molecular Pathology, vacated the Federal Circuit’s 2011 opinion, and remanded the case for further consideration in light of the Supreme Court’s decision in Mayo.13

THE FEDERAL CIRCUIT’S SECOND ASSOCIATION FOR MOLECULAR PATHOLOGY DECISION

On August 16, 2012, a divided three-judge panel of the United States Court of Appeals for the Federal Circuit again held that isolated DNA molecules are patentable subject matter under § 101 of the Patent Act.14 The holding closely mirrors the panel’s 2011 opinion. On behalf of the majority, Judge Lourie wrote that the Supreme Court’s opinion in Mayo concerned “method claim patentability” and “does not control the question of patent-eligibility” of “isolated DNA molecules,” which the majority deemed to be “compositions of matter, expressly authorized as suitable patent-eligible subject matter in § 101.”15

As in its 2011 decision, the majority deemed isolated genes patentable compositions of matter. In the opinion of the court, Judge Lourie wrote that the “isolated DNA results from human intervention to cleave or synthesize a discrete portion of a native chromosomal DNA, imparting on that isolated DNA a distinctive chemical identity as compared to native DNA.”16 In a concurring opinion, Judge Moore expressed her view that “[i]t is not the chemical change alone, but that change combined with the different and beneficial utility that leads [her] to conclude that small isolated DNA fragments are patentable subject matter.”17 As he did in his 2011 dissent, Judge Bryson believed isolated DNA to be unpatentable, because “extracting a gene is akin to snapping a leaf from a tree.”18

With respect to the method patent claims, the Federal Circuit unanimously reaffirmed its prior holding.19 The circuit court “renew[ed]” its conclusion that “Myriad’s claims ‘comparing’ or ‘analyzing’ two gene sequences fall outside the scope of § 101 because they claim only abstract mental processes.”20 Finally, the Federal Circuit again held that the method claim for “growing transformed cells and determining those growth rates” is patentable, because “at the heart of [the method claim] is a transformed cell, which is made by man, in contrast to a natural material.”21

IMPLICATIONS

The Federal Circuit has again left in place the United States Patent and Trademark Office’s decades-old practice of issuing patents for “isolated DNA.” It is certainly possible, however, that the en banc Federal Circuit or Supreme Court will eventually consider the issue, either in this case or in a subsequent case. Moreover, as Judge Moore’s concurring opinion noted, this might also be a “debate” for Congress to resolve.22 In addition, the panel’s conclusion that the Supreme Court’s decision in Mayo does not apply to “composition of matter” claims could have significant effects in analyzing the patentability of many different technologies.