The difficulty in consistently applying the prevailing test for subject matter eligibility was evident in the April 13, 2018, opinion of the U.S. Court of Appeals for the Federal Circuit in Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals International Limited (2016-2707, 2016-2708). As a result of U.S. Supreme Court decisions in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66 (2012) and Alice Corp. Pty. v. CLS Bank International, 534 S. Ct. 2347 (2014), a twostep test has been adopted for determining patent subject-matter eligibility. The U.S. Patent and Trademark Office has operationalized the test in its guidelines (M.P.E.P. §§ 2106 through 2106.07).
The Alice/Mayo Test
The first Alice/Mayo step is to determine whether the claim is directed to a patent-ineligible concept, such as a law of nature, natural phenomenon, or abstract idea. The second Alice/Mayo step is to determine whether the portion of the claim that excludes the patent-ineligible concept amounts to significantly more than the patent-ineligible concept itself.1 Between the Vanda district court, the Federal Circuit majority, and the Federal Circuit dissent, every possible result was elicited from the two-part test.
At step one, the district court concluded that the Vanda claim depends upon laws of nature and natural phenomena and therefore was directed to a patent-ineligible concept. However, it also found that the method of treating was not proven routine or conventional, i.e., was inventive at step two of the test.2
The Federal Circuit majority hung its analysis on distinguishing the Vanda claim from the Mayo claim. While both contained a step of administering a drug to a patient, the majority characterized Vanda’s claim as directed to a novel method of treating disease, while it characterized the Mayo claim as directed to a diagnostic method in which drug was administered in order to measure metabolite levels in the blood. The majority performed step one of the Alice/Mayo test, i.e., determining to what the claim is directed, by characterizing the claim. Moreover, the majority distinguished the Vanda claim as actually applying the natural relationship of genetics and metabolism by administering a tailored dose, whereas the Mayo claim did not require any action based on the metabolite levels determined. Having found no patent-ineligible concept, the majority did not need to perform step two of the analysis. Nonetheless, it did state that the claim “provides ‘a new way of using an existing’ test that is safer for patients because it reduces the risk of QTc prolongation.” This sounds like a favorable step two analysis.
The dissent criticized the majority’s analysis as “conflat[ing] the inquiry at step one with the search for an inventive concept at step two.” The dissent found a natural law in the claim at Alice/Mayo step one. Then, looking at the remainder of the claim, the dissent found nothing “to supply the requisite inventive concepts.”
The majority also discussed pre-emption as it applied differentially to the Vanda and Mayo claims. Because the Mayo claim did not have an active step of applying the diagnostic result, the majority found that the Mayo claim pre-empted physician treatment choices. The majority explained that as long as a party performed the diagnostic step, it would not matter what treatment the physician employed because all would be infringing. In contrast, the Vanda claim did not preempt treatment options beyond the recited treatment step.
The majority pointed to a statement in Mayo that supported its distinction from the Vanda claim. The Supreme Court in Mayo had contrasted the Mayo claim from “a typical patent on a new drug or a new of using an existing drug,” implying but not stating that those typical patents would be patent eligible. The majority found the Vanda claim to fit nicely into that protected niche.
Despite the seemingly mechanical analysis of the Alice/Mayo test for determining patent-ineligible subject matter, the test can yield wildly different results, as the Vanda litigation demonstrates. The variability suggests that determination of subject-matter eligibility is subjective. Patent law is no stranger to subjectivity, as the fundamental concept of obviousness often turns on the eye of the beholder. However, it seems that the test for obviousness articulated in Graham v. John Deere3 has provided a more workable decision framework than that in Alice/Mayo. The Graham factors are factual findings upon which an ultimate legal judgment rests. However, in the Alice/Mayo test, the underlying elements themselves seem malleable and subject to disagreement. This area of the patent law cries out for congressional intervention.
Click here to download the decision in Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals International Limited.
Click here to read our December 21, 2017, report on the Vanda oral arguments.