On July 5, 2016, the U.S. Court of Appeals for the Federal Circuit issued an opinion vacating a decision of patent invalidity under 35 U.S.C. § 101 by the U.S. District Court for the Northern District of Illinois. See Rapid Litigation Management Ltd., et al. v. CellzDirect, Inc., et al., No. 2015-1570 (Fed. Cir. Jul. 5, 2016) (“CellzDirect Opinion”). Click here for the opinion.
Rapid Litigation Management sued CellzDirect for infringing U.S. Patent No. 7,604,929 (“the ’929 patent”) and CellzDirect moved for summary judgment of invalidity under 35 U.S.C. § 101. The district court granted the motion after applying the U.S. Supreme Court’s two-step framework for determining patent eligibility under Mayo and Alice.1 On appeal, the Federal Circuit vacated, holding that the claims of the ’929 patent were not “directed to” a patent-ineligible natural law, even though the patent related to methods of preserving natural liver cells.2 This ruling clarifies that a patent claim may touch on a patent-ineligible concept without being directed to that law, and further clarifies why claims to classically patentable subject matter in the pharmaceutical field indeed remain patentable under § 101.
Section 101 of the patent statute has been held to contain an implicit exception that laws of nature, natural phenomena, and abstract ideas are not patentable. The Supreme Court has articulated a two-part test (the “Mayo/Alice framework”) for determining whether a patent claims patent-ineligible subject matter or instead a patent-eligible application.4 Step one asks whether the claim is “directed to” one of the patent-ineligible categories.5 If it is, the inquiry moves to step two: whether, considered both individually and as an ordered combination, the additional claim elements transform the nature of the claim into an “inventive concept” — e.g., something “significantly more” than a patent upon the patent-ineligible concept itself, and more than an ineligible concept plus “well-understood, routine, conventional activity already engaged in by the scientific community.”6 Several recent Federal Circuit decisions have discussed when a patent is directed to a patent-ineligible natural law.7 But the Federal Circuit had issued few decisions discussing when a patent is not directed to a patent-ineligible natural law under step one of the Mayo/Alice framework.
The inventors of the ’929 patent discovered that some fraction of hepatocytes (liver cells) are capable of surviving multiple freeze-thaw cycles.8 The prior art for “cryopreserving” (freezing and thawing) hepatocytes indicated that hepatocytes could be frozen only once and then had to be used or discarded — limiting the ability to pool hepatocytes from different sources for scientific study.9 The inventors used their discovery to develop an improved process of cryopreserving hepatocytes, and claimed that process in the ’929 patent. In general, the improved process was said to comprise: (1) subjecting previously frozen and thawed cells to density gradient fractionation to separate viable cells from non-viable ones; (2) recovering the viable cells; and (3) refreezing the viable cells.10
Applying step one of the Mayo/Alice framework at the summary judgment stage, the district court determined that the ’929 patent was “directed to an ineligible law of nature: the discovery that hepatocyctes are capable of surviving multiple freeze-thaw cycles.”11 Under step two, the district court concluded that the patented process lacked the requisite inventive concept because, upon discovering the hepatocytes’ capability of surviving multiple freeze-thaw cycles, the inventors simply reapplied a well-understood freezing process.12
The Federal Circuit’s CellzDirect Opinion Upholding Eligibility
The Federal Circuit found that the district court had incorrectly determined at step one that the claims of the ’929 patent were “directed to” the patent-ineligible “natural law” identified by the district court, i.e., the hepatocytes’ capability of surviving multiple freeze-thaw cycles.13 According to the Federal Circuit, the claims were actually “directed to a new and useful laboratory technique for preserving hepatocytes” — a “constructive process” carried out “to achieve a new and useful end.”14 The Federal Circuit reasoned that while the inventors discovered the ability of hepatocytes to survive multiple freeze-thaw cycles, they did not simply patent this concept, but instead “employed their natural discovery to create a new and improved way of preserving hepatocyte cells for later use.”15
The Federal Circuit distinguished prior decisions finding that process claims relating to biological phenomena were “directed to” patent-ineligible concepts, explaining that the challenged claims in those cases “amounted to nothing more than observing or identifying the ineligible concept itself,” and that the “end result” and the “essence of the whole” of those claims was the patent-ineligible concept itself.16 Importantly, the Court likened the ’929 patent claims to other subject matter it considered classically patentable such as methods of producing new chemical compounds or methods of treating disease — which could at a level of abstraction be described as relating to a natural ability (e.g., the ability of chemical components to come together; the ability of the body to respond to a drug), but nonetheless are not “directed to” that natural ability. The Federal Circuit confirmed the Supreme Court’s recognition in Mayo that “‘all inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas,’” and explained that “to preclude the patenting of an invention simply because it touches on something natural would ‘eviscerate patent law.’”17
After determining that the ’929 patent claims were not directed to a patent-ineligible natural law, the Federal Circuit further held that, even if they had been directed to a patent-ineligible law of nature, they would still survive under Mayo/Alice step two.18 The Court reasoned that the ’929 patent claims recited an improved process for preserving hepatocytes for later use, and improvements on such technological processes would be sufficient to transform the process into an inventive application of a patent-ineligible natural law. In reaching this conclusion, the Court rejected the argument that there was no inventive concept because each of the claimed individual steps were known independently in the prior art, finding that the claimed process as a whole — including the step of freezing and thawing hepatocytes twice — was “far from routine and conventional.”19
Analysis and Implications
The CellzDirect Opinion clarifies that just because a claim “touches on” a natural law or phenomenon at some level, the claim is not necessarily “directed to” that natural law or phenomenon under the first step of the Mayo/Alice framework. The Federal Circuit in CellzDirect demonstrated a practical application of the Supreme Court’s remarks in Mayo that “all inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas,” and that an overextension of these principles would “eviscerate patent law.”20 The CellzDirect panel confirmed the gatekeeping role of § 101 in precluding patenting of claims that “amount to nothing more than observing or identifying the ineligible concept itself” — even where the ineligible law of nature or natural phenomenon was newly discovered.21 But the Court was careful to distinguish the claiming of an ineligible natural law itself — or claiming a method where the “end result” or the “essence of the whole” was an ineligible natural law — from claiming the “new and improved technique, for producing a tangible and useful result” at issue in the case, i.e., patentable subject matter.22
The CellzDirect Opinion further clarifies why claims to classically patentable subject matter in the pharmaceutical field — such as methods of treating diseases with particular drugs or therapies — would remain patent-eligible under § 101 and Supreme Court precedent. As the CellzDirect court reasons, a claim directed to the use of a drug to treat a condition (such as chemotherapy drug to treat cancer; aspirin to treat a headache) is not the same as a claim directed to the body’s or cells’ natural response to the drug.23 This accords with the Supreme Court’s comment in Mayo that patents on a new drug, or a new way of using an existing drug, are generally patentable.24 The CellzDirect opinion may very well discourage generic drug companies seeking to argue that classically patent-eligible subject matter in the life sciences field, such as methods of treatment of diseases with drugs, is ineligible under Mayo.