For companies in the life sciences industry, the scope of patent eligibility continued its apparently inexorable contraction in 2017. Inventions deemed ineligible for patenting included methods for assessing cardiovascular risk based on myeloperoxidase levels — despite the existence of prior art methods that failed to preserve a correlation;1 methods for diagnosing a new subtype of myasthenia gravis — despite the methods’ practical application of man-made reagents;2 and dietary alanine supplements and their use for increasing human muscle tissue strength — despite the non-natural physiological effects of such supplementation.3

But in the first months of 2018, the Federal Circuit has exhibited a more generous approach to both steps one and two of the patent eligibility analysis. Moreover, the court’s acknowledgement that patent eligibility, while ultimately a question of law, may rest on factual issues improves the likelihood of surviving early dismissal motions. To be clear, congressional action remains necessary to ensure that valuable inventions in the life sciences industry receive crucial patent protection. Since no such action seems imminent, this article discusses the recent developments from the Federal Circuit, and explores how these developments offer potential routes for navigating Section 101 challenges in the courts.

As elaborated by the U.S. Supreme Court in Mayo and Alice, the eligibility analysis consists of two steps.4 The challenged claim is first examined to determine if it is “directed to” ineligible subject matter, i.e., a law of nature, a natural phenomenon, or an abstract idea. If it is not, then the claim is patentable under Section 101 and the analysis ends. But if the claim is found directed to ineligible subject matter — usually a law of nature or natural phenomenon for inventions in the life sciences — then the analysis proceeds to step two to determine whether the claim elements, alone or in an ordered combination, contain some other inventive concept, beyond mere “well-understood, routine, conventional activity.” This two-step framework is said to ensure that a claim directed to, say, a law of nature does not rely solely on that natural law to establish patent eligibility.

In Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals Int’l Ltd.,5 the Federal Circuit affirmed a district court’s finding that claims to a personalized method of treatment are patent eligible. Although the district court found patent eligibility at step two, the majority opinion — with Chief Judge Sharon Prost dissenting — concluded that the claims are not drawn to patent ineligible subject matter in the first instance. And in so doing, the decision strongly suggests that, where appropriately drafted, method of treatment claims directed to the application of a drug to a particular disease are generally patent eligible.

Vanda’s patent describes an improved method of treating schizophrenia with iloperidone, wherein the drug dosage administered is determined by the patient’s genotype. Following its administration, iloperidone is metabolized by the enzyme cytochrome P450 2D6, encoded by the CYP2D6 gene. Certain mutations in that gene, however, impair iloperidone clearance, thereby effectively increasing the concentration of iloperidone in the patient. Such impaired drug clearance can prove dangerous given that iloperidone has been observed to prolong the QT interval, thus increasing the risk of fatal cardiac arrhythmias. In order to decrease the risk of QT prolongation, the claimed method thus requires genotyping a schizophrenic patient to determine if that individual possesses “a CYP2D6 poor metabolizer genotype,” and administering iloperidone either at a dosage of 12 mg/day or less if the patient is a poor metabolizer or at a dosage of more than 12 mg/day if the patient is not a poor metabolizer.

While acknowledging that the claimed invention rests on the inventors’ discovery of the natural relationship between iloperidone, CYP2D6 metabolism, and QT prolongation, the majority opinion concludes that the claims are “directed to” an application of that natural relationship, and not the natural relationship itself. According to the majority, that application is a particularized method of disease treatment: “At bottom, the claims here are directed to a specific method of treatment for specific patients using a specific compound at specific doses to achieve a specific outcome.” By contrast, the majority differentiates the claims at issue in Mayo — drawn to “optimizing therapeutic efficacy” by determining the levels of a thiopurine drug in a patient’s blood and specifying thresholds indicative of a need to increase or decrease the thiopurine’s dosage — as instead “directed to a diagnostic method” given the absence of any requirement that drug dosage be adjusted in response to the diagnostic finding.

The Vanda decision offers patent eligibility relief not only to life sciences companies developing new drugs and new methods for disease treatment, but also to those companies developing diagnostic tests. Specifically, by adding particularized treatment steps, it may be possible to reclaim patent eligibility for diagnostic claims. Care is required in drafting such claims, however, to minimize issues of divided infringement, as diagnosis and treatment steps may be performed by separate entities.6

In Exergen Corp. v. Kaz USA Inc.,7 the Federal Circuit similarly affirmed a district court’s finding that the claims at issue were patent eligible, but at step two rather than step one. The decision, from which Judge Todd Hughes dissented, suggests that it may be possible to establish patent eligibility in the life sciences for claims directed to a combination of routine elements specifically adapted to a new purpose.

Exergen’s founder developed a noninvasive thermometer capable of determining core body temperature. Specifically, he discovered the precise mathematical algorithm that allows core body temperature to be calculated from two more easily measured temperatures: first, the temperature of the skin above the temporal artery in the forehead and second, ambient temperature. Exergen’s founder further realized that even though the location of the temporal artery varies among individuals, the temperature above it could be easily detected by laterally scanning the forehead and identifying the peak reading. Exergen ultimately obtained claims to both a “body temperature detector” and a “method of detecting human body temperature,” with additional claim elements requiring that the device or method used employ lateral scanning of the forehead, obtain at least three temperature readings per second, and identify the peak temperature. Following a jury trial, the district court concluded that this claimed combination is patent eligible.

On appeal, the majority opinion found that the claims are directed to the natural phenomenon of core body temperature, and so summarily proceeded to step two of the patent eligibility analysis. The conventionality of the physical component of Exergen’s claims — i.e., the thermometer itself — was largely, if not entirely, undisputed given that Exergen had previously marketed the DermaTemp product, a device that could scan surface temperature, take ten temperature readings per second, and identify the peak temperature scanned. DermaTemp, however, was not used to determine core body temperature as required by the claims at issue, but rather to identify variations in skin temperature as an aid to the diagnosis of injury or disease. This distinction allowed the majority opinion to base patent eligibility on the unconventionality of the method of temperature measurement encompassed by Exergen’s claims:

Following years and millions of dollars of testing and development, the inventor determined for the first time the coefficient representing the relationship between temporal-arterial temperature and core body temperature and incorporated that discovery into an unconventional method of temperature measurement.

In reaching this conclusion, the majority also emphasized the deference owing to the district court as factfinder, as further explored in the next section.

Although brief, the majority’s analysis suggests that when viewed as a whole, a combination of conventional elements may be patent eligible when put to a new purpose. Exergen effectively adapted old technology by incorporating electronics capable of running the core temperature algorithm discovered by its founder, and then using that device in a particular way — to laterally scan the human forehead. The same is true of many diagnostic inventions, which often adapt known methods to measure a natural phenomenon. The majority decision in Exergen suggests that another path to patent eligibility for such diagnostics lies in claiming both the different application of any conventional methods used in the invention, as well as any nonroutine modifications required to make those methods work.

Surviving Early Motions to Dismiss

Exergen appears to have benefited from the fact that its case proceeded all the way to a jury trial. After hearing extensive testimony and evidence of novelty and nonobviousness, and receiving a jury verdict in the patentee’s favor, a district court will likely find it more difficult to nonetheless conclude that this same invention consists purely of well-understood, routine, conventional elements. Nor are the facts that the jury must necessarily find in reaching such a verdict consistent with a conclusion of patent ineligibility at step two. Surviving early Section 101 challenges thus significantly increases the odds of later prevailing on patent eligibility.

Fortunately, the Federal Circuit’s recent procedural clarifications should make it easier for patentees to survive early Section 101 challenges. In a series of three decisions,8 the appellate court made explicit that while patent eligibility under Section 101 is ultimately an issue of law, step two nonetheless implicates an underlying question of fact. Specifically, whether a technology was well-understood, routine and conventional to a skilled artisan at the time of the patent is a factual determination.

This is a crucial development for those facing a motion pursuant to Rule 12(b)(6), as dismissal is now inappropriate so long as the pleadings include concrete allegations that the elements of the claims, individually or together, did not constitute well-understood, routine or conventional activity. Of course, such allegations must include sufficient factual detail to be plausible, and need not be accepted by a court as true if contradicted by the patent specification itself.9 The latter may prove challenging for some patentees if their specification describes the claim elements as well-known to those of skill in the art. This prosecution shortcut is, unfortunately, not uncommon in an industry subject to increasingly stringent written description and enablement requirements.10 Faced with that scenario, a patentee’s best approach — where possible — may be to include allegations explaining why application of the admittedly well-known methods in the context of the claimed invention was not well-understood, routine, or conventional.

Conclusion

Although the Federal Circuit’s recent eligibility decisions bring some hope to patent owners, they are not a cure for what ails the life sciences industry. Judicial decisions are not always lasting, as evidenced by the changes wrought by Mayo and Alice themselves. Indeed, the Federal Circuit has refused to grant precedential status to its Exergen decision,11 and petitions for en banc rehearing have been filed requesting that the full court consider whether patent eligibility is a pure question of law with no underlying factual issues.12 Perhaps the new leadership at the U.S. Patent and Trademark office will spur congressional movement toward a permanent legislative solution that accounts for the needs of the life sciences industry. But in the meantime, the toeholds described in this article may provide patent owners with strategic prosecution and litigation options as they navigate Section 101.