SCOTUS Decisions Show Patent Eligibility Erosion Trend

June 17, 2015

Published in NH Bar News

For attorneys who guide the patent strategy of technology-based companies, either internally or as outside counsel, a series of recent decisions from the US Supreme Court has changed the game on what can be patented.

Under the US Patent Act, an inventor may obtain a patent for “any new and useful process, machine, manufacture, or composition of matter,” provided that the other specific requirements of the statute are satisfied (35 USC § 101).

Despite the broad statutory language, however, courts have long held that certain inventions that meet the letter of the law are nonetheless ineligible for patent protection. For example, laws of nature, physical phenomena, and abstract ideas are not patentable. This law-of-nature exception to patent eligibility prevents individuals from tying up “the basic tools of scientific and technological work” and thereby thwarting progress in these fields (Gottschalk v. Benson (1972)).

Most members of the patent community agree that the law-of-nature exception to patent-eligible subject matter is necessary and beneficial. Often disputed, however, is the question of what qualifies as a law of nature under the exception. The US Supreme Court has addressed the issue in three cases over the last three years, and in each instance the Court interpreted the exception to encompass subject matter that was previously thought to be patent-eligible.

Mayo v. Prometheus

The first in the trilogy of game-changing cases on patent-eligible subject matter was Mayo Collaborative Services v. Prometheus Laboratories Inc. (2012). At issue in Mayo were patent claims to methods of optimizing the efficacy of a drug by administering the drug to a patient and determining the level of a metabolite in red blood cells.

The Court held these claims invalid because the methods did not involve “significantly more” than applying a law of nature. Instead, the Court found, the claimed methods included only “additional steps consist[ing] of well-understood, routine, conventional activity already engaged in by the scientific community…”

According to the Court, the change in metabolite level in response to the drug is a natural correlation, and the language of the claims was not limited to any particular method of “determining” the metabolite level. Consequently, the claims preempted the application of the natural law.

Association for Molecular Pathology v. Myriad

The Supreme Court’s next interpretation of the law-of-nature exception came in Association for Molecular Pathology v. Myriad Genetics Inc. (2013). In addressing the patent-eligibility of isolated DNA molecules, the Court in Myriad held that patent-eligibility depends on the nucleotide sequence: a DNA molecule having a naturally-occurring sequence is not eligible for patent protection, whereas one with a non-naturally-occurring sequence is eligible.

The Court was unpersuaded by Myriad’s argument that the claimed DNA molecules do not exist naturally in isolation but must be separated from chromosomes by breaking chemical bonds. Instead, the Court noted that the claims focused on genetic content, which was identical between the isolated DNA molecules and their chromosomal counterparts. Thus, DNA molecules with naturally-occurring sequences are un-patentable products of nature.

Alice Corp. v. CLS Bank

The Supreme Court’s latest explication of the law-of-nature exception was in Alice Corp. Pty. Ltd. v. CLS Bank Intern (2014). The patent-eligibility of all the disputed claims in Alice rested on methods of exchanging financial obligations.

After finding that the methods involved an abstract idea, the Court, following the Mayo standard, analyzed whether the methods entailed significantly more than applying the idea. The Court found that the additional elements in the methods were generic and routine and therefore insufficient to transform the abstract idea into a patent-eligible process.

PTO’s Interim Guidance

In late 2014 the Patent and Trademark Office (PTO), which is tasked with applying the standards set forth by the Supreme Court in reviewing patent applications, issued its Interim Guidance on Subject Matter Eligibility. The Guidance contains several useful tips for patent practice under the new regime.

For example, under Supreme Court precedent, a composition must have “markedly different characteristics” from a product of nature to be patent-eligible. The Guidance clarifies that structural, functional, or other properties of the composition may satisfy this requirement. The Guidance also illuminates what can add “significantly more” to a law of nature to render a claim patent-eligible under Mayo. The Supreme Court’s analysis focused on the abstract policy concern of whether a patent claim forecloses future innovation. The Guidance addresses the standard on a more practical level by providing examples of added elements that do and do not pass this test.

The Supreme Court has signaled that much of the subject matter that was being patented just a few years ago is not patent-eligible. It behooves practitioners to adapt to the changing environment.

Mark Nickas is a registered patent attorney in the Woburn, Mass., office of McLane, Graf, Raulerson & Middleton. Nickas focuses on patent prosecution for clients in the life sciences, medical devices, and nano-manufacturing industries.