By Kevin E. Noonan –

A consequence of the Supreme Court’s assault on subject matter eligibility a dozen years or so ago was that the patent defense bar presented the judiciary with ever more stringent standards and extreme if not fanciful positions that resulted in invalidation on Section 101 grounds becoming the default outcome.  Envelopes (blessedly) having the tendency to eventually be pushed too far, in REGENEXBIO Inc. v. Sarepta Therapeutics, Inc., the Federal Circuit finally said “Enough!”

The case arose over infringement of U.S. Patent No. 10,526,617 directed to recombinant host cells, the opinion setting forth Claim 1 as representative:

1.  A cultured host cell containing a recombinant nucleic acid molecule encoding an AAV vp1 capsid protein having a sequence comprising amino acids 1 to 738 of SEQ ID NO: 81 (AAVrh.10) or a sequence at least 95% identical to the full length of amino acids 1 to 738 of SEQ ID NO: 81, wherein the recombinant nucleic acid molecule further comprises a heterologous non-AAV sequence.

The District Court granted Sarepta’s motion for summary judgment of invalidity, disclosing the court’s opinion that “in both [Diamond v. Chakrabarty, 447 U.S. 303 (1980)] and [Association for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576 (2013)] the Supreme Court ‘highlight[ed] the importance of change’ between naturally occurring subject matter and the claimed composition.”  Illustrating one source of the District Court’s error, the opinion notes that “the district court determined that none of the individual naturally occurring components in the claims had been changed and that ‘combin[ing] natural products and put[ting] them in a host cell’ does not make the invention patentable under § 101.”  The jurisprudential basis for this conclusion is Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948),” resurrected by Justice Thomas in his Myriad decision, wherein that decision was premised on the concept that “[t]aking ‘two sequences from two different organisms and put[ting] them together’ is no different than taking two strains of bacteria and mixing them together.”  The District Court furthered its conclusion by deciding the question of whether the claim recited an “inventive concept” from what it called the “Mayo/Alice” framework, whereby the District Court concluded it did not because “the claimed invention is made using well-understood, routine, and conventional steps.”

The Federal Circuit reversed and remanded, in an opinion by Judge Stoll, joined by Judges Dyk and Hughes.  The panel provided what they term “an overview” of the Supreme Court’s mandates in Chakrabarty, Funk Brothers, and Myriad, prior to assessing the patent eligibility of REGENEXBIO’s claims.

Regarding Chakrabarty, the opinion opines that there were no naturally occurring bacteria that could break down crude oil, and the Federal Circuit characterized this (as it famously was stated by the Supreme Court) to be “a nonnaturally occurring manufacture or composition of matter—a product of human ingenuity having a distinctive name, character and use.”*  The opinion also provides a reminder that the Chakrabarty opinion also distinguished the circumstances in that case from Funk Brothers, which was a natural phenomenon whereby “there existed in nature certain species of root-nodule bacteria which did not exert a mutually inhibitive effect on each other” and “used that discovery to produce a mixed culture capable of inoculating the seeds of leguminous plants.”  That was considered ineligible as being “only some of the handiwork of nature,” hence providing the rationale for finding noneligibility.  Finally, the opinion provided how Myriad assessed claims to isolated BRCA gene-encoding DNA in light of Chakrabarty and Funk Brothers: the Supreme Court did not consider Myriad to have “created anything” because the genetic sequence in the chromosome were the same when isolated (ignoring that the isolation “gene” was what Myriad created, with all its attendant utility, much like the history of antibiotic and other medicinal chemistry that found patent eligibility for isolated drugs; see In re Bergy).  The opinion also provides a reminder that in rendering its decision, the Supreme Court focused on the BRCA gene genetic sequence rather than regarding Judge Lourie’s characterization that “a gene is but a chemical compound, albeit a complex one” in Amgen Inc. v. Chugai Pharmaceutical Co. Ltd., 927 F.2d 1200 (Fed. Cir. 1991).

The opinion further notes that the Supreme Court held that claims directed to complementary DNA (cDNA) were patent-eligible because as in Chakrabarty’s invention cDNA is not naturally occurring (“creation of a cDNA sequence from mRNA results in an exons-only molecule that is not naturally occurring“), despite efforts some amici (notably, Eric Lander of the Broad Institute) to argue otherwise.

The opinion then assays other biotechnology-related patent eligibility decisions, particularly ChromaDex, Inc. v. Elysium Health, Inc., 59 F.4th 1280 (Fed. Cir. 2023) (directed towards isolation of a vitamin from milk).  There, consistent with Myriad‘s rubrics that “mere” isolation was insufficient to confer patent eligibility to naturally occurring products, the Court held claims to the isolated vitamin to be patent-ineligible.

In this case, the opinion relies on Chakrabarty to “define the inquiry” and to the patent-eligible claim in Myriad as distinguished from the claims in Funk Brothers, ChromaDex, and the patent ineligible claims in Myriad.  The opinion analogizes the recombinant nucleic acid recited in these claims (reciting the capsid protein and the heterologous AAV vector sequences) to the four plasmids combined in Chakrabarty’s bacteria and with the cDNA claims in Myriad (“the lab technician unquestionably creates something new”) to reach the conclusion that what is claimed here should likewise be patent-eligible.  The opinion further distinguishes these claims with Funk Brothers, the Federal Circuit calling the District Court’s analogy relying on that case “flawed and inconsistent with the undisputed scientific evidence in the record” (albeit reiterating the Supreme Court’s conclusion that mixing the two Rhizobium strains previously thought to be incompatible to be no more inventive than “an improvement in packaging”).  Here, the Court considers the invention to not being “merely directed to repackaging products of nature” because it creates a cell containing a molecule (the recombinant DNA) that could not arise in nature without human intervention.  This rationale caused the panel to hold that the District Court erred by ignoring the Supreme Court’s Chakrabarty decision (wherein as here Chakrabarty did not change any of the invention’s naturally occurring components; see below).  In addition, the opinion criticizes the District Court’s analysis for failing to consider the invention “as a whole,” wherein what could be distinguished from nature was the recombinant genetic construct even if the individual components were not otherwise altered from their naturally occurring state.  Also mentioned in the opinion was “the potential for significant utility” which existed for the invention in Chakrabarty and did not exist for the invention in Funk Brothers.  The panel makes explicit the relevance of this distinction as arising in the Chakrabarty decision itself, to the extent that “no naturally occurring bacteria possessed the same property for breaking down crude oil even though the claims only recited the hydrocarbon-degrading properties of the plasmids contained by the bacterium rather than any capability of the bacterium itself” that was contained in the Supreme Court’s opinion.

In distinguishing (and rejecting) Sarepta’s arguments contrary to their decision the panel emphasizes the nonnaturally occurring combination of “a cultured host cell, a heterologous nucleic acid sequence, and a recombinant nucleic acid molecule that codes for both the heterologous sequence and the AAV rh.10 sequence.”  The opinion also rejects Sarepta’s attempt to focus on the AAV rh.10 sequence alone “because the other claim limitations are conventional and would not themselves be patentable advancements,” citing Chakrabarty and expressly Diamond v. Diehr, 450 U.S. 175, 188 (1981), for the inappropriateness of “dissect[ing] the claims into old and new elements and then . . . ignor[ing] the presence of the old elements in the [§ 101] analysis.”

The opinion also contains the Court’s understanding (being derived from disclosure in the ‘617 specification) of the importance of the technology with regard to developing better understanding and treatment of genetic mutation-associated disease, including modified virus vectors for producing transgenes that can replace defective or missing genes to be introduced into host cells, which further have life cycles particular to the virus, the host cells, and in some instanced the transgenes.  This understanding emphasizes that nothing about this invention is naturally occurring.

There has always been some tension between the patent prosecution bar and litigators defending accused infringers, unavoidably perhaps because of their differing perspectives on what is or isn’t (or should or shouldn’t) be patented, and the eligibility morass created by the lower courts’ responses to recent Supreme Court precedent that has exacerbated these tendencies.  This decision will not eliminate those tensions, but in the face of continuing disregard of these consequences of their decisions by the Supreme Court (certiorari denials on this issue approaching 100) the only possibility of getting back to a reasoned equilibrium may come if the Federal Circuit adopts its historic (and Congressionally mandated) role of exercising its expertise with regard to this issue.  At the very least by doing so the Court may be motivated to productively revisit the issue and provide needed clarity benefiting from the Federal Circuit’s analysis.

* The Federal Circuit recognizes an important detail in Chakrabarty’s invention that can be lost in view of the type of genetic engineering that has become commonplace in the almost fifty years since that invention was made:

In Chakrabarty, the inventors transferred four different plasmids, each of which were naturally occurring and capable of degrading four different oil components, into a naturally occurring bacterium.  While the inventors genetically modified the four plasmids to combine them, there is no indication that the four plasmids transferred into the host bacterium were otherwise themselves genetically engineered.

REGENEXBIO Inc. v. Sarepta Therapeutics, Inc. (Fed. Cir. 2026)
Panel: Circuit Judges Dyk, Hughes, and Stoll
Opinion by Circuit Judge Stoll