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  • Shire Development LLC v. Watson Pharmaceuticals Inc. (Fed. Cir. 2017)

    By Kevin E. Noonan —

    Shire PharmaceuticalsThe Federal Circuit, in its third opinion involving ANDA litigation between these parties over Shire's LIALDA® (mesalamine) product, has apparently brought this case to a close in generic drug maker Watson's favor, in a decision handed down last Friday.

    Watson PharmaceuticalsThe lawsuit involved Watson's ANDA filing seeking approval for a generic version of Shire's controlled-release oral pharmaceutical composition for the treatment of inflammatory bowel disease, Crohn's disease, and ulcerative colitis, sold by Shire under the brand name LIALDA®.  Shire listed U.S. Patent No. 6,773,720 in the Orange Book having claims for its patented formulations of the active pharmaceutical ingredient mesalamine (5-amino salicylic acid).  These formulations were characterized as having high concentrations (85-90% by weight) of the API.  The formulations contain an "inner hydrophobic matrix" and an "outer hydrophilic matrix," as used in the following representative claims of the '720 patent:

    1.  Controlled-release oral pharmaceutical compositions containing as an active ingredient 5- amino-salicylic acid, comprising:
        a) an inner lipophilic matrix consisting of sub- stances selected from the group consisting of unsaturated and/or hydrogenated fatty acid, salts, esters or amides thereof, fatty acid mono-, di- or triglycerid[e]s, waxes, ceramides, and cholesterol derivatives with melting points below 90° C., and wherein the active ingredient is dispersed both in said the lipophilic matrix and in the hydrophilic matrix;
        b) an outer hydrophilic matrix wherein the lipophilic matrix is dispersed, and said outer hydrophilic matrix consists of compounds selected from the group consisting of polymers or copolymers of acrylic or methacrylic acid, alkylvinyl polymers, hydroxyalkyl celluloses, carboxyalkyl celluloses, polysaccharides, dextrins, pectins, starches and derivatives, alginic acid, and natural or synthetic gums;
        c) optionally other excipients;
        wherein the active ingredient is present in an amount of 80 to 95% by weight of the total composition, and wherein the active ingredient is dispersed both in the lipophilic matrix and in the hydrophilic matrix.

    The claimed formulations provide the "sustained and uniform manner" by which the mesalamine API is released as the drug passes through the gut.

    In the first trial on the merits, the District Court construed the term "inner hydrophobic matrix" to mean "a matrix including at least one lipophilic excipient, where the matrix is located within one or more substances," and construed "outer hydrophilic matrix" to mean "a matrix of at least one hydrophilic excipient, where the matrix is located outside the inner lipophilic matrix."

    On appeal the Federal Circuit reversed, holding that these constructions did not comport with the "ordinary and customary" meanings of the claim terms because they were "impermissibly broad."  Specifically, that panel held that the District Court had properly construed the term "matrix" in each instance as "a macroscopically homogeneous structure in all its volume," but disagreed with how the court construed "lipophilic matrix" to mean "a matrix that includes at least one lipophilic excipient."  This error arose because the District Court's construction "focuse[d] on the lipophilic properties of an excipient in the matrix, rather than the properties of the matrix itself."  That panel believed that the intrinsic evidence mandated a construction wherein lipophilicity (or, for that matter the hydrophilicity) is a characteristic of the matrix, not the excipient in the matrix, according to distinctions found in the specification.

    Shire petitioned for certiorari and the Supreme Court vacated this decision and remanded to the Federal Circuit for reconsideration in view of the Court's intervening decision in Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc.  In that case, the Court set forth the standard of Federal Circuit review of district courts' claim construction, changing the completely de novo standard of Fas v. Cybor to one wherein questions of law are to be reviewed de novo but factual determinations of a district court should be reviewed for clear error, i.e., giving deference to the district court's factual findings pursuant to Federal Rule of Civil Procedure 52(a)(6).  Notably, this change was not mandated for cases where a district court relied solely on the intrinsic evidence (plain meaning of the claim language, the specification and the prosecution file history).  On remand, the Federal Circuit saw fit not to change its earlier determination that the District Court had erred (based on its determination that the District Court had relied only on intrinsic evidence) and remanded the matter to the District Court for trial according to that panel's claim construction.

    This appeal is the result of that trial, wherein the District Court again found infringement under 35 U.S.C. § 271(e)(2).  And once again the Federal Circuit reversed, in an opinion by Judge Hughes, joined by Chief Judge Prost and Judge Taranto.  In this opinion, the panel focused on the Markush groups recited in the claims ("selected from the group consisting of"; see Ex parte Markush, 1925 C.D. 126 (Comm'r Pat. 1925) and MPEP 803.02), which format the opinion noted was relevant to the opinion because, in its earlier claim construction they formed the basis for the Court's determination that "'the correct construction requires that the inner volume contain substances from the group described for the inner lipophilic matrix (which are all lipophilic substances), and that the outer volume separately contain substances from the group described for the outer hydrophilic matrix (which are all hydrophilic).'"  The District Court here found that the presence of components of the lipophilic and hydrophilic matrices comprising Watson's formulation falling outside the scope of the Markush groups did not bar infringement because these components were "'unrelated' to the invention because they did not drive the water-affinity property of their respective matrices."  In some instances, permitting unrelated components to be present in an invention claimed using Markush group language is permissible, according to the opinion, provided that these are related to "aspects unrelated to the invention," citing Norian Corp. v. Stryker Corp., 363 F.3d 1321, 1331 (Fed Cir. 2004).  Here, however, Watson's formulation "does not facially satisfy the claim 1(b) Markush limitation," according to the opinion, because the extragranular space comprising the outer hydrophilic matrix contains lipophilic magnesium stearate, a component not recited in the claim 1(b) Markush group.

    Specifically, the Federal Circuit rejected the District Court's distinction that "magnesium stearate in the extragranular space is overwhelmed by the hydrophilic properties of the sodium starch glycolate in the extragranular space" based in part on expert testimony that the hydrophilic "'sodium starch glycolate is more potent than the mag[nesium] stearate" when "outside" the granules.'"  Indeed, the District Court found (and the Federal Circuit agreed) that magnesium stearate "retained its lipophilic character in the extragranular space" to the same extent that it exerted a lipophilic effect in granules.  On that basis, the panel held that the compound "structurally and functionally" is related to the invention as claimed and thus violates the Markush group of claim 1(b), which does not recite magnesium stearate as a member thereof.  In doing so, the panel rejected Shire's contention (adopted by the District Court) that magnesium stearate in Watson's formulation was used as a lubricant and not for its lipophilic properties and was not lipophilic enough to render the outer matrix lipophilic.  According to the opinion, Norian did not impose a requirement that related components were only those that "advance or are intended to advance" the inventive elements recited in a Markush group, on the grounds that such a requirement would be equivalent to construing "consisting of" in the Markush language to have a scope of "comprising" or "consisting essentially of" (the latter phrasing being most closely related to the scope that Shire advanced in its claim construction arguments).

    The Court remanded with directions to enter judgment of non-infringement, thus putting Watson in the position to be able to market its generic mesalamine formulation (the Hatch-Waxman 30-month stay having expired long ago).  Shire may still appeal, either by requesting rehearing en banc or filing another certiorari petition.  Insofar as the Federal Circuit's opinion is based on the District Court's factual findings (supported by expert testimony) cert. is not a foregone conclusion.  It will depend on whether Shire can convince the Justices that the Federal Circuit has not minded the High Court's lessons regarding claim construction.  Perhaps needing to delve into the minutiae of Markush claiming will be enough to deter the Court from revisiting this aspect of claim construction so soon after its Teva decision (similar to the Court refusing to grant cert. in the Sequenom case after its recent spate of diagnostic method claim cases).  But this case provides a reminder of the tortured path litigants may need to take to get what presumably is a final outcome, and the uncertainty that persists until entry of a final judgment from which there is no further appeal.

    Shire Development LLC v. Watson Pharmaceuticals Inc. (Fed. Cir. 2017)
    Panel: Chief Judge Prost and Circuit Judges Taranto and Hughes
    Opinion by Circuit Judge Hughes

  • Integrated Technological Systems, Inc. v. First Internet Bank of Indiana (E.D. Tex.)

    Business Method / Software Patent Invalidated for Claiming Ineligible Subject Matter

    By Joseph Herndon —

    District Court for the Eastern District of TexasIn the U.S. District Court for the Eastern District of Texas, Integrated Technological Systems, Inc. (ITS) sued First Internet Bank of Indiana (FIB) of infringing four patents, U.S. Patent Nos. 7,912,786; 8,131,643; 8,321,347; and 8,620,809.  FIB moved to dismiss the complaint for failure to state a claim, contending that the subject-matter claimed by the patents is not eligible for patenting under 35 U.S.C. § 101.  The Court granted the motion, and found that the claimed automated business process for transferring money funds simply lacked enough detail to survive the challenge.

    The Court followed the two-part subject matter eligibility (SME) test in which the Court first determines whether the claims at issue are directed to a patent ineligible concept, and if the claims are directed to an ineligible concept, the court then considers the elements of each claim both individually and as an ordered combination to determine whether the additional elements transform the nature of the claim into a patent eligible application.

    Step One

    The patents-in-suit share a substantially similar specification.  The summary of the invention in each patent describes the "primary objective" of the invention — "to provide a method and system for sending money transfers such as cash between a sender and a remotely located recipient without a pre-established relationship, such as an account link, between the parties."  The concept to which the patents are directed is illustrated by an example in which the sender of funds first enters their account information "via an electronic input device . . . such as . . . a touch-tone telephone, a computer modem, an automated teller machine (ATM), and the like."  The sender then authorizes a money transfer, funds are transferred to an "electronic escrow agent," and the funds are then forwarded to the recipient.

    Each asserted claim is directed to this same concept.  The claims differ to the extent they recite variations in how to implement the concept.  The '786 patent claims, for example, recite a "computer machine system for transferring money funds."  The computer system recited by the '643 patent claims, by contrast, is "adapted to being accessed by a communication medium device," such as a phone.  Thus, the claims differ in the types of hardware and the means used to transfer the funds.

    The Court noted that the patents do not describe the type or configuration of the hardware as inventive.  To the contrary, the specifications state that the invention does not require special hardware since existing ATM terminals can easily be used with the invention.  The specifications also explain that while the preferred embodiment describes using a touch-tone telephone to send the money transfer, other devices can be used, including personal computers connected to modems, the Internet, merchant card swipe machines, live telephone operators, P.O.S. (Point of Sale Terminals), and automated telephone operators.

    Because each asserted claim is directed to the same concept, and because the claims only differ in the way in which the concept is implemented, the '786 patent claims were considered sufficiently representative of all the asserted claims for purposes of determining subject-matter eligibility.  Claim 1 of the '786 patent recites:

    1.  An automated business process computer machine system for transferring money funds comprising:
        a computer system which receives, processes and transmits account information data in order to effect simultaneous money transfers from sending debit card accounts to receiving debit card accounts; and
        the computer system being adapted to being accessed by a human sender's communication medium device, wherein the computer system receives the account information data and transfer authorization data from the communication medium device, and processes and transmits the data in automated modes with data transmission language through transmission and electronic mediums, so that the computer system processes and effects a money transfer from a sending debit card account to a receiving debit card account without the necessity of a pre-established relationship between the sending debit card account and the receiving debit card account, and
        in which the computer system simultaneously repeats the computer system processes and, by the computer system, effects additional transfers between different sending debit card accounts and different receiving debit card accounts causing simultaneous money transfers from the different sending debit card accounts to the different receiving debit card accounts.

    The Court considered the query to be whether the concept to which claim 1 is directed, i.e., the concept of transferring funds between accounts without a pre-established link between the accounts, is an abstract idea.  ITS highlighted that the claims include a particular limitation that is novel — "without the necessity of a pre-established relationship between the sending debit card account and the receiving debit card account," as recited in claim 1 of the '786 patent.

    Although it appears that this feature is novel and was the reason the Examiner allowed the claims over prior art, the Court noted that a novel abstract idea can still be an abstract idea.

    While the concept of simultaneously transferring funds without the necessity of a pre-established link between accounts does not seem abstract, the term "abstract" in the context of § 101 law does not mean the same thing as it does in common parlance.  Indeed, there is no definitive rule to determine what constitutes an "abstract idea," but rather, it is sufficient to compare claims at issue to those claims already found to be directed to an abstract idea in previous cases.

    The Court found that the patents-in-suit describe transferring funds through an "electronic escrow agent," and whether this concept is "fundamental" or not, it is impossible to distinguish it from other business methods found to be abstract in previous cases.  The Court thus found step one to be satisfied, i.e., the claims are directed to an abstract idea, in a conclusory manner.

    Step Two

    The Court found that the claims recite nothing more than conventional computer activities or routine data-gathering steps.  Although ITS insisted that claim construction is necessary before making this determination, the Court found that the patents themselves are sufficient to answer the question.  The patents describe conventional media and components, such as personal computers, the Internet, cell phones, and ATMs, and expressly state that specialized hardware is not required.

    Without any description in the patents themselves indicating special purpose hardware, or hardware configured in a new way, the patents were not able to survive the step two challenge.  Since the claims broadly recite functions that can be performed by any generic computing device, no new inventive step was identified.  As a result, the claims were found to be invalid under section 101.

    Report and Recommendation by Magistrate Judge Roy S. Payne

  • USPTO News Briefs

    By Donald Zuhn —

    USPTO Announces Expansion of eMod Text Pilot

    USPTO SealIn August 2015, the U.S. Patent and Trademark Office announced that it would begin implementing a new system that would eventually replace the EFS-Web, Public PAIR, and Private PAIR (see "USPTO News Briefs," August 9, 2015).  According to the Office, the new initiative, eCommerce Modernization (eMod), is intended to improve the electronic patent application process by modernizing the filing and viewing systems, and will be implemented in phases over the next few years.

    Last month, the Office announced via a Patent Alert e-mail that it was expanding the eMod Text Pilot Program.  As part of that expansion, participants in the pilot program will be able to access new system functionality such as the ability to submit text and receive Office actions in text.  The Office continues to seek new participants for the pilot program, but encourages those interested in participating in the pilot program to carefully review the eMod Text Pilot Participant Guidelines, which describes the use of the Text features offered in the pilot.  Those wishing to participate in the pilot program must fill out a participation form.

    The Office's latest announcement indicates that the goal of the eMod Text Pilot Program is to have applicants utilize new features to file patent applications in text, and provide feedback to the eMod Team for further improvements.  Additional information regarding the eMod Text Pilot Program can be found at the eMod Participant Programs webpage.

    Changes to Conditions under which ILPO May Act as ISA/IPEA for PCT Applications Filed with RO/US

    ILPOLate last year, the U.S. Patent and Trademark Office announced in the Official Gazette (1432 OG 264) that the conditions under which the Israel Patent Office (ILPO) would act as an International Searching Authority (ISA) and an International Preliminary Examining Authority (IPEA) under the Patent Cooperation Treaty (PCT) for International applications filed with the U.S. Patent and Trademark Office (USPTO) as a Receiving Office (RO/US) had changed.  In particular, the restriction against the ILPO acting as an ISA for applications containing one or more claims directed to a business method (as defined by specified areas of the International Patent Classification System) has been removed.  In addition, instead of limiting the number of applications the ILPO can receive from the USPTO to 75 per fiscal quarter, the ILPO will now take up to 100 applications per fiscal quarter.

    The changes are part of a new agreement that was signed in April 2016 by the Director of the USPTO and Director of the ILPO and Commissioner of Patents, Designs and Trademarks.  According to the agreement, the ILPO may act as an ISA under the PCT for International applications filed with the RO/US provided that: (1) the applications are submitted in the English language; (2) the ILPO has not received more than 100 international applications from the USPTO during a fiscal quarter; and (3) the ILPO is chosen as a competent authority by the applicants of said applications.  The ILPO will also act as an IPEA if these three requirements are met, and the ILPO acted as the ISA.

    The USPTO's announcement indicates that the search fee for the ILPO acting as an ISA for international applications received by the USPTO is $912 (USD), which the USPTO will collect and transmit to the ILPO.

    USPTO Announces Continuation of IP5 PPH Pilot Program

    PPH LogoIn November, the U.S. Patent and Trademark Office announced that the IP5 offices — the USPTO, European Patent Office (EPO), Japan Patent Office (JPO), Korean Intellectual Property Office (KIPO), and State Intellectual Property Office of the People's Republic of China (SIPO) — have agreed to extend the IP5 Patent Prosecution Highway (PPH) pilot program to January 5, 2020.

    The IP5 PPH pilot program enables applicants who receive a positive ruling on patent claims from one of the IP5 offices to request accelerated prosecution of corresponding claims in another IP5 office.  A discussion of the requirements for participation in the IP5 PPH can be found here.

  • Conference & CLE Calendar

    CalendarFebruary 14, 2017 – "Post-Grant Proceedings: Practical Tips and Strategies in 2017" (Knowledge Group) – 3:00 to 4:00 pm (EST)

    February 14, 2017 – "Understanding the ADS: Little Things Make a Big Difference" (U.S. Patent and Trademark Office) – 12:00 to 1:00 pm (ET)

    February 15, 2017 – "Exploring Cross-border Differences in Canadian and US Patent Law: Strategic Benefits and Traps for the Unwary" (Bereskin & Parr) – 12:00 to 1:00 pm (EST)

    February 15, 2017 – "Identifying the Effects of Brexit on the Protection and Enforcement of IP Rights" (Knowledge Group) – 10:00 to 11:00 am (EST)

    February 16, 2017 – "Trade Secrets and Patents: A Comprehensive Approach to Protecting Intellectual Property — Evaluating the Protection Options, Weighing the Benefits and Risks" (Strafford) – 1:00 to 2:30 pm (EST)

    February 17, 2017 – "Patent Litigation 2017: The Courts and Patent Trial and Appeal Board" (Federal Circuit Bar Association) – 1:00 pm to 5:00 pm (MST), Rocky Mountain Regional U.S. Patent and Trademark Office, Denver, CO

    February 21, 2017 – "Structuring Collaborative Agreements in Life Sciences — Drafting Terms to Expand Product Lines, Reduce Costs and Risks, and Leverage and Protect Assets" (Strafford) – 1:00 to 2:30 pm (EST)

    February 22, 2017 – "Patent-Eligibility Update: Abstract Ideas in the Federal Circuit and USPTO" (McDonnell Boehnen Hulbert & Berghoff LLP) – 10:00 am to 11:15 am (CT)

    February 23, 2017 – "Functional Claiming for Software Patents: Leveraging Recent Court Treatment — Surviving 112(f) and Disclosing Functional Basis for Software to Meet Heightened Standard of Review" (Strafford) – 1:00 to 2:30 pm (EST)

    March 2, 2017 – "Responding to Patent Demand Letters: Leveraging State Laws on Bad Faith Assertion of Patents — Determining What to Include or Exclude in Response, Minimizing Risk of Litigation" (Strafford) – 1:00 to 2:30 pm (EST)

    March 9-10, 2017 - Advanced Patent Law Seminar (Chisum Patent Academy) – Cincinnati, OH.

    ***Patent Docs is a media partner of this conference or CLE

  • Webinar on Differences in Canadian and US Patent Law

    Bereskin & ParrBereskin & Parr will be offering a presentation entitled "Exploring Cross-border Differences in Canadian and US Patent Law: Strategic Benefits and Traps for the Unwary" on February 15, 2017 from 12:00 to 1:00 pm (EST).  Victor Krichker (moderator), James Raakman, and Carmela De Luca will discuss important differences in Canadian and U.S. patent law and highlight strategic opportunities and traps to avoid.  Topics to be discussed will include:

    • Is it too late to file in Canada? Making use of grace periods as well as the use of deferred or expedited examination options including the Patent Prosecution Highway (PPH).
    • Benefits of filing in Canada including lower costs, lack of extra claim fees and absence of multiple claim dependency restrictions.
    • Common questions and situations that arise in cross-border filings including divisional practice, double patenting, lack of continuations, subject matter eligibility and restriction practice.
    • More complex issues such as interpretation standard applied during examination and restrictions on revival of abandoned applications.

    Those wishing to register for the presentation can do so here.

  • FCBA Program on Patent Litigation

    Federal Circuit Bar AssociationThe Federal Circuit Bar Association (FCBA) will be offering a program entitled "Patent Litigation 2017: The Courts and Patent Trial and Appeal Board" on February 17, 2017 from 1:00 pm to 5:00 pm (MST) at the Rocky Mountain Regional U.S. Patent and Trademark Office in Denver, CO.  The program will include presentations on the following topics:

    • Agency Review and Practical Considerations for Appeals
    • Leading Edge Challenges: Amendments at PTAB
    • Adjudicatory Systems Panel –- panel includes Magistrate Judge Kristen L. Mix, U.S, District Court for the District of Colorado (moderator); Circuit Judge Kara F. Stoll, U.S. Court of Appeals for the Federal Circuit; and Magistrate Judge Craig B. Shaffer, U.S. District Court for the District of Colorado

    Those interested in registering for the program, can do so here.  Additional information regarding the program can be found here.

  • Webinar on Collaborative Agreements in Life Sciences

    Strafford #1Strafford will be offering a webinar/teleconference entitled "Structuring Collaborative Agreements in Life Sciences — Drafting Terms to Expand Product Lines, Reduce Costs and Risks, and Leverage and Protect Assets" on February 21, 2017 from 1:00 to 2:30 pm (EST).  Judith A. Hasko of Latham & Watkins and Amy L. Toro of Covington & Burling will provide guidance to counsel for companies in the life sciences industry for structuring collaborative agreements, and discuss key considerations including allocation of risk, establishment of milestones and obligations, protection of IP rights, and termination of agreements.  The webinar will review the following issues:

    • What considerations and potential pitfalls should counsel keep in mind when crafting collaborative agreements?
    • What are the key contract terms that should be included in life sciences collaborative agreements?
    • What approaches are most effective for assigning ownership and development rights?

    The registration fee for the webinar is $297.  Those interested in registering for the webinar, can do so here.

  • Webinar on Functional Claiming for Software Patents

    Strafford #1Strafford will be offering a webinar/teleconference entitled "Functional Claiming for Software Patents: Leveraging Recent Court Treatment — Surviving 112(f) and Disclosing Functional Basis for Software to Meet Heightened Standard of Review" on February 23, 2017 from 1:00 to 2:30 pm (EST).  James J. DeCarlo of Greenberg Traurig and Doris Johnson Hines of Finnegan Henderson Farabow Garrett & Dunner will provide guidance to IP counsel on functional claiming in software patents and in USPTO prosecution, and examine recent court treatment and how to navigate the issue of functionality given the uncertainties in the prosecution and litigation contexts.  The webinar will review the following issues:

    • What impact will the Williamson decision have on functional claim interpretation for software patents?
    • What are the benefits and limitations of using functional claims for software patents?
    • What are the lessons from recent decisions regarding functionality in software patents?

    The registration fee for the webinar is $297.  Those interested in registering for the webinar, can do so here.

  • Webinar on Responding to Patent Demand Letters

    Strafford #1Strafford will be offering a webinar/teleconference entitled "Responding to Patent Demand Letters: Leveraging State Laws on Bad Faith Assertion of Patents — Determining What to Include or Exclude in Response, Minimizing Risk of Litigation" on March 2, 2017 from 1:00 to 2:30 pm (EST).  Sharon A. Israel of Mayer Brown, Brian R. Iverson of Bass Berry & Sims, and Baldassare Vinti of Proskauer Rose will provide guidance to patent counsel for responding to demand letters, discuss legal and strategic considerations, as well as current and proposed state laws addressing bad faith assertion claims, and also discuss what to include or exclude in the response to avoid creating potential harm in future litigation.  The webinar will review the following issues:

    • What are the key considerations for patent counsel when evaluating whether and how to respond to patent demand letters?
    • What is the effect of state laws on bad faith assertion claims on the response to a demand letter?
    • What are some of the pitfalls patent counsel confront in responding to demand letters—and how can they be avoided?

    The registration fee for the webinar is $297.  Those interested in registering for the webinar, can do so here.

  • What to Do about Section 101? IPO Provides Its Answer

    By Kevin E. Noonan —

    IPO #2In the aftermath of the Supreme Court's decision not to grant certiorari in Sequenom v. Ariosa (and in some quarters, considerably before that), many have voiced the opinion that only Congress can resolve the acknowledged uncertainty that recent Supreme Court decisions have created in the law of patent subject matter eligibility.  While many groups (such as the AIPLA and ABA-IP law section) have been said to be working on their own legislative proposals, the Intellectual Property Owners this week released theirs (see "Proposed Amendments to Patent Eligible Subject Matter under 35 U.S.C. § 101").  It proposes the following amendments to the statute (with strikethrough indicating text to be deleted and underlining identifying new language):

    101 Inventions patentable.

    101(a) ELIGIBLE SUBJECT MATTER: Whoever invents or discovers, and claims as an invention, any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereto, shall be entitled to thereof, may obtain a patent for a claimed invention thereof therefor, subject only to the exceptions, conditions, and requirements set forth in this Title of this title.

    101(b) SOLE EXCEPTION TO SUBJECT MATTER ELIGIBILITY: A claimed invention is ineligible under subsection (a) if and only if the claimed invention as a whole, as understood by a person having ordinary skill in the art to which the claimed invention pertains, exists in nature independently of and prior to any human activity, or exists solely in the human mind.

    101(c) SOLE ELIGIBILITY STANDARD: The eligibility of a claimed invention under subsections (a) and (b) shall be determined without regard as to the requirements or conditions of sections 102, 103, and 112 of this Title, the manner in which the claimed invention was made or discovered, or the claimed invention's inventive concept.

    This effort avoids any attempt at outright abrogation of Supreme Court precedent (likely a fool's errand in any case) in favor of codifying the IPO's understanding of the Court's intentions (which clearly could not have been to hamstring if not abolish vast swaths of American industry).  The IPO's approach is similar to the approach Giles Sutherland Rich and PJ Federico took almost two generations ago in codifying the Court's inchoate "inventiveness" standard into the modern concept of obviousness.  Thus, in proposed Section 101(b), the proposed revised statute expressly defines what have been judicially created exceptions based on Supreme Court law.  This section posits that claims must be considered as a whole (as required under Diamond v. Diehr) and that their interpretation be bounded by the understanding of one having ordinary skill in the art (echoing Section 103 in this regard).  Rather than merely then reciting the judicial exceptions ("abstract ideas, laws of nature and natural phenomena"), IPO's suggested language binds these concepts up into one:  that "the invention existed independent of and prior to any human activity, or exists solely in the human mind."  This phrasing keeps some of the novelty aspects in the revised statute that may have otherwise been banished by removing "new" from the preamble and is reminiscent of (but neither as elegant nor nuanced) as the language from Diamond v. Chakrabarty, that the invention be the product of human ingenuity.  It also risks some degree of misinterpretation should all natural products be considered to have existed "independent of and prior to" human activity; it is possible that the drafters believed this risk to be mitigated by proper claim drafting, wherein an "isolated" natural product would pass statutory muster provided that the claim is construed as a whole.  In like manner the proscription that the invention not exists "solely in the human mind" might cabin ineligibility of computer and like inventions to those capable of existing in the human mind.

    The proposal comes closest to a Congressional "we really mean it this time" in proposed Section 101(c), where the drafters have tried to restore the doctrinal distinctions between Section 101 and the other statutory requirements of patentability.  It also owes inspiration from Section 103 ("Patentability shall not be negatived by the manner in which the invention was made.") and contains the only direct rebuke of Supreme Court language by excluding considerations of "inventive concept" from the eligibility calculus.

    The election of Donald Trump as the 45th President has thrown into a cocked hat any expectations regarding what Congress may be willing to consider.  Amending the patent statute, particularly on fundamental matters like eligibility, could be a Pandora's box of goodies every species of political interest will want to exploit for their own purposes.  But IPO (and the other groups) should be applauded for not just throwing up their hands in despair.  In the current political climate perhaps anything is possible.