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  • Square, Inc. v. Protegrity Corp. (PTAB 2016)

    U.S. Patent to Database for Protecting Formula for Coca-Cola Found Invalid under CBM Review

    By Joseph Herndon —

    USPTO SealOn March 2, 2016, the USPTO Patent Trial and Appeal Board (PTAB) issued a final written decision in the Covered Business Method (CBM) patent review between Square, Inc. and Protegrity Corp., in which challenged claims were found to be unpatentable under 35 U.S.C. § 101 as being directed to non-statutory subject matter, and proposed substitute claims were denied.  The PTAB's institution of the CBM is questionable, however, since the claims do not recite anything even remotely close to some kind of financial product or service.

    Square, Inc. filed a petition requesting a review under the transitional program for CBM patents of claims 1–60 of U.S. Patent No. 8,402,281, and challenged the claims under 35 U.S.C. §§ 101, 102, and 103.  The '281 patent, titled "Data Security System for a Database," issued on March 19, 2013 and has a priority date of June 18, 1997.  The '281 patent discloses a database management system for protecting data that includes multiple databases, including an operative database ("O-DB") and an information assets manager database ("IAM-DB").  The O-DB contains data that is to be protected.  The IAM-DB contains a data element protection catalogue with protection attributes for such data element types as are associated with data element values in records in the operative database O-DB and is preferably physically separated from the other O-DB.  The protection attributes state rules for processing the corresponding data element values DV.  For example, a protection attribute indicates the degree to which data element value DV is encrypted or indicates that only accepted, or certified, programs are allowed to process data element value DV.  When a user initiates an attempt to process certain data element value DV, a calling is created to data protection catalogue DPC to obtain the protection attributes associated with the data element type for data element value DV.

    Claim 33 of the '281 patent is illustrative of the claims at issue and is reproduced below.

    33.  A computer-implemented data processing method comprising:
        maintaining a database comprising a plurality of data portions, each data portion associated with a data category;
        maintaining a separate data protection table comprising, for at least one data category, one or more data processing rules associated with the data category that must each be satisfied before a data portion associated with the data category can be accessed;
        receiving a request to access a data portion associated with a first data category from a user;
        determining whether each of the one or more data processing rules associated with the requested data portion are satisfied; and
        granting the user access to the requested data portion responsive to each of the retrieved one or more data processing rules being satisfied.

    Standing to Seek CBM Patent Review

    A CBM patent claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions.

    i.  Financial Product?

    Protegrity contended that the '281 patent does not claim a financial service or product because not a single word in any single claim of the '281 Patent is purportedly directed to a financial product or service.

    The PTAB does not require a literal recitation of terms of data processing of financial products or services in the claim for CBM standing.  The legislative history states that "the patent claims must only be broad enough to cover a financial product or service."  In this regard, claim 33 recites a "computer-implemented data processing method" and includes a step of "determining whether each of the one or more data processing rules associated with [a] requested data portion are satisfied."  The PTAB noted that the '281 patent discloses that protection attributes (i.e., the claimed data processing rules) are used to protect against unauthorized access of a data portion in a database and that banking is a field where protection against unauthorized access to databases that are used for administering and storing sensitive information is desired.

    The PTAB also noted that although not sufficient on its own, the '281 patent is classified in 705/51 of the Office's patent classification system, which served as the original template for the definition of a CBM.  Further, the PTAB noted that whether an allegedly infringing product was a financial service was another factor to consider.

    The PTAB found that this totality of evidence showed that at least claim 33 encompasses activities that are financial in nature, incidental to a financial activity, or complementary to a financial activity.

    ii.  Technological Invention?

    The definition of CBM patents does not include patents for "technological inventions."  To determine whether a patent is for a technological invention, the PTAB considers whether the claimed subject matter as a whole recites a technological feature that is novel and unobvious over the prior art; and solves a technical problem using a technical solution.

    Data processing computers that have separate databases, which store associated data and associated rules, were known at the time of filing the '281 patent.  The claims do no recite details of managing a collection of data and for making a calling to the data protection table.  Thus, at least claim 33 does not recite a technological feature that is novel or unobvious over the prior art and does not satisfy the first prong of the test.  The '281 patent, thus, is a CBM patent that is not a technological invention.

    35 U.S.C. § 101

    With respect to the challenge of the claims under 35 U.S.C. § 101, the PTAB first found that the claims are directed to the abstract idea of determining whether access to data should be granted based on whether one or more rules are satisfied.  Second, merely reciting a generic computer in the claims cannot transform a patent-ineligible abstract idea into a patent-eligible invention.

    Protegrity submitted declarations allegedly show that the invention of the '281 patent was used to protect the formula for Coca-Cola from unauthorized access by database administrators or system administrators.  The PTAB, however, found that the declarations failed to establish a nexus between the system provided to Coca-Cola and the claims of the '281 patent.  Thus, the PTAB was not persuaded by the declarations, and found that the '281 patent does not provide a novel and nonobvious solution to a problem deeply rooted in computer technology.

    The PTAB analyzed all claims and noted that all features in the claims were well-known and conventional at the time of filing the '281 patent.  According to the PTAB, such well-known features included:

    • Data processing computers having separate databases, which store associated data and associated attributes,

    • Restricting access to data based upon a user, a program or version of a program, whether activity logging is occurring, or to columns or fields of databases,

    • Different levels of encryption and storing and transmitting encrypted data,

    • Encrypting data using a cryptographic key and providing the key to authorized users.

    Thus, all claims were found patent ineligible under section 101 as being directed to an abstract idea without any inventive features.

    Motion to Amend

    Protegrity filed a Motion to Amend that requested cancellation of claims 1–32 (which was granted) and to substitute new claims 61–68 for some of the challenged claims, but this aspect was denied by the PTAB.

    In a CBM patent review, an amendment may not broaden a challenged claim in any respect when responding to a challenge of unpatentability.  An amendment also may not introduce new matter.

    Notably, proposed substitute claim 61 was amended to add a limitation that requires "automatically calling from the database to the separate data protection table to collect each of the plurality of data processing."  Proposed substitute claim 61 was also amended to delete the limitation that requires "determining whether each of the one or more plurality of data processing rules associated with the request data portion are satisfied."

    First, deleting this feature from the claim necessarily broadened the scope of the claim in some respect, and so the amendment is denied entry for this reason.

    Second, the '281 patent and its original disclosure do not "clearly" define or describe a calling from the database to the separate date protection table.  Although the '281 patent describes a calling to collect the data protection attributes, it does not describe that the calling is from the database.  Protegrity, thus, failed to show that the proposed substitute claims are adequately supported by the written description.

    Thus, the PTAB denied entry of the substitute claims, and determined that remaining claims 33–60 are unpatentable under 35 U.S.C. § 101 as being directed to non-statutory subject matter.

    An interesting aspect in this CBM is whether it should have been instituted in the first place.  The patent claims recite nothing that can be considered as a "financial product or service", but the fact that the claims may cover some financial product or service is enough, according to the PTAB.  If the patent description describes any kind of financial product or service, then the claims will be considered to possibly cover one.  Further, if the alleged infringing product is a financial product, then of course, the claims will be considered to cover a financial product.

    The problem in this instance is that if this CBM was not instituted, then the challenger could only have sought review by the PTAB through reexamination or inter partes review, both of which prohibit challenges under 35 U.S.C. § 101.  Then, the challenger/defendant would have had to assert invalidity under 35 U.S.C. § 101 in court, which follows a more strict standard for claim interpretation.  This may not really have changed the outcome here though, since the claims at issue are quite broad and lacking in novelty and technical features.

    Square, Inc. v. Protegrity Corporation (PTAB 2016)
    Before Kevin F. Turner, Meredith C. Petravick, and Gregg I. Anderson, Administrative Patent Judges.
     Final Written Decision by Meredith C. Petravick

  • CRISPR Interference Motions Set

    By Kevin E. Noonan —

    USPTO SealThe Patent Trial and Appeal Board has made its decision regarding the motions each party will be able to bring in Interference No. 106,048 between the Broad Institute and the University of California ("University") over CRISPR (an acronym for Clustered Regularly lnterspaced Short Palindromic Repeats).  As discussed previously (see "CRISPR Interference Declared"), this interference will determine patent rights for CRISPR, which is part of a system for altering chromosomal sequences in situ in a cell in combination with a bacterially derived protein called Cas9, has been hailed as the "Breakthrough of the Year" for 2015, and rightfully so.  CRISPR provides a mechanism for inserting or deleting specific DNA sequences using CRISPR-associate targeting RNAs and the Cas9 RNA-guided DNA endonuclease enzyme.  It provides for the first time the type of specificity for altering DNA that the polymerase chain reaction (PCR) provided a generation ago for amplifying specific DNA, as illustrated by this schematic:

    Image
    As part of the interference proceedings, each party proposed a set of motions directed to altering the procedural posture of the case and to challenge patentability of each other's patents or applications involved in the interference.  Last Thursday, the Board ruled on whether it would authorize those motions; those decisions and the substance of the proposed motions are set forth below.

    The Broad Institute suggested the following motions:

    1.  A motion that there is no interference in fact between its claims designated by the PTAB as corresponding to the Count (i.e., comprising interfering subject matter) and the University of California's claims. (Motions 2-13)

    Permission to file this motion was GRANTED, as a threshold issue that could decide the interference at the beginning.  As the Board explained, "[a] holding of no interference in-fact means that none of a party's claims meet the 'two-way' test for the existence of an interference under 37 C.F.R. § 41.203(a).  Under such circumstances, no one has standing to proceed because the parties are not claiming interfering subject matter."  Should the Broad Institute prevail, the parties would exit the interference with the claims corresponding to the Count, and the University should have its claims granted.

    2.  Thirty-three motions that the Broad's dozen patents involved in the interference should be accorded the benefit of priority to 16 provisional applications. (Motions 14-46)

    Permission to file one motion on the priority issue was GRANTED but limited to no more than four provisional applications.  In addition, the Broad Institute must provide a claim chart containing one column reciting the elements of the count and a second column providing "only citations to the asserted disclosure in the specification of the earlier application" but no other argument or information.

    3.  A motion that the University's claims corresponding to the count are unpatentable for lack of written description. (Motion 47)

    Permission to file this motion was GRANTED as being directed to a threshold issue, which the Board explained would result in judgment against the University for lack of standing to participate in the interference.

    4.  A motion that the University's claims corresponding to the count are unpatentable for lack of enablement. (Motion 48)

    Permission for this motion was DEFERRED because it "does not appear to impact the priority contest."

    5.  Motions that the University claims are not patentable over "certain prior art." (Motions 49-50)

    Permission for this motion was DEFERRED for substantially the same reasons for deferring Motions 48.

    6.  A motion for access to the prosecution histories of the University's related, pending, unpublished applications, and that the University keep the Board and the Broad informed regarding the status of the claims of these applications with regard to whether the Examiner has issued a notice of allowance. (Motion 57)

    This motion was DENIED regarding access but GRANTED regarding keeping the Board and the Broad Institute informed, and to keep the Examiner in each of these pending applications informed regarding the existence of the interference.

    The University suggested the following motions:

    1.  A motion that all of the claims of all of the Broad's patents are invalid over the publication of the University's application in interference, based on an error in how the Broad's application was filed involving changes resulting from the America Invents Act. (Motion 1)

    Consideration of this motion was DEFERRED because, as with some of the Broad Institute's claims, this motion does not impact the priority questions before the Board.  Unspoken but implicit in the Board's reasoning was that there were other avenues for challenging validity of the Broad Institute's patents (including, inter alia, inter partes review).

    2.  Five motions to change the count. (Motions 2-5)

    Permission to file one motion was GRANTED, based on the University identifying the count that "best describes the interfering subject matter and sets the scope of admissible proofs in a way that is just to both parties," or in the alternative two claims if the University can show that both are necessary to describe the interfering subject matter (but the University cannot propose alterative counts).

    3.  A motion to have the Board give the University the priority benefit of its provisional application as a constructive reduction to practice of the original or alternative count. (Motion 6)

    Permission to file this motion was GRANTED.  As with a similar motion by the Broad Institute, the Board requires the University to file a claim chart containing one column reciting the elements of the count and a second column providing "only citations to the asserted disclosure in the specification of the earlier application" but no other argument or information.

    4.  A motion that the Broad's involved claims are anticipated by certain prior art. (Motion 8)

    Permission for this motion was DEFERRED for substantially the same reasons for deferring the Broad Institute's Motions 48-50.

    5.  A motion that each of the Broad's patents are unpatentable under the doctrine of obviousness-type double patenting. (Motion 9)

    Permission for this motion was DEFERRED for substantially the same reasons for deferring Motion 8.

    6.  A motion that each of the Broad's patents are unpatentable for improper inventorship. (Motion 10)

    Permission for this motion was DEFERRED, with the Board advising that if relevant, it would be considered during the priority phase of the interference.

    11.  A motion that each of the Broad's patents were obtained by inequitable conduct. (Motion 11)

    The Board DENIED authorization for this motion, stating that it was premature and that the substance of the allegations would "likely be apparent from the priority proofs."

    In addition, each party filed a motion for judgment on priority grounds, which the Board DEFERRED until the priority phase of the interference.

    In addition to these decisions, the Board also ordered that one of the University's allowed applications be added to the interference and that this application be included in the Broad Institute's motions 2 and 5 (that there is no interference in fact and that certain of the Broad Institute's claims do not correspond to the count, respectively) and the University's motion for substituting the count.  Procedurally, the Board did not waive the requirement for a statement of facts to accompany each motion, nor did it extend the page limit for the motions.  Both these decisions increase the pressure on the parties to address the complex issues in these motions.  Finally, the Board did not extend the schedule for filing motions, responsive motions and oppositions to motions and replies, as well as objections and observations regarding evidence.  The complete schedule is as follows:

    TIME PERIOD 1 — 22 April 2016

    File motions
    File (but serve one business day later) priority statements

    TIME PERIOD 2 — 13 May 2016

    File responsive motions to motions filed in TIME PERIOD 1

    TIME PERIOD 3 — 24 June 2016

    File oppositions to all motions

    TIME PERIOD 4 — 5 August 2016

    File all replies

    TIME PERIOD 5 — 16 September 2016

    File request for oral argument
    File motions to exclude evidence
    File observations

    TIME PERIOD 6 — 7 October 2016

    File oppositions to motions to exclude
    File response to observations

    TIME PERIOD 7 — 21 October 2016

    File replies to oppositions to motions to exclude

    DEFAULT ORAL ARGUMENT DATE — 17 November 2016

    If oral argument ordered

  • Peschke Map Technologies LLC v. Rouse Properties Inc. (E.D. Va. 2016)

    By Michael Borella —

    District Court for the Eastern District of VirginiaPlaintiff Peschke Map Technologies ("Peschke") sued Rouse Properties ("Rouse") for infringement of U.S. Patent No. 6,397,143, directed to a computer-based map navigation and display system.  Rouse filed a 12(b)(6) motion to dismiss on the pleadings, alleging that the '143 patent is invalid because it claims an ineligible abstract idea.  In a perfect storm of broad claims and aggressive application of the 35 U.S.C. § 101 judicial exclusions, the Court granted the motion.

    Claim 1 of the '143 patent recites:

    A method of presenting and providing navigation through a series of maps, comprising:
        (a) providing at least one first level map depicting plural store layouts;
        (b) providing description pages corresponding to each of said store layouts comprising information related to said corresponding store; and
        (c) providing links from each of said plural layouts to each of said corresponding description pages whereby activation of said link causes said description page to be displayed.

    On its face, this claim is rather broad, and does not explicitly require computer implementation.  Nonetheless, the Court read such a limitation into the claim based on the patent's specification.  Particularly, the Court described the invention as follows.

    The basic iteration of the system is a map of a shopping mall that displays the location and shape of all of the different stores in the mall.  Each store functions as a link that, when clicked on, takes the user to a "description page" containing information about that particular store.  The system might also contain several levels of maps that permit a user to zoom in to and out of the shopping mall from a larger region or neighborhood.  This system is designed to give consumers access to information about different stores using the physical layout of a mall as opposed to, for example, navigating through a list of the names of the stores at a mall.

    Peschke first contended that it was improper to dismiss the claims under § 101 prior to claim construction.  The Court disagreed, noting that patent-eligibility is decided as a matter of law, and that the Federal Circuit allows district courts to determine whether claim construction is needed for the § 101 analysis.  Particularly, the Court stated that "the claimed subject matter is readily ascertainable from the face of the '143 patent" and proceeded to cite to a number of sections of the patent's specification in which aspects of the claims were described.  The Court also observed that "nearly all of the technical terms used in the '143 patent — including click, layout, link, hyperlink, neighborhood, region, shopping center, and store — have been defined in the glossary section."  Thus, despite its position that the claims did not need to be formally construed, the Court still carried out a form of claim construction by pointing out where, in the patent itself, claim term definitions could be found.

    Not helping its argument, Peschke only suggested that one claim term needed to be defined in order to construe the claim terms.  The Court further disagreed that this term required definition, and instead ruled that the motion to dismiss was not premature.

    Peschke then argued that the claims were valid under § 101, which prompted the Court to review the two-prong test for patent-eligibility set forth in Alice Corp. v. CLS Bank Int'l.  First, one must determine whether the claim at hand is directed to a judicially-excluded law of nature, a natural phenomenon, or an abstract idea.  If so, then one must further determine whether any element, or combination of elements, in the claim is sufficient to ensure that the claim amounts to something more than the judicial exception.  Notably, generic computer implementation of an otherwise abstract process does not qualify as "something more."

    Applying the first prong, the Court characterized the claimed invention as "an electronic map navigation system that enables a user to locate a particular store through the use of location and layout information and that provides a link to a description page containing information about the store."  The invention further allows the user to "zoom in and out of larger or smaller geographic areas depicted on these maps."  The Court found these ideas to be well-understood, routine, and conventional.

    In coming to this conclusion, the Court was apparently persuaded by evidence introduced by Rouse relating to a 1798 map of the town of Alexandria.  According to the Court, this map "depicts the layout of Alexandria and identifies the location of several structures, which have been labeled with numbers [where the] "Remarks" section of the map identifies the building that corresponds to each number."  The Court ultimately found that this map "achieves the same result as the invention described in the '143 patent . . . [t]he only difference is that the process described in the '143 patent occurs on a computer and uses hyperlinks that cause a description page to appear instead of using markers that direct a user to an index or legend."  Thus, according to the Court, "numbers perform the same function as the hyperlinks."

    The Court also stated that "the use of multiple layers of maps that enables users to zoom into and out of a geographic area is an unpatentable abstract idea," despite the claims not reciting such language.  Nonetheless, the Court found that the '143 patent admitted that such zooming was well know, and that "atlases have long provided maps of large geographic areas along with corresponding maps of smaller portions of these larger maps that contain more detail."

    Peschke attempted to make an analogy between its claims and those of DDR Holdings v. Hotel.com.  However, the Court quickly shot this notion down, stating that the '143 patent does not address a challenge particular to the Internet — instead it addresses a problem from the pre-Internet world.

    Thus, the claims were found to be abstract under the first prong of Alice.  Moving to the second prong, the Court considered whether the claims recited an inventive concept above and beyond the abstract ideas therein.  Particularly, the Court compared the '143 patent's claims to those in Benson v. Gottschalk and Diamond v. Diehr, and determined that the claims were closer to Benson.  Specifically, the Court noted that the claimed invention "does not apply the abstract idea, using a computer, to a new technological process or in an otherwise new way to solve a unique problem."

    Peschke contended that "when the computerized mapping system was invented it was not commonplace to use an object overlaid on a map as a hyperlink to an information page."  But the Court found this to be merely the automation of the well-known process of "using a map that depicts the shapes of stores as seen from above to provide the map user with information about those different stores."

    Failing both prongs of the Alice test, the claims were ruled invalid.

    The outcome of this case is not surprising given the breadth of the claims, but procedurally it raises a number of issues.  When performing the Alice test, the Court deviated in a significant fashion from the actual claim language, and used phrases from specification instead to represent the invention.  Thus, as noted above, the Court seems to have performed a de facto claim construction.

    Notwithstanding that odd approach, the Court's analogies between paper maps and computerized maps (and between numbers and hyperlinks in particular) were tenuous at best.  Unfortunately, this reflects a broader trend in both the courts and the USPTO, where a software claim is held to be abstract if one can find a previously-known act or article that is tangentially similar.  Moreover, the use of the 1798 map in this case is telling, as once again the notion that § 101 is to be assessed as a matter of law is undermined by the introduction of "prior art."

  • Sequenom Petitions for Certiorari

    By Kevin E. Noonan —

    Supreme Court Building #2Sequenom filed its anticipated petition for certiorari today for Supreme Court review of the Federal Circuit's decision in Ariosa v. Sequenom.  The petition advises the Court that it "should take this opportunity to provide the guidance the Federal Circuit is openly seeking, and avoid a result neither it nor Congress could have intended."

    The "Question Presented" reads as follows:

    QUESTION PRESENTED

    In 1996, two doctors discovered cell-free fetal DNA (cffDNA) circulating in maternal plasma.  They used that discovery to invent a test for detecting fetal genetic conditions in early pregnancy that avoided dangerous, invasive techniques.  Their patent teaches technicians to take a maternal blood sample, keep the non-cellular portion (which was "previously discarded as medical waste"), amplify the genetic material within (which they alone knew about), and identify paternally inherited sequences as a means of distinguishing fetal and maternal DNA.  Notably, this method does not preempt other demonstrated uses of cffDNA.

    The Federal Circuit "agree[d]" that this invention "combined and utilized man-made tools of biotechnology in a new way that revolutionized prenatal care."  Pet.App. 18a.  But it still held that Mayo Collaborative Servs. v. Prometheus Labs., 132 S. Ct. 1289 (2012), makes all such inventions patent-ineligible as a matter of law if their new combination involves only a "natural phenomenon" and techniques that were "routine" or "conventional" on their own.  Multiple judges wrote separately below to explain that while this result was probably not intended by Mayo, it controlled, and only this Court could now "clarify" Mayo's reach to prevent a "crisis" in life-science innovation.

    The Question Presented is: Whether a novel method is patent-eligible where: (1) a researcher is the first to discover a natural phenomenon;(2) that unique knowledge motivates him to apply a new combination of known techniques to that discovery; and (3) he thereby achieves a previously impossible result without preempting other uses of the discovery?

    The Petition asserts three grounds: that:

    • The Decision Below Has Dangerously Overextended Mayo, and the Court needs to clarify that its precedents permit patenting meritorious inventions like this one.

    • This Issue is Vitally Important.

    • This Case Is An Ideal Vehicle.

    The Statement of the Case recites the inventiveness of the claimed invention, including that the fraction of maternal blood from which the cffDNA was detected was routinely discarded.  It recounts the surprise and acclaim with which the invention was greeted in the art, and the application of human ingenuity required to make a practical genetic test from their discovery that cffDNA could be found in maternal blood, i.e., specifically targeting paternally derived portion of the cffDNA.  Specifically recited in this regard are the utilities of detecting Downs syndrome, fetal gender and Rh disease using a simple blood test instead of invasive conventional methods (amniocentesis, e.g.).  The Petition also mentions the parsimoniousness of the claimed invention, being limited to the test and not including the cffDNA itself or having claims that would preempt all uses of cffDNA by others, citing peer-reviewed journal articles describing alternative methods that would not infringe the claims invalidated by the inferior courts.  Tellingly, the Petition asserts that what is inventive is the combination, not the individual steps which were all well known.

    SequenomThe Petition also recites the procedural history of the case and the decisions of the courts below, making special mention of Judge Linn's "remarkable" concurrence.  It characterizes the panel decision as being based on "evident rationale was that, because the discovery of cffDNA in maternal plasma directly motivated the '540 patent's new combination of known techniques, that invention merely reflected that patent-ineligible discovery itself.  According to the majority, that rendered the patent ineligible under Section 101 as a matter of law, even though it 'agree[d]' that the patent 'combined and utilized man-made tools of biotechnology in a new way that revolutionized prenatal care.'  Id.  (emphasis added)."  It further characterizes (as error) the panel's treatment of the preemption issue as "a one-way ratchet: It 'may signal patent ineligible subject matter,' but 'the absence of complete preemption does not demonstrate patent eligibility.'"  Finally the Petition notes that Judge Linn's concurrence, as well as the concurrences to the Federal Circuit's decision denying rehearing en banc, evince the conclusion that "despite this patent's inventive merit, the case would have to be resolved in this Court because Mayo tied the Federal Circuit's hands."

    The Petitioner then boldly states that "[t]his is as straightforward a certiorari candidate as any patent case can be," because the judges below clearly stated that only correction by the Court would remedy the situation.  The practical effect is clear: "Right now, Section 101 doctrine lacks any discernable limits, and so no company can trust in the patent system when deciding whether to invest in bringing an invention to market."  How to do so is simple, according to Petitioners: "this case allows the Court to emphasize that a new combination of otherwise conventional techniques is patent-eligible even if it is straightforwardly motivated by a patentee's unique discovery of a natural law or phenomenon."  In this regard, the Petition cites Justice Breyer's dicta in Mayo that "a new use for a known drug" should remain patent eligible, and Justice Thomas's citation in Myriad with approval Judge Bryson's view that the party who discovers a natural phenomenon would be in the best position to claim applications of that knowledge." — which is just the case here.

    This portion of the Petition recites a litany of horrors if the Court does not review (and reverse) the decision below — from preventing patenting (and development) of vaccines against, for example, the Zika virus, to the conclusion that prior inventions would be patent-ineligible on drugs like aspirin, and even PCR itself, which in Kary Mullis's own words was "a simple idea that 'lay unrecognized for more than 15 years after all the elements for its implementation were available.'"  As a consequence, "anyone who would invest in making, validating, or commercializing inventions like these for human medical use must invite others along for the free ride, with predictably unfortunate results."

    Worse, according to petitioners, the Federal Circuit's decision "jettison[ed]" the one objective basis for making a Section 101 determination: preemption.  "An approach to Section 101 that reduces such a critical fact to a 'moot' afterthought is too badly broken to let lie."

    The Petitioners further note that that Justice Breyer himself did not intend the Mayo decision to be the end of the development in the law, but to merely "sketch the outer shell of the content" of Sec 101.

    The Petition cites Diehr, Mayo, and Myriad for the proposition that a new combination of old steps should be enough to pass Section 101 muster, illustrating the principle with the statements from Mayo regarding new uses of an old drug:

    [T]he Court intimated that "a new way of using an existing drug" would be patent eligible.  But that can be true only if patent eligibility extends to new combinations of routine steps that would be self-evident to researchers who knew about a new discovery: After all, the drug is known, the means of administering it are known, and the only new insight is the natural law that the drug treats a disease no one previously knew it treated.  So, unless the "inventive concept" that Mayo requires can be found in combining existing techniques in a new way to capitalize on a newly discovered natural phenomenon, Mayo itself is wrong about the patent eligibility of new uses for existing drugs.  Conversely, if Mayo (like Diehr) is better understood to permit patenting unconventional combinations of known techniques and materials to accomplish new results that capitalize on newly discovered natural phenomena, the invention at issue here is patent-eligible, because that description fits it to a T.

    And regarding preemption:

    [T]he preemption concern is not that the patent covers all the immediately useful ways in which an insight known only to the inventor can be harnessed right now. . . .  Instead, the concern is that a patent covers all the ways a natural discovery might ever be put to use, including highly innovative ones the patentee does not know and cannot teach.

    Finally in this section Petitioner outlines the dangers to innovation that the decisions below create, including invalidation of almost all prior patents including the first one ever granted, on a method for making potash, and otherwise comprising an exhaustive list of suddenly and retrospectively patent ineligible inventions.

    With regard to the importance of the issue the Petition cites the twelve "trustworthy amici" who participated at the en banc rehearing stage, as well as the Solicitor General's similar warnings in Mayo.  The "suddenly muddled" state of Section 101 law discourages innovation in the life sciences according to the Petition and, ironically, "now affirmatively encourages researchers to keep as secret as possible those very 'basic tools of scientific and technological work' that Section 101 doctrine is designed to render into a public good for the benefit of scientific progress."  Repeating a meme developed below:

    After the decision below, those seeking new vaccines, new uses for existing drugs, and even holy grail insights like early, non-invasive cancer screens, may conclude that the game isn't worth the candle.  And who could blame them: They could revolutionize their field, teach their colleagues a method that is the diametric opposite of conventional wisdom, create a practical, non-invasive test that confers enormous medical benefits on society, have their research cited a thousand times, and yet still lose their patent (after incurring a huge expense in reliance on its protection) because their previously unknown method relies on too fundamental an insight they alone had into the natural world.  If this is the permanent reality, neither aspiring scientists nor venture capitalists may see much to gain in developing or commercializing biomedical research.

    And then there are the international obligations (ironic in light of Justice Breyer's recent exposition on how the laws of other nations can inform the interpretation of American law, albeit to be fair not patent law; see, The World and the Court: American law and the New Global Realities) that are contravened by the suddenly limited view of patent eligibility that distinguishes what it eligible in the U.S. from what is eligible in the rest of the world.

    The section arguing why this case as an ideal vehicle for review repeats the mantra that even the Federal Circuit recognized that it rendered the "wrong" decision but felt hamstrung by Mayo.  Accordingly only the Court can correct this error.  The Petition ends on three final points:

    • The record below, which includes a preliminary injunction motion, claim construction and inter partes review is better developed than most Section 101 cases;

    • The claims at issue include independent and dependent claims, down to the scope of individual tests, which imposes particular granularity for the Court to consider in deciding what should be patent eligible; and

    • Finally, this may be the last chance for the Court to correct the situation, because left intact this decision will turn genetic diagnostic inventions into trade secrets and other forms of protection when available, and will preclude certain innovations entirely.

    Amicus briefs are due in 30 days, and as stated in the Petition are expected to encourage the Court to grant certiorari.

  • Will “Open Source” be the Future of Genetic Diagnostics?

    By Kevin E. Noonan —

    Ambry GeneticsOne of the effective arguments made by the ACLU in the AMP v. Myriad case was that somehow permitting patents on genes implicated a patient's privacy right in her genetic material.  This was also the theme of their public relations campaign to raise money and gain members, and when the Supreme Court handed down its decision, the group hailed it as a victory on that basis (among others).

    But an interesting aspect of this debate is that genetic bases for disease (and for methods for detecting or diagnosing diseases with a genetic basis) is not an individual phenomenon.  A particular person's genetics is of course very important to them, but developing a genetic diagnostic test depends on a population of individuals who share a particular genetic variant and are at risk for or actually have a disease with a genetic basis.  This is one reason why the University of Utah was successful in isolating the BRCA genes (and earlier, before the widespread application of genomic sequencing), due to the genealogical (population) information amongst the relatively homogeneous Mormon population.  Records of births, deaths and causes of death extended in some cases into the 19th century, and a similar population demographic was behind Decode Genetics' attempt to sequence the population of Iceland.  This reality is not readily appreciated; indeed, President Obama, in extoling the virtues and promise of the administration's "Precision Medicine Initiative," stated that the goal was to pool a great deal of data (for up to a million patients) so we can discern the underlying similarities.  And yet, in his very next breath Mr. Obama said that genetic data should belong to the individual.  Which misses the point, that no matter who owns the individual data, the value is in the database, not in the individual data points that make it up.

    It is helpful to have these factors in mind when considering the announcement last week by Ambry Genetics that the company was going to put online its database of genetic variants complied from the results of their genetic diagnostic tests (from among other things its BRCA testing, which was the subject of a lawsuit it won against Myriad in In re Utah Research Foundation (Myriad III) (see "Myriad Throws in the Towel").  According to this announcement, data from 10,000 Ambry customers would be released into a publicly accessible database, as reported in the New York Times and Genomeweb (see "Putting It Out There").  Predictably, interested parties like the President of the Personalized Medicine Coalition, Edward Abrahams, reacted by saying Ambry "should be applauded" according to the report.  But as noted by Professor David Goldstein of Columbia University, data from 10,000 patients doesn't "change[] the game much."  However, Ambry promises to add data from 200,000 patients per year going forward, which if accomplished should achieve one of the President's goals of removing the siloing of genetic data that occurs when these tests are limited to an academic environment.  Similar efforts have been announced by others, for example by requesting Myriad's customers to voluntarily submit their genetic data in an effort to replicate the much larger Myriad database of BRCA gene mutations (see "Consortium Launches Public Database of BRCA Data" and "Myriad Genetic Database Under Siege").

    Of course, Ambry it still far behind Myriad in the size of its database, which is one consequence of not being the first mover in what used to be a new technology of genetic diagnostics.  But these circumstances raise the question of whether the changing paradigm instituted by the Supreme Court's Myriad and Mayo decisions will in fact ultimately promote or inhibit the goal of discovering genetic correlates to disease for the most people and the most diseases.  Fortunately, the Court had not put its judicial thumb on the diagnostic scale in 1997, and as a consequence Myriad was able to use its patent exclusivity to justify the costs of developing the support infrastructure of genetic counselors and gynecologists to get the test to patients effectively, and convince payors that the results were reliable enough that paying for tests would reduce the costs of paying for treatment.  The effectiveness of these tests being established (by Myriad and others in the ensuing decades), the issue now is whether altruism (purported or actual) will be sufficient to motivate the type of cooperation that is at the base of the President's vision for a public database.  Perhaps, but there is just as good a chance that the data will be kept in proprietary databases and thus fail to promote the progress in understanding the genetic basis of disease that the President seeks.  For now, policymakers seem to think betting on this view of how technology develops is worth trying.  It will take time to determine whether they are right, but if they are not, it will be reasonable to ask at what cost we have decided to take this particular path.

  • Court Report

            By Sherri Oslick —

    Gavel About Court Report:  Each week we will report briefly on recently filed biotech and pharma cases.

    Vanda Pharmaceuticals Inc. v. Roxane Laboratories Inc.
    1:15-cv-00919; filed October 13, 2015 in the District Court of Delaware

    Vanda Pharmaceuticals Inc. v. Inventia Healthcare Pvt. Ltd.
    1:15-cv-00921; filed October 13, 2015 in the District Court of Delaware

    The complaints in these cases are substantially identical.  Infringement of U.S. Patent No. 9,138,432 ("Methods for the Administration of Iloperidone," issued September 22, 2015) in conjunction with defendants' filing of an ANDA to manufacture a generic version of Vanda's Fanapt® (iloperidone, used for the acute treatment of adults with schizophrenia).  View the Roxane complaint here.


    Vanda Pharmaceuticals Inc. v. Taro Pharmaceuticals USA, Inc. et al.
    1:15-cv-00920; filed October 13, 2015 in the District Court of Delaware

    • Plaintiff:  Vanda Pharmaceuticals Inc.
    • Defendants:  Taro Pharmaceuticals USA, Inc.; Taro Pharmaceutical Industries, Ltd.

    Vanda Pharmaceuticals Inc. v. Apotex Inc. et al.
    1:15-cv-00922; filed October 13, 2015 in the District Court of Delaware

    • Plaintiff:  Vanda Pharmaceuticals Inc.
    • Defendants:  Apotex Inc.; Apotex Corp.

    The complaints in these cases are substantially identical.  Infringement of U.S. Patent Nos. 8,586,610 ("Methods for the Administration of Iloperidone," issued November 19, 2013) and 9,138,432 (same title issued September 22, 2015) following a Paragraph IV certification as part of  Taro's filing of an ANDA to manufacture a generic version of Vanda's Fanapt® (iloperidone, used for the acute treatment of adults with schizophrenia).  View the Taro complaint here.


    Helsinn Healthcare S.A. et al. v. Fresenius Kabi USA, LLC
    1:15-cv-00918; filed October 13, 2015 in the District Court of Delaware

    • Plaintiffs:  Helsinn Healthcare S.A.; Roche Palo Alto LLC
    • Defendant:  Fresenius Kabi USA, LLC

    Infringement of U.S. Patent Nos. 7,947,724 ("Liquid Pharmaceutical Formulations of Palonosetron," issued May 24, 2011), 8,518,981 ("Liquid Pharmaceutical Formulations of Palonosetron," issued August 27, 2013), 8,598,218 (same title, issued December 3, 2013), 9,066,980 (same title, issued June 30, 2015), and 9,125,905 (same title, issued September 8, 2015) following a Paragraph IV certification as part of Fesenius' filing of an ANDA to manufacture a generic version of Helsinn's Aloxi® (palonosetron hydrochloride intravenous solution, used to prevent chemotherapy induced nausea and vomiting).  View the complaint here.


    Boehringer Ingelheim Pharma GmbH & Co. KG et al. v. Sandoz Inc. et al.
    1:15-cv-07461; filed October 13, 2015 in the District Court of New Jersey

    • Plaintiffs:  Boehringer Ingelheim Pharma GmbH & Co. KG; Boehringer Ingelheim International GmbH; Boehringer Ingelheim Pharmaceuticals, Inc.
    • Defendants:  Sandoz Inc.; Sun Pharma Global FZE; Sun Pharmaceutical Industries, Ltd.; Sun Pharmaceutical Industries, Inc.

    Infringement of U.S. Patent No. 6,015,577 ("Pharmaceutical Compositions Containing Dipyridamole or Mopidamol and Acetylsalicylic Acid or the Physiologically Acceptable Salts Thereof, Processes for Preparing Them and Their Use in Treating Clot Formation," issued January 18, 2000) following a Paragraph IV certification as part of defendants' filing of an ANDA to manufacture a generic version of Boehringer's Aggrenox® (extended-release dipyridamole/acetylsalicylic acid, used to reduce the risk of stroke in patients who have had transient ischemia of the brain or completed ischemic stroke due to thrombosis).  View the complaint here.


    Novartis AG et al. v. Roxane Laboratories, Inc. et al.
    2:15-cv-02905; filed October 13, 2015 in the Southern District of Ohio

    • Plaintiffs: Novartis AG; Novartis Pharmaceuticals Corporation
    • Defendants: Roxane Laboratories, Inc.; Boehringer Ingelheim Roxane Inc.

    Infringement of U.S. Patent Nos. 6,894,051 ("Crystal Modification of a N-phenyl-2-pyrimidineamine Derivative, Processes for Its Manufacture and Its Use," issued May 17, 2005) and RE43,932 ("Crystal Modification of a N-phenyl-2-pyrimidineamine Derivative, Processes for Its Manufacture and Its Use," issued January 15, 2013) following a Paragraph IV certification as part of Roxane's filing of an ANDA to manufacture a generic version of Novartis' Gleevec® (imatinib mesylate, used for various indications, including treatment of myeloid leukemia).  View the complaint here.  [NB: The complaint was later dismissed.]

  • Conference & CLE Calendar

    CalendarMarch 22, 2016 – "Federal Circuit Practice Around 2020: A Look Ahead" (Federal Circuit Bar Association) – 12:00 to 1:00 pm (EDT)

    March 24, 2016 – "Structuring Patent Licensing Agreements: Avoiding Litigation, Allocating Risk and Maximizing Patent Value" (Strafford) – 1:00 to 2:30 pm (EDT)

    March 24, 2016 – "Structuring Patent Licensing Agreements: Avoiding Litigation, Allocating Risk and Maximizing Patent Value" (Strafford) – 1:00 to 2:30 pm (EDT)

    March 30, 2016 – "Patent Prosecution from a Litigator's Viewpoint: Position Your Patent to Succeed in Litigation & Post-Grant Procedures" (American Intellectual Property Law Association) – 12:30 – 2:00 pm (Eastern)

    March 31, 2016 – "Conducting and Analyzing Patent Searches — Strategies for Validity, Patentability, Infringement, FTO and State-of-the-Art Searches" (Strafford) – 1:00 to 2:30 pm (EDT)

    April 5-7, 2016 – IP Strategy, Patent Portfolio Development and Innovation*** (Fleming) – Boston, MA

    April 12, 2016 – "A Federal Trade Secrets Act? The Defend Trade Secrets Act of 2016" (McDonnell Boehnen Hulbert & Berghoff LLP) – 10:00 am to 11:15 am (CDT)

    April 13, 2016 – "Protecting Your IP Overseas: WIPO Services and Initiatives" (World Intellectual Property Organization, American Intellectual Property Law Association, and U.S. Patent and Trademark Office) – Nashville, TN

    April 15, 2016 – "Protecting Your IP Overseas: WIPO Services and Initiatives" (World Intellectual Property Organization, American Intellectual Property Law Association, and U.S. Patent and Trademark Office) – Atlanta, Georgia

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

  • Webinar on Patent Licensing Agreements

    Strafford #1Strafford will be offering a webinar/teleconference entitled "Structuring Patent Licensing Agreements: Avoiding Litigation, Allocating Risk and Maximizing Patent Value" on March 24, 2016 from 1:00 to 2:30 pm (EDT).  John M. Augustyn of Leydig Voit & Mayer and Peter J. Toren of Weisbrod Matteis & Copley will prepare IP counsel to craft effective patent licenses by reviewing key clauses and licensing in joint development projects, and outline best practices for structuring the agreement to avoid litigation, allocate risk and maximize patent value.  The webinar will review the following issues:

    • What are the key contract terms to include in patent licensing agreements?
    • What steps should be taken when structuring a licensing agreement in the context of a joint development project?
    • What factors must be considered to structure a patent license to avoid or minimize litigation?

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

  • WIPO, AIPLA & USPTO Program on WIPO Services and Initiatives

    WIPOThe World Intellectual Property Organization (WIPO), American Intellectual Property Law Association (AIPLA), and U.S. Patent and Trademark Office will be co-sponsoring a program on "Protecting Your IP Overseas: WIPO Services and Initiatives" on April 13, 2016 in Nashville, TN and on April 15, 2016 in Atlanta, Georgia.  The Program will offer sessions on the following topics:

    • Introduction to WIPO — Development of the International Legal Framework Major Intellectual Property Economic Studies
    • ​Global Intellectual Property Systems: The International Registration of Trademarks, using the Madrid System
    • Global Intellectual Property Systems: Protecting your Inventions Internationally using the Patent Cooperation Treaty (PCT)
    • Global Intellectual Property Systems: The Hague System; A Simplified Application Process for Obtaining "Registered Designs" (or, "Design Patents"), for the Protection of Industrial Designs in Many International Jurisdictions
    • How WIPO Alternative Dispute Resolution (ADR) Services (which provide alternatives to conventional court actions) May be used to More Efficiently Settle IP Disputes
    • How WIPO Databases and Tools may be used to Support the Knowledge Economy

    An agenda for the program can be found here.  The registration fee for the program is $50.  Those interested in registering for the conference can do so here.

  • FCBA Webcast on Federal Circuit Practice in 2020

    Federal Circuit Bar AssociationThe Federal Circuit Bar Association (FCBA) will be offering a webcast entitled "Federal Circuit Practice Around 2020: A Look Ahead" on March 22, 2016 from 12:00 to 1:00 pm (EDT).  Michael Franzinger of Sidley Austin LLP will moderate a panel consisting of Polk Wagner, Professor, University of Pennsylvania Law School; Daralyn Durie of Durie Tangri LLP; Jennifer Hillman, Former Commissioner, USITC and Visiting Professor, Georgetown University Law Center; and Christopher Yukins, Lynn David Research Professor in Government Procurement Law, George Washington University Law School.  The panel brings together leading practitioners and professors to share their views on issues primed to shape several areas of Federal Circuit jurisdiction, including patent law, international trade, and government contracts, in the years ahead.

    The registration fee for the webinar is $125 (non-member private practitioner), $50 (non-member government/academic/retired), or free (FCBA member).  Those interested in registering for the webinar, can do so here.