• By Michael Borella

    USPTO SealAs the fallout from the Supreme Court's Alice Corp. v. CLS Bank Int'l case makes its way through the federal courts and the U.S. Patent and Trademark Office (USPTO), applicants and patentees continue to struggle with the implications of the decision.  Alice provided a two-part test for patent-eligibility under 35 U.S.C. § 101, requiring that one first determine whether the claim at issue 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 exclusion.  Notably, generic computer implementation of an otherwise abstract process does not qualify as "something more."

    Notoriously unclear and difficult to apply in practice, when employed by courts, the Alice test has resulted in the vast majority of claims under review being found patent-ineligible under § 101.  Similar statistics are the case for the Patent Trial and Appeal Board (PTAB), the body that handles appeals within the USPTO.  As a result, any court or PTAB decision finding that claims meet the requirements of Alice are useful clues for applicants and patentees.  For instance, drawing analogies between one's claims that those that a judicial body has found patent-eligible can be persuasive to patent examiners in the USPTO, as well as to other judicial bodies.

    Recently, the PTAB twice reversed examiners' rejections of claims under § 101.  While both opinions were short, and thus do not provide extensive reasoning, they do offer examples of the type of claim language and subject matter that can be viewed favorably by the PTAB.  Notably, in both cases, the PTAB found that the claims were not abstract.

    In Ex Parte Cyriac J. Wegman III, 2015 WL 5578687 (P.T.A.B. Sep. 18, 2015), U.S. Patent Application No. 12/765,954 had been rejected by the examiner on the grounds of patent-ineligibility, lack of novelty, and obviousness.  A representative claim recites:

    1.  A method for providing an empirical model of a defined space comprising steps of:
        a. defining the desired space;
        b. describing at least a portion of the defined space with multiple correlated dimensions;
        c. reducing the dimensionality of the described portion;
        d. combining the described portion with the remaining portion of the defined space;
        e. creating a hypothetical model of the defined space; and
        f. calculating coefficients for the hypothetical model according to an analysis of real and/or or virtual objects.

    The examiner viewed the claim as being directed to the abstract idea of "providing an empirical model in which a hypothetical model is created and coefficients are calculated for the model."  The applicant argued that the claim was more specific than the examiner's characterization, in that it "requires the description of a portion of a defined space using multiple correlated dimensions: the described portion of the space is then altered in terms of the dimensionality of the description of the space."  The applicant further stated that "nothing in these steps may be considered necessary, routine, or conventional."

    Applying the first part of the Alice test, the PTAB found that "claim 1 requires performing an analysis of objects, either actual or virtual, and calculating coefficients for the model based upon that analysis," and that "these steps are sufficiently concrete as to set them outside the broad definition of abstract idea as set forth in Alice."  Consequently, the PTAB reversed the examiner's § 101 rejection.

    In Ex Parte Bruce Gordon Fuller, Brian Alexander Wall, Kevin George Gordon, Mark David Hobbs, and Mohamed Salehmohamed, 2015 WL 3467122 (P.T.A.B. May 28, 2015), U.S. Patent Application No. 11/864,531 had been rejected by the examiner on the grounds of patent-ineligibility and obviousness.  A representative claim recites:

    1.  A method of associating a first variable and an event on a display, the method comprising:
        displaying the first variable relative to a time period on the display, resulting in a graph of the first variable;
        receiving first user input from a graphical indicator device, wherein the first user input comprises an instruction to position an indicator over a portion of a data curve of the graph corresponding to a time period of interest to the user;
        in a processor, determining if the event occurred during the time period of interest; and
        displaying the event on the display nearby the portion of the graph if the event occurred during the time period of interest.

    In rebutting the § 101 rejection, the applicant argued that "claim 1 recites physical elements that allow a user to view a graph and an event occurring during a time period of interest on the display if the processor determines that an event occurred" and that "these elements provide sufficient structure to prevent the method steps from being interpreted as too abstract."

    Using terse reasoning, the PTAB stated that the applicant's arguments were persuasive and that the examiner did not rebut these arguments in the examiner's answer to the applicant's appeal brief.  Thus, the PTAB reversed the examiner in this case as well.

    Despite these two applications involving different subject matter, a commonality can be found between their respective claims.  Particularly, both claim sets involve or incorporate a physical-world aspect.  For instance, Application No. 12/765,954 recites "calculating coefficients for the hypothetical model according to an analysis of real and/or or virtual objects."  Likewise, Application No. 11/864,531 requires displaying a graph, receiving user input related to a time period of interest on the graph, and then "displaying the event on the display nearby the portion of the graph if the event occurred during the time period of interest."

    While the blessing of the PTAB is in no way a guarantee that a reviewing court will come to the same conclusion, these cases provide applicants with indications of what types of claims and arguments are likely to result in the Alice test being satisfied.  Unfortunately for the applicants here, the examiners' rejections of both applications were ultimately upheld on other grounds.

  • By Kevin E. Noonan

    NovartisEarlier this summer, in Ariosa Diagnostics, Inc. v. Sequenom, Inc., the Federal Circuit affirmed a decision by the District Court for the Northern District of California granting summary judgment of invalidity of the asserted claims of U.S. Patent No. 6,258,540 (see "Ariosa Diagnostics, Inc. v. Sequenom, Inc. (Fed. Cir. 2015)").  Last month, Sequenom filed a petition for rehearing en banc, arguing that the panel's decision in June was inconsistent with the Supreme Court's decisions in Diamond v. Diehr, 450 U.S. 175 (1981), Mayo v. Prometheus Laboratories, 132 S. Ct. 1289 (2012), and Association for Molecular Pathology v. Myriad Genetics, 133 S. Ct. 2107 (2013), and that the panel's decision poses a threat to patent protection in multiple fields of invention.  On August 27, twelve amicus curiae briefs were filed in support of Sequenom's petition for rehearing en banc.  Over the next few weeks, Patent Docs will examine these amicus briefs.  Today, we review the brief submitted by Novartis AG.

    In the brief's Statement of Interest, the amicus states that they are "a global healthcare company whose mission is to discover, develop and successfully market innovative products to prevent and cure diseases, to ease suffering and to enhance the quality of life for patients across the world."  The company's interest in the panel's decision is that it is "at heart an innovation company, relying primarily on our substantial investment in our own research and development (R&D) — $9.9 billion in 2014 alone — to fuel the ingenuity and high-stakes work that it takes to invent, develop and deliver new medicines."  Accordingly, the company relies on patenting to protect its investment "in spite of the high costs and risks inherent in biopharmaceutical R&D."  And the amicus notes that, for most of the 220 years of the U.S. patent system these protections have been successful in encouraging investment in innovation because patent protection was extended to "anything under the sun made by man [] subject only to limited judicial exceptions."  The brief characterizes Section 101 as a "Janus," "with the power to begin entire fields of useful Arts — or, if the gates are closed, to end them as abruptly."  Being a business dependent on patent protection, the company asserts that the "critical role" of Section 101 as a gatekeeper has motivated it to follow the recent Supreme Court decisions "with concern over the certain and uncertain ways that it might impact the direction of our R&D, and have provided comments to the U.S. Patent and Trademark Office regarding the Guidances the Office has promulgated in an attempt to adapt government patent policy to those decisions.  The continued viability of the Court's "seminal cases" (including Diamond v. Chakrabarty and Diamond v. Diehr), says this amicus, have provided "reassurance" in the face of the questions raised by these cases about the boundaries of patent eligibility, as has the Court's "repeated admonitions to interpret those holdings narrowly, lest they 'eviscerate patent law'" (citing Mayo).

    This reassurance has "slipped away," according to Novartis, with the panel's "erroneous" decision, which "ignores the case 'most directly on point' (Diehr), misinterprets the framework of the principal case on which it relies (Mayo) and dangerously expands the judicial exceptions further than any decision in history" (a passage that most succinctly states the position of most of the amici, Sequenom and most of the biotech patent bar).  The brief argues that Section 101 is intended to be a broadly interpreted threshold of "possibly patentable subject matter" (citing Diehr) and not as a door that forecloses what the "stricter" substantive patent law provisions of the statute would allow (saying colorfully that "such a door cannot be correctly construed as a vanishing portal that shrinks in scope with every step of the 'Progress of Science and the useful Arts'").

    This is precisely what the panel decision does, however according to the brief, an outcome caused by "a fundamental misreading" of Mayo.  And (perhaps even more dangerously) "the decision goes well beyond merely finding that a particular invention that applies 'manmade tools of biotechnology' in a 'revolution[ary]' way is ineligible for patenting": citing Judge Linn's soi-disant concurrence, "the decision threatens to signal to other courts and the USPTO to expand its flawed reasoning to untold numbers of other inventions."  The panel decision threatens Novartis's "own inventions related to personalized medicine, biomarkers and point-of-care testing" as well as third party tests that may be of interest to Novartis in future. The consequences are dire indeed: "[i]f these inventions are no longer patent-eligible, the incentives to develop them may well disappear, or move overseas, or push us and others to rely on trade secrets, marking the death of a system in which the "public good fully coincides . . . with the claims of the individuals," citing The Federalist No. 43 (James Madison).  And the decision might also bleed over to threaten "methods of treatment, medical therapies [and drug development]," having a "devastating" effect on medicine.  Accordingly, this amicus concludes that the panel decision "deserve[s] another look" by the court en banc.

    With this explication of the situation as prelude, Novartis makes three arguments in favor of reconsideration (and reversal) of the panel decision.  The first of these is that the panel "impermissibly narrow[ed] the eligibility test for method claims by failing to consider the "claims as a whole."  According to this brief, the second step in the Mayo/Alice test for patent eligibility not only "does not compel" the panel's result but indeed "leads readily to the opposite" one (emphasis in the brief).  This assertion is based on the command from Mayo that the second step mandates that a court "consider whether 'other elements or a combination of elements, sometimes referred to as an "inventive concept"' transform the claim into a patent-eligible application [of a judicial exception]."  The error was not in deciding that cffDNA was a natural phenomenon in applying the first step of the test, but instead by "completely excising these natural phenomena from the claim, asking only whether what remained (e.g. PCR) was 'inventive' on its own."  PCR could not be considered inventive per se in 1997, but performing PCR on cffDNA from material blood "surely was," according to the brief.  This situation is sanctioned (in the good way) by Mayo, being either an inventive "combination of elements" or by considering the claim as a whole.  This "second layer of analysis," arose in Diehr and was cited with approval by the Court in Mayo and quoted in the brief as standing for the principle that the Court rejected the "rigid 'additional elements' approach applied by the panel:

    [It is argued that] if everything other than the [patent-ineligible concept] is determined to be old in the art, then the claim cannot recite statutory subject matter.  The fallacy in this argument is that we did not hold in Flook that the [patent-ineligible concept] could not be considered at all when making the §101 determination.  To accept [that] analysis . . . would, if carried to its extreme, make all inventions unpatentable because all inventions can be reduced to underlying principles of nature which, once known, make their implementation obvious.

    According to the brief's interpretation of the Court's Mayo decision, this was the "secondary check" on step 2 of its patent eligibility test, applied after the Court had determined that none of the steps recited in the claim by themselves contained an inventive concept.  The brief then argues that "in line with Diehr, the Court's secondary analysis indicates that it was searching for an inventive concept in the way that the inventor arranged the known elements in the claim as a whole, including the natural phenomenon."  It was the panel's failure to perform this assessment that lead it to error as argued in this brief.

    A second argument proposed by Novartis is that the panel decision applies Section 101 more restrictively than the other statutory sections, contrary to the "broader patent law."  Cited as an example of this conflict is the likelihood that a claim could contain an inventive step (non-obviousness) sufficient to pass muster under Section 103 but lack an inventive concept sufficient to confer patent eligibility.  Acknowledging that what the Court meant by the term "inventive concept" (insofar as the term is different from non-obviousness) is still being developed, the brief finds conflict in the language of the statute, specifically that patents shall be granted on eligible subject matter "subject to the conditions and requirements of this title."  35 U.S.C. § 101 (emphasis added).  The brief repeats the point that the Supreme Court considers Section 101 to be a threshold test, and that Congress intended the section to be construed broadly ("anything under the sun made by man").  Using language from the panel opinion recognizing that the invention was "a significant human contribution that "combined and utilized man-made tools of biotechnology in a new way that revolutionized prenatal care," the brief asserts that the opinion satisfies the hypothetical raised earlier that a claim could be simultaneously non-obvious and ineligible, an outcome the brief argues is contrary to the statute and "broader" patent law precedent.  Simply put, here the brief argues that a claim cannot be both non-obvious and patent ineligible so long as the criteria for eligibility includes the existence of an inventive concept.

    Finally, the brief argues that the panel opinion turns the judicial exceptions into "moving targets" and as a result "creat[es] needless uncertainty [that] undermin[es] the objectives of the patent system."  (The basis of this in reality stems from Justice Breyer's reincorporation of inventive concept" into Section 101 sixty years after Giles Rich and P.J. Federico thought they had relegated this requirement to Section 103.)  But Novartis has a point when it states that the panel's application of the eligibility test makes what is an exception depend on the "constantly-changing state of the art" and that this is in conflict with how the Court has defined and (until now at least) applied the judicial exceptions.  Novartis argues that the exceptions are exceptions because they are "universal constants" that are "outside the reach of human intervention" and hence do not change over time.  Logic dictates that "what amounts to a 'natural phenomenon' at a given time cannot become an invention later, nor can a human invention become a 'natural phenomenon' with the passage of time."  One illustrative basis for this idea is PCR:  the panel determined that amplifying cffDNA using PCR was not "enough" to infuse the claim with an inventive concept because the technique was known in the art.  The brief then notes that "implicit in this reasoning is that the use of PCR would be patent-eligible if the technique were new, as it was when Kary Mullis invented (and indeed patented) the process in 1983."  While this may make sense under a novelty (Section 102) or obviousness (Section 103) analysis, the brief argues that it not only should not but "logically cannot be" under the judicial exceptions to patent eligibility under Section 101.  "If the broad application of PCR to any form of DNA was not an ineligible 'natural phenomenon in 1983 [as presumptively it was not because Mullis was awarded a patent on the method], it cannot have become one 14 years later when applied to a more specific form of DNA in an admittedly 'revolution[ary]' way," the brief concludes.

    Novartis was represented on the brief by Corey A. Salsberg.

    For additional information regarding this topic, please see:

    • "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: Paul Gilbert Cole," Setember 22, 2015
    • "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: Bioindustry Association," September 20, 2015
    • "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: WARF, Marshfield Clinic, and MCIS, Inc.," September 17, 2015
    • "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: BIO and PhRMA," September 16, 2015
    • "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: Amarantus Bioscience Holdings, Personalis, Inc., and Population Diagnostics, Inc.," September 15, 2015
    • "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: Coalition for 21st Century Medicine," September 14, 2015
    • "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: IPO," September 8, 2015
    • "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: Professors Lefstin and Menell," September 6, 2015
    • "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: 23 Law Professors," September 3, 2015
    • "Amici Support Sequenom's Petition for Rehearing En Banc," August 28, 2015
    • "Sequenom Requests Rehearing En Banc," August 18, 2015
    • "Ariosa Diagnostics, Inc. v. Sequenom, Inc. (Fed. Cir. 2015), June 22, 2015

  • By Kevin E. Noonan

    Cole, PaulEarlier this summer, in Ariosa Diagnostics, Inc. v. Sequenom, Inc., the Federal Circuit affirmed a decision by the District Court for the Northern District of California granting summary judgment of invalidity of the asserted claims of U.S. Patent No. 6,258,540 (see "Ariosa Diagnostics, Inc. v. Sequenom, Inc. (Fed. Cir. 2015)").  Last month, Sequenom filed a petition for rehearing en banc, arguing that the panel's decision in June was inconsistent with the Supreme Court's decisions in Diamond v. Diehr, 450 U.S. 175 (1981), Mayo v. Prometheus Laboratories, 132 S. Ct. 1289 (2012), and Association for Molecular Pathology v. Myriad Genetics, 133 S. Ct. 2107 (2013), and that the panel's decision poses a threat to patent protection in multiple fields of invention.  On August 27, twelve amicus curiae briefs were filed in support of Sequenom's petition for rehearing en banc.  Over the next few weeks, Patent Docs will examine these amicus briefs.  Today, we review the brief submitted by Paul Gilbert Cole (at right).

    In the brief's Statement of Interest, the amicus states that he is "a practising UK and European patent attorney, is a visiting professor in IP Law at Bournemouth University in the UK and has been writing about and teaching patent law for over 35 years."  He is "concerned with the integrity of the legal system and the correctness of the consequential guidance that is given to patent examiners in the USPTO" and in his professional opinion "the panel decision's application of § 101 exceeds the scope of the Supreme Court's § 101 jurisprudence and the scope of Article 27 of the TRIPS agreement."

    Mr. Cole makes several arguments.  First, he contends that the panel decision is contrary to controlling Supreme Court and other precedent, citing a dozen cases ranging from Mayo and Myriad to Parke-Davis & Co. v. H.K. Mulford Co., 189 F. 95 (C.C.S.D.N.Y. 1911), and Merck & Co. v. Olin Mathieson Chem. Corp., 253 F.2d 156 (4th Cir. 1958).  He also argues that it is "based on a legally incomplete and a legally and factually incorrect interpretation of the invention described and claimed in U.S. Patent No. 6,258,540."  The brief then sets forth three "precedent-setting questions of exceptional importance":

    (1) Should the context in which a claimed method that involves a newly discovered natural phenomenon be disregarded for the second part of the test in Mayo, so that steps that are known but only in different contexts do not count towards eligibility?
    (2) How relevant to the natural phenomenon exclusion of § 101 is a new and beneficial result never attained before and evidencing inventive step under § 103?
    (3) Is the second part of the Mayo test applied in the breadth of the Panel Opinion incompatible with the obligations of the United States under Article 27 of TRIPS?

    The brief then sets forth Mr. Cole's reasons for urging the court to grant Sequenom's en banc petition.

    The first reason Mr. Cole asserts is that the decision will "likely" be the basis of further guidance from the U.S. Patent and Trademark Office.  This is problematic, according to Mr. Cole, because the Office "has a history of over-broad interpretation of Supreme Court and other decisions, which has created widespread difficulty for patent applicants and hence widespread adverse comment from both individuals and organizations."  This tendency should not be encouraged.

    Second, Mr. Cole asserts that the District Court and the panel "mischaracterized" the amplified cffDNA as being a natural phenomenon, when instead it should be considered as a manufacture and hence to fall within an expressly recited patent-eligible category of invention according to the statute.  (It could be argued that this rationale underlay the Supreme Court's distinction between patent-ineligible genomic DNA and patent-eligible cDNA in its Myriad decision).  In addition, Mr. Cole argues that the amplification primers are not natural phenomena, because they do not exist in the bloodstream; he further states that "[t]he fact pattern here diverges materially from that in Myriad where neither wild-type BRCA1 nor the corresponding cDNA were reported as having been isolated as real and tangible molecules" (based on the lack of description of actually isolating a BRCA cDNA clone, which while true doe not answer the Section 112 issue: the entire coding sequence was disclosed and it was within the skill of the ordinarily skilled artisan to make such a cDNA clone from the information disclosed in Myriad's patents).  Mr. Cole also argues (citing Learned Hand in Parke-Davis & Co. v. H.K. Mulford Co., 189 F. 95 (C.C.S.D.N.Y. 1911)) that the real and tangible oligomer sequences in their amplified form have become for every practical purpose a new thing commercially and analytically (wherein the amplified PCR fragments can be detected visually by ethidium bromide staining, something that the unamplified cffDNA cannot be).  The brief also cites Hartranft v. Wiegmann, 121 U.S. 609 (1887), as that case was cited in support of the Court's Diamond v. Chakrabarty decision, wherein "a change of form accompanied by new utility is the hallmark of a manufacture." 447 U.S. 303 (1980).  Along these lines, the brief echoes the Chakrabarty decision in stating that "[t]he amplified sequences are the product of human ingenuity being a non-naturally occurring composition of matter having (following the wording in Chakrabarty and Myriad) a distinctive name (amplified maternal plasma sequences), character (short oligomer sequences in high and analyzable concentration) and use (analytical detectability) not possessed by maternal cffDNA," and hence that the sequences themselves met the eligibility test and thus negated the panel's basis for applying the Mayo/Alice test.

    In the brief's third basis for urging en banc reconsideration, Mr. Cole argues that the panel found patent ineligibility based on a consideration of the claim limitations individually and ignored the Court's exhortation that "ordered combinations" can recite patent-eligible subject matter.  Under a proper application of the law, the brief argues that the "starting point" for the claimed methods was maternal plasma or serum (not cffDNA), and thus the selection of this source "set[s] the claimed method apart from the prior art," citing United States v. Adams, 383 U.S. 39 (1966).  Considered as such an ordered combination, the brief maintains that the claims are directed to "a hitherto unavailable test of high sensitivity for a range of medical conditions that can be applied early in pregnancy and avoids the risks to the fetus inherent in amniocentesis and that revolutionized prenatal care," i.e., something that is patent eligible.

    Point four of the brief expands on this assessment of Sequenom's claims as reciting "an ordered combination" by applying the rule from Webster Loom Co. v. Higgins, 105 U.S. 580, 591 (1881), that "if a new combination and arrangement of known elements produce a new and beneficial result, never attained before, it is evidence of invention."  Here, according to the brief, "the claimed combination of starting material and method steps here produced a new and beneficial test for fetal abnormalities and the like [that] is affirmative evidence of invention" and the panel erred in not considering this.

    Finally, Mr. Cole cites the conflict of the panel's decision with U.S. treaty obligations including the TRIPS agreement, citing a comment from the Japan Intellectual Property Association to the effect that "the U.S. was introducing special eligibility criteria contrary to the international trend of intellectual property protection."  The brief also cites Article 27.1 of the TRIPS agreement, which the brief asserts is binding on member nations and requires patents to be available "for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application, and that patent rights should be enjoyable without discrimination as to the field of technology."  And the brief cites Art. 52(2)(a)-(d) for the provisions that define unpatentable subject matter in Europe that are limited to those satisfying these criteria:

    If a new property of a known material or article is found out, that is mere discovery and unpatentable because discovery as such has no technical effect and is therefore not an invention within the meaning of Art. 52(1) EPC.  If, however, that property is put to practical use, then this constitutes an invention which may be patentable.  To find a previously unrecognised substance occurring in nature is also mere discovery and therefore unpatentable.  However, if a substance found in nature can be shown to produce a technical effect, it may be patentable…."

    The brief closes by accusing the panel decision as being "an internationally discordant, not harmonious, result, contrary to the eligibility requirements of TRIPS Article 27," and notes that the European counterpart was challenged on inventive step not eligibility grounds (and was found to satisfy the EPC requirements).

    For additional information regarding this topic, please see:

    • "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: Bioindustry Association," September 20, 2015
    • "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: WARF, Marshfield Clinic, and MCIS, Inc.," September 17, 2015
    • "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: BIO and PhRMA," September 16, 2015
    • "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: Amarantus Bioscience Holdings, Personalis, Inc., and Population Diagnostics, Inc.," September 15, 2015
    • "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: Coalition for 21st Century Medicine," September 14, 2015
    • "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: IPO," September 8, 2015
    • "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: Professors Lefstin and Menell," September 6, 2015
    • "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: 23 Law Professors," September 3, 2015
    • "Amici Support Sequenom's Petition for Rehearing En Banc," August 28, 2015
    • "Sequenom Requests Rehearing En Banc," August 18, 2015
    • "Ariosa Diagnostics, Inc. v. Sequenom, Inc. (Fed. Cir. 2015), June 22, 2015

  • Be Wary of Claim Amendments During Reexamination

    By Joseph Herndon

    R+L CarriersTraditional patent law holds that a patentee of a patent that survives reexamination is only entitled to infringement damages for the time period between the date of issuance of the original claims and the date of issuance of the reexamined claims if the original and the reexamined claims are "substantially identical."  If, on the other hand, a substantive change has been made to the original claims during reexamination, the patentee is entitled to infringement damages only for the time period following issuance of the reexamination certificate.  This notion is referred to as intervening rights, which protect the public's reliance on the scope of an issued patent.  Intervening rights are granted to anyone who relied on the original scope of the issued patent and had already begun to make, use, or sell a given invention that is now newly infringing under the amended patent.

    QualcommIn this recent Federal Circuit decision, R+L Carriers, Inc. ("R+L") sued Qualcomm, Inc. ("Qualcomm") asserting infringement of U.S. Patent No. 6,401,078 ("the '078 patent").  This is the second time R+L has brought the case to the Federal Circuit (in a prior appeal, on June 7, 2012, the Federal Circuit held that R+L's induced infringement claims survived Qualcomm's motion to dismiss, In re Bill of Lading Transmission & Processing Sys. Patent Litig., 681 F.3d 1323, 1346–47 (Fed. Cir. 2012), and the case was remanded against Qualcomm for further proceedings).

    While the case was pending, R+L filed for ex parte reexamination of the '078 patent based on prior art identified by a third party.  This strategy can be helpful if R+L believed the prior art to be troublesome and likely to invalidate the patent.  Thus, R+L put the patent back into examination likely to modify the claims to be in a stronger position to survive an invalidity challenge, or to "whitewash" the patent over newly found art.  Although the patent survived reexamination, R+L added language to all of the claims at issue.  Accordingly, this case turns on whether the original claims and the amended reexamined claims are "substantially identical" so as to avoid intervening rights to be granted to Qualcomm.

    The Bill of Lading Patent

    R+L obtained the '078 patent, that generally relates to an improved method of consolidating freight into trailers to optimize delivery efficiencies for the loads in each trailer.  According to the '078 patent, prior art shipping practices would evaluate the contents of each incoming trailer by reviewing bills of lading for the packages when they arrived at a central terminal.  The patent explains that the freight on each trailer was then consolidated with freight going in the same direction and hauled away from the central terminal.  The patent explains that the purpose of consolidation was to deliver all of the freight on time, while using the fewest number of trailers to do so.  Although load planning software at the time could help perform this task more efficiently, the patent asserts that the prior art software could not account for unscheduled freight that was not entered into the computer.

    To solve this alleged deficiency in the prior art, the '078 patent discloses a system for transmitting the contents of a trailer to the central terminal so that load planning can occur while the trailer is en route.  The system contemplates the scanning of bills of lading, transmitting those documents once scanned, and receiving the data where it can be extracted for load planning and billing purposes.  The patent describes two methods for extracting the load planning information from the transmission and preparing loading manifests therefrom:  (1) a computerized system automatically interpreting the data; and (2) a data entry clerk manually reviewing the information.  The U.S. Patent and Trademark Office (USPTO) initially issued the patent on June 4, 2002, containing only one independent claim (original claim 1).

    During reexamination, in a first office action, the USPTO rejected original claim 1 as being anticipated by a key prior art reference.  To overcome the USPTO's rejection, R+L amended original claim 1 as follows (deletions shown in brackets; additions shown by underlining):

    1.  A method for transferring shipping documentation data for a package from a transporting vehicle to a remote processing center comprising the steps of:
        placing a package on the transporting vehicle;
        using a portable document scanner to scan an image of the documentation data for the package, said image including shipping details of the package;
        providing a portable image processor capable of wirelessly transferring the image from the transporting vehicle;
        wirelessly sending the image to a remote processing center;
        receiving the image at said remote processing center; and
        prior to the package being removed from the transporting vehicle, utilizing said documentation data at said remote processing center to prepare [[a]] an advance loading manifest document for another transporting vehicle which includes said package for further transport of the package on another transporting vehicle.

    The USPTO then allowed the amended claim 1 and issued the reexamination certificate, and stated that the key prior art reference only discussed loading a "manifest for the current shipping vehicle and not an advance loading manifest document for another transporting vehicle."

    Were Substantive Changes Made to Claims During Reexamination?

    To determine whether substantive changes have been made, and thus intervening rights exist, the Federal Circuit considers "whether the scope of the [original and amended] claims are identical, not merely whether different words are used."

    The two conflicting arguments presented by Qualcomm and R+L focused on why the amendments were presented during reexamination.  The Federal Circuit, though, stated that under the statute and prior case law, it is irrelevant why an amended claim is narrowed during reexamination, or even whether the patentee intended to narrow the claim in a particular way.  The important aspect to note, according to the Federal Circuit, is whether the scope of the amended claim is not "substantially identical" to the scope of the original claim — based on a normal claim construction analysis.  When the scope is different, intervening rights apply.

    The fact that the reason for the amendment during reexamination might not have been for the purpose of narrowing the claim in a particular way does not matter.  In determining whether an amended claim is narrower, the Federal Circuit stated that the analysis includes determining whether there is any product or process that would infringe the original claim, but not infringe the amended claim.  The purpose of the amendment is irrelevant to this inquiry.

    The Federal Circuit ultimately agreed with the District Court's thorough claim construction analysis of original claim 1 and its conclusion that the term "loading manifest" is broad enough to encompass both manual and computer generated documentation.  The question then is whether amended claim 1 covers a different scope.

    The Federal Circuit noted that R+L only made amendments to original claim 1 after the USPTO rejected original claim 1 over various pieces of prior art.  The term "advance" was added during reexamination in amended claim 1 to get around the key prior art, which, among other things, disclosed manual entry of the loading manifest.

    To determine that amended claim 1 resulted in a narrowed claim scope, the Federal Circuit placed reliance on reasons for allowance given by the examiner during reexamination.  Namely, the examiner expressly stated he was allowing amended claim 1 because "the manifest discussed by [the prior art] is a manifest for the current shipping vehicle and not an advance loading manifest document for another transporting vehicle."  In other words, the examiner's focus in allowing the claims was not on whether a computer produced the loading manifest, but on the additional limitation that the advance loading manifest be "for another transporting vehicle."  Although the amendment may not have limited amended claim 1 to computer-produced loading manifests, the examiner's commentary reveals a method that would be covered by original claim 1 but not amended claim 1:  the process of preparing a loading manifest "for the current shipping vehicle."  Thus, claim 1 was narrowed during reexamination, and is not substantially identical to original claim 1.

    The Federal Circuit noted that even if the word "advance" was only added to "provide clarity," as R+L argues, R+L clearly understood that it was limiting the scope of its claims in another way to get around the prior art.  This is almost always necessarily the case when presenting amendments during prosecution, and also follows the Festo presumption that amendments made during prosecution are for presumed to be for reasons of patentability.  R+L was unable to overcome this presumption.

    Since amended claim 1 is not "substantially identical" to original claim 1, R+L is not entitled to infringement damages prior to issuance of the reexamination certificate.  At this time in the litigation there was no dispute that Qualcomm ceased its allegedly infringing activity.  As a result, there can be no damages against Qualcomm, and the infringement claims were dismissed by the Federal Circuit.

    R+L Carriers, Inc. v. Qualcomm, Inc. (Fed. Cir. 2015)
    Panel: Circuit Judges Newman, O'Malley, and Wallach
    Opinion by Circuit Judge O'Malley

  • By Kevin E. Noonan

    BIAEarlier this summer, in Ariosa Diagnostics, Inc. v. Sequenom, Inc., the Federal Circuit affirmed a decision by the District Court for the Northern District of California granting summary judgment of invalidity of the asserted claims of U.S. Patent No. 6,258,540 (see "Ariosa Diagnostics, Inc. v. Sequenom, Inc. (Fed. Cir. 2015)").  Last month, Sequenom filed a petition for rehearing en banc, arguing that the panel's decision in June was inconsistent with the Supreme Court's decisions in Diamond v. Diehr, 450 U.S. 175 (1981), Mayo v. Prometheus Laboratories, 132 S. Ct. 1289 (2012), and Association for Molecular Pathology v. Myriad Genetics, 133 S. Ct. 2107 (2013), and that the panel's decision poses a threat to patent protection in multiple fields of invention.  On August 27, twelve amicus curiae briefs were filed in support of Sequenom's petition for rehearing en banc.  Over the next few weeks, Patent Docs will examine these amicus briefs. Today, we review the brief submitted by the Bioindustry Association.

    In the brief's Statement of Interest, the amicus states that it is a "United Kingdom trade association of over 300 member organizations working in research and development ("R&D") and manufacturing in the bioscience sector."  The association's members "include emerging and established biotechnology companies, pharmaceutical companies, academic research and philanthropic organizations," which are "responsible for over ninety per cent of biotechnology-based medicines currently in clinical development in the UK; they are at the forefront of innovative scientific developments targeting areas of unmet medical need."  The amicus asserts that the issues in this case are of "great importance" because "[t]he majority of BIA's members are small and medium size enterprises" and thus "the ability to raise R&D funding or attract larger companies to collaborate heavily depends on the strength of their intellectual property, primarily patents."  Without patent protection, the ability of BIA members to bring to life new and improved treatments" is "severely hinder[ed] and, in many cases, [is] impossible."  Unique to the amicus briefs that have been filed, this brief makes the point that the U.S. represents 47% of the biotech market globally and that about 50% of U.S. biotech applications are filed by foreign companies (putatively to inform the Court of why a foreign trade association is concerned with the panel's interpretation of U.S. law).

    The brief cites stark facts:  that the panel decision is at odds with patent eligibility standards throughout the rest of the world and is contrary to (and harms) efforts to harmonize patent law among industrialized nations.  The panel's interpretation of U.S. law also disadvantages foreign and multinational companies because inventions not patentable in the U.S. under the unique standards applied by the panel forces these companies to choose between getting patent protection abroad or keeping the technology as a trade secret globally.  The brief counsels that "the unintended consequence of the Sequenom decision may be an exodus of investment and businesses from the US market or the life science industry in general."

    The brief then sets forth its evidence and arguments regarding how outside the bounds of accepted patent eligibility standards the panel decision is, beginning with the statement that "[t]he Supreme Court could not have intended a general exclusion denying patent protection to meritorious inventions merely because they are based on a discovery of something that occurs in nature."  What is "critical," according to this amicus, is "to delineate with clarity when a patent-ineligible discovery becomes sufficiently transformed" to become patent eligible.  Too broad an interpretation of Supreme Court precedent leads to the "unfortunate result[]" that "even an acknowledged ground-breaking meritorious invention is denied patent protection merely because it originates from a discovery of a natural phenomenon."  The brief then provides a concrete example for comparison:  European Patent No. EP 994 963, which is the counterpart of the Sequenom patent at issue in this case (U.S. Patent No. 6,258,540) which was granted having claims almost identical to the one invalidated by the District Court.  The brief notes that this patent was opposed in the EPO but survived, and cites decisions of the EPO Board of Appeals affirming the patentability of these claims (which were not challenged in eligibility grounds in Europe).  And the brief sets for the EPO Guidelines for comparison:

    If a new property of a known material or article is found out, that is mere discovery and unpatentable because discovery as such has no technical effect and is therefore not an invention within the meaning of Art. 52(1).  If, however, that property is put to practical use, then this constitutes an invention which may be patentable.  For example, the discovery that a particular known material is able to withstand mechanical shock would not be patentable, but a railway sleeper made from that material could well be patentable.  To find a previously unrecognized substance occurring in nature is also mere discovery and therefore unpatentable.  However, if a substance found in nature can be shown to produce a technical effect, it may be patentable.  An example of such a case is that of a substance occurring in nature which is found to have an antibiotic effect.

    EPO Guidelines for Examination (emphasis added).

    Specifically, the brief identifies the "significantly more" requirement enunciated by Mayo as having "no equivalent in the patent laws of other industrialized countries."

    Using these discrepancies as context, the brief then argues that the decision "frustrates" efforts to harmonize patent law globally.  More importantly, the brief also asserts that the panel's application of the Supreme Court's Mayo/Alice precedent is also contrary to U.S. treaty obligations (and, of course, contrary to the constitutional basis of Congress's exercise of the patent power).  With regard to the treaty aspects, the brief goes back to the Paris Convention of 1883 as the beginning of harmonization efforts, and includes the creation of WIPO (1967), the Patent Cooperation Treaty (1970), and GATT/TRIPS (1995) to illustrate these harmonization efforts, evidenced by the overwhelming majority of countries that have acceded to these treaties.  The brief than takes a short detour to argue that the panel decision is also inconsistent with provisions of the Leahy-Smith American Invents Act, insofar as the Act was directed at harmonizing U.S. patent law with the rest of the world and in particular how the AIA did not change § 101 (except for expressly precluding claims to a human organism in superposition to the 13th Amendment).  Insofar as the panel decision has effects contrary to this push towards harmonization, the brief argues that "the panel decision threatens the innovativeness and competitiveness of the US economy," something the Supreme Court could not have contended.

    Finally, the amicus argues that the traditional alternative to eschewing patent protection, trade secret, is not available to foreign and multinational companies because of the disjunction between U.S. patent eligibility standards the rest of the world.  Such companies face the choice of filing only in the U.S. and requesting no publication, and then keeping the invention as a trade secret if unsuccessful, or filing everywhere and having patent protection globally but no protection (patent or trade secret) in the U.S.  The result:  "a consequence of the panel's decision in Sequenom is the de facto abolition of intellectual property protection in the United States for many foreign and multinational companies who were able to procure patents abroad."

    The thrust of the arguments made by this amicus may be more persuasive to Justice Breyer than they will be to the Federal Circuit; the Justice has received a fair amount of press (both good and bad) over his assertions in a recent book (The Court and the World: American Law and the New Global Realities, Knopf, 2015) that the Court should look to the laws of other nations in making its decisions.

    This amicus were represented by Konstantin Linnik, Lana Gladstein and Isaac Hubner of Nutter McClennen & Fish.

    For additional information regarding this topic, please see:

    • "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: WARF, Marshfield Clinic, and MCIS, Inc.," September 17, 2015
    • "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: BIO and PhRMA," September 16, 2015
    • "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: Amarantus Bioscience Holdings, Personalis, Inc., and Population Diagnostics, Inc.," September 15, 2015
    • "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: Coalition for 21st Century Medicine," September 14, 2015
    • "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: IPO," September 8, 2015
    • "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: Professors Lefstin and Menell," September 6, 2015
    • "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: 23 Law Professors," September 3, 2015
    • "Amici Support Sequenom's Petition for Rehearing En Banc," August 28, 2015
    • "Sequenom Requests Rehearing En Banc," August 18, 2015
    • "Ariosa Diagnostics, Inc. v. Sequenom, Inc. (Fed. Cir. 2015), June 22, 2015

  • CalendarSeptember 22, 2015 – "The Evolving World of Biosimilars Litigation" (McDonnell Boehnen Hulbert & Berghoff LLP) – 10:00 am to 11:15 am (CT)

    September 22, 2015 – "Advanced Conflict Waivers: How to Avoid Unpleasant Surprises" (Intellectual Property Owners Association) – 2:00 to 3:00 pm (ET)

    September 23, 2015 – "Pharma Leaders IP Conference" (J A Kemp) – London

    September 24, 2015 – "Trade Secrets and Cybersecurity: Protecting Intellectual Property, Mitigating Loss and Navigating Legal Responses" (Strafford) – 1:00 to 2:30 pm (EDT)

    September 24, 2015 – "Patent Term Adjustments and Extensions: Leveraging Recent Decisions and USPTO Rule Changes" (Strafford) – 1:00 to 2:30 pm (EDT)

    September 24, 2015 – "IP Licensing:  Implications & Best Practices in Light of Brulotte [Kimble v. Marvel]" (American Intellectual Property Law Association)

    September 24-25, 2015 - Advanced Patent Law Seminar (Chisum Patent Academy) – Washington, DC

    September 24-25, 2015 – Seminar on European Patent Law (Grünecker) – Munich, Germany

    September 27-29, 2015 – 43rd Annual Meeting (Intellectual Property Owners Association) – Chicago, IL

    September 30 to October 1, 2015 – Paragraph IV Disputes master symposium (American Conference Institute) – Chicago, IL

    September 30 to October 1, 2015 – FDA Boot Camp (American Conference Institute) – Boston, MA

    October 1, 2015 – "USPTO Rule Changes for PTAB Trial Proceedings — Navigating Changes to New Testimonial Evidence, Rule 11-Like Requirement, Claim Construction Standard, Motions to Amend, and More" (Strafford) – 1:00 to 2:30 pm (EDT)

    October 2, 2015 – Developments in Pharmaceutical and Biotech Patent Law 2015 (Practising Law Institute) – New York, NY

    October 6, 2015 – "USPTO's Proposed Changes to PTAB Practice: A Primer on the Recently Proposed Amendments to the Rules Governing PTAB Proceedings" (American Intellectual Property Law Association) – 12:30 – 2:15 pm (Eastern)

    October 7, 2015 – "Unitary Patent Protection in Europe – An Attunement on the Upcoming New System" (American Intellectual Property Law Association) – 12:30 – 2:00 pm (Eastern)

    October 8, 2015 – "Proactive Patent Procurement and Prosecution Strategies: Minimizing the Threat of Post-Grant Challenges — Insulating Your Patent Portfolio From New Threats" (Strafford) – 1:00 to 2:30 pm (EDT)

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

  • AIPLA #1The American Intellectual Property Law Association (AIPLA) will be offering a webinar on "USPTO's Proposed Changes to PTAB Practice: A Primer on the Recently Proposed Amendments to the Rules Governing PTAB Proceedings" on October 6, 2015 from 12:30 – 2:15 pm (Eastern).  Acting Deputy Chief Judge Scott Boalick and Lead Judge Susan Mitchell of the U.S. Patent & Trademark Office, Todd Baker of Oblon McClelland Maier & Neustadt, LLP, and Joseph Palys of Paul Hastings will provide a fulsome discussion of the second package of proposed PTAB rule changes including strategies and practice tips for practitioners as the rules are implemented.

    The registration fee for the program is $145 (AIPLA member rate) or $195 (non-member rate).  Those interested in registering for the program, can do so here.

  • Strafford #1Strafford will be offering a webinar/teleconference entitled "USPTO Rule Changes for PTAB Trial Proceedings — Navigating Changes to New Testimonial Evidence, Rule 11-Like Requirement, Claim Construction Standard, Motions to Amend, and More" on October 1, 2015 from 1:00 to 2:30 pm (EDT).  Michael J. Flibbert, Thomas L. Irving, Partner, and Dr. Amanda K. Murphy of Finnegan Henderson Farabow Garrett & Dunner will provide patent counsel with an in-depth review of the U.S. Patent and Trademark Office's newly proposed rule changes for PTAB trial practice, and discuss the potential implications of the changes and address what counsel needs to do now regarding matters that could be impacted if/when the rule is adopted.  The webinar will review the following questions:

    • What is the potential impact of patent owners being able to submit declarations with preliminary responses? How will it change strategy?
    • What approach should patent counsel take regarding the standard of review if the expiration date is in dispute?
    • How will counsel need to alter their approach in light of the proposed rule changes?

    The registration fee for the webinar is $297 ($362 for registration and CLE processing).  Those interested in registering for the webinar, can do so here.

  • AIPLA #1The American Intellectual Property Law Association (AIPLA) will be offering a webinar on "Unitary Patent Protection in Europe – An Attunement on the Upcoming New System" on October 7, 2015 from 12:30 – 2:00 pm (Eastern).  Jim Bell of Cabinet Beau de Lomenie will moderate a panel consisting of Markus B. Boelling  and Thomas Koerfer of Mitscherlich PartmbB.  The panel will provide an overview on the new Unitary Patent system, including its advantages and drawbacks, describe the nature of the new patent and the related prosecution process, and discuss the introduction of the Unified Patent Court.  The webinar will enable participants to make informed decisions on the most urgently upcoming issues related to patent protection in Europe.

    The registration fee for the program is $95 (AIPLA member rate) or $150 (non-member rate).  Those interested in registering for the program, can do so here.

  • Strafford #1Strafford will be offering a webinar/teleconference entitled "Proactive Patent Procurement and Prosecution Strategies: Minimizing the Threat of Post-Grant Challenges — Insulating Your Patent Portfolio From New Threats" on October 8, 2015 from 1:00 to 2:30 pm (EDT).  Margaret A. Focarino and Scott A. McKeown of Oblon McClelland Maier & Neustadt will provide patent counsel with an overview of the current USPTO's Patent Trial & Appeal Board (PTAB) and patent litigation landscape with an eye toward emerging trends and challenges for patents owners, and offer best practices to minimize the threat of post-grant patent challenges as well as prosecution strategies to strengthen and/or insulate patent portfolios from PTAB attack.  The webinar will review the following questions:

    • What are the emerging challenges for patent owners under the current PTAB landscape?
    • What is the PTAB’s impact on patent portfolios and what steps can counsel take to strengthen portfolios?
    • What proactive steps in patent procurement and prosecution can counsel take to minimize the threat of post-grant challenges?

    The registration fee for the webinar is $297 ($362 for registration and CLE processing).  Those interested in registering for the webinar, can do so here.