By Donald Zuhn —

Last month, at the Biotechnology Industry Organization (BIO) IP & Diagnostics Symposium in Alexandria, VA, Sherry Knowles of Knowles IP Strategies addressed the impact of the U.S. Patent and Trademark Office's Myriad-Mayo Guidance.  The Guidance, which was issued on March 4, implements a new procedure for determining the subject matter eligibility of claims under 35 U.S.C. § 101 in view of the Supreme Court's decisions in Association for Molecular Pathology v. Myriad Genetics, Inc. (2013), and Mayo Collaborative Services v. Prometheus Laboratories, Inc. (2012).  Ms. Knowles, who as former Senior Vice President and Chief Patent Counsel at GlaxoSmithKline played a leading role in challenging the USPTO's continuation and claims rules in Tafas v. Dudas, appeared on a panel with June Cohan, Legal Advisor with the USPTO's Office of Patent Legal Administration, and Patent Docs author Kevin Noonan to discuss the Guidance.  A summary of Ms. Cohan's presentation can be found here.

Ms. Knowles' presentation focused on the implications of the Guidance.  She began by examining the Supreme Court's decisions in both Myriad and Mayo, on which the Guidance was based.  Ms. Knowles argued that it was not a coincidence that the 1952 Patent Act followed closely after the Supreme Court's 1948 decision in Funk Brothers Seed Co. v. Kalo Inoculant Co., and pointed to commentary that Congress' intent was to overrule Funk and remove the judicial subjectivity of a 101 analysis, substituting an objective test for patentability based on obviousness.  She pointed out that "[c]learly, Congress did not like Funk."  Ms. Knowles suggested, however, that the Supreme Court has repeatedly and consistently ignored both the statutory language of § 101 and the Congressional intent behind the 1952 Patent Act.  Instead, it has morphed patent law to its own liking with a subjective § 101 test, which now after Mayo and Alice incorporates a subjective inventiveness evaluation, and narrows statutory allowable patentable subject matter through improper doctrines of judicial exceptions.  According to Ms. Knowles, the Court's subjective test, which does not require a rigorous analysis of prior advances nor comprehensive consideration of the perspective of one of ordinary sill in the art, has now become the main gating item for patent validity, as opposed to the Congressionally mandated tests under §§ 102, 103, and 112.  Later, Ms. Knowles commented that the adopted subjective test has eviscerated the metes and bounds of what Congress has decided is patentable — that being "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof," a decision which is the exclusive purview of Congress and not the Court.

Noting that the Mayo Court "decline[d] the Government's invitation to substitute §§102, 103, and 112 inquir­ies for, in the Court's view "the better established inquiry under §101," Ms. Knowles countered that compliance with the U.S. Constitution is "not an invitation" and is "not optional."  In Ms. Knowles' view, the Court is required to carry out a rigorous statutory construction and Congressional intent analysis, and must stop there.  For this reason, she called the Mayo decision "among the worst decided cases in the history of the Supreme Court" because the Court ignored its Constitutional duty and limitation.  Likewise, in the Myriad decision, Ms. Knowles stated that only Congress is authorized and equipped (with hearings, subpoenas, and evidence gathering authority) to make policy decisions on which patent law must be based.  The Court was not authorized by the Constitution to make economic decisions for the country.  Ms. Knowles suggested, however, that the Myriad Court did precisely that by stating that without the judicial exceptions to § 101 "there would be considerable danger that the grant of patents would 'tie up' the use of [basic] tools [of scientific and technological work] and thereby 'inhibit future innovation premised upon them.'"  As for the USPTO, she criticized the Office for implementing the Guidance and thereby "follow[ing] another co-equal branch of the government that [was] acting outside of the Constitution, which is superior to all three branches."

The remainder of Ms. Knowles' presentation addressed the real world impact of the Guidance on patent litigation, pharmaceutical and biotech industry decisions, and on everyone personally.  With respect to patent litigation, she noted that courts have begun to rule on cases involving § 101 issues via Fed. R. Civ. Proc. 12(b)(6) motions (i.e., on the pleadings).  As examples of such cases, Ms. Knowles reviewed the recent decision in Genetic Technologies, Ltd. v. Laboratory Corp. of America Holdings (D. Del. 2014), and Ariosa Diagnostics, Inc. v. Sequenom, Inc. (N.D. Cal. 2013).  Ms. Knowles pointed out that both patent eligibility and obviousness are questions of law based on factual underpinnings, however, it appears that Courts are more willing to dispose of patent eligibility without getting to a jury trial.  In Ms. Knowles view, this is another ramification of the Supreme Court implementing a § 101 "you know if when you see it" threshold inventiveness determination.  In Ariosa, Ms. Knowles suggested that the District Court "strained to decide facts in summary judgment instead of going to the jury," and that if the issue had been obviousness rather than patent eligibility, the case may well have gone to a jury.

Turning to the impact of the Guidance on corporate decisions, Ms. Knowles pointed out that industry requires well-settled expectations of what the law will be long into the future.  Pharmaceutical and biotech companies make evaluations of the length of proprietary protection for a target product based on current patent law which are used to make long term financial projections.  Ms. Knowles wondered how IP attorneys could continue to provide information on which critical corporate decisions were being made "if you are working on a moving slate?"  She also contended that changes to the law resulting from court decisions were worse than those resulting from statutory changes, because the former are retroactive.

Finally, she noted that the Guidance also adversely impacted the corporate decisions of multinational pharmaceutical and biotech companies by moving further away from the harmonization of patent law.  Noting that the USPTO website describes the America Invents Act as "enable[ing] the USPTO to lead on a vision of an IP world in which national and regional patent systems are harmonized in pursuit of creating an optimal environment for technological innovation and diffusion," she asserted that the recent Court decisions and the Guidance do the opposite.  In particular, Ms. Knowles argued that because of the morphing § 101 law, the U.S. was now segregated from the European Union, China, Russia, Australia, South Korea, and Japan on the issue of subject matter eligibility.

Effect of Guidelines on Us Personally

Ms. Knowles saved the most passionate and persuasive portion of her presentation for last by addressing the impact of the Myriad and Mayo decisions and the Guidance on all of us.  She began by noting that she is working with Georgia Tech Professor Matthew J. Higgins through the IMS Heath and Pharmaprojects program to determine the number of natural product dosages that were sold in the United States between 2001 and 2011 for a range of drugs.  She shared for the first time data on eleven top-selling natural product therapeutics which indicated that patients have benefited by taking almost 31 billion doses of drugs that arguably would not be patentable under the Guidelines, and thus not commercialized, using the assumption that corporations act rationally and would not develop drugs without market protection.  She asked the attendees to raise their hands if friends or family members had been treated with these drugs, to a strong response.  Of course, this leads to the question of what drugs we will not get the benefit of in the future if commercialization is stalled by the new 101 interpretation.

Effect of Guidelines and Myriad/Mayo on Women with Breast Cancer

In the final portion of her talk, Ms. Knowles noted that as of January 1, 2012, 2.9 million women alive now have experienced breast cancer.  For the first time in a public forum, Ms. Knowles said that she is one of these 2.9 million women and a breast cancer survivor.  She said that if the Guidelines and Mayo/Myriad had been the law years ago, she would probably not be at the podium because she likely would have died.  Ms. Knowles told attendees that her life was saved by Adriamycin, an antibiotic fermentation product of bacteria (and cousin of daunorubicin) and "Amazonic Acid" (Taxol).

Pertinent to October as Breast Cancer Awareness Month, Ms. Knowles shared a chart from the Susan G. Komen for the Cure Foundation which indicates that of the six front line treatments for breast cancer, Adriamycin is a component of four.

Ms. Knowles also noted that in 2013, 232,340 women were diagnosed with invasive breast cancer and 39,620 deaths were attributed to breast cancer.  She then held up two patents that she had identified which were related to the natural product drugs administered to her:  U.S. Patent Nos. 3,590,028 and 5,641,803.  Ms. Knowles stated that without corporate support for those drugs based on an expectation of patent protection, she may not have become a breast cancer survivor.  After the conference, Ms. Knowles told me that she was motivated "to make this unusual personal statement to support all of the brave friends she met in infusion wards fighting for their lives with the only hope coming from news that their doctors will tell them there is a new clinical trial they can try or a new diagnostic that can tell them more about the monster growing inside them."  She also indicated that because of the Myriad and Mayo decisions and the Guidance, and the uncertainty introduced by the decisions and Guidance, pharmaceutical and biotech companies might not be driven to identify new natural product drugs that could be used to save lives in the future.  If her assessment turns out to be correct, this would be the worst impact of all.

Postscript:  Ms. Knowles asked me to add the following message to the above report:

If you have been touched by cancer personally or through a family member or friend, please post a message and tell your story.  It wasn't easy for me to make a public statement, but maybe it will make it a little easier for you.  Have you seen a natural product or it's derivative save a life?  Or have you lost a friend or relative to cancer and want to support innovation for additional drugs, including natural products?  Please make some noise.

    By Paul Cole* —

Is there a chain of reasoning that leads to the outcome in Myriad more shortly and directly than that outlined by Justice Thomas and without invoking judicial exceptions?  It is strongly arguable that this is indeed the case and that, applying Occam's razor, the shorter chain of reasoning is to be preferred.

Doubts about the Myriad reasoning become apparent on studying a book by Justice Antonin Scalia and Bryan Gardner, Reading Law, the Interpretation of Legal Texts, Thompson/West, 2012.  A reader hoping to find a chapter explaining judicial exceptions will come away disappointed:  they are not indexed and there is no specific discussion of them.  The Omitted-Case Canon at pp. 93-109 represents the closest approach, but begins with a quote from Justice Frankfurter:  "Whatever temptations the statesmanship of policymaking might wisely suggest, construction must eschew interpolation and evisceration.  [The judge] must not read in by way of creation."  The expected result of applying an unwise law as written, leading to a serious defect, is that the legislature will cure it.  "The statute books will become more complete, and improvised judge-made exceptions that cannot be found in the text of enacted laws will become less numerous."  A theme of the book is that non-textual interpretation of the Constitution, statutes and other legal documents such as contracts should be avoided because judicial over-reaching is autocratic rather than democratic.

The above doubts become reinforced on re-reading the introduction to the opinion of Chief Justice Berger in Chakrabarty which is in agreement with Scalia and Gardner:

In cases of statutory construction we begin, of course, with the language of the statute.  Southeastern Community College v. Davis, 442 U.S. 397, 405 (1979).  And "unless otherwise defined, words will be interpreted as taking their ordinary, contemporary, common meaning." Perrin v. United States, 444 U.S. 37, 42  (1979).  We have also cautioned that courts "should not read into the patent laws limitations and conditions which the legislature has not expressed."  United States v. Dubilier Condenser Corp., 289 U.S. 178, 199 (1933).

It will be recalled that the questions before the Court were firstly whether a naturally occurring segment of deoxyribonucleic acid (DNA) is patent eligible under 35 U.S C. § 101 by virtue of its isolation from the rest of the human genome and secondly whether synthetically created DNA known as complementary DNA (cDNA), which contains the same protein-coding information found in a segment of natural DNA but omits portions within the DNA segment that do not code for proteins, is eligible.

Following Justice Scalia, the Court's first task was to interpret 35 U.S.C. § 101 and determine whether the questions before the Court could be resolved using the express wording of the statute:  only if that task was impossible was it necessary to reach the judicial exceptions.

One basis by which a naturally occurring segment could qualify under § 101 is if it could be regarded as a new and useful composition of matter.  A definition of that term was adopted by Chief Justice Berger in Chakrabarty:

"[C]omposition of matter" has been construed consistent with its common usage to include "all compositions of two or more substances and . . . all composite articles, whether they be the results of chemical union, or of mechanical mixture, or whether they be gases, fluids, powders or solids."  Shell Development Co. v. Watson, 149 F. Supp. 279, 280 (DC 1957) (citing 1 A. Deller, Walker on Patents 14, p. 55 (1st ed. 1937)).

However, an isolated naturally-occurring DNA segment does not fall within the above definition because it is a single substance and not a mixture of substances and because it is not the result of chemical union (i.e., synthesis by the hand of man) but instead is merely an otherwise unchanged fragment of a larger naturally-occurring molecule.  Insofar as Myriad treated the claims in issue as composition claims it arguably gave the statutory language a meaning broader than its plain meaning and conflicted with Chakrabarty and Shell Development.

The alternative and more plausible basis on which the isolated naturally-occurring DNA segment could have been eligible under § 101 is as a new and useful manufacture.  Again in Chakrabarty a definition is provided:

[T]his Court has read the term "manufacture" in 101 in accordance with its dictionary definition to mean "the production of articles for use from raw or prepared materials by giving to these materials new forms, qualities, properties, or combinations, whether by hand-labor or by machinery."  American Fruit Growers, Inc. v. Brogdex Co., 283 U.S. 1, 11  (1931).

The standard set out in American Fruit Growers was that there must be a transformation:  a new and different article must emerge having a distinctive name, character, or use, as explained in Hartranft.  In order to qualify as a new manufacture relevant new utility for the isolated naturally-occurring segment had to be demonstrated.  As explained in the dissenting opinion of Judge Bryson in the Federal Circuit the analysis should be from the standpoint of a geneticist rather than a chemist, and the isolated wild-type BRCA1 gene had no relevant new utility for the following reasons:

The structural differences between the claimed "isolated" genes and the corresponding portion of the native genes are irrelevant to the claim limitations, to the functioning of the genes, and to their utility in their isolated form.  The use to which the genetic material can be put, i.e., determining its sequence in a clinical setting, is not a new use; it is only a consequence of possession.  In order to sequence an isolated gene, each gene must function in the same manner in the laboratory as it does in the human body.  Indeed, that identity of function in the isolated gene is the key to its value.  The naturally occurring genetic material thus has not been altered in a way that would matter under the standard set forth in Chakrabarty.  For that reason, the isolation of the naturally occurring genetic material does not make the claims to the isolated BRCA genes patent-eligible.

It follows that the claimed isolated naturally-occurring DNA segment was not covered by § 101 either as a composition of matter or as a manufacture, and that invoking judicial exceptions to reach that result was unnecessary.

The status of the cDNA was equally easy to resolve using the express language of the statute.  It differed from the naturally-occurring segment insofar as that it comprised the exons of the naturally occurring sequence joined directly one-to another and without intervening introns.  It was a new chemical substance resulting from a chemical union brought about by the hand of man, and as such was plainly an eligible composition of matter.

Do these points matter, insofar as a decision has already been handed down and no different outcome is suggested?  It is suggested that they do because they emphasize the wide and relevant applicability of the language of the statute, and provide a basis for reconsideration of the appropriate balance between the express provisions of the statute and less-certain judge-made exceptions.  It is possible that straightforward interpretation of the statutory language concerning new and useful processes and machines and avoidance of unnecessary reliance on judicial exceptions could simplify and illuminate the discussion of computer and business-method inventions as in Alice.

* Mr. Cole is a European Patent Attorney and Partner with Lucas & Co. in Warlingham, Surrey, UK and Visiting Professor at Bournemouth University.