By Kevin E. Noonan —

Earlier this week, Sequenom, Inc. filed its opening brief in Ariosa Diagnostics, Inc. v. Sequenom, Inc., appealing summary judgment that its licensed claims to a genetic diagnostic method for detecting fetal diseases and abnormalities in utero were invalid for reciting patent-ineligible subject matter.  In view of the exquisitely subjective nature of the standards for patent eligibility enunciated by the Supreme Court (most recently in Mayo v. Prometheus), Sequenom may face a task more daunting that it should be.  But in view of the fact that anything short of reversing the District Court's decision below can be expected to reduce the likelihood that personalized medicine will become commercially viable in our lifetimes, it is important that they prevail.

To recap, the technology at issue was non-invasive prenatal diagnosis of sex determination, blood typing, other genetic disorders and detection of pre-eclampsia, using a simple blood test that reduces or eliminates the need for amniocentesis and chorionic villus sampling (which incur risks to both mother and child).  Sequenom Inc. is the exclusive licensee of U.S. Patent No. 6,258,540 originally obtained by Isis Inc.; there were three independent claims attacked by Ariosa and asserted by Sequenom in its patent infringement counterclaims:

1. A method for detecting a paternally inherited nucleic acid of fetal origin performed on a maternal serum or plasma sample from a pregnant female, which method comprises
 amplifying a paternally inherited nucleic acid from the serum or plasma sample and
 detecting the presence of a paternally inherited nucleic acid of fetal origin in the sample.

24. A method for detecting a paternally inherited nucleic acid on a maternal blood sample, which method comprises:
  removing all or substantially all nucleated and anucleated cell populations from the blood sample,
 amplifying a paternally inherited nucleic acid from the remaining fluid and subjecting the amplified nucleic acid to a test for the Paternally [sic] inherited fetal nucleic acid.

25. A method for performing a prenatal diagnosis on a maternal blood sample, which method comprises
 obtaining a non-cellular fraction of the blood sample
 amplifying a paternally inherited nucleic acid from the non-cellular fraction and
 performing nucleic acid analysis on the amplified nucleic acid to detect paternally inherited fetal nucleic acid.

The District Court based its decision on the Supreme Court's decision in AMP v. Myriad Genetics, that "naturally occurring" DNA is not patent eligible as a "product of nature," coupled that with the proscription from Mayo that "merely" adding "routine, conventional and well-understood" process steps to a "natural law" (or, in this case, "product of nature") was not "enough" to render method claims patent-eligible, determined that the amplification and sequencing steps recited in the claims were "routine, conventional and well-understood" process steps, and finally invoked Parker v. Flook for the proposition that the Supreme Court did not recognize any distinctions between an "abstract idea" and natural laws or phenomena to arrive at its decision that the claims at issue did not satisfy Section 101.  The District Court also discounted evidence that the art had developed alternative, non-infringing methods for performing the claims detection and diagnosis methods, on the grounds that these methods were not contemporaneous and were not "commercially viable."  The District Court entered summary judgment last November, and Sequenom timely appealed.

Sequenom presents its arguments in thre parts:  first, that the Federal Circuit should review the District Court's determination de novo, and should apply the exceptions to subject matter eligibility narrowly while reading Section 101 expansively, consistent with Congressional intent.  Second, the Court should recognize that the District Court erred in how it applied controlling precedent to the claims at issue, first because the claims do not "merely" claims a "natural phenomenon" and second that the lower court applied a standard (i.e, the "commercially viable" standard for noninfringing alternatives that "lacks legal basics and contradicts public policy").  And finally, whether the District Court erred by deconstructing the claims and assessing their patent-eligibility separately, contrary to the Supreme Court's teachings in Diamond v. Diehr (but, honestly, consistent with Justice Breyer's treatment of the claims in Mayo, a case that pointedly did not overrule Diehr).

The brief first begins with a section on the nature of the invention, which points our to the Court the benefits to the public of the invention disclosed and claimed in the patent-in-suit.  These include the ability to detect fetal abnormalities earlier in pregnancy and without the need for invasive procedures like amniocentesis and chorionic villus sampling that can put both mother and child's lives at risk.  The facts elucidated include those that support the novelty and non-obviousness of the claimed methods, factors necessitated by the Supreme Court's focus on whether a claim is "inventive" in Mayo (thus turning back the clock to the state of the law before Congress affirmatively created Section 103 in the Patent Act to inhibit if not prevent this type of subjective determination of what was patent-worthy by the Court).  (In homage to this pre-1952 Act Supreme Court precedent, Sequenom characterizes the inventors' recognition that cffDNA could be found in the acellular fraction of maternal blood as an "original stroke of genius" and note that the scientific journal article announcing this discovery had been cited "over a thousand times.")  And bowing to more recent trends from the Court, Sequenom accentuates in its factual allegations that the claimed methods were "limited" to detecting paternally inherited DNA in the cffDNA in maternal blood.  Finally, the fact statement notes that the claimed methods "transform" the cffDNA in application of the process steps, including fractionation, amplification and detection (including sequence determination) of the amplified cffDNA.  This section also sets forth the alternative methods for detecting cffDNA and using said detection for diagnostic applications.

The brief also reminds the Court that, because this was a decision on summary judgment (under Ninth Circuit precedent) and because subject matter eligibility is a question of law, the Court is entitled and should decide the question before it de novo.  In so doing, Sequenom urges the Court to apply patent eligibility broadly and the exceptions to it narrowly, based on the statutory language and the Supreme Court's construction of the scope of the statute in Diehr and Bilski v. Kappos as well as recent Federal Circuit precedent, such as CLS Bank v. Alice and Ultramercial v. Hulu (perhaps in an effort to show that, no matter how the cases before these courts have come out, the principle of expansive reading on the scope of Section 101 is consistently broad).  The brief cites much of the same precedent for the corresponding principle that judicially created exceptions to broad subject matter eligibility should be applied parsimoniously.  In this context, of course, Ariosa had the burden of proving that the exception should be applied against Sequenom's claims by clear and convincing evidence, citing CLS Bank, and while not affirmatively drawing the conclusion suggests that Ariosa failed to meet this burden.

In its first argument, Sequenom asserts that its claims do not claim a natural product or phenomenon, nor preempt all uses of fetal DNA or cffDNA, but rather claim narrow, specific, and limited applications of the biological act that cffDNA is present in maternal blood.  The brief identifies undue preemption (defined as "all other uses of the phenomenon"), which Sequenom argues is not the case here due to the existence of alterative, non-infringing methods for detecting cffDNA (once these inventors had disclosed that it was present in maternal blood).  Sequenom argues that the District Court erred by assessing subject matter eligibility of its claims as if they claimed the cffDNA itself, rather than an application of methods for detecting such DNA and providing a diagnosis of fetal disease or developmental disorder therefrom.  Sequenom also argues that the existence of the identified alternative methods for detecting cffDNA was dispositive on the question of preemption, and further that the claims taken as a whole satisfied the statutory requirements of novelty and non-obviousness as well as the Supreme Court's subjective "inventive concept" test and thus are patent eligible.

Regarding preemption, the brief argues that the Supreme Court's concern with preemption was that a claim "preempts all practical uses" of a natural law, phenomenon of nature, or abstract idea, again citing Supreme Court (Mayo, O'Reilly v. Morse) as well as Federal Circuit case law.  This primacy for the preemption question was ignored by the District Court, according to Sequenom's brief, which deemed the preemption issue to be only "a consideration" when deciding whether a claim satisfies Section 101 or falls within an exception to it.  According to the brief:

The Supreme Court has variously stated the distinction it drew in the Morse and Telephone cases, but the essence is that a patent recites ineligible subject matter only when it claims for itself, or preempts all other uses of, an abstract idea, law of nature, or natural phenomenon.

The brief then contrasts this proscription of patent eligibility with instances where "a patent applies a natural phenomenon in a limited, non-preemptive manner so that other uses may be made of it," citing Bilski and Diehr (emphasis in original).  In this regard the brief argues that the District Court misread Flook, Bilski, and Mayo to be directed to "non-preemptive" patent claims, and thus failed to recognize the importance of the preemption question, and that the failure to unduly preempt prevented Sequenom's claims from invalidity under Section 101.  And the brief identifies Diehr as the case most closely related to the facts in this case (and cites how the Diehr Court distinguished the claims before it from the Flook case), asserting error by the District Court in "giving short shrift" to the Diehr decision.  Thus:

In sum, the Supreme Court's and this Court's precedents follow a consistent theme:  where claims recite a natural phenomenon and no more, or when they recite a method in terms so general that it covers all ways to use the natural phenomenon, then the claims are not patent-eligible.  Where, as here, the patent claims a specific limited method and there are alternative methods available, then there is no preemption and no Section 101 eligibility concern.  The District Court failed to follow this controlling Section 101 law.

With regard to the second argument, Sequenom asserts that the District Court "discounted" its evidence for alternative, noninfringing methods, and that "[t]he District Court adopted an unprecedented and improper standard to determine the relevance of alternative methods offered to prove the claimed method does not preempt all uses of a natural phenomenon.  It held that an alternative method would be relevant to show lack of preemption only if it both (i) was disclosed publicly before the '540 patent issued, and (ii) was shown by Sequenom to be commercially viable, a standard not enunciated by either the Supreme Court nor the Federal Circuit.  Further, the brief argues that there is no "rule or logic" in the District Court's "commercially viable" standard for alternative methods for practicing the claimed methods.  The brief notes that the concern has always been that claims "tie up future invention" and thus strongly suggest both that Sequenom's evidence for after-arising non-infringing alternatives was relevant and that this evidence supported Sequenom's arguments for subject matter eligibility.  Sequenom's claims do not do so and thus the District Court erred according to the brief.  Sequenom sets forth the consequences of the misapplied thinking of the District Court:

As the Supreme Court observed in Myriad, it is expected that the original discoverers of a natural phenomenon or law of nature will invent the first (and perhaps best) method of applying their discovery.  . . .  However, the District Court's rule would require inventors, such as Lo and Wainscoat — who discovered cffDNA in 1996 and claimed a method applying it a few months later — to wait, perhaps indefinitely, to patent their method until other inventors have disclosed alternative methods using the discovery.

Further, the District Court's "previously disclosed" requirement turns the presumption of validity on its head.  Under the District Court's rule, the first-to-invent is branded as a "preempter" whose method is doomed to be patent-ineligible.  Because Lo and Wainscoat came up with the first-filed method applying their ground-breaking discovery of cffDNA before any alternatives had been published, under the District Court's reasoning, their patent necessarily preempts all other methods that could apply their discovery.  Someone has to file first, and the first inventors should not be required to hold back disclosure of their method until others disclose alternative methods.  The net effect of the waiting game the District Court's rule creates would be to stymie the disclosure and exploitation of inventions — the reverse of the incentives the patent laws are intended to foster.

(citations omitted).

Specifically addressing the "commercially viable" standard enunciated by the District Court, the brief argues that "[t]he "commercially viable" requirement would impose a higher standard on alternative, non-preemptive methods than now exists for patented methods," and argues that this is a rule unsupported by legal precedent nor logic itself.  In making these arguments, the brief contrasts the District Court's standards for non-infringing alternatives with the requirements of patented methods, wherein there is no requirement that a claimed invention be commercially viable (citing Juicy Whip, Inc. v. Orange Bang, Inc., 185 F.3d 1364, 1366 (Fed. Cir. 1999), CFMT, Inc. v. YieldUp Int'l Corp., 349 F.3d 1333, 1338 (Fed. Cir. 2003), and Barmag Barmer Machinenfabrik AG v. Murata Machinery, Ltd., 731 F.2d 831, 839 (Fed. Circ. 1984) as examples).  This portion of the brief also notes that, under the District Court's rubric many earlier patents would need to have been invalidated due to lack of commercially viable, non-infringing alternatives.  (And the brief asserts that there is no definition or other factual basis or standard for what "commercially viable" requires or entails, while providing a propensity to invalidate the best method for a particular purpose.)

Finally, Sequenom argues that the District Court misinterpreted and misapplied the law regarding the need for an "inventive concept" in the claims.  Here the error Sequenom asserts is that the District Court did not consider the claims "as a whole" but rather cherry-picked the different limitations and evaluated them separately and independently for patentability.  The brief argues that this analytical style is contrary to Supreme Court precedent, and then argues that the term is not a cipher for novelty and non-obviousness but rather a way of assessing "genuine human contribution" to an invention, citing (and trying to apply) Supreme Court precedent on this question.  And even using the District Court's failed analytical tools these claims should be deemed "inventive," according to the brief, based on the conventional practices in the art (including discarding acellular blood fraction containing cffDNA).  On the subject of inventiveness the brief has this to say:

What is probative of patent-eligibility, and what the District Court erroneously denied, was the patent's combination of these steps for the first time in a groundbreaking method for the purpose of detecting paternally-inherited cffDNA in maternal plasma or serum and diagnosing fetal characteristics.  This new combination for this new purpose was neither conventional nor routine, and it satisfies the requirements of Section 101.

It is the failure to look at the combination "as a whole" that was the source of the District Court's error.

In the final section of the brief, Sequenom reminds the Court that this case was decided on remand from the Federal Circuit with instructions to consider the issues before the District Court in light of the Myriad decision, and that the District Court misapplied that law as it relates to patent-eligible method claims for screening anticancer drugs, analogizing the laboratory transformed variant with cffDNA in this case.  The brief reads the Court's Myriad decision as "[drawing] the patent-ineligibility line tightly around the genes' DNA sequences themselves" and that the Myriad decision "holds that even a small step away from the natural phenomenon as the result of human intervention is sufficient for patent-eligibility."  In the claims before the Court, Sequenom argues, the cffDNA is much more like cDNA deemed patent-eligible under Myriad than naturally occurring genomic DNA (which the Myriad Court deemed patent-ineligible).  And the brief argues that these claims fall squarely within the types of patent-eligible claims and methods cited with approval in Section III of the Myriad decision itself.

Patent Docs will provide additional posts on Ariosa's responsive brief as well as any amicus briefs filed on behalf of either party.

By Michael Borella —

While non-precedential, this recent Federal Circuit decision further illustrates the Court's thinking with regard to the patent-eligibility of computer-implemented inventions under 35 U.S.C. § 101, and provides a reminder about the importance of procedural issues in § 101 cases.

SmartGene filed a declaratory judgment action against the defendants ("ABL"), alleging non-infringement and invalidity of U.S. Patent Nos. 6,081,786 and 6,188,988, both owned by ABL.  On summary judgment, the District Court found both patents invalid under § 101.  A Federal Circuit panel consisting of Judges Lourie, Dyk, and Taranto affirmed.  Judge Lourie was the author of the contentious en banc CLS Bank v. Alice Corp. plurality concurrence that is currently under review by the Supreme Court, and Judge Dyk joined him in that opinion.  Judge Taranto, who wrote the present opinion, began his tenure at the Federal Circuit after the en banc Court heard oral arguments for CLS Bank.

Each patent includes independent claims directed to a method, a system, and a computer readable medium, respectively, "for guiding the selection of a treatment regimen for a patient with a known disease or medical condition."  In December 2011, SmartGene moved for summary judgment under § 101, stating that that "for the purpose of the § 101 analysis, claim 1 of the '786 patent is representative of all of the claims of the patents-in-suit."  The District Court granted the motion based solely on its analysis of this claim, stating that "the differences between the various method and system claims within the patents-in-dispute are immaterial with respect to whether the patents constitute eligible subject matter under 35 U.S.C. § 101."

ABL never contested this grouping of the claims in its responsive brief.  In oral argument against summary judgment, however, ABL attempted to rectify this omission by noting that "claiming an actual system . . . makes it even less abstract because it's not just a method . . . it is even more intimately connected to the computer."  But the District Court held firm, based on ABL's failure to contest the representativeness of claim 1 in its brief, as well as ABL's apparently non-persuasive oral arguments.

ABL appealed both the District Court's grouping of the claims in its § 101 analysis, and the outcome of this analysis.

Turning first to the grouping of the claims, the Federal Circuit quickly dismissed ABL's contentions.  Judge Taranto wrote that "[i]t is well established that arguments that are not appropriately developed in a party's briefing may be deemed waived."  Consequently, the District Court acted within its discretion to rule that "ABL forfeited any argument that any patent claims here are to be treated differently from claim 1 of the '786 patent."

Moving to the substantive § 101 issue, the Federal Circuit once again upheld the District Court's position.  The claim at issue recites:

1.    A method for guiding the selection of a therapeutic treatment regimen for a patient with a known disease or medical condition, said method comprising:
    (a)  providing patient information to a computing device comprising:
        a first knowledge base comprising a plurality of different therapeutic treatment regimens for said disease or medical condition;
        a second knowledge base comprising a plurality of expert rules for evaluating and  selecting a therapeutic treatment regimen for said disease or medical condition;
        a third knowledge base comprising advisory information useful for the treatment of a patient with different constituents of said different therapeutic treatment regimens;
and
    (b)  generating in said computing device a ranked listing of available therapeutic treatment regimens for said patient; and
    (c)  generating in said computing device advisory information for one or more therapeutic treatment regimens in said ranked listing based on said patient information and said expert rules.

Notably, all steps of the method either require the involvement of a computing device, or are performed by the computing device.  Nonetheless, the Federal Circuit still found that the claim was directed to a patent-ineligible mental process.

Leaning heavily on the reasoning in CyberSource Corp. v. Retail Decisions, Inc., Judge Taranto wrote "section 101 [does] not embrace a process defined simply as using a computer to perform a series of mental steps that people, aware of each step, can and regularly do perform in their heads."  Also echoing Justice Breyer in Mayo v. Prometheus, Judge Taranto found that each step of claim 1 involved "well-understood, routine, conventional activity previously engaged in by researchers in the field."

Particularly, in Judge Taranto's view, step (a) was directed to "routine input, memory, look-up, comparison, and output capabilities," step (b) was directed to generating "a ranked listing of available therapeutic treatment regimens, and step (c) was directed to generating "advisory information for one or more therapeutic treatment regimens in said ranked listing."  Consequently, he found that, without citing to any evidence or explaining why, these steps were routinely and consciously performed by doctors.  As a result, he found claim 1 to recite "a mental process excluded from section 101: the mental steps of comparing new and stored information and using rules to identify medical options."

This decision, which I again emphasize is non-precedential, is another illustration of the Federal Circuit's § 101 reasoning post-Mayo and post-CLS Bank, and of the Court's current willingness to disregard the non-abstractness of general-purpose computer hardware when undertaking such reasoning.  However, a further issue is hidden within the subtext of this case.

The alleged "mental process" of claim 1 is more than a series of purely mental steps.  For the claimed invention to be useful, a doctor would have to access a "knowledge base" of different therapeutic treatment regimens, and then produce a "ranked listing of available therapeutic treatment regimens."  Thus, it is implicit that the Federal Circuit considers "mental processes" to include steps that may require looking information up in a book or a database, and perhaps using pencil and paper to produce a result.

But even if the breadth of claim 1 permits such a reading, the Court's § 101 "mental process" jurisprudence has essentially become a patent-eligibility bar on any computer-implemented algorithm that could conceivably be performed with pencil and paper, no matter how long it takes, how complicated, or how error-prone.  In today's "big data" systems, billions of data entries can be received, processed, analyzed, and used to draw conclusions.  It would take an army of humans thousands, or in some cases millions, of years to perform the same steps that could be performed in seconds, minutes, or hours by a modern cloud-computing system.

As just one example, Amazon.com and Netflix are two entities that use recommendation engines to suggest to their users what media and products those users might want to purchase.  These suggestions are often based on the consumption habits of other users (e.g., using logic such as "people who buy product A also buy product B").  These systems often require a large amount of data (much more than one person could hold in his or her head or organize on paper) and a large amount of computing power to make useful recommendations.  Thus, without being computer-implemented, such recommendation engines would not exist.  And yet, method claims drawn to a recommendation engine operating on a general-purpose computer would likely be subject to § 101 challenges.

Judge Lourie's CLS Bank concurrence sets forth this problematic reasoning:  "At its most basic, a computer is just a calculator capable of performing mental steps faster than a human could.  Unless the claims require a computer to perform operations that are not merely accelerated calculations, a computer does not itself confer patent eligibility."  Nonetheless, accelerating calculations has enabled new technologies that drive the information economy.

One of aspect of innovation is to make products and services faster, cheaper, and better.  The patent system is intended to incentivize individuals and organizations to publically disclose such inventions, and as a result receive a limited property right thereover.  A broad exclusion of computer-implemented "mental processes" via § 101 is illogical and disregards the fundamental tradeoff on which the system is based.

SmartGene, Inc. v. Advanced Biological Laboratories, SA (Fed. Cir. 2014)
Nonprecedential disposition
Panel: Circuit Judges Lourie, Dyk, and Taranto
Opinion by Circuit Judge Taranto