By Pei Wu and James F. Ewing, Foley & Lardner LLP
This article is part of our Spring 2011 edition of Legal News: China Quarterly Newsletter, Eye on China.
In the Fall 2010 issue of the China Quarterly Newsletter (http://tinyurl.com/4a8l8er), we reported the Supreme Court’s decision in Bilski v. Kappos, 130 S.Ct. 3218 (2010) relating to the issue of patentable subject matter. Although the Court in Bilski did not categorically exclude business method patents, it did not offer clear guidance on patent-eligibility for other types of method claims. For biotech and pharmaceutical method claims, there has been much speculation about how the lower courts will apply the patent-eligibility requirements in light of the Bilski decision.
One month after the Bilski decision, the U.S. Patent and Trademark Office (USPTO) released interim guidelines, detailing steps for determining whether method claims are patentable subject matter in view of Bilski. Among other things, these guidelines provided specific factors relevant to evaluating method claims for subject matter eligibility under Bilski. These factors include evaluating whether the methods involve association with a machine or apparatus, whether performance of the claimed methods involves a transformation of an article, whether performance of the claimed methods involves an application of a law of nature, and whether a general concept is involved in executing the claimed methods. Based on these guidelines, methods involving association with a machine or apparatus, a transformation of an article, or an application of a law of nature are likely to be weighed in favor of patentability. However, if a general concept is involved in executing the methods, this will be weighed against patentability.
Although no clear guidance was offered in Bilski, the Court suggested that the Federal Circuit develop "other limiting criteria" to evaluate claims for patentability under § 101. On December 17, 2010, the Federal Circuit decision in Prometheus provided the first post-Bilski guidance on application of patent-eligibility requirements for method claims in biotech and pharmaceutical industry. Prometheus Laboratories, Inc. v. Mayo Collaborative Services, No. 2008-1403 (Fed. Cir. 2010).
The Prometheus case involves claims directed to a method of treating an immune-mediated gastrointestinal disorder by administering a drug to a subject and determining appropriate dosage by measuring changes in the patient’s metabolite levels. Prometheus Laboratories, Inc. v. Mayo Collaborative Services 581 F.3d 1336, 1339-40 (Fed. Cir. 2009). The Federal Circuit previously found the claims valid under § 101 after applying the machine-or-transformation test. Id. at 1345-48. After the Court’s decision in Bilski, the Prometheus case was remanded to the Federal Circuit for additional consideration in view of Bilski. The central issue on remand was to determine "whether Prometheus’s asserted claims are drawn to a natural phenomenon ... or ... only to a particular application of that phenomenon." In a two-part analysis, the court first concluded that the claimed methods "recite a patent-eligible application of naturally occurring correlations between metabolite levels and efficacy or toxicity, and thus do not wholly preempt all uses of the recited correlations." The court next re-affirmed that the claimed methods also satisfy the machine-or-transformation test and therefore are patent-eligible under § 101.
Another case, Classen Immunotherapies, Inc. v. Biogen IDEC, Nos. 2006-1634 and 2006-1649, is currently on remand to the Federal Circuit and involves method claims directed to immunizing a treatment group and comparing the incidence of chronic immune-mediated disorders in the treatment group to a control group. In invalidating the claims, the Federal Circuit indicated it had applied the machine-or-transformation test but provided no substantive discussion of the merits. See Classen, 2008 WL 5273107, at *1 (Fed. Cir. Dec. 19, 2008). It will be interesting to see what other "limiting criteria" or analytical tools the Federal Circuit will develop to analyze the validity of the claims under § 101 on remand.
In addition to Prometheus and Classen, the Federal Circuit has received briefing in Ass’n for Molecular Pathology v. U.S. Patent and Trademark Office (Myriad). In Myriad, the method claims are directed to determining susceptibility to disease by comparing the patient’s DNA sequence to normal and mutant BRCA gene sequences. See Myriad, 2010 WL 1233416 (S.D.N.Y. Mar. 29, 2010). The district court invalidated the method claims, reasoning that they were not tied to any particular machine and did not result in a tangible transformation. Id. at *47-49. It will interesting to see how the Federal Circuit will define the limits of patentable subject matter under Bilski.
In sum, Bilski raises as many questions as it answers for the biotech and pharmaceutical industry. The Prometheus decision is encouraging to personalized medicine industry. It is possible future decisions by the Federal Circuit in Classen and Myriad will provide additional "limiting criteria" for analyzing the validity of claims under § 101. Until the court provides clear guidelines to those questions, however, applicants and litigants in the biotech and pharmaceutical industry should continue to emphasize the transformative aspects of their patent claims and tie the methods to a particular diseases or particular drugs.
For Chinese companies and innovators, even though claims to methods of diagnosis are unpatentable under Chinese patent law, Chinese innovators seeking profits in the United States can gain a leg up in the competition by following the guidelines from these case decisions when drafting method claims for the U.S. market.