Will The Celsis Appeal Put An End To 101 Rejections Of Laboratory Method Claims?

On April 5, 2016, the Federal Circuit heard oral arguments in Rapid Litigation Mgmt. Ltd. v. CellzDirect Inc., where the U.S. District Court for the Northern District of Illinois held invalid claims directed to a “method of producing a desired preparation of multi-cryopreserved hepatocytes.” While it is never a safe bet to predict the outcome of an appeal based on the judges’ comments at the oral hearing, the Federal Circuit judges hearing this case appeared to have little patience for the application of Mayo to the type of method claims at issue.

The Laboratory Method Patent At Issue

The patent at issue is U.S. Patent 7,604,929, issued to In Vitro Technologies, Inc. Claim 1 reads as follows:

A method of producing a desired preparation of multi-cryopreserved hepatocytes, said hepatocytes, being capable of being frozen and thawed at least two times, and in which greater than 70% of the hepatocytes of said preparation are viable after the final thaw, said method comprising:
(A) subjecting hepatocytes that have been frozen and thawed to density gradient fractionation to separate viable hepatocytes from non-viable hepatocytes,
(B) recovering the separated viable hepatocytes, and
(C) cryopreserving the recovered viable hepatocytes to thereby form said desired preparation of hepatocytes without requiring a density gradient step after thawing the hepatocytes for the second time, wherein the hepatocytes are not plated between the first and second cryopreservations, and wherein greater than 70% of the hepatocytes of said preparation are viable after the final thaw.

Discussing the invention, the district court noted that “[p]revailing wisdom … taught that [hepatocyte] cells could be frozen only once and then had to be used or discarded,” which “severely limited the creation of pooled hepatocyte products.” The inventors of  ‘929 Patent discovered that some hepatocyte “cells can be frozen and refrozen without losing significant cell viability, so that pooled hepatocyte products are far more readily attained.”

Instead of viewing the laboratory method claims as a patent eligible application of a natural phenomenon, the district court held the claims invalid under 35 USC § 101:

Applying Mayo-Alice step 1, this Court concludes that the patent is directed to an ineligible law of nature: the discovery that hepatocytes are capable of surviving multiple freeze-thaw cycles.

*****

Applying Mayo-Alice step 2, this Court further agrees that the patented process lacks the requisite inventive concept. One of the inventors, James Hardy, said that “the unexpected outcome was that cells twice frozen behaved like cells that were once frozen” — unquestionably a natural characteristic of the hepatocytes, though no one may have remarked it before — and it is undisputed that upon making that discovery Hardy reapplied a well-understood freezing process.

The Oral Hearing

The appeal was argued before Chief Judge Prost, Judge Moore and Judge Stoll.

The attorney arguing for the patent holder distinguished Mayo on the ground that the method does not involve detecting something that occurs in nature, and emphasized that the methods subject the product to non-naturally-occurring methods.

The attorney arguing for CellzDirect argued that the method was, in effect, a method of detection, since it results in the selection of cells capable of surviving multiple freeze-thaw cycles. He also pointed out that each of the cells in the final preparation are the same as they were at the start of the method.

Judge Moore appeared to be most frustrated with the application of Mayo to these claims, emphasizing that the Supreme Court in Myriad made clear that method claims were not before the Court in that case, and noting that these claims were not like the Prometheus claims, which detected an inherent trait.

Judge Stoll noted several times that CellzDirect had been able to design-around the claims, suggesting that she may be concerned with the preemption aspect of the Supreme Court’s subject matter eligibility jurisprudence.

USPTO Guidance On Laboratory Method Claims

A decision reversing the district court here would be consistent with the USPTO’s examination guidelines, which advise that method claims need not be subject to the “markedly different” analysis merely because they recite the use of a nature-based product.