universal-s-hard-rock-hotel_5.jpgIn a session on Case Law Updates at the the BIO Intellectual Property Counsel Committee’s Fall Conference and Committee Meeting, Chad Shear led a panel discussion with John Dragseth and Dr. John Garvish through a discussion of Bilski and how we got to Bilski.  The case, involved a patent application seeking exclusive rights to a method of using hedge contracts to reduce the risk that a commodity’s wholesale price might change.  In re Bilski raises the question of whether business methods and other inventions devoid of technology can be patented.

Section 101 of the Patent Act defines what types of inventions are patentable as “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” The Supreme Court construed this section broadly, stating it includes “anything under the sun that is made by man” with three exceptions of “laws of nature, natural phenomena and abstract ideas.”

In State Street Bank v. Signature Financial Group, the Federal Circuit held that ideas about how to conduct business aren’t always unpatentably abstract. So, any business method that produces a “useful, concrete and tangible result” can be patented as a “process” under Section 101.

In re Nuijten

Our problems start back at In re Nuijten (en banc denied 2008), a case that looked at whether a transitory propagating signal is proper patentable subject matter.  Here, the court looked at patent claims to signals and ruled that signals are “just too transient” to be patentable subject matter  because it does not fit within any of the four statutory categories of process, machine, manufacture, or composition of matter.  This case is an example of the court parsing technological differences as a politician would, not as a scientist would.

In re Comisky

We continue on to In re Comisky where the courts looked at claims directed to a method and system for mandatory arbitration involving legal documents, such as wills or contracts.

The Court concluded that the independent method claims “claim the mental process of resolving legal disputes between two parties by the decision of a human arbitrator[,]” and are therefore, “directed to an abstract idea itself rather than a statutory category” and are unpatentable. However, two independent system claims in Comisky’s application did incorporate various modules and a database as part of the system and were found to contain patentable subject matter for purposes of section 101. The Court explained that “[w]hen an unpatentable mental process is combined with a machine, the combination may produce patentable subject matter[.]” 

As a result of this decision, applications involving mental processes will be required to combine a particular technology such as a computer with such mental processes for the subject matter to meet the statutory requirement of patentable subject matter.  

In re Bilski

Finally, we get to In re Bilski, in which the Federal Circuit looked en banc at when does a claim that contains both mental and physical steps create patent-eligible subject matter and whether a method or process must result in a physical transformation of an article or be tied to a machine to be patent-eligible subject matter under section 101.

Here, the court looked at an abstract idea or mental process.  But, what about where a claim contains both mental and physical steps to create patentably eligible subject matter?  Must a method claim need to result in physical transformation of an article or be tied to machine under 101?

For the biotech industry, to see the possible effects it’s important to also look back at LabCorp v. Metabolite for determining patentably eligible subject matter under section 101, which looked at whether a method patent setting forth an indefinite, undescribed, and non-enabling step directing a party simply to “correlat[e]” results can validly claim a monopoly over a basic scientific relationship used in medical treatment such that any doctor necessarily infringes the patent merely by thinking about the relationship after looking at a test result.

The application claimed a method for detecting a deficiency of cobalamin or folate by assaying homocysteine and correlating elevated level with a deficiency.  The Supreme Court declined to weigh in but we know that Justice Breyer wanted this decided and said that the Court should invalidate as “claim 13 is invalid no matter how narrowly one reasonably interprets” the claim.

The problem here is that anyone performing the test for other reasons can’t avoid infringing if do test and “think” about the correlation knowing it exists.

The panel wrapped up stating that the consequences of LabCorp and Bilski for the biotech business is the impact on:

  • Mechanism of action claims
  • Pro-drug claims
  • Diagnostic tests
  • Adverse effects or other clinical trial/regimen claims

Clearly, claims will need to rely on more than “mental steps” and claims should always be included that tie the steps to physical materials or transformation.

To see the courts movement on invalidating methods on natural phenomenon see the pending case of Classen Immunotherapies v. Biogen, awaiting an appellate decision. This case, seemingly a do-over of the Metabolite case, involves patents involving a mechanism for evaluating the safety of vaccine administration schedules by comparing or identifying the adverse events associated with various vaccine schedules.

The district court held that the claims were invalid as an attempt to patent the idea of a correlation between vaccine schedules and immune mediated disorders (natural phenomenon).

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