March 21, 2012
On March 20, 2012, the Supreme Court issued its decision in Mayo Collaborative Services v. Prometheus Laboratories, 566 U.S. __ (2012), addressing the scope of the "laws of nature" exception to the definition of patentable subject matter set out in 35 U.S.C. § 101. While Section 101 provides that "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof," is eligible for a patent, the Supreme Court long has held that laws of nature, mathematic principles, and other abstract ideas may not be patented. In Mayo, a unanimous Court held that where a claimed process makes use of a law of nature, the claim must present a specific and demonstrably innovative application of that natural phenomenon in order to be patent-eligible. Where a process applies a newly discovered law of nature in a manner that (apart from using the law of nature at issue) is well known in the art, it is not, the Court held, eligible for patenting. Instead, to be eligible for patenting, a process that applies a law of nature must include an "inventive concept" in its method of application separate and apart from the law of nature itself. The Court’s analysis in Mayo is likely to have far-reaching repercussions for patent prosecution, patent litigation, and research and development in technological areas heavily dependent on patent protection.
At issue in Mayo were processes developed and patented by Prometheus for identifying the metabolic responses of patients to certain drugs used to treat autoimmune diseases. Under Prometheus’s processes, by measuring the levels of certain substances in blood treated with the drugs, doctors could determine whether a particular dosage level was too low or too high and adjust their treatments accordingly. Slip op. at 3. All agreed that the relationship between metabolite concentrations in the blood and the efficacy of the drug was a natural phenomenon–a law of nature. Yet Prometheus argued that its three-step process applying that law of nature (administering the drug, determining the metabolite levels of the patient’s blood, and finally evaluating the relevant data in light of the known correlation to ascertain whether that measured metabolite level suggested an adjustment to the patient’s dosage) was eligible for patenting. Id. at 5-6.
Mayo, which had used diagnostic tests based on Prometheus’s patents for a time, announced in 2004 its intention to develop and sell a refined version of the test. Id. at 6. Prometheus sued for patent infringement, and the district court granted summary judgment to Mayo on the ground that Prometheus’s patent effectively claimed a law of nature that was ineligible for patenting. Id. at 7. The Federal Circuit reversed, finding that Prometheus’s process was eligible for patenting under its "machine-or-transformation test." After the Supreme Court rejected that test as the sole measure of patent eligibility in Bilski v. Kappos, 561 U.S. __ (2010), the Supreme Court vacated the Federal Circuit’s decision and remanded for reconsideration. Slip op. at 7-8. The Federal Circuit then concluded that Prometheus’s satisfaction of the "machine-or-transformation" test, even if not immediately dispositive, still "le[d] to a clear and compelling conclusion" that the process was eligible for patenting.
In a unanimous decision authored by Justice Breyer, the Supreme Court reversed. The Court first addressed the issue whether Prometheus’s claimed process disclosed an inventive contribution sufficiently beyond the underlying law of nature so as to warrant patent protection. The Court held that it did not. Id. at 8. In order to be patentable, the Court explained, a process must go beyond merely stating a natural law and instructing a practitioner to apply it. Id. at 9. In this case the additional steps relied on by Prometheus–the administration of drugs and measurement of blood concentrations–"consist of well-understood, routine, conventional activit[ies] already engaged in by the scientific community" that are not eligible for patent protection individually or as an ordered combination. Id. at 11. At most, the Court stated, "the effect [of the processes] is simply to tell doctors to apply the law somehow when treating their patients." Id. at 13. The Court described the "determining" step, in which doctors measure a patient’s blood metabolite concentrations, as insignificant "pre-solution" activity, no more deserving of patent protection than similar "post-solution" activity discussed in Bilski. Id. at 10. The Court found the fact that Prometheus’s process may have satisfied the "machine-or-transformation" test insignificant, stating that the "’clue’ to patentability" offered by the machine-or-transformation test could not "trump the ‘law of nature exclusion.’" Id. at 19. In reaching these conclusions, the Court gave no apparent deference to the Federal Circuit’s analysis of the claims. Instead, the Court reviewed the claim language and the issues underlying Section 101 eligibility de novo, reaching its own conclusion regarding the scope of the claims and the implications for patent eligibility.
The Court also discussed the practical concerns underlying the law-of-nature exception to Section 101 eligibility, explaining the risks to innovation posed by restricting the use and further investigation of newly discovered laws of nature through the patent system. Id. at 17. Although the Court acknowledged that patents serve an important incentive function, it declined to depart from the "general legal rules" forbidding patents on natural laws lest such a departure disrupt other scientific fields. Id. at 23-24. It is of no consequence to this analysis, according to the Court, that the particular natural law in this case was a narrow one. Id. at 20. While it acknowledged that a patent on only a narrow law of nature ordinarily will not have a significant adverse effect on scientific invention, the Court pointed out that the offsetting concern–the value of promoting the original patented innovation–is correspondingly diminished when an invention has only narrow applications. Id. at 20.
The Court reconciled this result with its previous Section 101 decisions in Diamond v. Diehr, 450 U.S. 175 (1981), and Parker v. Flook, 437 U.S. 584 (1978), explaining that Prometheus’s patent claims were weaker than the claim in Diehr (which was held patent-eligible) and "no stronger" than the claim in Flook (held patent-ineligible). Id. at 13. The Court distinguished Diehr, which involved a process for molding rubber using a mathematical equation to determine when to release the rubber press, on the ground that the combination of steps involved were not "obvious, already in use, or purely conventional"; thus, the process as a whole contributed something new and valuable beyond the simple application of the mathematical formula. Id. at 12. Conversely, the process in Flook, which involved adjusting alarm limits in the context of catalytic conversion, contained no "inventive concept" beyond the general application of the underlying mathematical formula. Id. at 12-13.
The Court also recognized that its evaluation of "the significance of the additional steps" might cause the Section 101 patent-eligibility inquiry to overlap with the other statutory requirements for patentability, including the novelty requirement of Section 102. Id. at 21. But the Court found that preferable to the "significantly greater legal uncertainty" inherent in the government’s suggestion "that the novelty of a component law of nature may be disregarded when evaluating the novelty of the whole." Id. To strip examination of an invention’s novelty out of Section 101 eligibility analysis and confine it to the requirements of Section 102 and Section 103, the Court concluded, would "assume that those sections could do work that they are not equipped to do." Id. For at least those inventions classified as laws of nature, the Court thus seems to have embedded an inquiry into the invention’s novelty as a central feature of the analysis of the invention’s eligibility for a patent.
It seems likely that the most immediate repercussions of the Mayo decision will be felt in the life sciences industries, including pharmacology and biotechnology. Many life-enhancing medical procedures are patented, in part to allow the developers to recoup the enormous costs of research and regulatory approval. And it is a truism that such procedures, to be effective, must adhere to the laws of nature. Mayo makes clear, however, that merely adapting a newly discovered physical principle to the context of patient treatment will, in many cases, be insufficient to permit the procedure to be patented. Rather, Mayo seems to indicate that the use of the principle, as well as its existence, must satisfy the prerequisites to patentability. This ruling will cast doubt on many patents previously issued by PTO and could lead to substantial litigation regarding the viability of life sciences companies’ current patent portfolios. More broadly, it could deter (or at least influence) further investment in this sector if investors fear an inability to recoup, through the incentive structure of the patent system, the costs of developing new treatments.
Mayo also has significant implications for other industries, including information technology companies. The Court’s decision bolsters the "underlying invention" analysis found in decisions like CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1374 (Fed. Cir. 2011), while weakening eligibility analyses premised on well-known physical claim elements, as in the Federal Circuit’s decision in Mayo. Indeed, while the Court’s holding is focused on the patentability of medical diagnostic techniques, the Court also indirectly addressed the patentability of computer software. As part of its analysis, the Court addressed Gottschalk v. Benson, 409 U.S. 63, 67 (1972). Benson was first cited for the proposition that "to transform an unpatentable law of nature into a patent-eligible application of such a law, one must do more than simply state the law of nature while adding the words ‘apply it.’" Slip op. at 3. The Court, however, later characterized Benson as holding that "simply implementing a mathematical principle on a physical machine, namely a computer, was not a patentable application of that principle." Id. at 16. This, the Court reasoned, was because the claims in Benson were "overly broad" and "did not differ significantly from a claim that just said ‘apply the algorithm.’" Id. at 16. The implications for this reading of Benson were not further explored by the Court in this case, but will assuredly be discussed as Section 101 case law develops.
Patent prosecution and examination practice in the Patent and Trademark Office ("PTO") likewise will be affected. The eligibility requirements of Section 101 now likely will receive significantly increased attention from examiners in the patent application process. If the principles articulated in Mayo are extended from process patents to other forms of inventions (as the Federal Circuit’s decision in CyberSource suggests), then applicants may find it difficult to avoid a Section 101 rejection simply by amending the form of the claim; the applicant likely will need to include new substantive limitations that will limit the claim’s scope. And, particularly because the Court’s analysis in Mayo at least implies that Section 101 patent-eligibility determinations are to be reviewed as a question of law–which is to say without deference–it is likely that Section 101 challenges will feature more prominently in future challenges to issued patents as well. The Court’s tightened patent-eligibility requirements offer to defendants in patent litigation a potent new opportunity to obtain summary judgment of invalidity–an opportunity rarely available when invalidity is asserted under Section 102 or 103 because those determinations are either purely factual or said to depend on subsidiary questions of fact. And the lack of deference to any prior determination of patent eligibility combined with the Court’s heightened requirements also means that Section 101 will be a fertile ground for challenges under the PTO’s newest procedure, Post-Grant Review, and particularly Covered Business Method Patent Review, 77 Fed. Reg. 7095 (Feb. 10, 2012).
Gibson Dunn filed an amicus brief in Mayo in support of neither party on behalf of Microsoft Corporation, EMC Corporation, and Intel Corporation.
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