(148b) Patents Are Integral to Monetizing Innovation. Court Decisions Have Led to Uncertainty As to What Is Patentable, Affecting Drug, Diagnostic, Genetic, and Other Innovation

It has been nearly five years since the U.S. Supreme Court issued the Alice Corp. Pty. Ltd. v. CLS Bank Intern. decision and about seven years since its decision in Mayo Collaborative Servs. v. Prometheus Labs., Inc.. Those decisions established the current framework—dubbed the “Alice/Mayo test”—for determining the subject matter (i.e., technology) eligible for patent protection. Since the creation of the Alice/Mayo test, the primary appellate court that handles patent appeals has issued many decisions hinging on this issue, but significant uncertainty remains. This topic is important for those in academia and industry because patents are prevalent and highly-sought after in both arenas.

The Mayo/Alice test is a two-step analysis used to interpret § 101 of the Patent Act, which states that a patent can be granted for “any new and useful process, machine, manufacture, or composition of matter.” The Supreme Court has created certain exceptions to that rule that include natural products, natural phenomena, and abstract ideas. The Court justified the judicial creation of those exceptions by expressing concern that, without them, a patent could cover the “building blocks” of nature and tie-up their use for future innovation. This is complicated, however, by the fact that all inventions are governed by the natural laws and scientific confines of the universe. When an innovator is working to create new technologies that use or rely upon naturally-occurring materials like DNA, proteins, antibodies, and other chemical constituents, it can be difficult to ascertain whether a court might consider a discovery to fall into one of the exceptions and be ineligible for patent protection.

In general, the Mayo/Alice test implicates patents that rely on computers (often characterized as “abstract ideas”) or that incorporate or rely on naturally-occurring substances. The latter can be particularly problematic for those working in chemical and biological fields. For example, the Mayo case involved a therapeutic method for treating an immune-mediated gastrointestinal disorder that included the steps of administering a drug and then determining the levels of 6-thioguanine after that administration. The Supreme Court declared that therapeutic method was ineligible for patent protection.

Many important technologies have been implicated by this relatively recent jurisprudence. For instance, patent claims for isolated DNA, a method of assessing the risk of a major cardiac event using enzyme levels, a method for detecting mycobacterium tuberculosis, a method of DNA intron sequence analysis, a method of diagnosing a neurological disorder based on the presence of certain autoantibodies, and a prenatal test for certain fetal characteristics using cffDNA were all found to be patent-ineligible natural products or natural phenomena. However, patent claims for treating a patient with schizophrenia, compositions used for increasing athletic performance using beta-alanine, and a process for cryogenically freezing hepatocytes were found patent-eligible. Despite some common technological threads running through these patents, the courts’ opinions have made it difficult to cogently predict how similar patents might be treated in the future.

Logically, overbroad patents are often considered to have an inhibitory effect on innovation because they can tie-up later innovators’ ability to use preexisting technology to expand upon it and create new technology using it. Much innovation is iterative, after all. However, the U.S. patent system is designed to encourage invention and innovation and when innovators lose the incentive to invest in and create valuable and complex technology because they have no way to protect those inventions, this can be detrimental to innovation and society.

The author of this abstract recently represented a dietary supplement company in a successful appellate reversal of a lower court’s ruling that the supplements at issue and methods of treatment using them were patent-ineligible. The patents involved in that case concerned a dietary supplement containing unnatural amounts of beta-alanine that were administered over an extended period of time, resulting in an increase in the anaerobic working capacity of a subject’s muscles. That particular method of administration caused an unnatural override of the body’s homeostasis. After the lower court concluded those treatments were nothing more than a natural law, the appellate court reversed that decision and held that the patents sufficiently distinguished themselves from a natural law or natural phenomenon and were patent-eligible. Based on this experience, the author intends to discuss the state of patent law, with particular focus on this issue, along with the courts’ treatment of the two-step Mayo/Alice test. The presentation would also discuss how innovators may seek patent protection on the types of inventions that a court or the U.S. Patent Office might consider subject-matter ineligible.