by Scott Rylan Powell and Gerry J. Elman^†

In New York City on October 20, 2009, the American Civil Liberties Union  (“ACLU”) hosted a screening of In The Family, a documentary on the emotional turmoil experienced by people across the nation who carry certain mutations along the Breast Cancer 1 and 2 (“BRCA”) genes. Everyone has these genes, and as the name implies, the mutated forms are linked to an increased risk of breast cancer.  And certain specific mutations of these genes indicate a high probability of developing ovarian and/or prostate cancer. These types of cancer, after developing in one organ, are prone to spreading throughout the body and killing the host. 

The main focus of In The Family is that, once a woman learns that she carries any of the mutations, the only preventative step she can take is to have her breasts and ovaries surgically removed.  Understandably, the women interviewed in the documentary struggled with the prospect of voluntarily excising these organs before cancer had even struck.  Ones who chose the surgery had joined emotional support groups. Many of those who had chosen to forego surgery died after the cancer developed and spread throughout their bodies. All in all, the movie paints a gloomy picture, leaving the viewer desperately looking for a solution to end the trauma.

After the movie, the ACLU presented their solution: sue the U.S. Patent and Trademark Office, along with anyone associated with patents relating to the BRCA 1 and 2 genes. Representatives from the ACLU proudly announced that ACLU and Public Patent Foundation (“PubPat”)( lawyers, on behalf of a variety of plaintiffs including makers of home-brew genetic testing kits that infringe intellectual property rights, had already filed such a lawsuit.

If the connection between the problem and the proposed solution seems attenuated, that’s because it is. However, with gross oversimplification and some sleight-of-hand, the ACLU converted their emotionally-charged, if slightly-confounded, audience of laypeople into supporters of the ACLU/Pubpat’s lawsuit.

The Lawsuit

On May 12, 2009, lawyers for the ACLU and the Public Patent Foundation (“PubPat”), an organization affiliated with the Benjamin N. Cardozo School of Law, filed a federal lawsuit in the Southern District of New York against the U.S. Patent and Trademark Office, Myriad Genetics Inc., and directors of the University of Utah Research Foundation.[1] Myriad Genetics (“Myriad”), portrayed as the archetypal evil corporation in the propaganda issued by the ACLU and PubPat, is a practitioner of a patent-protected test used to determine whether a person carries certain  mutations of the breast cancer susceptibility genes.  A number of patents are at issue in the case: US 5,693,473; US 5,709,999; US 5,710,001; US 5,747,282; US 5,753,441; US 5,837,492; and US 6,033,857.  All of the patents are owned or co-owned by the University of Utah Research Foundation. Myriad is a co-owner of US 5,747,282 and is a licensee of the other patents.

Patents for Genes?

First some background: To provide a means for inventors to recover their research and development costs and to incentivize further innovation, Article I of United States Constitution grants patent holders a time-limited exclusive right to practice their invention.  When the founding fathers drafted the Constitution, inventions were primarily mechanisms. Accordingly, whether a given area of technology qualifies as patent-eligible subject matter is a question that repeatedly appears as science and engineering branch out into new fields.

Fast-forward to 1972, when, having developed an oil-eating bacterium that would be particularly useful for cleaning up oil spills at sea, a scientist at General Electric Company, Ananda Chakrabarty, applied for a patent with claims to the microorganism itself.  When the application was examined for patentability, Chakrabarty immediately encountered resistance at the U.S. Patent and Trademark Office (“PTO”).  The government rejected the notion that a man-made microorganism could be patent-eligible subject matter. That began a struggle starting at the PTO, winding its way through appellate-level venues, and reaching its conclusion at the U.S. Supreme Court in 1980, when Chakrabarty’s bacterium was finally deemed to be patent-eligible.[2] As a result, the doctrines of U.S. patent law were adjusted to recognize the patent-eligibility of biological entities generated through human ingenuity.

Such a change in perspective was timely, given that during the interim, molecular biologists had been hard at work developing improved techniques to splice together DNA fragments and arrive at previously-non-existent sequences.  In short, U.S. patent law was seen as recalibrated to accommodate and support the burgeoning field of biotechnology.

Man-Made Molecules or Products of Nature?

The case strikes at the validity of any patent claims to polynucleotide molecules embodying naturally occurring genetic sequences, though “isolated” through a man-made process. The ACLU/PubPat arguments obscure the latter aspect by repeatedly stating in their complaint and through widely distributed propaganda that the patent claims are drawn to subject matter that is purely a product of nature. Whether it is through a misunderstanding of the science and U.S. patent law, or through intentional misrepresentation, the ACLU/PubPat’s efforts threaten to pull the rug out from under an entire biotech industry that has invested heavily in intellectual property and which is relying on the U.S. patent system in order to recover costs attendant to innovation. Whatever the underlying reasons for the ACLU/PubPat’s joint efforts in this regard, would-be infringers of the patents are all too happy to join the bandwagon. Indeed, one maker of a home-brew test for the BRCA mutations spoke at the New York City film screening to express her outrage at receiving a cease-and-desist letter for infringing the patents.

The Right to Exclude after eBay v. MercExchange

Moreover, the thrust of the ACLU/PubPat’s case is misguided.  In 2006, the Supreme Court issued a decision in eBay Inc. v. MercExchange, L.L.C., which reinterpreted one of the fundamental principles of U.S. patent law.[3]  Prior to the decision, a patent was understood to give its owner an automatic ability to enjoin others from practicing the patented invention, absent exceptional circumstances. Indeed, the Patent Act states that “patents shall have the attributes of personal property,” including “the right to exclude others from making, using, offering for sale, or selling the invention.”[4]  The availability of an injunction against patent infringement differed from most other areas of federal law, where a four-factor test is utilized to carefully weigh the pros and cons of granting this extraordinary type of relief instead of money damages. The test requires the plaintiff to show (1) that it has suffered an irreparable injury; (2) that remedies available at law are inadequate to compensate for that injury; (3) that considering the balance of hardships between the plaintiff and defendant, a remedy in equity (such an injunction) is warranted; and (4) that the public interest would not be disserved by a permanent injunction.[5]

In the case of eBay v. MercExchange, this reinterpretation of patent law allowed eBay and its customers to continue using the “buy it now” feature of eBay’s online auction system, even though MercExchange owned a patent covering that functionality.

As a result of the Supreme Court’s holding that the same four-factor test also applies for injunctions against infringement of U.S. patents, the public interest is now a relevant consideration in whether a court would enjoin a patent infringer to altogether stop practicing the invention or instead hold that the infringer should just compensate the patent holder with money, rather as if it were a licensee of the patent.

The ACLU/PubPat lawyers justify their case by arguing that since a patent gives the patent holder the right to exclude all others from practicing the invention, members of the public are prevented from getting the test for BRCA mutations from anyone but Myriad. The lawyers argue that, in order for members of the public to have the option of getting a second opinion on whether their BRCA genes contain the mutations indicative of breast, ovarian, or prostate cancer, the patents must be deemed invalid.

Yet, since the day eBay v. MercExchange was decided, the public interest is a factor to be carefully weighed before a court grants a patent holder an injunction to prevent others from practicing an invention recited in a patent claim. If the goal is to ensure the availability of health care that includes widely available genetic tests, there is no need to challenge the patentability of molecules embodying isolated genetic sequences.  Instead, the same ends of enabling other entities to perform the BRCA gene tests could be achieved simply through licensing the patents to others.  And if as seems to be the case, the owners of the pertinent patents are unwilling to license them to others, the courts are now open to considering the public policy arguments that weigh in favor allowing others to pay monetary damages, equivalent in effect to licensing royalties, instead of enjoining others from performing the tests.

The Research Exception to Patent Infringement

Another assertion that the ACLU/PubPat lawyers make is that research that could lead to developments of cures for cancer resulting from mutations along the BRCA genes is stifled because the act of researching the genes would constitute infringement of the BRCA patent claims. However, U.S. patent law provides an exception to patent infringement for research and development efforts that could lead to such a cure. Title 35, section 271(e)(1) of the United States Code states, in pertinent part:

It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention … solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.

The Supreme Court visited this topic in the case of Merck KGaA v. Integra Lifesciences I, Ltd. and helped further define the metes and bounds of this statutory exception to patent infringement.[6] In that case, the Supreme Court said that (1) experimentation on drugs that are not ultimately the subject of an FDA submission or (2) use of patented compounds in experiments that are not ultimately submitted to the FDA can still fall within the protection of 35 U.S.C. §271(e)(1).[7]  In other words, if an entity, such as a research physician or hospital, is developing a drug that will cure or treat cancer caused by mutations along the BRCA genes, then it is reasonable to expect that entity will be submitting information about the drug to the FDA in the future. Correspondingly, the entity would be protected under 35 U.S.C. §271(e)(1) and free to use the isolated genetic sequences recited in the claims of the BRCA patents for research and experimentation.  According to Merck v. Integra Lifesciences, even if the experiments are not ultimately submitted to the FDA, perhaps because further testing revealed that the drug is ineffective, there is still no infringement.[8]

Accordingly, the ACLU/PubPat’s tearful assertion that research into treatments and cures for breast and ovarian cancer is inhibited by the BRCA patents has little merit.  Their tears are crocodile tears, unnecessarily shed but to gather support from lay people for their assault on the protections fostered by U.S. patent system.

The Claims in Question

 Perhaps the most glaring disconnect between the ACLU’s statements and reality is the nature of certain patent claims that the ACLU seek to invalidate. The ACLU argue that the patent claims in dispute fall outside the scope of statutory subject matter, defined in a 35 U.S.C. §101 as “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” The ACLU assert that the claims recite products of nature, a class that has been judicially recognized as falling outside the scope of statutory subject matter.[9]  A quick look at the challenged patent claims reveals that they are directed to isolated DNA sequences of BRCA. Isolation is a process that must be carried out by a person or machine. In other words, for an isolated sequence of BRCA to exist, there must be human intervention. As the Supreme Court said in Chakrabarty, “non-naturally occurring manufacture or composition of matter – a product of human ingenuity” is patent-eligible subject matter.[10] The claims in question, reproduced below, all recite “isolated” as a limitation, thereby excluding naturally occurring compositions of matter from their scope:
 

U.S. Patent 5,693,473

Claim 1: An isolated DNA comprising an altered BRCA1 DNA having at least one of the alterations set forth in Tables 12A, 14, 18 or 19 with the proviso that the alteration is not a deletion of four nucleotides corresponding to base numbers 4184-4187 in SEQ. ID. NO:1.

(b) a DNA having the nucleotide sequence set forth in SEQ ID NO:1 having an extra C at nucleotide position 5385;

U.S. Patent 5,747,282

Claim 1: An isolated DNA coding for a BRCA1 polypeptide, said polypeptide having the amino acid sequence set forth in SEQ ID NO:2.

Claim 2: The isolated DNA of claim 1, wherein said DNA has the nucleotide sequence set forth in SEQ ID NO:1.

(c) a DNA having the nucleotide sequence set forth in SEQ ID NO: 1 having G at nucleotide position 5443; and, (d) a DNA having the nucleotide sequence set forth in SEQ ID NO:1 having 11 base pairs at nucleotide positions 189-199 deleted.

Claim 5: An isolated DNA having at least 15 nucleotides of the DNA of claim 1.

Claim 6: An isolated DNA having at least 15 nucleotides of the DNA of claim 2.

Claim 7: An isolated DNA selected from the group consisting of:

(a) a DNA having the nucleotide sequence set forth in SEQ ID NO:1 having T at nucleotide position 4056;

U.S. Patent 5,837,492

Claim 1: An isolated DNA molecule coding for a BRCA2 polypeptide, said DNA molecule comprising a nucleic acid sequence encoding the amino acid sequence set forth in SEQ ID NO:2.

Claim 6: An isolated DNA molecule coding for a mutated form of the BRCA2 polypeptide set forth in SEQ ID NO:2, wherein said mutated form of the BRCA2 polypeptide is associated with susceptibility to cancer.

Claim 7: The isolated DNA molecule of claim 6, wherein the DNA molecule comprises a mutated nucleotide sequence set forth in SEQ ID NO:1.

The Bayh-Dole Act

As mentioned previously, the BRCA patents in dispute are owned in whole or in part by the University of Utah Research Foundation, with Myriad as a partial owner of one of them and a licensee of the remaining patents. In other words, even though the ACLU/PubPat lawyers portray Myriad Genetics as an evil corporation hoarding patents on naturally-occurring material, the reality is that the patents are by-and-large owned by the University of Utah, which is collecting fees from Myriad Genetics to practice the patents. The court complaint also briefly references the fact that the Trustees of the University of Pennsylvania have an ownership interest in two of the patents. To the lay person, it may seem odd that educational institutions, which on their face seem to support the free flow and sharing of knowledge, are actually building fences and toll-booths around the products of their research.

A patent portfolio can be a significant source of income for a university, biasing it towards a proprietary view of its research efforts instead of an open, socialistic approach. For example, the University of Utah Technology Commercialization Office reports that it received over $25 million in licensing income for 2008.[11] The MIT Technology Licensing Office states that granted 67 patent licenses and brought in $66.3 million in royalties in 2009.[12] In universities, the old model of 1) research, then 2) publish has been replaced by 1) research, 2) apply for patent, and then 3) publish. The argument for the new process is that the revenue generated from licensing the resulting patents is necessary to fund further research. This appears to be a valid argument and would probably be agreeable to most lay people. What most lay people might not find agreeable is that their tax dollars are actually being appropriated to these institutions to help fund their research, the fruits of which the institutions are obtaining exclusive rights to.

The Bayh-Dole Act, passed by Congress in 1980, the same year as the aforementioned Chakrabarty decision, allows the recipient of government funding for research and development to hold sole title to the patents for any resulting inventions.[13] In fact, the Bayh-Dole Act requires that an entity receiving government funds and obtaining title to any resulting inventions seek patent protection for and commercialize the inventions.[14] Naturally, a university that intends to keep pace with its competition is going to take advantage of the government funds for research, and correspondingly, comply with the provisions of the Bayh-Dole Act. The result is that universities build up patent portfolios based on subject matter they might have simply published, if they were operating under the pre-Bayh-Dole model of 1) research, then 2) publish. 

There are those who assert that the principles of the Bayh-Dole Act should be blunted when gene patents are involved.  On February 5, 2010, a federal advisory committee to the Secretary of Health and Human Services approved a draft report on Gene Patents and Licensing Practices and Their Impact on Patient Access to Genetic Tests.[15]  

To head off the position expected of the SACGHS report, a press conference was convened by the Biotechnology Industry Organization (“BIO”) on February 4^th.  There former U.S. Senator Birch Bayh said that the legislation he had co-sponsored with former Senator Bob Dole came at a time when the federal government owned all the inventions that came from federally-funded research and U.S. innovation was stagnating and investment in R&D was not growing.  He added that the Senate Judiciary Committee reported “that it could not find a single instance where the old policies had resulted in even one drug being developed when the government controlled the patent.  We found numerous potentially helpful medical discoveries simply languishing on laboratory shelves, benefiting no one.”

“The American taxpayers had invested $30 billion in research and had received no return on investment,” Bayh added, pointing out that there needs to be incentives to get people and companies to invest in such ideas. “This incentive would not exist unless the investor has a right to the patent in which he’s investing.”

“Collaboration fostered by the Bayh-Dole Act and fueled by massive amounts of private investment means that research is translated into tangible medicines, diagnostic tests, and other healthcare-related products that save lives, improve diagnoses, and alleviate suffering for millions of people worldwide,” added BIO President and former Congressman Jim Greenwood. Although the SACGHS report indicates that gene patents and licensing practices have not had an adverse impact on patient access to genetic tests, the committee is nevertheless making recommendations that “would undermine the U.S. patent system and the Bayh-Dole technology transfer system that have served our nation so well,” he said.

SACGHS task force member Brian Stanton, Ph.D., a former biotechnology expert at the PTO and former director of the Division of Policy at the National Institutes of Health’s Office of Technology Transfer, said the report shows “no evidence of harm, and yet it still calls for changes.” One proposal under consideration has been exempt infringers of gene patents from liability. Acknowledging that the Task Force on Gene Patents and Licensing had identified isolated instances of harm that need to be addressed, it also determined that “the court systems and the systems of checks and balances that are built into the fabric of the patent system were more than capable of addressing problems on a case-by-case basis.” He pointed out that the SACGHS report includes a letter of dissent from the only three members of the full committee who have direct experience in business and law with respect to intellectual property and private sector development of products and services.

Conclusion

The ACLU/PubPat lawsuit exemplifies an oversimplified and ultimately incorrect view of the underlying facts and law. Their grandstanding threatens to sway public opinion in a direction that would reverse the advances fostered since 1980 by the U.S. patent system. It is of utmost importance that the defendants and the patent bar in general correct the ACLU/PubPat’s misrepresentations and reverse the damage that the ACLU has caused and prevent any further damage.  Evidence of such damage due to misguided public opinion is in the SACGHS recommendations approved on February 5^th.  It is to be hoped that HHS Secretary Kathleen Sebelius will take them with a grain of salt.

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^†  Attorneys with Elman Technology Law, P.C.  Opinions expressed herein should not be attributed to anyone else.  However, the authors wish to thank Geoffrey Karny for his thoughtful discussions on the subject of this article.

[1] Association for Molecular Pathology, et al. v. United States Patent and Trademark Office, et al., 1:2009cv04515, S.D.N.Y., May 12, 2009.  The plaintiffs are: Association For Molecular Pathology, American College of Medical Genetics, American Society for Clinical Pathology, College of American Pathologists, Breast Cancer Action, Boston Women’s Health Book Collective and certain gene researchers and individuals potentially affected by breast cancer. The named defendants are: United States Patent and Trademark Office (“USPTO”), Myriad Genetics, and the directors of the University of Utah Research Foundation.

[2] Diamond v. Chakrabarty, 447 U.S. 303 (1980).

[3] eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006). 

[4] 35 U.S.C. §§ 261, 154(a)(1).

[5] 547 U.S. 388, 391 (2006).

[6] Merck KGaA v. Integra Lifesciences I, Ltd, 545 U.S. 193 (2005).

[7] Id. at 206.

[8] Id.

[9] Diamond v. Chakrabarty, 447 U.S. 303 (1980).

[10] Id. at 309.

[11] http://www.tco.utah.edu/metrics.html

[12] http://web.mit.edu/tlo/www/about/office_statistics.html

[13] 35 U.S.C. §§200-212; 37 C.F.R. §401

[14] 35 U.S.C. §§202(c)(3),(5).

[15] Secretary’s Advisory Committee on Genetics, Health, and Society, Twenty-first Meeting, February 4-5, 2010, Washington, D.C.

In a packed courtroom in New York City, a federal judge hears arguments about gene patents for BRCA

By Scott Rylan Powell and Gerry J. Elman

On February 2, 2010, Judge Robert M. Sweet at the U.S. District Court in Manhattan heard oral arguments in the case of Association for Molecular Pathology, et al. v. United States Patent and Trademark Office, et al.[1] The courthouse was swarmed by concerned citizens and reporters, in response to the American Civil Liberties Union’s mass mailings about the case and free screenings of “In The Family,” a documentary film on breast cancer that the ACLU has used as a platform to garner public support for this lawsuit.  

The oral arguments heard by Judge Sweet were for (i) the ACLU’s motion for summary judgment that the claims in seven U.S. patents[2] are invalid under 35 U.S.C. § 101 and in violation of Article I, Section 8, Clause 8 (the “IP clause”) of the U.S. Constitution, as well as the First Amendment; (ii) Myriad Genetics’ (“Myriad”s) countermotion for summary judgment in its favor; and (iii) the U.S. Patent and Trademark Office’s (“USPTO”s) motion to dismiss the Constitutional claims directed against it.  The humanities-oriented lawyers of the ACLU and counsel for the science-oriented defendants vehemently supported their differing positions on the meaning, scope, and implications of the patent claims in question.  The process seemed to embody C.P. Snow’s famous theory of The Two Cultures, on the communications breakdown between the humanities and sciences.[3]

 Chris Hansen, an ACLU lawyer, opened with assertions that the “isolated DNA” recited in certain of the patent claims in question is not markedly different from DNA as it exists in the body and accordingly is simply a “product of nature.” Quoting the U.S. Supreme Court in the 1948 case of Funk Brothers Seed Co. v. Kalo Inoculant Co., Hansen said that a patent cannot be granted for “one of the an ancient secrets of nature now disclosed.[4]” Hansen analogized isolated DNA to gold extracted from a mine and emphasized that while counsel for Myriad has argued that isolation of DNA is a complex process, the end result is still a DNA sequence made not by man, but by nature.

Apparently borrowing from copyright law, Chris Hansen averred that patents are not awarded for effort. This principle of copyright law is rooted in Feist Publications, Inc v. Rural Telephone Service Co., Inc., in which the U.S. Supreme Court held that information compiled in a telephone directory does not constitute copyright-protectable creative expression.[5]

Hansen argued that the method claims of the patents violate the First Amendment because they appear to cover the mere act of looking at one sequence of letters and another sequence of letters and thinking about or saying whether they appear to be the same. This, Hansen said, stifles the sharing of information between researchers who, without this obstacle, would be able to build upon existing research and potentially develop cures or treatments for BRCA1 and BRCA2-related cancer. Under this reasoning, the patents do not “Promote the Progress of Science and the useful Arts” under the Intellectual Property Clause of the U.S. Constitution.[6]

Sandra Park, also with the ACLU, discussed Diamond v. Chakrabarty, wherein the U.S. Supreme Court held in 1980 that claims to a genetically engineered bacterium capable of breaking down oil recited subject matter eligible for patent protection.[7]  She also briefly summarized the aforementioned Funk Brothers  v. Kalo case in which the U.S. Supreme Court held that claims to mixtures of naturally occurring bacteria that could extract nitrogen from the air were products of nature, and thus not patent-eligible under section 101 of the patent law.[8] Additionally, she mentioned American Fruit Growers v. Brogdex in which the U.S. Supreme Court held in 1931 that claims to fruit with a skin or rind that contains mold-resistant borax does not qualify as an “article of manufacture” under section 101.[9] Park said that these cases clearly show that section 101 is satisfied only when the claimed subject matter has useful properties that it did not have in its natural form. Park echoed Hansen’s assertions as to the purported insignificance of a DNA sequence being “isolated” and argued that the venerable Judge Learned Hand was wrong in concluding in the 1911 case of Parke-Davis & Co. v. H.K. Mulford Co. that isolated and purified adrenaline is patent-eligible subject matter in light of its commercial utility.[10] To buttress this position, Park said that Chakrabarty, Funk Brothers, and American Fruit Growers impliedly overruled the Parke-Davis case.

In arguing against the validity of the method claims in the patents in suit, Park cited the recent case of In re Bilski, wherein the Court of Appeals for the Federal Circuit (“CAFC”) held that a claimed process is patentable if “(1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.”[11] Park asserted that neither prong of the test is met by the method claims in the disputed patents, because no particular machine is recited and because comparing one DNA sequence to another does not involve a transformation of an article into a different state or thing. Park sought to distinguish the claims at issue from those in Prometheus Laboratories v. Mayo, where the CAFC recently held that method claims for measuring the level of a drug in a blood sample involved a transformation under the “machine or transformation” test of the Bilski case.  Park said that in Prometheus, the claims included a first step of administering a drug to a subject, which induced a chemical transformation that is necessary for subsequently determining the level of the drug in a blood sample taken from the subject and that, by contrast, no transformative step is necessary for comparing one DNA sequence to another.[12]

Brian Poissant, counsel for Myriad Genetics, took the podium and began by noting that history has a tendency to repeat itself. He elaborated, saying that the same level of controversy and media attention around this case also occurred 30 years ago when the Supreme Court considered the Chakrabarty case.  Poissant said that then, as now, some members of the public proclaimed that a “gruesome parade of horribles” would result if the Court were to decide that claims involving genetic technology could be patented. He added that the Court in 1980 wisely deferred these public policy issues to Congress, urging that Judge Sweet interpret the claims in question in light of the law as written.

Poissant invoked the language of section 101 of the patent law, directing the court’s attention to two of the four categories of patentable-eligible subject matter: processes and compositions of matter, and to the qualifier that they be “new and useful.”  Focusing on “new,” Poissant said that the isolated nucleic acids recited in the patent claims to compositions of matter simply do not exist in nature. And an “isolated” polynucleotide having a particular sequence that’s “useful” takes a lot of work to come up with. A critical portion of the cell’s undifferentiated DNA must be identified by the scientist. Such isolated nucleic acids are useful because they can be used as probes that find and attach to complementary sequences in a subject’s DNA, such as in diagnostic tests. The claimed nucleic acids may also potentially be used for gene therapy.

Poissant cast doubt on the ACLU’s contention that Parke-Davis was impliedly overruled by later case law and added that the patent-eligibility of isolated DNA sequences has long been recognized in the law and in the USPTO’s rules and procedures. Poissant also urged the court to take the approach of the Supreme Court in J.E.M. Ag Supply v. Pioneer Hi-Bred and look to whether Congress has passed legislation that renders subject matter patent-ineligible when it otherwise appears to be patent-eligible.[13] Now, as then, Poissant said, such legislation is absent.

Poissant also argued that many of the cases that the ACLU relies on are off-topic. He said that Funk Brothers dealt with anticipation under section 102, not patent-eligible subject matter under section 101.  He also noted that American Food Growers was about whether the claimed subject matter was an “article of manufacture,” not involving either a process or a composition of matter, as here.

Applying the “machine or transformation test” for method claims stated in the Bilski decision of the CAFC, Poissant asserted that, as in the Prometheus case, the method claims of the patents at issue do involve a “transformation.” Elaborating on this, Poissant said that cells are taken from the body and are opened up, probes having the recited BRCA sequences are introduced, the probes traverse the DNA from the cell and, if the DNA from the cell contains a sequence complementary to a probe, the probe attaches to the complement.  Poissant said that the claims are not about intangible information, but about physical molecules.  He added that thinking or talking about the DNA sequences are not precluded by the patents, despite what the ACLU would have the court believe.

Counsel for the USPTO, Ross Morrison, spoke briefly to state that under the Doctrine of Constitutional Avoidance[14], the court should decide the case on the basis of the ACLU’s Constitutional arguments only if it first finds that the patent claims are valid under section 101 of the patent statute. Morrison then said that the applicable test for a Constitutional challenge is whether Congress had a rational basis for establishing the patent system and that the rational basis was clearly to “Promote the Progress of Science and the useful Arts” as stated in the IP Clause of the Constitution.

In response to the First Amendment claim made by the ACLU, Morrison said that the patent system promotes the sharing of information under the “written description and enablement” requirements of section 112 of the patent law.  Furthermore, when the first Patent Act was being passed by Congress in 1790, the First Amendment to the Constitution was in the process of being ratified, so that Congress at the time would have taken into consideration the interplay between the two.

Judge Sweet said that he wouldn’t issue his decision immediately, noting that the importance and complexity of the subject matter justifies careful deliberation.

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This is an annotated version of our article in the March 1, 2010 issue of GEN, Genetic Engineering & Biotechnology News.

[1] Association for Molecular Pathology, et al. v. United States Patent and Trademark Office, et al., 1:2009cv04515, S.D.N.Y., May 12, 2009.  The plaintiffs are: Association For Molecular Pathology, American College of Medical Genetics, American Society for Clinical Pathology, College of American Pathologists, Breast Cancer Action, Boston Women’s Health Book Collective and certain gene researchers and individuals potentially affected by breast cancer.   The lawyers for plaintiffs are with the American Civil Liberties Union (ACLU) and the Public Patent Foundation. The named defendants are: United States Patent and Trademark Office (“USPTO”), Myriad Genetics, and the directors of the University of Utah Research Foundation.

[2] U.S. Patents 5,747,282; 5,693,473; 5,709,999; 5,710,001; 5,753,441; 5,837,492; and 6,033,857, owned by Myriad Genetics or licensed to Myriad by the University of Utah Research Foundation or other universities.

[3] See http://en.wikipedia.org/wiki/The_Two_Cultures.

[4] Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 132 (1948).

[5] Feist Publications, Inc., v. Rural Telephone Service Co., Inc., 499 U.S. 340 (1991).

[6] U.S. Const., Article I, sec. 8, cl. 8.

[7] Diamond v. Chakrabarty, 447 U.S. 303 (1980).

[8] Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948); 35 U.S.C. § 101.

[9] American Fruit Growers v. Brogdex Co., 283 U.S. 1 (1931).

[10] Parke-Davis & Co. v. H.K. Mulford Co., 189 F. 95 (S.D.N.Y. 1911).

[11] In re Bilski, 545 F.3d 943, 954 (Fed. Cir. 2008).  This case is currently on appeal to the Supreme Court, having been argued there November 9, 2009.

[12] Prometheus Laboratories, Inc. v. Mayo Collaborative Services, 581 F.3d 1336 (Fed. Cir. 2009).

[13] J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred Int’l, Inc., 534 U.S. 124 (2001).

[14] See Ashwander v. Tennessee Valley Authority, 297 U.S. 288, concurring opinion of Brandeis, J. at 346-56 (1936).

The United States Patent and Trademark Office (“USPTO”) has just published the first issue of Inventors Eye, a new electronic publication for and about America’s independent and small entity inventor community.

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The CAFC opinion Wyeth v. Kappos has provided a revised method for calculating Patent Term Adjustment (“PTA”) under 35 U.S.C. § 154(b). Patents issued from Tuesday August 4, 2009, through Tuesday February 23, 2010, will be reviewed by the  U.S. Patent and Trademark Office for PTA recalculation, but only if a request to recalculate the patent term adjustment is timely made, by filing a PTO/SB/131 form within 180 days from the date the patent issued. This new form is provided at the USPTO’s web site, here.  The USPTO’s response will be limited to a recalculation in accordance with the holding in the Wyeth case, at no charge to the patentee.    

 It is important to note the date the patent issued.  If the 180-day deadline is missed, the USPTO will not change the record.  However, perhaps a formal declaration of the proper Patent Term Adjustment might be achieved through judicial or legislative means.

 Wyeth v. Kappos, – F.3d. – , 2010 WL 27184 (No. 2009-1120) (Federal Circuit  January 7, 2010)

by Jerome R. Smith, Jr. and Gerry J. Elman

The U.S. Court of Appeals for the Federal Circuit (“CAFC”) opinion Wyeth v. Kappos, – F.3d. – , 2010 WL 27184 (No. 2009-1120) (Fed. Cir. 2010) has provided guidance for calculating patent term adjustments arising under 35 U.S.C. § 154(b).  In a patentee-favorable opinion, affirming the U.S. Federal District Court order in Wyeth v. Dudas, 580 F.Supp. 2d 138 (D. D.C. 2008), the CAFC  interpreted “overlap” between “periods of delay” under 35 U.S.C. § 154(b)(2)(A).  Applying these interpretations, the Court recalculated the patentee’s patent term adjustment (“PTA”), resulting in a patent term greater than what had been originally determined by the United States Patent and Trademark Office (“USPTO”). 

The recalculated patent term accounted for the overlap between the “periods of delay” which occurred during the application’s pendency.  The analysis used to determine the recalculated patent term is now the basis for calculating patent term adjustments.

 Patent term adjustments originated in the American Inventor’s Protection Act of 1999 (Public Law 106-113) (“the Act”). As summarized by the CAFC:

The Act promised patent applicants a full patent term adjustment for any delay during prosecution caused by the USPTO. This promise took the form of three distinct “guarantees” in 35 U.S.C. § 154(b)(1):

 (A) Guarantee of prompt Patent and Trademark Office responses.–Subject to the limitations under paragraph (2), if the issue of an original patent is delayed due to the failure of the Patent and Trademark Office to [meet deadlines specified in clauses (i)-(iv)] . . . the term of the patent shall be extended 1 day for each day after the end of the period specified in clause (i), (ii), (iii), or (iv), as the case may be, until the action described in such clause is taken.

 (B) Guarantee of no more than 3-year application pendency.–Subject to the limitations under paragraph (2), if the issue of an original patent is delayed due to the failure of the United States Patent and Trademark Office to issue a patent within 3 years after the actual filing date of the application in the United States . . . the term of the patent shall be extended 1 day for each day after the end of that 3-year period until the patent is issued.

 (C) Guarantee or adjustments for delays due to interferences, secrecy orders, and appeals.–Subject to the limitations under paragraph (2) . . the term of the patent shall be extended 1 day for each day of the pendency of the proceeding, order, or review, as the case may be.

 In both the lower court and on appeal, the USPTO contended that patent term adjustments in accordance with 35 U.S.C. § 154(b), were based on the longer of periods of delay i) caused by the USPTO’s failure to meet administrative deadlines during the pendency period, known as “A” delay, as defined in 35 U.S.C. § 154(b)(1)(A), or ii) the delay resulting from longer than a three year pendency, known as “B” delay, as defined in 35 U.S.C. § 1.54(b)(1)(B), but not both “A” and “B” delay.  Moreover, the “B” period began on the filing date and ended at the issue date, but was limited to a three-year maximum. The lower court explained that the USPTO’s rationale for this interpretation of the 35 U.S.C. § 154(b)(2)(A) was to prevent double counting of “periods of delay,” whereby the patentee would receive a windfall of an unintended patent term adjustment. 

 Wyeth asserted that the patent term adjustment included both “A” and “B” delay periods.  These periods overlapped only if they occurred on the same calendar day and the “B” delay period began three years after the application’s filing date.  The “overlap” days would be subtracted from the total number of days of “A” and “B” delay.  Wyeth’s position is shown diagrammatically in Example 1 below.      

 The CAFC agreed with Wyeth, finding that the USPTO misconstrued application of “overlap” of “periods of delay”of  35 U.S.C. § 154(b)(2)(A).  The Court held that overlap between delay periods and the designated delay period for a three year application pendency, began three years after the application’s filing date and had to occur on the same calendar days.  With this interpretation of “overlap,” the CAFC recalculated the patentee’s patent term adjustment, resulting in a patent term adjustment greater than that granted by the USPTO.  The CAFC’s recalculation is now the basis for calculating patent term adjustments, which should be performed as follows:

 PTA = A Delay  + B Delay + C Delay – (Overlap between any or all of A, B, and C Delays) – (Applicant-Initiated Delay)

with “B” delay beginning three years after the filing date.

The court initially classified the “periods of delay” for patent term adjustment as “A,” “B,” and “C” delays.  These delays correspond to the periods prescribed by statute in 35 U.S.C. § 154(b)(1), paragraphs (A), (B) and (C), respectively, that were summarized above. 

The “A” delay was designed for the USPTO to meet examination deadlines.  Such “A” delays occurred:  i) fourteen months after the filing date should an office action on the merits or a notice of allowance not have issued, ii) four months after the applicant submitted a reply to an office action or an appeal was filed, iii)  four months after a decision by the USPTO Board of Appeals and Interferences or a Federal Court in a case in which allowable claims remain in the application, and, iv) four months after the date on which the issue fee for the application was paid, provided the applicant has satisfied all outstanding issuance requirements.

The “B” delay is based on a three-year pendency.  It occurs when the “USPTO fails to issue a patent three years after the actual filing date of the application in the United States.”  This three-year period is the difference in the pre-1994 patent term being seventeen years from the date the patent issued, and the current patent term of twenty years from the date the patent application was filed.  Accordingly, the “B” delay “runs from the three-year mark after the application’s filing date until the patent application issues.”

 “C” delays result from interferences, secrecy orders, and appeals.  Their calculation is similar to that for the “A” and “B” delays, but were not addressed in this opinion, as they were not present. 

 All of the aforementioned delays are subject to limitations, where days of patent term may be lost.  35 U.S.C. § 154(b)(2).  These limitations include periods attributable to the applicant’s own delay, and overlap between the “A,” “B,” and “C” delay periods.  Periods attributable to the applicant’s own delay include the applicant’s response time beyond three months after a notice was mailed from the USPTO making any “rejection, objection, argument, or other request.”  Overlap can occur only if the days of the “A” and “B” delay (and “C” delay if there is “C” delay) are the same calendar day.  The court also noted that before the three-year mark, there can not be overlap between the “A” and “B” delay, since the “B” has not begun.      

 While not specifically addressed in the opinion, it appears well within the statute that appeals, interferences, and requests for continued examination (“RCEs”) would also stop the “B” delay until the issue fee is paid.   However, it is an open question as to whether there would be additional “A” delay should there be more than four months between payment of the issue fee and the issue date, resulting from the appeal, interference or RCE (and the applicant has satisfied all outstanding issuance requirements).  This further “A” delay is based on the fact that once the issue fee has been paid, the USPTO regains control of the application, and the USPTO’s processing from the issue fee payment date is outside of the applicant’s control.  This additional “A” delay is presently being asserted in, The General Hospital Corporation v. Dudas, Case 1:09-cv-00109-RMU, filed January 16, 2009 (D. D.C.).

 Another issue with the “B” delay calculations involves determining the “actual filing date” of applications based on international applications, for example, a national stage filing under 35 U.S.C. § 371 from a Patent Cooperation Treaty (PCT) application or other direct U.S. national filing.  The three-year “B” delay calculations are based on the “actual filing date.”  However, since the USPTO issued the PTO/SB/131 form, the “actual filing date” is either:  i) the 35 U.S.C. § 371(b) 30-month date from the priority date, or ii)  the 35 U.S.C. § 371(f) date, where the applicant files an express request for processing requirements, prior to the aforementioned 30-month date, provided that applicant has fulfilled the requirements of 35 U.S.C. § 371(c) to qualify for the requisite filing date. 

In summary, “A” and “B” delays should be calculated from a single filing date, which is the § 371(b) or (f) date, if the application is based on an International application, depending on its date of U.S. National Phase entry, and all § 371(c) requirements having been fulfilled.  If there is overlap between the “A,” “B,” and “C” delays, the overlapping days should be subtracted from the patent term adjustment.  Finally, note that “A” delay based on USPTO issue processing, after an appeal, interference, or RCE, should be included in the term adjustment.

Two examples, each with an accompanying time-line diagram and calculation, are listed below to show patent term adjustment calculations we believe to be in accordance with the CAFC’s opinion.

Example 1

The first example was provided by Wyeth in Wyeth v. Dudas, 580 F.Supp. 2d 138 (D. D.C. 2008), the lower court decision of this case. This example is as follows:

A patent application is filed on 1/1/2002. The patent issues on 1/1/2008, six years later. In that six-year period are two “A” periods, each one year long: (1) the 14-month deadline for first office action is 3/1/2003, but the first office action does not occur until 3/1/2004, one year late; (2) the 4-month deadline for patent issuance after payment of the issuance fee is 1/1/2007, but the patent does not issue until 1/1/2008, another year of delay attributable to the USPTO.  The “B” period begins running on 1/1/2005, three years after the patent application was filed, and ends three years later, with the issuance of the patent on 1/1/2008. In this example, then, the first “A” period does not overlap the “B” period, because it occurs in 2003-04, not in 2005-07. The second “A” period, which covers 365 of the same days covered by the “B” period, does overlap.

Accordingly, the patentee is entitled to four years of adjustment (one year of “A” period delay + three years of “B” period delay), or 366 days (A₁) (2004 was a leap year) + A₂ (365 days) + 1055 days (B) – 365 days (O _A-B) = 1421 days.  The time line and calculation is as follows:

  

Example 2

A patent application is filed on 1/15/2004.  The patent issues on 12/30/2009.  The first office action is not mailed until 3/15/2007, two years after the 14 month “A” date of 3/15/2005.  The applicant files his response to this first office action on 7/20/2007, resulting in 35 days of applicant-initiated delay (AID), as the applicant’s response was due without delay on 6/15/2007.  The USPTO issues a final office action on 12/20/2007, causing another “A” delay of one month, as the final office action was due from the USPTO on 11/20/2007, a four-month statutory date.  The applicant files an RCE on 3/15/2008.  The USPTO issues a Notice of Allowance 4/30/2009.  The issue fee is paid 5/30/2009, and the patent issues on 12/30/2009, three months past the “A” date of 9/30/2009 (four months issuance processing after the issue fee was paid).  The “B” period begins on 1/15/2007, the three year mark past the filing date, but stops on 3/15/2008 with the RCE filing.

 There is “A” delay of 730 days (14 months from the filing date to 3/15/2007) plus 30 days (USPTO delay in responding to office action response from 11/20/2007 to 12/20/2007) plus 91 days (USPTO delay in Issuance from 9/30/2009 to 12/20/2009).  There is “B” delay of 425 days (from the three year mark 1/15/2007 to 3/15/2008 including one day for the leap year of 2008).  There are “A-B” delay overlap periods of i) 59 days (the three year mark 1/15/2007 to 3/15/2007, the mailing date of the first office action), and ii) 61 days (“A” delay for the PTO’s failure to issue the final office by the four month date of 10/20/2007).  There is an applicant-initiated delay (AID) of 35 days (response to first office action was due 6/15/2007 but was made on 7/20/2007).  Accordingly, the patent term adjustment is 730 + 30 + 91 + 425 – 59 – 30 – 35 = 1152 days.     The time line and calculation is as follows.

 

 

 

 

 

 

  

As a result of Wyeth v. Kappos, many patentees will be entitled to recalculated patent term adjustments, which may add significant term.  Accordingly, such adjustments should not be overlooked.  Patentees of newly issued patents less than 180 days old and of any patents issued from today (February 2) through February 23, 2010, may file a Request for Recalculation of Patent Term Adjustment in View of Wyeth, form PTO/SB/131, in the USPTO.

The USPTO says that its computers will be reprogrammed by March 2, 2010, to calculate PTA in accordance with the Wyeth decision for patents issuing thereafter, so that it shouldn’t be necessary to use the form PTO/SB/131 after the end of February 2010.

Other remedies available to dissatisfied patentees to correct patent term adjustment include petitioning the USPTO:  i) before the issue fee is paid, or ii) not more than two months after the patent issues, as per 37 C.F.R. §§ 1.705(b) and (d).  Should either of the aforementioned dates be missed, the patentee could appeal the adjusted patent term by filing a civil action against the Director of the USPTO in the Federal District Court for the District of Columbia, but must file it no later than 180 days after the patent is granted (the issue date).  35 U.S.C. § 154(b)(4)(A).

The USPTO has so far been silent as to the effect of Wyeth v. Kappos on patents issued more than 180 days ago regardless of whether the patentee had petitioned the USPTO to recalculate the PTA pursuant to 37 C.F.R. §§ 1.705(b) and (d).   It’s likely that some of those patentees will find it appropriate to seek judicial or legislative redress for the perceived inequity, now that the CAFC has determined that the formula that the USPTO has been using for years  for calculating PTA doesn’t fulfill the “promises” that Congress wrote into the law enacted in 1999 and expressly made applicable to patents arising from applications filed from May 29, 2000 on.

 

We’re proud to announce that patent attorney Jerome R. Smith, Jr. has joined us at Elman Technology Law. Read his biosketch here.