Patent-eligible subject matter – the path to clarity and consistency requires legislative action
In the United States, the statutory requirements that determine whether an invention is patentable are codified in Chapter 35 of the United States Code (35 USC Sections 101, 102, 103 and 112). In order for inventions to be patented, the statutory language requires them to be drawn to useful processes, machines, articles of manufacture or compositions of matter (35 USC Section 101), both novel (35 USC Section 102) and non-obvious (35 USC Section 103) in view of the state of the art, and described by the patent specification in enough detail so that others can understand what is being claimed and how to make and use the claimed invention (35 USC Section 112). Over time, the United States Patent and Trademark Office (USPTO) and the judicial system have attempted to define the meaning and practical contours of each of the statutory sections so that patent applicants can pursue inventions with a certain level of predictability. In the past decade the judicial system, including the Supreme Court, has focused in particular on the metes and bounds of subject-matter eligibility under 35 USC Section 101. The resulting case law has clouded the predictability of obtaining patents for many technologies, including the life sciences, and has undermined the validity of some granted patents drawn to subject matter that had not been previously contemplated as being ineligible under the statute. While the USPTO has published practical examination guidance documents that attempt to provide a consistent and predictable patenting framework for patent examiners and applicants within the boundaries of the developing case law, the USPTO’s guidance does not have the force of law. This has created substantial uncertainty regarding what constitutes patent-eligible subject matter and casts doubt on the validity of issued patents with claims that have been relied on to enforce the patent owner’s rights against accused potential infringers.
Patent eligibility under 35 USC Section 101
The foundations of patent protection in the United States can be traced back to Article I, Section 8 of the US Constitution which states that “the Congress shall have Power… To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries”. The first patent laws were enacted with the Patent Act 1790 and intended to grant patents for discoveries and improvements in the ‘useful arts’. This standard of patent eligibility, codified in 35 USC Section101, remained the law for more than 150 years, until 1952 when Congress clarified that patents are available to anyone who “invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof”. This amendment to the statute was made in part to change the perceived hostility to patents emerging from the judicial branch, and particularly to the types of invention that were eligible for patenting. In passing the law, Congress indicated a clear intent for patent eligibility under Section 101 to be construed broadly, setting a relatively low barrier to the types of invention and discoveries that could be considered eligible. However, under a ‘four-corners’ reading of the statue, Congress provided only unambiguous protection for processes, machines, manufactures or compositions of matter or improvements thereto. This language provided the basis and opportunity for some to advance an argument that if an invention did not fit neatly into one of these specific categories, its eligibility for patenting could be called into question. Over time, courts developed and maintained a line of cases that established that abstract ideas, laws of nature, mathematical algorithms and natural physical phenomena were not eligible for patenting unless they were practically applied in the form of a new article or process. The practical effect of these judicially created exceptions was to narrow the breadth of the statute that Congress constructed around patent-eligible subject matter. The reasoning behind many of these decisions was based on an overly broad scope of a patent claim that effectively pre-empted any and all practical applications of the underlying exception (eg, law of nature or physical phenomenon). These early decisions that established exceptions regarding patent-eligible subject matter provided the basis for the recent cases that have created nearly 10 years of uncertainty in the law concerning the types of claim that are eligible for patenting.
Expansion of ineligible subject matter
In 1980 the Supreme Court issued a landmark opinion that established the prevailing attitude towards subject-matter eligibility, especially in the life sciences, until about 2010. The case, Diamond v Chakrabarty, related to an invention regarding to recombinant microorganisms that could break down crude oil, covering aspects of microbiology and recombinant genetics. The Supreme Court concluded that Congress intended that “anything under the sun that is made by man” was eligible for patenting. The opinion set the table for 30 years of significant patenting activity in the emergent life sciences technologies of that time, particularly in biotechnology and diagnostics. Over time, however, developing case law and the USPTO modified the minimum thresholds needed to meet the statutory requirements for patentability. Arguably, the most drastic and notable change was to subject-matter eligibility as articulated in the Supreme Court’s Chakrabarty decision.
One significant marker of the schism in the Supreme Court’s view of subject-matter eligibility in Chakrabarty can be traced to the court’s 2010 decision in Bilski v Kappos. While the invention in that case did not relate to the life sciences (the claims were drawn to a method of hedging investment risk that the court ultimately held to be “an unpatentable abstract idea”), the court’s expanding view of patent ineligibility in that case continued to balloon into other technologies, including life sciences.
The first Supreme Court life sciences case following Bilski that addressed the question of subject-matter eligibility was decided in 2012 in Mayo v Prometheus. In that case, the court reviewed claims directed to a method of determining an optimised dosing schedule for a drug that adjusted the dosage administered to the patient based on measuring the amount of the drug that the patient can metabolise. In holding the underlying patent claims to be ineligible, the court reasoned that because the claimed diagnostic method merely identified a natural phenomenon (drug metabolite) and correlated that phenomenon to a disease state, it essentially referred only to the excepted phenomenon. The court also expressed concern that patent claims should not be able to pre-empt purely mental activity (eg, a medical doctor thinking about a test result).
One year after Mayo, the Supreme Court continued to expand the scope of exceptions to patent eligibility when it heard the widely publicised case relating to so-called ‘gene patents’, Association for Molecular Pathology v Myriad. Some of the significance of that decision related to the expansion of judicially excepted subject matter to compositions of matter, as the court held that patent claims directed to isolated portions of nucleic acid sequences that could be found in nature were not patent eligible. This decision departed substantially from the view that the USPTO had taken with regard to the patent eligibility of isolated nucleic acid sequences as, at the time of the decision, an estimated 2,000 human genes had been patented as isolated nucleic acid sequences. Both the Mayo and Myriad decisions included language and analysis that commingled the statutory requirements of subject-matter eligibility with novelty and non-obviousness, rather than maintaining a clear demarcation between them. Both decisions also failed to provide any useful test that could be used to analyse the eligibility of diagnostic methods or natural products in a predictable way. As a result, these decisions have increased the difficulty in obtaining patent rights to inventions in the fields of diagnostics, personalised medicine, automated methods of selecting a treatment for patients, isolated nucleic acids and proteins, natural products and formulations, cell lines and genetic mapping.
The final cornerstone of the foundation on which the Supreme Court would construct its current view of subject-matter eligibility was provided by its decision in Alice Corp v CLS Bank International, where the court held that claims to a computer-implemented method of handling a financial transaction were ineligible because the underlying method was characterised to be an abstract idea. Merely implementing that abstract idea on a computer was insufficient to transform it to something that was patent eligible. Despite this case marking the fourth occasion in a four-year period that the court had addressed the issue of subject-matter eligibility it did not attempt to provide any usable definitions or guidance regarding what, in the court’s view, marked the boundary between ineligible ideas and eligible applications of ideas. Instead, the court chose to delegate the substantial task of developing a usable framework for the analysis of subject-matter eligibility to the lower courts and the USPTO.
USPTO examination guidance and the need for legislative action
Following each Supreme Court decision, the USPTO has published guidance documents and training materials that describe its approach in examining applications for subject-matter eligibility. The USPTO revises, refines and adds to its guidance with each precedential decision that adds additional nuance to the analysis of subject-matter eligibility. Admirably, the USPTO has created and published more than 40 hypothetical examples that are based on case law and illustrate how the USPTO intends to apply the analysis in subject matter-specific circumstances. Current life sciences examples illustrate nature-based products and compositions, vaccines, diagnosing and treating disease, isolated natural compounds and mixtures, and genetic screening. While these materials and training programmes attempt to provide clarity and consistency to the ways in which USPTO personnel evaluate subject-matter eligibility, the practical reality is that there continues to be (and will likely always be) inconsistency and uncertainty in the analysis. Further, the USPTO materials are merely guidelines and do not have the same force and effect as case law. As such, the guidance and analytical framework that the USPTO uses to assess subject-matter eligibility could be rendered moot by a precedential case that articulates a different analytical framework. It has become increasingly accepted that legislative action may present a better and more direct solutions to resolve the unpredictability for stakeholders.
Several professional IP associations have proposed legislative changes to Section 101 in an effort to clarify the law and provide more predictable outcomes to the patent process. Specifically, proposals have been advanced by the American Bar Association Section of Intellectual Property Law (ABA-IPL), the Intellectual Property Owners Association (IPO) and the American Intellectual Property Law Association (AIPLA).
The IPO and AIPLA developed a joint proposal to amend 35 USC Section 101 to include new sections that define ‘sole exceptions to subject-matter eligibility’ and a ‘sole eligibility standard’. The sole exception section states two clear ‘if and only if’ conditions that define ineligible inventions as those which exist in nature independently of and prior to any human activity, and those performed solely in the human mind. The sole eligibility section attempts to isolate the eligibility enquiry from any of the other statutory requirements for patentability and seeks to prohibit any requirement that the invention contains an ‘inventive concept’ in order to be eligible. These sections seem to provide a well-defined framework on which to assess subject-matter eligibility and represent a clear departure from the current opaque enquiries that have been used in the eligibility determination since the Mayo and Myriad Supreme Court decisions.
The ABA-IPL approach would impose a ‘scope of protection’ exception that would enumerate and codify the relatively well-settled judicial exceptions to eligibility. Specifically, under this approach a “claim for a useful process, machine, manufacture, or composition of matter, or any useful improvement thereof, may be denied eligibility under this section 101 on the ground that the scope of the exclusive rights under such a claim would preempt the use by others of all practical applications of a law of nature, natural phenomenon, or abstract idea”. This language is permissive in its prospective denial of eligibility, presumably with an intention to deny eligibility only in instances where the scope of a patent attempts to pre-empt all applications of the law of nature, natural phenomenon or abstract idea in which the invention is grounded.
While legislation would provide the most conclusive and clear path towards revising the law concerning subject-matter eligibility, the lack of bipartisan cooperation in Congress and the relative importance of other issues suggests that any substantial change is unlikely to be made in the near future. It may be that analyses of the impact that the change in the law has had on the economic and social health of certain life sciences technologies will prioritise this issue with Congress.