Chapter 10 - The Limits of Biotechnology Inventions in Patent Eligibility

    26/10/2018

    Over the last 10 blog chapters I have summarized a few interesting topics I learnt about pharmaceutical and biotech patents back when I was doing my Food and Drug Law class.  At the end of that class I realized that the pharmaceutical industry puts a great deal of effort into applying for and maintaining eligible patents.  The US Supreme Court has repeatedly struck down many patent validity appeals for biotechnology products in the past years after they arrived at the US Patent and Trademark Office (USPTO).  Some lawyers have even commented on how the Supreme Court has destroyed the overall US patent system over the last decade.

    At issue is that case law defines an eligible patent to be “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof” under 35 U.S.C. § 101.  However, the law is vague when it comes to defining eligibility of patents which fall under laws of nature, natural phenomena, and abstract ideas.  The bulk of modern biotechnology and pharmaceutical innovations are likely to fall into these narrowly defined categories, which, while not patentable under strict interpretation, have extremely useful applications that do merit eligibility.  For example, a recent patent application (Patent Application No. 20140194345) was rejected despite being a potentially life saving treatment for antibiotic resistance in lethal bacterial infections.  Inventors in biotech companies must put a lot of energy and resources into a discovery.  However when the final patent is deemed a mere law of nature, natural phenomenon or abstract idea, patent protection is lost and pricing decisions become controlled by the market, leaving inventors unable to recuperate their financial losses.

    Examples of the Supreme Court’s decisions invalidating patents for this very reason include:

    Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. ­­­___, 132 S.Ct. 1289 (2012).  The courts invalidated the patent claim of using 6-thioguanine as an indicator of whether a drug dose should be modified.  They decided the indication could be defined as a natural phenomenon.

    Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. ___, 133 S.Ct. 2107 (2013).  The courts ruled that isolating genomic DNA associated with BRCA genes in breast cancer was not an act of invention because DNA is naturally occuring.  However, cDNA, which lacks the non-coding regions of genomic DNA, was held to be patentable because it is synthesized outside the body.

    Alice Corp. v. CLS Bank Int’l, 134 S.Ct. 2347 (2014).  The courts ruled against patent eligibility for 4 patents concerning electronic methods, computer systems, and program code because they were considered abstract ideas.

    Each of these Supreme Court decisions spurred the USPTO to issue a new set of guidelines setting forth rules on patent eligibility.  A study, by Gaudry, Grab & McKeon LLC carried out careful statistical analysis of the Supreme Court decisions on patent eligibility rejections under 35 U.S.C. § 101 over the last three years.  The results cast a grim shadow on the pharmaceutical industry.  They show a trend in the courts to increasingly reject patent eligibility from “select art unit groups” including molecular biology, immunology and protein chemistry technologies.  That means, from the time of the Mayo case in 2012 until 2015, there has been a steady rise in patent rejections from 11.2% to 32.5%.  Furthermore, the number of patent claim appeals for biotechnology inventions has risen by 25% over the last three years, suggesting that it is getting harder to secure a patent.  The study then found that following 35 U.S.C. § 101 rejections, firms usually did not appeal to the Patent Trial Appeal Board because the rapid new changes issued by USPTO guidance documents dis-incentivize companies from doing so.

    Graph showing percentages of patent office actions (OAs) 
    OAs issued during the time period that included a Supreme Court 35 U.S.C. § 101 rejection were calculated for each art unit group in TC 1600.  Art unit groups 1640, 1650 and 1660 (red box) focus on molecular biology, immunology and protein chemistry technologies.  The proportion of OAs with rejections have increased subsequent to each Supreme Court ruling and guideline publication.  Graph made by Gaudry, Grab & McKeon LLC:

    What does this mean for the biotech inventor?

    In spite of the doom and gloom in patent validity judgments, it is important to keep an eye out on patent reform and to push the agenda for patent protection for essential medical innovations when possible.  A few months ago President Obama signed the America Invents Act (AIA) into law which helped align the US patent system with modern day requirements.  This legislation has instituted sweeping reform into patent applications, including the “first to file” provision which protects the first inventor who files the patent.  In recent months four other major proposals for patent reform have been under consideration by Congress.  These include the Innovation Act, The TROL Act, the STRONG Patents Act and the PATENT Act.  Each of these acts, if approved by Congress, will serve to ease the burden of the patent review system and reduce the number of litigations in future providing a more just and verdant patent protection system.  It is hoped that one day the Supreme Court can be convinced by some of these new reforms to allow a broader definition of patent validity to cover biotech patents.

    Reference:

    http://www.ipwatchdog.com/2015/07/08/the-looming-patent-nightmare-facing-the-pharmaceutical-industry/id=51428/

    http://www.ipwatchdog.com/2015/07/12/trends-in-subject-matter-eligibility-for-biotechnology-inventions/id=59738/

    http://www.ipwatchdog.com/2015/05/07/patent-reform-101-a-primer-on-pending-patent-legislation/id=57529/

    http://www.ipwatchdog.com/2018/05/22/did-the-supreme-court-intentionally-destroy-the-u-s-patent-system/id=97514/