Biotech Patents Vulnerable? Court Ruling May Have Ripple Effect For Life Sciences Industry

Federal Circuit’s Bilski ruling could make some biotechnology patents vulnerable to infringement, industry group says.

An appeals court ruling that defines patentable subject matter could leave some biotech patents open to infringement, according to the Biotechnology Industry Organization - and may force companies to re-evaluate their patent portfolios.

The Oct. 30 decision by the U.S. Court of Appeals for the Federal Circuit is unrelated to the health care industry. The case, In Re: Bilski, involved claims for a method of hedging risk in commodities trading. But because the case narrowly defined the type of subject matter that can be patented, it may have repercussions for biotech.

In a 9 to 3 en banc ruling, the Federal Circuit affirmed a finding by the Board of Patent Appeals and Interferences that to be patented, a process or method claim must either be tied to a machine or apparatus, or transform an article into a different state - a bar that may not be met by some biotech inventions.

BIO, concerned about the potential ripple effect, filed an amicus brief advising the court not to create a new eligibility test for patents. The trade group did not get the desired result. "The court did exactly what BIO asked it not to do," said Hans Sauer, BIO's associate general counsel. "It created a rigid test for patent eligibility."

The bottom-line impact of the ruling on the biotech industry is unclear, Sauer said. But he predicted that accused infringers now will more frequently argue that the invention at issue is not patentable subject matter, and therefore not protected by existing patents.

The Federal Circuit, Sauer said, combined two inquiries of patent law: how broad is a patent claim, and does it claim a natural phenomenon or abstract idea?

"In the past, courts asked 'did you claim a broad invention and did you do enough work?'" he said. "Now they will ask 'did you claim too much from the public storehouse of knowledge?'"

Steve Carlson, an attorney with Fish & Richardson, agreed that the Federal Circuit left up in the air whether certain kinds of biological discoveries are patentable.

"This was a relatively easy case for them because the claims at issue had nothing concrete about them," Carlson said. The ruling "ducks the harder question of [whether] something tied to a computer or molecules in the body" is patentable.

Bilski may be applied to pending biotech cases

A few biotech cases are pending before the Federal Circuit that could be impacted by the Bilski decision. In one case, Prometheus v. Mayo Medical Ventures, the invention at issue uses a test that determines the level of drug metabolites in a patient's blood to decide whether to increase or decrease the drug dosage. A district court found that Prometheus' patent was invalid because it claimed a natural phenomenon.

Another case, Classen v. Biogen, involves a similar dispute over a method of determining the administration schedule of vaccines. As in the Prometheus case, a district court granted summary judgment of patent invalidity on the grounds that Classen's patents covered an unpatentable natural phenomenon.

In Bilski, the Federal Circuit said it was invoking the test put forward by the U.S. Supreme Court as to whether a claimed process is patent-eligible: the process must be tied to a particular machine or apparatus or transform a particular article into a different state or thing. Several parties argued in amici briefs that the Supreme Court did not intend this test to be the sole determinant of patent eligibility.

"We agree that future developments in technology and the sciences may present difficult challenges to the machine-or-transformation test, just as the widespread use of computers and the advent of the Internet has begun to challenge it in the past decade," the circuit court stated in its decision on Bilski.

"Thus, we recognize that the Supreme Court may ultimately decide to alter or perhaps even set aside this test to accommodate emerging technologies. And we certainly do not rule out the possibility that this court may in the future refine or augment the test or how it is applied," the court continued.

"At present, however, and certainly for the present case, we see no need for such a departure and reaffirm that the machine-or-transformation test, properly applied, is the governing test for determining patent eligibility of a process."

Dissenting judges say ruling could harm new technologies

Circuit Judges Pauline Newman and Randall Rader dissented, saying the circuit court's finding could have a negative impact on patents covering new technologies.

Rader wrote: "This court labors for page after page, paragraph after paragraph, explanation after explanation to say what could have been said in a single sentence: 'Because Bilski claims merely an abstract idea, this court affirms the Board's rejection.'"

He said the court also took out of context Supreme Court opinions that dealt with technology of the past. The court "links patent eligibility to the age of iron and steel at a time of subatomic particles and terabytes," he said.

Newman said the court's redefinition of the word "process" in the patent statute "excludes many of the kinds of inventions that apply [to] today's electronic and photonic technologies, as well as other processes that handle data and information in novel ways."

"This exclusion of process inventions is contrary to statute, contrary to precedent, and a negation of the constitutional mandate," Newman stated. "Its impact on the future, as well as on the thousands of patents already granted, is unknown."

Judge Haldane Robert Myer also issued a dissenting opinion. He agreed that Bilski's claim on a method of conducting business should not be eligible for patent protection and argued that previous decisions in support of business method patents - State Street Bank & Trust v. Signature Financial Group in 1998 and AT&T v. Excel Communications in 1999 - should be overruled.

- Brenda Sandburg ([email protected])