Federal Circuit Tosses Diagnostic Patent, Spurring Biopharma Calls For Congressional Action

A divided panel finds Athena Diagnostics' patent on method to diagnose myasthenia gravis is invalid; in dissent, Judge Newman cites industry concerns that the decision will deter development of new diagnostic methods.

An appeals court finding that a diagnostic method was directed to a natural law, and thus not patent eligible, has prompted renewed calls for Congressional action to prevent such rulings.

In its Feb. 6 decision in Athena Diagnostics Inc. v. Mayo Collaborative Services LLC, the US Court of Appeals for the Federal Circuit affirmed by 2-1 a district court ruling that Athena's patent covering a method for diagnosing neurological disorders by detecting antibodies to the muscle-specific tyrosine kinase (MuSK) protein is invalid. The process involves contacting MuSK or an epitope thereof having a 1251 label, with a bodily fluid, immunoprecipitating any antibody/MuSK complex, and monitoring to see if the label appears on the complex, indicating the presence of a MuSK-related disorder.

Athena argued that the patent claims are directed to a new laboratory technique that makes use of man-made molecules. But the Federal Circuit said the correlation between the presence of naturally occurring MuSK autoantibodies in bodily fluid and MuSK-related neurological diseases like myasthenia gravis exists in nature apart from any human action. Thus, it said, there can be no dispute that it is a natural law ineligible for a patent. And it said the additional steps "only apply conventional techniques to detect that natural law."

Judge Pauline Newman disagreed, noting that until discovery of the diagnostic method described in the patent, some 20% of patients suffering from myasthenia gravis were not capable of being diagnosed.

"At this point, only Congress can provide the needed clarity, and cases like this one underscore the urgency with which Congress must act," BIO's Hans Sauer said.

"My colleagues rule that this new diagnostic method is not patentable, although new and unobvious. However, '[t]his new and improved technique, for producing a tangible and useful result, falls squarely outside those categories of inventions that are 'directed to' patent-ineligible concepts,'" she stated in a dissenting opinion, quoting the court's 2016 decision in Rapid Litigation Management Ltd. v. CellzDirect Inc.

"This court's decisions on patent-ineligibility of diagnostic methods are not consistent, and my colleagues today enlarge the inconsistencies and exacerbate the judge-made disincentives to development of new diagnostic methods, with no public benefit," she said.

Newman quoted the amicus briefs of the Biotechnology Innovation Organization, patent attorneys at McDonnell Boehnen Hulbert & Berghoff, and a group of 10 law professors. They "point out that the public interest is poorly served by adding disincentives to the development of new diagnostic methods," she said. "This is a severe criticism; and when presented by the entire industry, and stressed by thoughtful scholars,  it warrants judicial attention."

BIO expressed dismay at the decision.

"We are disappointed that the Court of Appeals once again felt compelled to strike down a patent on an important diagnostic invention. If anything can be learned from this decision, it is that the law of so-called patent-eligible subject matter is simply too unstable to offer any guidance to inventors, innovative businesses, patent examiners and judges," Hans Sauer, deputy general counsel for intellectual property at the Biotechnology Innovation Organization, said. "At this point, only Congress can provide the needed clarity, and cases like this one underscore the urgency with which Congress must act."

Seeking Legislative Fix

The American Intellectual Property Law Association and Intellectual Property Owners Association are trying to get legislation introduced to circumvent such decisions and assure certain inventions are eligible to be patented.

Last year, the two groups adopted a joint proposal for a legislative amendment to Section 101 of the Patent Act, which specifies what categories of subject matter are patent eligible. Under their proposed amendment, a claimed invention would be ineligible only if as a whole it "(i) exists in nature independently of and prior to any human activity or (ii) is performed solely in the human mind."

It is uncertain whether a member of Congress will sponsor such a bill but the Athena ruling will likely renew efforts to get congressional support.

Subject matter patentability is a major issue for industry and was highlighted at the Federal Trade Commission's October hearing on innovation and IP. (Also see "FTC Hearing On IP Policy: Patent Eligibility Requirements Are Top Industry Concern" - Pink Sheet, 28 Oct, 2018.)

An AIPLA representative said recent Supreme Court decisions, including its 2012 Mayo Collaborative Services v. Prometheus Laboratories Inc. ruling and its 2014 decision in Alice Corp. Pty. Ltd. v. CLS Bank International, had distorted patent eligibility determinations, caused significant uncertainty, and discouraged investment in certain areas.

The Mayo decision found unpatentable a process for administering the correct dosage of a drug by observing naturally occurring correlations between the dosage and red blood cell count. (Also see "Supreme Court Overturns Drug Calibration Patents, Creating Confusion In Biotech Realm" - Pink Sheet, 20 Mar, 2012.) The Alice decision held that a method for exchanging financial obligations was an abstract idea ineligible to be patented.

The Federal Circuit said that in applying the test for subject matter eligibility established in these decisions, known as the Alice/Mayo test, the district court concluded that the claims in Athena's patent were directed to a law of nature and determined that they lacked an inventive concept.

The appeals court pointed out the difference between the patent claims in this case, which it said recite a natural law and conventional means for detecting it, and the applications of natural laws that are patentable. It cited its 2018 decision in Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals International Ltd. as an example of the latter. In that case, the court found that a method of treatment by administering a drug at certain dosage ranges based on a patient's genotype was not directed to a natural law.

"Claiming a natural cause of an ailment and well-known means of observing it is not eligible for patent because such a claim in effect only encompasses the natural law itself. But claiming a new treatment for an ailment, albeit using a natural law, is not claiming the natural law," the court said.

PTO Tussles With Subject Matter Eligibility

The Vanda ruling has been appealed to the US Supreme Court. The certiorari petition, Hikma Pharmaceuticals USA Inc. v. Vanda, asks the court to address whether patents that claim a method of medically treating a patient automatically satisfy Section 101. (Also see "US Supreme Court Declines Review Of False Claims Act, PCSK9, Hep C Patents" - Pink Sheet, 7 Jan, 2019.)

The US Patent and Trademark Office has also been trying to adapt to court decisions. It issued a June 7, 2018 memo to its patent examiners to address how to evaluate the patent eligibility of method of treatment claims in light of the Vanda decision.

It said its current subject matter eligibility guidance and training examples are consistent with the decision understanding that: "'method of treatment claims that practically apply natural relationships should be considered patent eligible" under its guidance and that "it is not necessary for method of treatment claims that practically apply natural relationships to include nonroutine or nonconventional steps to be considered patent eligible."

On Jan. 4, the USPTO issued revised guidance for determining subject matter eligibility, in which it acknowledged the difficulty in dealing with this issue.

"Properly applying the Alice/Mayo test in a consistent manner has proven to be difficult, and has caused uncertainty in this area of law," the guidance states. "Among other things, it has become difficult in some cases for inventors, businesses, and other patent stakeholders to reliably and predictably determine what subject matter is patent-eligible. "

"The legal uncertainty surrounding Section 101 poses unique challenges for the USPTO, which must ensure that its more than 8500 patent examiners and administrative patent judges apply the Alice/Mayo test in a manner that produces reasonably consistent and predictable results across applications, art units and technology fields," it says.

The revised guidance made two primary changes to how patent examiners apply the first step of the Alice/Mayo test, which determines whether a claim is "directed to" a judicial exception. It specifies three groupings of subject matter that is considered an abstract idea: mathematical concepts, certain methods of organizing human activity, and mental processes. And it clarifies that a claim is not "directed to" a judicial exception if the judicial exception is integrated into a practical application of that exception.