U.S. Gene Patents in Legal Limbo –– for Now

A long settled point of U.S. law regarding patentability of genes has recently become unsettled. Whether the USPTO will henceforth issue any new patents claiming genes as well as whether already-issued gene patents will survive a validity challenge has been called into question. The issue revolves around one of the conditions for patentability embodied in U.S. patent law: The requirement that the invention not have been obvious at the time the patent application was filed.

A single U.S. statute governs patentability of all inventions in the U.S., regardless of the technology. The unique features of gene inventions have posed a number of unique statutory interpretation issues for the USPTO and federal courts. One of those issues was presumably settled in 1995 in a far-reaching case decided by the U.S. Court of Appeals for the Federal Circuit (CAFC): In re Deuel, 34 USPQ2d 1210.

Deuel Standard for Obviousness

In Deuel, the CAFC held that the USPTO cannot reject a gene patent on the mere ground that prior to the patent application’s filing date, there existed a motivation to try cloning the gene and an obvious technique one could have used to clone it. The court noted that inventor Deuel was claiming a gene, not a cloning method, so the obviousness of the cloning method was irrelevant.

Instead, the court said that the proper standard for judging whether a gene is obvious and thus unpatentable requires that one ask the following questions: Was there a motivation to try cloning the gene, and was the nucleotide sequence of the gene predictable from what was known in the field prior to the patent application’s filing date? If the answer to both questions is yes, the gene is obvious.

Since the precise nucleotide sequence of a gene is, with trivial exceptions, entirely unpredictable, this holding in Deuel essentially abolished obviousness as an issue for nearly all gene patents in the U.S., until now, that is.

Obviousness Requirements in Flux

The U.S. Supreme Court addressed the general issue of obviousness in the recent patent case KSR v. Teleflex, 127 S.Ct. 1721 (2007) on appeal from the CAFC. The invention at issue in KSR was far removed from anything resembling a gene; it involved an automobile gas pedal. According to the Supreme Court, the CAFC had applied too lax a standard and should have found the gas pedal patent invalid for obviousness.

The Supreme Court, however, clearly intended its broad pronouncements to apply to all inventions, regardless of the technology. There are, of course, many important differences between the facts of the KSR case and those of most gene cases. Nevertheless, anyone considering the obviousness of any invention henceforth will have to take into account the general principles expounded by the Supreme Court in KSR. The USPTO’s Board of Patent Appeals and Interferences recently attempted to do just that in a gene case decided a few months after KSR: Ex parte Kubin, 83 USPQ2d 1410 (BPAI 2007).

Kubin Overrules Deuel

An inventor named Kubin applied for a patent claiming a novel gene encoding the protein NAIL. The USPTO examiner assigned to the case agreed that the NAIL gene was novel but rejected the claims anyway, saying that based on what was known about the NAIL protein at the time Kubin cloned the gene, it would have been obvious to clone it.

Kubin appealed to the USPTO’s board, arguing that this obviousness rejection was contrary to the holding in Deuel. The board decided that Kubin’s gene invention was indeed obvious, because there was both a motivation to clone the gene and a known technique for doing so. They thus resurrected the standard that the CAFC deemed incorrect 12 years earlier.

Normally, the board is obligated to follow the CAFC’s interpretations of the law and cannot ignore or replace them with contrary assessments. The board, however, apparently felt justified in ruling contrary to the Deuel case, because the Supreme Court stirred up issues related to the law regarding obviousness, calling into question the viability of many previous CAFC pronouncements on that subject.

Until the CAFC has an opportunity to reconsider the issue, gene patents are left in legal limbo. Only the CAFC and, ultimately, the Supreme Court has the authority to overrule Deuel and articulate what standard is correct. For now, Deuel remains the law, notwithstanding the board’s bold attempt to upend it.

Biotech Industry Implications

Whatever the obviousness standard turns out to be for gene inventions, it will have repercussions for gene patent applications still under consideration, those yet to be filed, as well as patents already issued.

The USPTO has already indicated its intention to follow the board’s reasoning in Kubin. In October 2007, it published a set of examination guidelines in which Kubin is cited as an example of how USPTO examiners should formulate obviousness rejections.

As a practical matter, if obviousness of a gene hinges on whether there was a known technique that could have been used to clone the gene, few if any gene inventions will pass muster. Thus, unless and until the CAFC overrules Kubin and reasserts the Deuel standard, we can expect issuance of new gene patents in the U.S., which has already been tapering off in recent years as the genome becomes thoroughly mined, to slow to a trickle and perhaps cease altogether.

Probably more disconcerting for the biotechnology industry is that Kubin calls into question the validity of many if not most gene patents that have been issued since Deuel became the touchstone.

Historically, patent owners and their competitors concerned with freedom to operate, based investment decisions on an assumption that issued gene patents were unassailable on obviousness grounds. Undermining this assumption could have wide-ranging implications.

For example, investors may now desert companies whose viability depends on gene patents. Conversely, firms may decide that the risks incurred when using a competitor’s patented genes as targets for drug discovery are not as great as previously thought, emboldening them to flaunt the patents that used to curb these lines of research.

While the board’s rulings apply only to the standards to be followed by the USPTO in examining applications and do not affect already-issued patents, the question of whether Deuel is still good law will persist until the CAFC has spoken on the issue. Meanwhile, uncertainty will reign. --- Janis K. Fraser, Ph.D., is a principal in the Boston office of Fish & Richardson P.C. She focuses her practice on patent prosecution, opinions, due diligence, and client counseling for companies in the biotechnology and pharmaceutical industries. Web: www.fr.com. Phone: (617) 521-7037. E-mail: fraser@fr.com.