January 1, 1970 (Vol. , No. )

Christopher Holman, Ph.D.

On March 20, 2012, the Supreme Court issued its much-anticipated decision in Prometheus v. Mayo, a case addressing the patent-eligibility of personalized medicine and diagnostic methods. The Federal Circuit had upheld Prometheus’ claims as patent-eligible, relying on a relatively permissive interpretation of the Supreme Court’s 2010 Bilski decision.

But an obviously displeased Supreme Court reversed, declaring all of the claims patent-ineligible in a unanimous decision authored by Justice Breyer that harkens back to his dissent in LabCorp v. Metabolite. Breyer’s decision emphasizes the gatekeeper role of Section 101 and the recently reinvigorated patent eligibility doctrine, in guarding against the danger of “too much patent protection.”

At this point, the implications for biotechnology are far from clear and could depend on how the Federal Circuit decides the closely related case of Association for Molecular Pathology et al. v. United States Patent and Trademark Office et al., which involves Myriad Genetics. On March 26, the Supreme Court granted petition for certiorari in Myriad and in a brief written decision sent the case back to the Federal Circuit to reconsider in light of its most recent pronouncements in Mayo.

To begin with, while the Supreme Court’s Mayo decision does include provocative language that might be read as rendering patent-ineligible much of the innovation that occurs in biotechnology, including drug method-of-treatment claims, I believe that in fact the decision will be interpreted more narrowly and in a manner that maintains patent-eligibility for the majority of biotechnology and pharmaceutical inventions that had been considered patent-eligible prior to Mayo. Unfortunately, however, the language and tenor of the decision creates substantial uncertainty with respect to the patent-eligibility of a large number of issued patent claims.

Clearly, the effect of Mayo will be felt most keenly with respect to diagnostics and personalized medicine. The identification and validation of clinically significant biomarkers will be critical in bringing to fruition the promise of the next-generation diagnostics and personalized medicine; however, in the wake of Mayo, it is unclear whether effective patent protection will be available to adequately incentivize the necessary research.

The most direct way of patenting this important class of innovation is by means of method claims of the sort held to be patent-ineligible in Mayo and Myriad. Diagnostic innovators will no doubt continue to seek patent protection, but they will need to re-think their claiming strategies, and, at the very least, the Supreme Court’s opinion in Mayo has made their task more challenging and uncertain.

Prometheus Labs’ patents were based on the discovery that the safety and efficacy of certain thiopurine drugs could be improved by monitoring the level of metabolites of the drug in a patient’s body and modifying the amount of drug administered to the patient when the level of metabolites was found to either exceed or fall short of certain thresholds. The claims recite methods that include steps of determining the level of specific drug metabolite in a patient’s body and being informed that, if the levels fall outside the thresholds, the dosage of the drug should be modified. Some of the claims also included a step of administering the drug to the patient prior to determining the level of metabolites.

The standard for patent-eligibility, at least in the abstract, has for many years been well-established by Supreme Court precedent. The Court has repeatedly held that any product or process “made by man” is patent-eligible so long as the patent claim does not “recite” or “embody” a fundamental principle such as an abstract idea or natural phenomenon.

Specific applications of fundamental principles are patent-eligible—indeed, it is difficult to imagine an invention that is not to some extent based on fundamental principles. For example, the Federal Circuit held Prometheus Labs’ claims to be specific applications of the correlation between metabolite level and optimal dosage and hence patent-eligible. In its decision, the Supreme Court did not alter the fundamental test for patent eligibility but rather applied it to Prometheus Labs’ claims in a much more restrictive manner than had the Federal Circuit.

Prior to the Mayo decision, U.S. case law provided little guidance on two critical questions: (1) where is the line to be drawn between “natural” and non-natural phenomena, particularly in the realm of biology, and (2) what does it means to “impermissibly claim a natural phenomenon,” as opposed to a patent eligible application of that phenomenon?

In Mayo, the Court adopts a very broad interpretation of the term “natural phenomenon,” holding that the correlation between thiopurine drug metabolite level and optimal drug dosage “exists in principle apart from any human action [and] as a consequence of the ways in which thiopurine compounds are metabolized by the body—entirely natural processes.”

Of course, the correlation does not exist naturally, but only as a consequence of introducing a non-naturally occurring, man-made molecule into the human body. In my view, such a correlation is not natural, and Prometheus Labs’ claims should not implicate the patent eligibility doctrine (which, incidentally, does not preclude the possibility that the claims are invalid on other statutory grounds, such as obviousness or lack of enablement).

In contrast, the claims at issue in LabCorp and Myriad, i.e., the correlation between levels of vitamin B and homocysteine in the body, and naturally occurring genetic variation in the BRCA genes, respectively, do appear to be based on natural phenomena (although in my view those claims should nonetheless be deemed patent-eligible).

In the Mayo decision, the Federal Circuit had also found the correlation between drug metabolite level and optimal dosage to be a natural phenomenon but concluded that Prometheus Labs’ claims were nonetheless patent-eligible because they were limited to specific applications of the phenomenon. The Federal Circuit’s analysis relied heavily on the Bilski “machine-or-transformation” test and found that both the “determining” and “administering” steps were sufficiently tangible and transformative to render the claim patent-eligible. Such an analysis would have maintained patent-eligibility for drug method-of-treatment claims as well as diagnostic claims that include a physically transformative step such as analyzing a patient sample for the presence of a molecular biomarker.

The Federal Circuit viewed this physical analysis of a molecular sample as critical to patent-eligibility. The Myriad claims, in contrast, were interpreted by the Federal Circuit to broadly encompass even the analysis of genetic sequence information, and I believe the lack of a step explicitly requiring the physical analysis of DNA molecules is what led the Federal Circuit to declare the Myriad method claims patent-ineligible.

In the Mayo decision, the Supreme Court, on the other hand, found neither the “administering” nor the “determining” steps sufficient to render the claims patent-eligible. The rationale provided by the Court is troubling. Justice Breyer dismissed the “administering” step as “simply refer[ing] to the relevant audience, namely doctors who treat patients with certain diseases with thiopurine drugs. That audience is a pre-existing audience; doctors used thiopurine drugs to treat patients suffering from autoimmune disorders long before anyone asserted these claims.”

It would seem, according to this logic, that the discovery of a new therapeutic use of a known drug should be considered patent ineligible, since there is already a pre-existing audience of doctors using the drug to treat patients. I very much doubt that the Justices intended to foreclose the patenting of newly discovered uses of drugs, but a literal reading of the decision would seem to support that outcome.

Similarly, Justice Breyer declared the “determining” step to be “well-understood, routine, and conventional,” and hence insufficient to render the claims patent-eligible. But again, think of the implications if this rationale were to be extended to method-of-treatment claims. In general, the administration of a known drug to a patient is “well understood, routine, and conventional.” But until now it has been generally understood and accepted that a new, nonobvious, and useful method of using a known drug to treat a disease can be patented. Mayo does not explain how one would distinguish between “well understood and routine” administration of a known drug in the context of a method-of-treatment claim on the one hand and administration of the drug as it appears in the context of Prometheus Labs’ claims.

In spite of the problematic language in Mayo, however, I predict that lower courts will be able to spin the decision in a way that preserves the patent-eligibility of methods-of-treatment claims and most other biotechnology inventions that have traditionally been considered patentable. Significantly, at one point the Court in Mayo observes that “[the patent claims in a] typical patent on a new drug or a new way of using an existing drug [include steps that] confine their reach to particular applications of [natural] laws,” unlike the Prometheus Labs’ claims, wherein the recited steps “add nothing of significance to the natural laws themselves.”

I think the drug industry and the courts will latch onto this dictum as evidence that the Supreme Court could not have intended Mayo to render conventional drug method claims patent-ineligible.

In attempting to distinguish the 1981 Diamond v. Diehr decision, in which the Supreme Court held a patent claim to be patent eligible even though it was based on a mathematical formula, Mayo explains that the Diehr claims included steps that “apparently added to the formula something that in terms of patent law’s objectives had significance, [thereby transforming] the process into an inventive application of the formula.”

The steps recited in the Diehr claims, which included “installing rubber in a press, closing the mold [and] constantly determining the temperature of the mold,” all seem quite routine and conventional. If the Federal Circuit is ever faced with the question of whether a method-of-treatment claim is patent-eligible under Mayo, it can cite to this passage, conclude that the method-of-treatment claim at issue in the case includes a step that has “significance in terms of patent laws objectives,” and declare the claim patent-eligible. I do not believe that the Supreme Court would intervene to upset such an interpretation of Mayo.

Patent protection will in all likelihood remain available, at least in some form, for most innovation that occurs in biotechnology. Mayo has, however, injected greater uncertainty into the process and could substantially limit the availability of patents in some important areas, particular diagnostics and personalized medicine. Biotechnology will survive, but I suspect it would have been better if the Supreme Court had simply let the Federal Circuit’s Prometheus decision stand.

The U.S. Patent and Trademark Office wasted no time in issuing preliminary guidance to the Patent Examining Corps. on the impact of Mayo on subject matter eligibility under 35 U.S.C. § 101, putting out a Memorandum dated March 21, 2012. Biotechnology Law Report has reproduced this Memorandum, so readers can see the PTO’s own preliminary understanding of Mayo’s impact.

Clearly, the issue of whether a claim recites patent-eligible subject matter will continue to surface in various guises. The impact of the decision on the patentability of isolated DNA and natural products in general will take center stage when the Federal Circuit takes Myriad again in light of Mayo.

Watch future issues of Biotechnology Law Report for reports of such developments and pertinent commentary from various perspectives.

Christopher M. Holman, Ph.D., is executive editor of Biotechnology Law Report, which is published by Mary Ann Liebert, Inc. He is also an associate professor at the University of Missouri in the Kansas City School of Law. This blog has been adapted from the original article that appears online with footnotes in the current issue of Biotechnology Law Report (http://www.liebertpub.com/blr).

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