September 1, 2011 (Vol. 31, No. 15)
David A. Gass
Multifaceted Approach Essential in Light of Complexities of Patent Enforcement
Effective patent protection for medical diagnostics is best achieved with a patent-drafting strategy that shows foresight for the complexities of patent enforcement. Under 35 USC §271(a), whoever without authorization makes, uses, sells, or imports a patented invention may be liable for infringement. However, a diagnostic process (or method) is not a physical article but rather a series of steps that are performed. Is it possible to make, sell, or import a process? What does “using” a process entail?
All of these questions have central importance when thinking of how to protect inventions in the field of medical and biomarker diagnostics—especially for new diagnostic processes that can be practiced using old, unpatentable reagents and machines. If a diagnostic process is patented, against whom can the patent be enforced? What patent strategies will improve prospects for enforcement?
The Court of Appeals for the Federal Circuit hears all appeals involving allegations of patent infringement and has considered these very questions. In NTP, Inc. v. Research in Motion Ltd., involving the makers of Blackberry® handheld communication devices, the court concluded that the concepts of infringement by “making” or “selling” simply do not apply to process inventions. While this decision did not involve diagnostic technology, the court’s statutory construction is presumed to apply for any technological field.
Section 271(g) of the patent statute creates liability for infringement of a process patent through importation of a “product which is made by a process patented in the United States…”. However, the Federal Circuit concluded, in Bayer AG v. Housey, that the statutory term “product…made” refers only to physical articles. The Bayer case involved a patented process for “screening for substances which specifically inhibit or activate a particular protein”.
The Court concluded that even if Bayer had imported “research data or information obtained from using the [Housey] patented methods [abroad],” Bayer would not be liable as an infringer because information is not a “product made.” It is widely presumed that the Court would follow the same reasoning for other processes in which the “product…made” is intangible, like the information of a medical diagnosis.
To prove infringement by those who “use” a patented process, the patentee must show that a defendant has performed each step of the patented process (BMC Resources v. Paymentech). Enforcement complications can arise if the process involves multiple actors, or a single actor who performs one or more steps outside of the United States.
Is there infringement, for example, if a diagnostic method requires extracting a sample, analyzing the sample to measure biomarkers, and making a diagnosis based on the measurements, when different entities perform the various steps of the method, or when one of the steps is performed abroad?
The Federal Circuit has been reluctant to find infringement in these circumstances. In the NTP decision, the court indicated that a patent for a process is not infringed under §271(a) unless each step is performed in the U.S. The BMC decision involved the multiple actors question, and the court opined that independent conduct of multiple actors via “arms-length cooperation” is not infringement.
Joint liability may be found for two parties that perform a patented process through their combined actions when one party—a “mastermind”—‘control[s] or direct[s]’ the activities of another party, such that every step is attributable to the controlling party. “A party cannot avoid infringement…simply by contracting out steps of a patented process to another entity.”
The Federal Circuit has revisited the multiparty issue a number of times since BMC and has repeatedly found that there was no “mastermind,” and the combined actions of two or more parties did not constitute infringement.
For example, in Golden Hour Data Sys., Inc. v. emCharts, Inc., the court held that even when the two entities “formed a strategic partnership, enabled their two [computer] programs to work together, and collaborated to sell the two programs as a unit,” there could be no infringement of the asserted method claims, because “the evidence of control or direction was insufficient as a matter of law to uphold a finding of joint infringement.”
The law of multiparty infringement is not entirely settled. In April and May, respectively, the Federal Circuit announced that it would rehear two such cases en banc. The parties in Akamai Technologies et al. v. Limelight Networks were instructed to brief the question: “If separate entities each perform separate steps of a method claim, under what circumstances would that claim be directly infringed and to what extent would each of the parties be liable?”
The parties in McKesson Technologies Inc. v. Epic Systems Corp. were asked to brief two questions: First, if separate entities each perform separate steps of a method claim, under what circumstances, if any, would either entity or any third party be liable for inducing infringement or for contributory infringement? Second, does the nature of the relationship between the relevant actors affect the question of direct or indirect infringement liability?
These two en banc decisions from the Federal Circuit should shed further light on what sorts of concerted actions by parties constitute joint infringement —with possible review by the Supreme Court thereafter.
So how should a developer of a diagnostic process protect against unauthorized use by the combined activities of two or more parties? One solution, suggested by the Federal Circuit, is for patentees to draft claims with fewer steps, that will be practiced by a single entity. While this sounds simple, the patent applicant will need to persuade the U.S. Patent and Trademark Office that the method with fewer steps defines a complete and patentable invention.
A second solution may be available in the form of patent protection for a diagnostic “system,” because some process inventions also can be described and claimed in a patent as systems to carry out the processes. The law relating to proving infringement of system patents has developed differently than it has for process inventions.
For example, in the NTP case, NTP’s invention was also claimed as a system relating to wireless e-mail, with components that could be geographically separate from each other.
Defendant Research in Motion’s (RIM) system included a “relay component” located in Canada, which RIM alleged prevented a finding of infringement of the U.S. patent. The Court disagreed, ruling that “[t]he use of a claimed system under section 271(a) is the place at which the system as a whole is put into service, i.e., the place where control of the system is exercised and beneficial use of the system is obtained.”
In this case, RIM’s customers in the U.S. (Blackberry handheld device users) controlled the transmission and benefitted from the exchange of information over the system. Therefore, the location of the relay in Canada did not preclude infringement of the system claims through customer use in the U.S.
Using similar logic, the Federal Circuit recently concluded that a system claim could be infringed by a user who put the system into operation and benefitted from it, even though the components of the system were divided among multiple parties.
For companies seeking to protect their diagnostic inventions with enforceable patents, these uncertainties with respect to the standard for infringement of process claims require careful planning and multiple strategies.
For example, process claims remain an important component for protecting diagnostic inventions, and even when multiple parties are involved, the relationship between the parties may still satisfy the “mastermind” standard currently being applied by courts. Still, it is worthwhile to heed the Federal Circuit’s advice and try to draft process claims limited to steps that will be practiced by a single party within the United States.
In addition, consideration should be given to whether there are novel or improved tangible articles that are needed to practice the invention and that could be the subject of “product” claims.
Finally, and significantly, consideration should be given to whether the diagnostic process can be protected with “system” patent claims because it may prove easier to enforce system claims when the activities of two or more parties are involved in practicing an invention. The sophisticated patent applicant will try to use all of these strategies for protecting a diagnostic invention with multiple patents.
David A. Gass ([email protected]) is partner, biotechnology patent group at Marshall, Gerstein & Borun. This article is intended to be informative and should not be construed as legal advice for any specific fact situation. Opinions expressed herein are those of the author and not necessarily the opinions of Marshall, Gerstein & Borun or any of its clients. Readers should not act upon the information presented without consulting professional legal counsel.