The dilemma. The pattern. What is a patentable invention? Case studies.

1. June 22, 20181
Enforcement and Patentable Subject Matter:
The U.S. Dilemma
Jay Erstling
January 6, 2015
The dilemma.
The pattern.
What is a patentable invention?
Case studies.

2. SM
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DISCLAIMER: This presentation and any information contained herein is intended for informational purposes only and should not be construed as legal
advice. Seek competent legal counsel for advice on any legal matter.
Enforcement and Patentable
Subject Matter:
the U.S. Dilemma
Jay Erstling
GIPC 2015
Mumbai, India

3. The Dilemma
How to determine patent eligible subject matter in the light of three important
U.S. Supreme Court decisions:
Mayo Collaborative Serv. v. Prometheus Labs., Inc., 132 S. Ct. 1289
(2012)
• Diagnostic testing
Association for Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct.
2107 (2013)
• Isolated DNA sequences (genes)
Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014)
• Software
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4. The Pattern
Industry and the patent community
Generally seek a broad scope of patentable subject matter
The Court of Appeals for the Federal Circuit
Generally endorses a broad scope
The Supreme Court
Tends to narrow or restrict the broad scope
The US Patent and Trademark Office
Attempts to interpret the narrowed scope
Industry and the patent community
Try to figure ways to widen the scope
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5. Definition of a Patentable Invention under US Law
35 USC § 101 (Inventions Patentable) – Section 1 of the US Patent Act
Whoever invents or discovers any new and useful process, machine,
manufacture, or composition of matter, or any new and useful
improvement thereof, may obtain a patent therefor, subject to the
conditions and requirements of this title.
• The Act contains no provisions on what is not an invention
• Exceptions to patentable subject matter are the result of case law
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6. Canadian Patent Act Definition Is Similar
“invention” means any new and useful art, process, machine, manufacture or
composition of matter, or any new and useful improvement in any art,
process, machine, manufacture or composition of matter;
But…
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7. Definition of a Patentable Invention under EP Law
Article 52 of the European Patent Convention
(1) European patents shall be granted for any inventions, in all fields of
technology, provided that they are new, involve an inventive step and are
susceptible of industrial application
(2) The following in particular shall not be regarded as inventions within
the meaning of paragraph 1:
• (a) discoveries, scientific theories and mathematical methods;
• (b) aesthetic creations;
• (c) schemes, rules and methods for performing mental acts, playing
games or doing business, and programs for computers
• (d) presentations of information.
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8. Definition under the Indian Patents Act
Article 2(1)(j)
"invention" means a new product or process involving an inventive step
and capable of industrial application
Article 3. What are not inventions.
(a) an invention which is frivolous…;
(b) an invention the primary or intended use or commercial exploitation of which could be
contrary public order or morality…;
(c) the mere discovery of a scientific principle…;
(d) the mere discovery of a new form of a known substance which does not result in the
enhancement of the known efficacy of that substance or the mere discovery of any new
property or new use for a known substance or of the mere use of a known process, machine or
apparatus unless such known process results in a new product or employs at least one new
reactant…;
(e) a substance obtained by a mere admixture resulting only in the aggregation of the properties
of the components thereof…;
(f) the mere arrangement or re-arrangement or duplication of known devices each functioning
independently of one another in a known way;
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9. Definition under the Indian Patent Act (2)
Article 3. What are not inventions (cont’d)
(h) a method of agriculture or horticulture;
(i) any process for the medicinal, surgical, curative, prophylactic, diagnostic, therapeutic or
other treatment of human beings…;
(j) plants and animals in whole or any part thereof other than micro organisms but including
seeds, varieties and species…;
(k) a mathematical or business method or a computer programme per se or algorithms;
(l) a literary, dramatic, musical or artistic work or any other aesthetic creation whatsoever…;
(m) a mere scheme or rule or method of performing mental act or method of playing game;
(n) a presentation of information;
(o) topography of integrated circuits;
(p) an invention which in effect, is traditional knowledge or which is an aggregation or
duplication of known properties of traditionally known component or components.
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10. And Even the TRIPS Agreement
Article 27. Patentable Subject Matter
2. Members may exclude from patentability inventions, the prevention
within their territory of the commercial exploitation of which is necessary to
protect ordre public or morality, including to protect human, animal or
plant life or health or to avoid serious prejudice to the environment….
3. Members may also exclude from patentability:
• (a) diagnostic, therapeutic and surgical methods for the
treatment of humans or animals;
• (b) plants and animals other than micro-organisms, and
essentially biological processes for the production of plants or
animals other than non-biological and microbiological processes….
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11. Does US Law Offer Any Guidance?
Three judicially created exceptions to patent eligible subject matter under
§101:
Laws of nature;
Natural phenomena; and
Abstract ideas
• Are not patentable
– Because “they are the basic tools of scientific and technological
work”
– And granting a patent “might tend to impede innovation more
than it would tend to promote it.”
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12. Mayo Collaborative Serv. v. Prometheus Labs., Inc.
A unanimous Court
The Invention
A method of assisting doctors who prescribe thiopurine drugs to
determine whether a given dosage level is too low or too high, based on
the concentration of a thiopurine metabolite in the blood and the likelihood
that the drug dosage won’t be effective or that it will produce harmful side
effects.
• The relationship is a natural result of the way in which thiopurine
compounds are metabolized.
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13. Mayo Collaborative Serv. v. Prometheus Labs., Inc. (2)
The Case
Prometheus’ patents claimed: an “administering” step (when the drugs
are given to patients); a “determining” step (when patients’ metabolite
levels are established); and a “wherein” step (indicating the
concentrations above which there is a likelihood of harmful side effects
and below which the dosage is likely to be ineffective, and allowing the
doctor to adjust the dosage levels accordingly).
Based on its patents, Prometheus developed and sold a metabolite blood
test.
Mayo used the test, but then it developed its own. When Mayo said it was
going to market its test, Prometheus sued for infringement.
The Issue
Whether the claims are patent eligible or constitute a patent ineligible law
of nature
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14. Mayo Collaborative Serv. v. Prometheus Labs., Inc. (3)
The Supreme Court decision: The claims are not patent eligible
The “patents set forth laws of nature—namely, relationships between
concentrations of certain metabolites in the blood and the likelihood that a
dosage of a thiopurine drug will prove ineffective or cause harm.”
• “The question before us is whether the claims do significantly more
than simply describe these natural relations.”
• “If a law of nature is not patentable, then neither is a process
reciting a law of nature, unless that process has additional features
that provide practical assurance that the process is more than a
drafting effort designed to monopolize the law of nature itself.”
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15. Mayo Collaborative Serv. v. Prometheus Labs., Inc. (4)
The Supreme Court decision (2)
“The Court has repeatedly emphasized… that patent law not inhibit further
discovery by improperly tying up the future use of laws of nature.”
• “The laws of nature at issue here are narrow laws that may have
limited applications, but the patent claims that embody them
nonetheless implicate this concern. They tell a treating doctor to
measure metabolite levels and to consider the resulting
measurements in light of the statistical relationships they describe.
In doing so, they tie up the doctor’s subsequent treatment decision
whether that treatment does, or does not, change in light of the
inference he has drawn using the correlations. And they threaten to
inhibit the development of more refined treatment
recommendations….”
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16. Mayo Collaborative Serv. v. Prometheus Labs., Inc. (5)
The Supreme Court decision (3): BUT
“The Court has recognized, however, that too broad an interpretation of
this exclusionary principle could eviscerate patent law.
“A process is not unpatentable simply because it contains a law of nature
or a mathematical algorithm…. An application of a law of nature or
mathematical formula to a known structure or process may well be
deserving of patent protection.”
• “A novel and useful structure created with the aid of knowledge of
scientific truth may be [patentable].”
• “Still, as the Court has also made clear, to transform an
unpatentable law of nature into a patent-eligible application of such
a law, one must do more than simply state the law of nature while
adding the words ‘apply it.’”
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17. Mayo Collaborative Serv. v. Prometheus Labs., Inc. (6)
The Supreme Court Test:
“We must determine whether the claimed processes have transformed
these unpatentable natural laws into patent eligible applications of those
laws.”
The Court’s precedents “warn us against interpreting patent statutes in
ways that make patent eligibility ‘depend simply on the draftsman’s art’
without reference to the ‘principles underlying the prohibition against
patents for natural laws.’ They warn us against upholding patents that
claim processes that too broadly preempt the use of a natural law. And
they insist that a process that focuses upon the use of a natural law also
contain other elements or a combination of elements, sometimes referred
to as an ‘inventive concept,’ sufficient to ensure that the patent in practice
amounts to significantly more than a patent upon the natural law itself.”
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18. Assoc. for Molecular Pathology v. Myriad Genetics
Another unanimous Court
The Invention
Myriad discovered the location and sequence of two genes (BRCA1 and 2
– both associated with breast and ovarian cancer) and obtained several
patents.
• The patents gave Myriad the exclusive right to isolate an individual’s
BRCA1 and BRCA2 genes by breaking the covalent bonds that
connect the DNA to the rest of the individual’s genome. The patents
also gave Myriad the exclusive right to synthetically create BRCA
cDNA.
– Myriad claimed that its patents gave it the right to exclude others
from isolating the genes (making its patented composition of
matter) and engaging in genetic testing
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19. Assoc. for Molecular Pathology v. Myriad Genetics (2)
The Case
Myriad acted to prevent other entities from providing BRCA testing, and
became the only testing entity
Several years later the petitioners filed a lawsuit seeking a declaration that
Myriad’s patents covered products of nature and therefore were invalid
under 35 U.S.C. §101 .
The Issue
Citing Mayo: “Patent protection strikes a delicate balance between
creating ‘incentives that lead to creation, invention, and discovery’ and
‘impeding the flow of information that might permit, indeed spur,
invention.’ We must apply this well-established standard to determine
whether Myriad’s patents claim any ‘new and useful . . . composition of
matter,” or instead claim naturally occurring phenomena.”
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20. Assoc. for Molecular Pathology v. Myriad Genetics (3)
The Issue (cont’d)
“It is undisputed that Myriad did not create or alter any of the genetic
information encoded in the BRCA1 and BRCA2 genes. The location and
order of the nucleotides existed in nature before Myriad found them. Nor
did Myriad create or alter the genetic structure of DNA. Instead, Myriad’s
principal contribution was uncovering the precise location and genetic
sequence of the BRCA1 and BRCA2 genes. The question is whether this
renders the genes patentable.”
The Supreme Court decision: Merely isolating genes that are found in nature
does not make them patentable.
A naturally occurring DNA segment is a product of nature and not patent
eligible merely because it has been isolated, but cDNA is patent eligible
because it is not naturally occurring.
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21. Assoc. for Molecular Pathology v. Myriad Genetics (4)
The Supreme Court decision (cont’d)
“Myriad did not create anything. To be sure, it found an important and
useful gene, but separating that gene from its surrounding genetic
material is not an act of invention.”
• “Groundbreaking, innovative, or even brilliant discovery does not by
itself satisfy the §101 inquiry.”
But
“cDNA does not present the same obstacles to patentability as naturally
occurring, isolated DNA segments.” “Creation of a cDNA sequence from
mRNA results in a… molecule that is not naturally occurring.”
• “The labtechnician unquestionably creates something new when
cDNA is made. cDNA retains the naturally occurring exons of DNA,
but it is distinct from the DNA from which it was derived. As a result,
cDNA is not a “product of nature” and is patent eligible under §101.”
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22. Assoc. for Molecular Pathology v. Myriad Genetics (5)
The limits of the Supreme Court decision
“It is important to note what is not implicated by this decision.”
• “First, there are no method claims before this Court. Had Myriad
created an innovative method of manipulating genes while
searching for the BRCA1 and BRCA2 genes, it could possibly have
sought a method pat- ent. But the processes used by Myriad to
isolate DNA were well understood by geneticists at the time of
Myriad’s patents…”
• “Similarly, this case does not involve patents on new applications of
knowledge about the BRCA1 and BRCA2 genes.”
• “Nor do we consider the patentability of DNA in which the order of
the naturally occurring nucleotides has been altered. Scientific
alteration of the genetic code presents a different inquiry, and we
express no opinion about the application of §101 to such
endeavors.”
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23. Assoc. for Molecular Pathology v. Myriad Genetics (6)
The limits of the Supreme Court decision (cont’d)
“We merely hold that genes and the information they encode are not
patent eligible under §101 simply because they have been isolated from
the surrounding genetic material.”
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24. Alice Corp. Pty. Ltd. v. CLS Bank Int’l
And again a unanimous Court
The invention:
Software directed to mitigating the financial risk that only one party to an
agreed-upon financial exchange will satisfy its obligation (“intermediated
settlement”)
• Claims include (1) a method for exchanging financial obligations, (2)
a computer system configured to carry out the method for
exchanging obligations, and (3) a computer-readable medium
containing program code for performing the method of exchanging
obligations
The Case:
Alice was the assignee of the patents at issue. CLS sued arguing that the
claims were invalid and unenforceable under §101 because they were
directed to an abstract idea.
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25. Alice Corp. Pty. Ltd. v. CLS Bank Int’l (2)
The Issue:
What, if anything, constitutes a patent-eligible software invention?
The Supreme Court decision:
The claims in this case are drawn to the abstract idea of intermediated
settlement, and merely requiring generic computer implementation fails to
transform that abstract idea in to patent-eligible invention.
The Court “must distinguish between patents that claim the ‘building
blocks’ of human ingenuity and those that integrate the building blocks into
something more, thereby ‘transforming’ them into a patent-eligible
invention. The former ‘would risk disproportionately tying up the use of the
underlying’ ideas…. The latter pose no comparable risk of pre-emption.”
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26. Alice Corp. Pty. Ltd. v. CLS Bank Int’l (3)
The Court applied the framework it adopted in Mayo:
“In Mayo, we set forth a framework for distinguishing patents that claim
laws of nature, natural phenomena, and abstract ideas from those that
claim patent-eligible applications of those concepts. First, we determine
whether the claims at issue are directed to one of those patent ineligible
concepts. If so, we then ask, ‘what else is there in the claims before us?’
To answer that question, we consider the elements of each claim both
individually and ‘as an ordered combination’ to determine whether the
additional elements ‘transform the nature of the claim’ into a patent-
eligible application. We have described step two of this analysis as a
search for an ‘inventive concept’—i.e., an element or combination of
elements that is ‘sufficient to ensure that the patent in practice amounts to
significantly more than a patent upon the ineligible concept itself.”
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27. Alice Corp. Pty. Ltd. v. CLS Bank Int’l (4)
The Supreme Court decision (cont’d): Applying the Mayo framework
The concept of intermediated risk is an abstract idea because it is a “a
fundamental economic practice long prevalent in our system of
commerce” and “a building block of the modern economy.”
“Because the claims at issue are directed to the abstract idea of
intermediated settlement, we turn to the second step in Mayo’s
framework. We conclude that the method claims, which merely require
generic computer implementation, fail to transform that abstract idea into
a patent eligible invention.”
• “A claim that recites an abstract idea must include ’additional
features’ to ensure ‘that the [claim] is more than a drafting effort
designed to monopolize the abstract idea.’”
• “The mere recitation of a generic computer cannot transform a
patent-ineligible abstract idea into a patent-eligible invention.”
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28. Alice Corp. Pty. Ltd. v. CLS Bank Int’l (5)
The Supreme Court decision: Lessons learned (and the questions that
remain)
The Mayo framework should be applied to claims directed to abstract
ideas
• A claim to an abstract idea must have an “inventive concept” that
“transforms” the claimed abstract idea into a patentable invention.
– An element or a combination of elements in the claim must be
sufficient to ensure that the claim amounts to “significantly more”
than the abstract idea itself
– A method claim directed to an abstract idea, the steps of which
simply require the use of a generic computer, is not a patent-
eligible claim
• Possible patent eligible claims might include: claims directed to
improving the operation of the computer itself or effecting an
improvement in another technology or technological field
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29. USPTO Interim Guidance on Patent Subject Matter
Eligibility
Issued December 2014
Principally for use by USPTO personnel in determining subject matter
eligibility under 35 USC §101
Relied upon also by patent applicants
Not yet final; the USPTO is still seeking public comment
Does not constitute substantive rulemaking and does not have the force and
effect of law
Sets out the USPTO’s interpretation of the subject matter eligibility
requirements in view of the Supreme Court’s recent decisions
Offers comprehensive advice on subject matter eligibility in light of Alice
Corp., Myriad and Mayo
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31. Questions?
Jay Erstling | erstling@ptslaw.com | +612-349-5740
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