Bilski Blog

Bad Science Makes Bad Patent Law—No Science Makes It Worse (Part I)

By: Robert R. Sachs

I believe that the opinions of the Federal Circuit do not reflect a deep understanding of science and technology. In this blog I'll focus specifically on the issue of laws of nature.  

It appears that the Federal Circuit has uncritically accepted the Supreme Court's statement in Mayo that a law of nature is any natural relationship that exists "in principle apart from any human action." In Genetic Technologies v. Merial*, the panel (Dyk, Prost, Taranto) held that the "linkage disequilibrium between the non-coding and coding regions," the condition in which certain alleles at two linked loci are non-randomly associated with each other, "is indisputably a universal, inherent feature of human DNA" and thus a law of nature. The panel in Ariosa (Reyna, Linn, Wallach) held that Sequenom's claims to identifying parental cell-free DNA "begins and ends with a natural phenomenon. Thus, the claims are directed to matter that is naturally occurring." Judge Dyk in his concurrence with the denial of en banc review in Ariosa clearly accepted the Supreme Court's definition, saying, "Mayo contributed only routine application to a law of nature that was already well known." In Rapid Litigation Management v. CellzDirect, the panel (Prost, Moore, Stoll) skipped the question of whether the ability of liver cells to survive multiple freeze-thaw cycles was a law of nature: "The district court identified in these claims what it called a “natural law”—the cells’ capability of surviving multiple freeze-thaw cycles. We need not decide in this case whether the court’s labeling is correct." Instead, the court engaged in the convoluted exercise of whether the claims were "directed to" this ability. While the result of this decision was correct—the claims were patent eligible—a more direct path to that outcome would have been a finding that there was no law of nature being claimed at all.

Of course, one can say that the Federal Circuit is bound by precedent and has no choice but to follow the Supreme Court. This is true but fails to grasp the problem: The Federal Circuit does not even recognize that the Supreme Court's definition is wrong. There have been no dissents by the Federal Circuit raising this issue. Instead, they apparently believe that the Supreme Court is correct, and thus only raise other concerns about the application of the Mayo test. 

Judge Lourie at least has attempted a formal statement of a law of nature, writing in his concurrence with the denial of en banc review in Ariosa, that "Laws of nature are exact statements of physical relationships, deduced from scientific observations of natural phenomena." This statement is correct, but it is not a complete statement of a law of nature. Merely having an exact statement of a physical relationship, derived from scientific observations does not make the relationship "lawful."

While there are a variety of different theories as to what constitutes a law of nature, here is list of criteria found in the literature:

1. Universality: The statement is true under any and all conditions and thus is independent of contingent facts. Consider the statement “All robin eggs are greenish-blue.” To be universal, there would have to be no examples of robin eggs that are not greenish-blue. Without this universality, the statement would not be a law of nature. It would merely be an “accidental generalization,” a statement that happens to be true for a large body of observations.
2. Necessity: The statement expresses something that must be true and not just true by definition (e.g., “all humans are mammals”) or by mathematics (e.g., “there is no largest prime number”). This requirement is called physical, natural or nomological necessity. Loosely speaking, is there something that makes it necessary that all robin eggs are blue? For some theories of laws of nature, necessity is what distinguishes a law-like statement from a (mere) universal truth.
3. Explanation: The statement is part of a theory that can explain the phenomena of interest and all of the instances. A law of nature regarding the particular color of robin eggs would be part of a theory that explains why and how this occurs. 
4.  Prediction: The statement makes predictions about future instances, which predictions can be confirmed (or disconfirmed). Will all robin eggs that are found in the future be greenish-blue?
5. Inference: the statement supports inferences from sets of facts to further sets of facts which can be confirmed. Given the color of robin eggs, can we infer any other useful facts?  For example, as mentioned below, Newton's law allow us to derive Kepler's more specific laws, and thus confirm specific facts.
6. Counterfactuals: A statement like “It is a law that robin eggs are greenish-blue” must be true in counterfactual examples, hypothetical situations in which there are no robin eggs at all.  In other words, if one imagines a hypothetical world where everything is the same except the specific facts that the law generalizes, would the law still be true?
7. Objectivity: Whether a statement is a law of nature does not depend on any human knowledge, belief, interest, need, or other subjective or pragmatic consideration. Thus, if it is a law that robin eggs are greenish-blue, it does not depend on any of our beliefs about robins, our perception of what is greenish-blue, or whether it is useful to humans that robin eggs have this color. 
8. Scientific: A statement should be discoverable by scientists; it is what scientists would
   consider a law.  Would the relevant scientific community recognize the evidence and explanation as sufficient to establish the truth of the law?

Perhaps the simplest definition of a law of nature is the following:

“What are the laws of nature? may be stated thus: What are the fewest and simplest assumptions, which being granted, the whole existing order of nature would result? Another mode of stating it would be thus: What are the fewest general propositions from which all the uniformities which exist in the universe might be deductively inferred?”

J. S. Mill, “A System of Logic" (1843)

Considering the above criteria or Mills' definition, none of various so-called "laws of nature" that have been found by the Supreme Court, the Federal Circuit, and the lower courts come even close qualifying as a true law. Here is a sample of "laws of nature" found in various court decisions:

• Detecting whether any antibody-antigen complexes are formed between the 125I-MuSK receptor and the antibodies present in said bodily fluid. Athena Diag., Inc. v. Mayo Collaborative Servs., LLC.
• The effect of nutrition on the expression of least one gene in the genomic map of an animal. Hemopet v. Hill's Pet Nutrition, Inc. (affirmed by Fed. Cir.)
• Whether a dog is susceptible to "exercise induced collapse" based on the presence of a mutation at position 767 of the DNM1 gene. Genetic Veterinary Sciences v. Canine EIC Genetics.
• The production of interferon-gamma by CD4 T-cells and  CD6 T-cells in response to the presence in vitro to synthetic peptides found in tuberculosis bacterium. Oxford Immunotec Ltd. v. Qiagen, Inc. 
• The presence of certain mutations in the kinase domain of a patient’s EGFR gene substantially increases the sensitivity of epidermal growth factor receptor to tyrosine kinase inhibitor therapy, in the treatment of epithelial cell cancer. Esoterix Genetic Labs. LLC v. Qiagen Inc.
• The relationship between an internal body temperature to ambient (skin) temperature.  Exergen Corp. v. Brooklands Inc. (affirmed by Fed. Cir.)
• The bioavailability of controlled released oxymorphone being affected by renal function. Endo Pharms. Inc. v. Actavis Inc.
• The presence of two copies of the 577R allele being positively associated with "elite athletic performance." Genetic Techs. Ltd. v. Lab. Corp. of Am. Holdings.

None of these—and most obviously the last one—is a "law of nature." They are at best examples of accidental generalizations or in even more weakly, simply facts.  

In that sense they are no different that the vast number of patents relating to physical processes, such as the very first patent ever issued, for the process of making potash. Potash, a form of potassium carbonate and potassium salts, was an important ingredient during the industrial revolution.  Potash is derived from the ashes of burned hardwood ("pot ash").  Samuel Hopkin's invention lay in the discovery that the raw ashes can be burned a second time in a furnace before they were dissolved in water, thereby reducing impurity. The second burning step more fully oxidized the ashes, resulting in  much greater carbonate formation.  Obviously, this fact is a result dictated by the "laws of chemistry".  If Hopkins' patent was challenged today, a court would likely invalidate it.  So much for progress.

The staple law of nature that the Supreme Court and other courts use is Einstein's E=mc². This equation, which states the mass-energy equivalence, is a physical law—it describes a universal constraint on all physical matter. This (real) law of nature is fundamentally different from the "laws of nature" that the courts have focused on and raised to the level of Einstein's law. The most obvious difference is this: the relationships set forth above, are biological relationships, and therefore they are the result of contingent evolutionary processes. By contrast, Einstein's law is a physical law—it describes the fundamental relationships of all matter. The difference between physical laws and generalizations in biology  is not merely a matter of "narrow" versus "broad" laws of nature. Physical laws define the behavior of physical systems, based on underlying fundamental forces and properties. In that sense, all physical laws are reductionist: They take a broad array of specific details from many different instances and observations and distill out a simplified, discrete relationship. Consider Newton’s three laws of motion:

1.  An object will remain at rest or in uniform motion in a straight line unless acted upon by an external force.
2. The force acting on an object is equal to the mass of that object times its acceleration.
3. To every action there is always opposed an equal reaction.

Also consider his law of universal gravitation:

A particle attracts every other particle in the universe using a force that is directly proportional to the product of their masses and inversely proportional to the square of the distance between them.

These statements are universal because they apply to any and all objects under all circumstances (excepting objects at quantum scales or relativist velocities). Newton’s laws explain not just the motion of apples and airplanes on Earth , or the motion of the Earth itself, but the motions of all of the planets and stars. Further, Newton’s laws are reductionist—they explain, for example Kepler’s specific laws of planetary motion in more general terms of mass and force. And the laws enable precise predictions of future events (as well as past conditions) that can be tested and reproduced. 

Similarly, Einstein's law is not specific to a particular type of matter—it is not limited to any particular chemical elements, let alone any particular physical substance. Einstein’s theory of relativity was further able to explain Newton’s laws in more general way, and thus was also reductionist. The relationships described by Newton’s, Einstein's and other physical laws are inherent in the structure of our physical reality.  

But the biological generalizations of naturally occurring relationships are entirely different. 

In Part II I'll explain why.

And it's no laughing matter.

* Genetic Technologies has filed a petition for certiorari.  In Part II I explain why the Court should grant the petition.

The One Year Anniversary: The Aftermath of #AliceStorm

By: Robert R. Sachs

It's been one year since the Supreme Court's decision in Alice Corp. v. CLS Bank. On its face the opinion was relatively conservative, cautioning courts to "tread carefully" before invalidating patents, and emphasizing that the primary concern was to avoid preemption of "fundamental building blocks" of human ingenuity.  The Court specifically avoided any suggestion that software or business methods were presumptively invalid.  But those concerns seem to have gone unheeded.  The Court's attempt to sidestep the tricky problem of defining the boundary of an exception to patent eligibility—"we need not labor to delimit the precise contours of the "abstract ideas category in this case""—has turned into the very mechanism that is quickly "swallow[ing] all of patent law.” The federal courts, the Patent Trial and Appeal Board, and the USPTO are using the very lack of a definition to liberally expand the contours of abstract ideas to cover everything from computer animation to database architecture to digital photograph management and even to safety systems for automobiles.

Let's look at the numbers to present an accurate picture of the implications of the Supreme Court’s decision. My analysis is a data-driven attempt to assess the implications of Alice one year out. It is with an understanding of how the Supreme Court’s decision is actually playing out in the theater of innovation that we can better project and position ourselves for what the future holds.

Alice at Court

As of June 19, 2015 there have been 106 Federal Circuit and district court decisions on § 101 grounds, with 76 decisions invalidating the patents at issue in whole or in part.  In terms of patents and claims, 65% of challenged patents have been found invalid, along with 76.2% of the challenged claims. 

The success rate of motions on the pleadings (including motions to dismiss and judgments on the pleadings) is extremely impressive:  67% of defense motions granted, invalidating 54% of asserted patents.  There has never been a Supreme Court ruling that the presumption of validity does not apply to § 101—only the Court's use of the originally metaphorical notion that eligibility is a "threshold" condition.  Given that, and the general rule that to survive a motion to dismiss the patentee (historically) need only show that there was a plausible basis that the complaint states a cause of action— there is a plausible basis that the patent claim is not directed to an abstract idea, law of nature, or natural phenomena.  One would be forgiven for thinking, as did former Chief Judge Rader in Ultramercial, LLC v. Hulu, LLC that a “Rule 12(b)(6) dismissal for lack of eligible subject matter will be the exception, not the rule.”  Apparently the rules change in the middle of the game.

Turning specifically to the Federal Circuit, the numbers are stark:

Of the 13 decisions, 11 are in software or e-commerce and only two are in biotech.  The one case where the court held in favor of the patentee, DDR Holdings, LLC v. Hotels.com, L.P. appeared to offer a narrow avenue for patentees to avoid invalidation.  However, only nine district court opinions have relied upon DDR to find patent eligibility, with over 30 court opinions distinguishing DDR as inapplicable.  Even more interesting is the fact that in DDR the Federal Circuit essentially held that creating a website that copies the look and feel of another website is patent eligible.  In the Silicon Valley, that's called phishing, and it's not a technology in which most reputable companies invest.

Alice at the Office

The impact of Alice is similarly impacting practitioners before the USPTO.  In December, 2014 the Office issued its Interim Guidance on Patent Subject Matter Eligibility, providing guidance to patent examiners as to how to apply the Alice, Mayo, and Myriad decisions along with various Federal Circuit decisions, to claims during prosecution.  Importantly, the Guidance noted that "the Supreme Court did not create a per se excluded category of subject matter, such as software or business methods, nor did it impose any special requirements for eligibility of software or business methods,” and it reminded examiners that "Courts tread carefully in scrutinizing such claims because at some level all inventions embody, use, reflect, rest upon, or apply a law of nature, natural phenomenon, or abstract idea."  Alas, most patent examiners are acting as if the patent applications before them are the exceptions to these cautionary instructions. 

With the assistance of Patent Advisor, I compiled a dataset of almost 300,000 office actions and notice of allowances sampled in two week periods during 2013, 2013, 2014 and early 2015, and all actions during March, April and May 2015, across all technology centers: 

About 100,000 actions were notices of allowances, leaving about 200,000 office actions.  Each office action was coded as to whether it included rejections under §§ 101, 102 and 103.  For each office action the art unit and examiner was identified as well, and the status of the application (abandoned, pending or patented) as of the date that the data was obtained.  I then analyzed the data for office actions rejections based on § 101, allowance rates, and examiner rejection rates.  Here's what I found. 

 Percent of all Actions with § 101 Rejections

Here, we have the percentage of all actions in each period that received a § 101 rejection, considering both rejections issued and notices of allowances.  The black line separates pre-Alice from post-Alice data.  For example, in TC 1600, the biotech area, in January, 2012 6.81% of all actions issued (counting both office actions and notices of allowances) were office actions with § 101 rejections; by May 2015 that percentage almost doubled to 11.86% of actions.   

Overall, data shows that in 2012 subject matter rejections were mainly in the computer related Tech Centers (2100, 2400) and began declining thereafter, while escalating in biotechnology (1600) and so-called "business methods" Tech Center, TC 3600, following Mayo and Alice.   Other technology centers such as semiconductors and mechanical engineering had essentially low and constant rejection rates.  But that's not because there are no software patents in these technology centers: you find plenty of software patents in these groups. Rather, my view is that it is because examiners in these groups treat software patents as they do any other technology.  

The rejection rates in Tech Center 3600 in the 30-40% range are higher than any other group, but they also mask what's really going on, since TC 3600 covers more than business methods.  Tech Center 3600 has nine work groups:

Percent of all Actions with § 101 Rejections in TC 3600 Work Groups

In TC 3600 most of the work groups handle good old-fashioned machines and processes, such as transportation (3610), structures like chairs and ladders (3630), airplanes, agriculture, and weapons (3640), wells and earth moving equipment (3670), etc.  Three work groups handle e-commerce applications: specifically, 3620, 3680 and 3690.  Here we see that these groups have significantly higher § 101 rejections than the rest of TC 3600.  But let's drill down further. 

Each of work groups 3620, 3680 and 3690 have between five and 10 individual art units that handle specific types of e-commerce technologies, but they are not all under the same work group. For example business related cryptography is handed by both art units 3621 and 3685; healthcare and insurance is handled by art units 3626 and 3686; operations research is handled in 3623, 3624, 3682 and 3684. If we consolidate the data according to technology type and then look at rates of § 101 rejections we get the following: 

Percent of all Actions with § 101 Rejections in E-Commerce Art Units by Technology Type

What's going on?  After Bilski in 2010, the § 101 rejections were running between 17% and 50%. Not great but tolerable since these were mostly formal and were overcome with amendments adding hardware elements ("processor," "memory") to method claims or inserting "non-transitory" into Beauregard claims. 

But after Alice, everything changed and § 101 rejections started issuing like paper money in a hyperinflation economy.  If your perception as a patent prosecutor was that the every application was getting rejected under § 101, this explains your pain.  Here's another view of this data, in terms of actual number of § 101 rejections per sample period:

Number of Office Actions with § 101 Rejections in E-Commerce Art Units by Technology Type

Notice here that the number of office actions in March, 2015 fell dramatically, and then in April the flood gates opened and hundreds of actions issued with § 101 rejections.  This is consistent with the Office's statements in January 2015 that it was training examiners in view of the 2014 Interim Guidance, so office actions were being held until the training was completed.  Apparently, the training skipped the part about no per se exclusions of business methods. 

 Now let's consider notice of allowance rates. First with respect to all Tech Centers. 

Percent of Actions that Are Notices of Allowance

This data reflects, of all the actions that were issued in a given period, the percentage that were notices of allowances. (Note here that contrary to the preceding tables, red cells are low percentage, and green cells are high since notices of allowance are good things, not bad things).  The numbers look good, with a general increasing trend over time.

Now consider what's happening in TC 3600's business methods art units. 

Percent of Actions that Are Notices of Allowance in Business Methods

Now the picture is quite different.  The rate of NOAs drops dramatically after Alice, especially in finance and banking and operations research.  If it seemed that you were no longer getting a NOAs, this is why.  The zero percent rate in March, 2015 is a result of the Office holding up actions and NOAs in view of the Interim Guidance training, as mentioned above.

Patents issued in the business methods art units typically are classified in Class 705 for "Data Processing."  I identified all patents with a primary classification in Class 705 since January, 2011, on a month by month basis, to identify year over year trends. Again the black line separates pre-Alice from post-Alice data.

This table shows a precipitous decline in the number of business method patents issued following Alice, especially year over year.  The lag between the June, 2014 Alice decision and the drop off in October 2014 is an artifact of the delay between allowance and issuance, as well as the USPTO's unprecedented decision to withdraw an unknown number of applications for which the issue fee had already been paid, and issue § 101 rejections.  It's an interesting artifact, as well, that the number of Class 705 patents issued peaked in the month after Alice: you have to remember that these patents were allowed at least three months, and as much as a year, before the Alice decision; it just took a long time to actually get printed as a patent.

Next, we'll consider abandonment rates, on a comparative basis, looking at the percentages of applications that were ultimately abandoned in relationship to whether or not they received a § 101 rejection.  We'll compare the data from January 2012 to July 2014. Again, consider the entire patent corps: 

Percent of Abandoned Applications with Prior § 101 Rejection

Here we see that of the applications that were abandoned during the respective sample periods, the vast majority did not have a prior § 101 rejection.  Only in TC 3600 did the majority shift after Alice with 51.83% applications that received § 101 rejections in July 2014 being subsequently abandoned by May 31, 2015.  Again, let's drill down into the business method art units in TC 3600:

 Percent of Abandoned Applications with Prior § 101 Rejection

First, prior to Alice, abandonments in the business method units appeared to result more frequently from other than § 101 rejections, typically prior art rejections.  This is shown by the fact that the Jan. 2012 "No" column (no prior 101 rejection) is greater than the Jan. 2012 "Yes" column.  Then after Alice, there is a huge shift with the vast majority of applications that were abandoned having § 101 rejections, as shown by the July, 2014 "Yes" column.  The vast majority of abandonments, upwards of 90%, followed a 101 rejection.   That's applicants essentially giving up over what only a few years ago was a relatively minor hurdle.  That's what happens when you change the rules in the middle of the game. Second, there is also significant differential behavior in the business method areas as compared to the rest of the technology centers after Alice. 

Here's my personal favorite.   

Rates of Examiner § 101 Rejections in TC 3600

This table shows the numbers of examiners in the business method art units with respect to the percentage of applications in which they issued § 101 rejections after Alice.  The first row shows that during the sampled periods since Alice, 58 business methods examiners issued § 101 rejections in 100% of their applications, for a total of 443 applications.  Twenty examiners issued § 101 rejections for between 90% and 99% of their cases, covering 370 applications.  In short, 199 examiners issued § 101 rejections more than 70% of the time, covering 3,304 applications or about 70.6% of all applications.  This is not "treading carefully."

We find similar, though less dramatic, trends and variations in TC 1600 which handles biotechnology, pharma, and chemistry.

Percent of all Actions with § 101 Rejections in TC 1600 Work Groups

The red line separate pre-Mayo/Myriad data from post-Mayo/Myriad, and the increase in the post-period is significant.  Here too, the various work groups mask the more significant rejection rates in specific technology areas, with the rejection rate in microbiology first jumping up to 34.6% post-Mayo and steadily climbing to the current 53.2%.   

Percent of all Actions with § 101 Rejections in TC 1600 by Technology

This table breaks down the work groups into technology types, and then these are sorting average rejection rate over the past four months.  Following Alice, we see a significant increase in eligibility rejections in bioinformatics related applications--inventions that rely on analysis and identification of biological and genetic information, and which are frequently used in diagnostics and drug discovery.  This is especially disconcerting because bioinformatics is critical to the development of new diagnostics, therapies and drugs.  

Note as well the enormous spike in rejections for plant related applications from 0% between July 2015 and April 2015, to 50% in May 2015. This is likely a result again of the USPTO's Interim Guidance which essentially instructed examiners to reject any claim that included any form of a natural product.  

At least pesticides and herbicides are safe from Alice, since we definitely need more of those.  The irony is that the more pesticides and herbicides that come to market, the more we need bioinformatics inventions to identify and treat conditions potentially resulting from these products.  

Alice at the Board

The Patent Trial and Appeal Board has been even more hostile to software and business methods patents under the Covered Business Method review program:

	Total Petitions	Petitions Granted	Percent Invalid
PTAB CBM Institution on § 101	72	64	89%
PTAB Final Decisions on § 101	27	27	100%

Covered Business Method review is available for patents that claim "a method, apparatus, or operation used in the practice, administration, or management of a financial product or service."  The Board takes a very broad view of what constitutes a financial product or service: if the patent specification happens to mention that the invention may be used in a financial context such as banking, finance, shopping or the like, then that's sufficient.  The Board has found CBM standing in 91% of petitions, and instituted trial in 89% of petitions asserting § 101 invalidity.   Once a CBM trial has been instituted, the odds are heavily in the petitioner's favor: of the 27 final CBM decisions addressing § 101, the Board has found for the petitioner 100% of the time. 

 Finally, we look at the Board's activity in handling ex parte appeals from § 101 rejections for the period of March 1, 2015 to May 30, 2015: 

• 32 Ex Parte Decisions on § 101, with 15 in TC 3600.
• 28 Affirmances overall, 13 in TC 3600
• Two Reversals on § 101, both in TC 3600
• Four New Grounds of Rejection for § 101

Following suit with how the Board is handling CBMs, they are also heavily supporting examiners in affirming § 101 rejections.  More disconcerting is the trend of new grounds of rejection under § 101.  While only four were issued in this period, there have been several dozen since Alice. In this situation, the applicant has appealed, for example, a § 103 rejection.  The Board can reverse the examiner on that rejection, but then sua sponte reject all of the claims under § 101.  What are the odds that the examiner will ever allow the case?  Close to zero. What are the odds that an appeal back to the Board on the examiner's next § 101 rejection will be reversed?  If the Board's 100% rate of affirming its CBM institution decisions on § 101 is any indication, then you know the answer. 

Conclusions

Looking at the overall context of the Alice decision, it's my view that Supreme Court did not intend this landslide effect.  While they were certainly aware of the concerns over patent trolls and bad patents, they framed their decision not as a broadside against these perceived evils, but as simple extension of Bilski and the question of whether computer implementation of an abstract idea imparts eligibility.  At oral argument, the members of the Court specifically asked if they needed to rule on the eligibility of software and they were told by CLS and the Solicitor General that they did not.  To the extent that there is broad language in that opinion, it is the cautionary instructions to the courts to avoid disemboweling the patent law from the inside, and the emphasis on preemption of fundamental ideas—not just any ideas—as the core concern of the exclusionary rule.  The evidence above shows that these guideposts have been rushed past quite quickly on the way to some goal other than the preservation of intellectual property rights.

 If the present trends hold, and I see no reason to suggest that they will not, we will continue to see the zone of patent eligibility curtailed in software (not to mention bio-technology after Mayo and Myriad).  Indeed, the more advanced the software technology—the more it takes over the cognitive work once done exclusively by humans, the more seamless it becomes in the fabric of our daily lives—the less patent eligible it is deemed to be by the courts and the USPTO.  What technologies will not be funded, what discoveries will not be made, what products will never come to market we do not know.  What we do know is this: there is only one law that governs human affairs and that is the law of unintended consequences. 

  

Recent Patent Eligibility Decisions: Ameritox, Certified Measurement, and MyHealth

By: Robert R. Sachs

In Ameritox v. Millenium Health (W.D. Wis., J. Conley) the court rejected the defendant's motion to reconsider its earlier ruling that Ameritox's patents were not ineligible.  (The earlier decision cited my Law360 article, noting that only 26% of patents have survived post-Alice motions.)  Here, Millenium argued that the court should not have considered that "the prior art steered a skilled artisan away" from the claimed invention, and that one of the claimed steps was not conventional, since this allegedly conflated eligibility with novelty and non-obviousness.  The court ripped Millenium on this point, saying "this argument ignores that Millenium itself squarely argues the relevant relevance of this factor in assessing the eligibility of the ’680 patent under § 101, by citing the Federal Circuit's decisions in In re BRCA1- and BRCA2- Based Hereditary Cancer Test Patent Litigation, where the court specifically held that "what practitioners already knew" and what were "well-understood, routine, and conventional techniques that a scientist would have thought of" were relevant to eligibility.

This is, in my view, the right approach.   Several recent district court decisions have said that evidence of novelty is not relevant to eligibility, and cited Diehr's statement that "the "novelty" of any element or steps in a process, or even of the  process itself, is of no relevance in determining whether the subject matter of a claim falls within the § 101 categories of possibly patentable subject matter."  This interpretation utterly misreads Diehr: the Court was discussing claim dissection, emphasizing that "it is inappropriate to dissect the claims into old and new elements and then to ignore the presence of the old elements in the analysis."  The Court was criticizing the approach of disregarding "old elements" that lack novelty from the the claim for the purposes of eligibility--not saying that actual novelty was irrelevant.  

One could argue that Diehr's approach cuts both ways, and so actual novelty does not matter.  In a perfect Diehr regime this would be correct.  The problem is that Alice/Mayo brought "conventional, well-understood, routine" into play.  If evidence (or more frequently mere assertions) of the "conventional" aspect of the claim is now relevant, then likewise is evidence of actual novelty or non-obviousness.  For a court to accept the former and reject the  latter is not legally sound.  Thus, the Ameritox court's analysis is squarely in line with the actual logic of Alice, even if Alice would superficially suggest a different result.

The Certified Measurement and MyHealth decision are of a piece.  Both were decided by Magistrate Judge Payne in the Eastern District of Texas on motions to dismiss for ineligibility, and suggest that he's predisposed to deny such motions. The text of both opinions in regards to Section 101 is identical. The court denied the motions stating that  "while the issue of patentable subject matter presents a question of law, the legal analysis can – and often does – “contain underlying factual issues," and that in the present case "the need for claim construction is especially apparent, where the defendants' invalidity argument is implicitly premised on its conclusions about the meanings of certain claim terms."  By using the exact same template in both cases, the court both literally and behaviorally signaled its overall view that motions to dismiss under § 101  are disfavored in his court:  

The difficulty of making a substantive ruling on the validity of an issued patent in what is – in essence – a complete vacuum cannot be understated. While the claim language of some patents may be so clear that the court need only undertake a facial analysis to render it invalid at the pleading stage, that will not be the norm and is certainly not the case here. (emphasis added). 

What makes this striking is that the asserted claim in MyHealth is not an especially technical one:

1. A method for tracking compliance with treatment guidelines, the method comprising:

determining a current assessment of one or more diagnosed conditions in a patient based

on data about each of the diagnosed conditions from the patient who is at a remote location and on one or more assessment guidelines for each of the diagnosed conditions;

updating an existing treatment plan for each of the diagnosed conditions based on the

existing treatment plan, the current assessment, and on one or more treatment guidelines for each of the diagnosed conditions to generate an updated treatment plan for each of the diagnosed conditions;

reviewing the updated treatment plan for each of the diagnosed conditions;

determining if one or more changes are needed to the reviewed treatment plan for each

of the diagnosed conditions;

changing the reviewed treatment plan if the one or more changes are determined to be

needed;

providing the patient with the reviewed treatment plan for each of the diagnosed conditions; and

generating and providing compliance data based on the updated treatment plan and the

reviewed treatment plan for each of the diagnosed conditions.

Most district courts would likely entertain, and probably grant a Section 101 motion to dismiss on such a claim, saying that there's no claim construction that could impact what appears to be the "abstract" and "mental" nature of these steps.  It would have been beneficial to future litigants if the court had identified some specific element of this claim that required claim construction.

On the other hand, the claims in Certified Measurement should easily pass Section 101 (and would also seem to require claim construction).  For example:

1. A device for secure measurement acquisition and certification, comprising:

a sensor;

a time generator for transmitting a representation of a time;

a computing device, including a computer processor and a memory, coupled to receive a

measurement signal representative of a physical measurement from the sensor and the representation of the time from the time generator, said computing device producing an augmented measurement including the measurement signal and the representation of the time, and performing a cryptographic operation on at least a portion of the augmented measurement to form a certifiable measurement;

an output device, coupled to the computing device, for writing the certifiable measurement in

response to a request for the certifiable measurement; and

tamper resistance means for rendering at least one of the sensor, the time generator, and the

computing device resistant to tampering.

Here, claim construction would definitely appear necessary, if for nothing else than the "tamper resistant means."  More over, unlike MyHealth, in which there was only a single claim at issue, there were 387 claims at issue in Certified Measurement. On its face it seems implausible to argue that they are all invalid on their face, with no need for claim construction or other evidence.  

Thus, while these decisions  may be at odds with the current zeitgeist of granting motions to dismiss and summary judgment in the absence of claim construction, the underlying rationale for these decisions is sound: patent eligibility, even if a question of law, still requires a real analysis of the claims and that turns on questions of fact.

 

Fenwick & West and George Mason University Patentable Subject Matter Roundtable Recap

By: Robert R. Sachs

On January 31, 2014, Fenwick & West and the Center for the Protection of Intellectual Property (CPIP) at George Mason University School of Law held a roundtable on Patentable Subject Matter at Fenwick’s Silicon Valley office. 

Our approach to this roundtable was different from the typical conference or roundtable on patent eligibility. As I have made clear in other posts, the question of patent eligibility reaches outside of the strict confines of the courtroom, the Patent Office and the patent statute; it is intimately grounded in science and philosophy, in the nature of human creativity and in the types of things that can be said to be the subject of human creation. In particular, the fundamental questions of patent eligibility—what is a law of nature, an abstract idea, or a natural phenomena—are questions that are ancient in origin, and that have been addressed in considerable detail outside the boundaries of the law.  

Accordingly, in addition to the usual suspects, such as law professors and patent practitioners, we included in our roundtable experts in a number of extra-judicial disciplines. Mark Turner, professor of Cognitive Science at Case Western Reserve University, is one of the leading theorists and researchers in studying the nature of human cognition, and one of the originators of the theory of Conceptual Blending, which describes how we combine abstractions from different domains to understand and imagine. Gregory Salmieri, visiting fellow in Philosophy at Boston University, provided insights on the historical and analytical issues underlying abstract ideas and laws of nature. Ted Brown, Emeritus Professor of Chemistry at University of Illinois at Urbana-Champaign, discussed the role of metaphor in scientific thinking, and how chemists and physicists think about laws of nature. Steve Rosenberg, Ph.D., Chief Scientific Officer at CardioDx, and an inventor on over 20 patents, brought his expertise in biochemistry and genetics to bear on these topics as well.

Our academic contingent included Adam Mossoff, Mark Schultz, Matthew Barblan, co-directors of CPIP; Kristin Osenga, professor of law at University of Richmond School of Law, with expertise in the role of linguistics in patent law; Christopher Holman, professor of law at University of Missouri-Kansas City, who has extensive experience in biochemistry and molecular biology; Andrew Chin, professor of law at the University of North Carolina, a specialist in the mathematical considerations under debate; and Saurabh Vishnubhakat, post-doctoral associate at Duke Law School and an expert advisor to the USPTO on patent policy. 

Our practitioners included myself, Courtney Brinckerhoff, partner at Foley & Lardner LLP, an expert in biotechnology patent issues and James Calkins, Vice President and Global Head of Patent Support at Sanofi (and former clerk to J. Giles Rich of the Federal Circuit), who explained the impact that the uncertainty in patent eligibility has on investments by companies in biotech innovations.

We will publish a white paper on the roundtable shortly. 

Alice Corp. v. CLS Bank Amicus Briefs Filed, Reckoning Day Approaches

By: Robert R. Sachs, Daniel R. Brownstone

Last week, we filed two amicus briefs with the Supreme Court in Alice Corp. v. CLS Bank, one on behalf of Advanced Biological Laboratories (ABL), and one for Ronald M. Benrey (Benrey). It goes without saying that this is the bellwether case for the patent eligibility of software. The question presented by the Court and the parties was whether claims to computer-implemented inventions—including claims to systems and machines, processes and items of manufacture—are directed to patent-eligible subject matter within the meaning of 35 U.S.C. § 101 as interpreted by this Court.

Our two briefs focused on different aspects of the issue. The ABL brief set forth a new framework for patent eligibility called “objective preemption.” The core thesis is that patent eligibility is a question of law, but must be predicated on objective analysis based on POSITA, the person of ordinary skill in the art. This conforms the analysis to how obviousness is determined, a question of law based on the Graham factors, as well as claim construction, enablement, written description and doctrine of equivalents infringement. In all of these, POSITA is used to ground the analysis in objective factors, not the subjective beliefs of the Court based on what it had for breakfast. The brief explains how POSITA would be used to understand the scope of the claim, and whether the claim preempts all practical applications of some abstract idea. The brief concludes by showing that Alice’s claims, which were held invalid by the district court and the Federal Circuit, are valid under objective preemption.

The Benrey brief is more narrowly focused. Benrey is the author of Understanding Digital Computers (1964). This book was cited by the Solicitor General to the Supreme Court in Gottschalk v. Benson in support of the proposition that computers perform mental steps like humans. This became a core principle over the years and persists today; Judge Lourie of the Federal Circuit has repeatedly stated it as a fact and continues to use it to invalidate software patents. The problem is that Benrey never suggested that computers in fact operate like human minds.  Benrey’s brief explains that he was quoted out of context, that computers do not perform mental steps, and that mathematical formulas are not scientific truths per se as apparently believed by the Court. Benrey's brief goes on to explain that the mental steps doctrine was extended to computers only on the basis of this misunderstanding of the nature of computers and mathematics. It further shows that the notion that general purpose computers cannot impart patent eligibility is scientifically unsound, based on the work of Alan Turing.

Copies of the briefs are available at the links below. We look forward to further discussion with those on all sides of the issue over the coming weeks, and ultimately, resolution regarding this question that remains critical to the future of innovation.

Oral argument is set for March 31, 2014.  We'll be there.

Brief for Amicus Curiae Advanced Biological Laboratories, SA in Support of Petitioner

Brief for Amicus Curiae Ronald M. Benrey in Support of Neither Party

A Modest Proposal for Protecting the Laws of Nature from Being Burdened by Patents, and Making them Free to All Men and Reserved Exclusively to None

By: Robert R. Sachs

The Supreme Court’s actions to invalidate the patents at issue in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. ___ (2012) and Association for Molecular Pathology, et al. v. Myriad Genetics, Inc., et al., 569 U.S. ___ (2013), unequivocally demonstrate that the USPTO has failed to properly prevent patents on laws of nature from issuing. Similarly, the Food and Drug Administration does not appear to understand the significance of its role as potential steward of biological laws of nature in approving new therapeutics, many based on what we now know to be patented laws of nature. In view of this melancholy state of affairs, I have a very modest proposal.

Mental Steps, Computers and the Patent Eligibility of Expert Systems

By: Robert R. Sachs

Earlier this week, I argued before the Federal Circuit on behalf of my client Advanced Biological Laboratories (ABL) in SmartGene v. ABL. This is, as far as I can determine, the first time the Federal Circuit has addressed the patent eligibility of an expert system. Appearing before Judges Lourie, Dyk and Taranto, I argued that the patents, U.S. 6,081,786 and U.S. 6,188,988, were not merely “mental steps plus a computer” by claiming a computer system having three distinct knowledge databases.

I made several arguments that I have not seen presented to the court before. First, I argued that this particular limitation was found by the examiner to be distinctive over prior art expert systems and is thus evidence that the limitation is “meaningful,” since it showed that there were other expert systems that provided the same abstract idea but which did not implement this feature. In the “real world,” this meant that the claims did not preempt all “practical applications” of the abstract idea of evaluating and considering treatment regimens for patients.   

Second, I argued that the patent examiner’s classification of the patent into class 706/924 for medical expert systems was evidence that the person of ordinary skill in the art—the “relevant audience” in Prometheus’ language—was a computer scientist and not a physician, and thus the claims must be read from that perspective, not as instructions to a doctor. If the PHOSITA was a doctor, the examiner would have classified the invention into one of the medical procedure classes, such as class 129 or class 600. Given that, the claims must be read from the perspective of a computer scientist, who would understand that they recite a computer system, not mental steps of a doctor.

A recording of the oral argument is here. Copies of the parties' appeal briefs are here.

Prometheus Unbound II: Does Prometheus’ Claim Recite a Law of Nature?

By: Robert R. Sachs, Jennifer R. Bush

In our previous post, we explored the philosophical aspects of what is a law of nature. We can now apply that analysis and consider whether Prometheus’ claim recites a law of nature under the variously described criteria. Here is the claim 1 of the ‘623 patent:

1. A method of optimizing therapeutic efficacy for treatment of an immune-mediated
gastrointestinal disorder, comprising:

(a) administering a drug providing 6-thioguanine to
a subject having said immune-mediated gastrointestinal disorder; and

(b) determining the level of 6-thioguanine in said
subject having said immune-mediated gastrointestinal disorder,

wherein the level of 6-thioguanine less than about
230 pmol per 8x10⁸ red blood cells indicates a need to increase the
amount of said drug subsequently administered to said subject and

wherein the level of 6-thioguanine greater than
about 400 pmol per 8x10⁸ red blood cells indicates a need to
decrease the amount of said drug subsequently administered to said subject. 

Prometheus Unbound I: The Untethering of Laws of Nature and Patent Eligibility from Scientific Reality

By: Robert R. Sachs, Jennifer R. Bush

In March 2012, the Supreme Court ruled, in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. ___ (2012), that a patent claim on a method of determining whether a given dose of a particular type of medication was safe and effective was a “law of nature” and thus invalid. In the following two-part series, we will show that the Court’s characterization of Prometheus' patent as nothing more than a law of nature does not withstand critical analysis. 

Prometheus Labs is the exclusive licensee of U.S. patents 6,355,623 and 6,680,302. The patents deal with a protocol to determine the safe and effective dosage for thiopurines, which are medications that treat autoimmune diseases such as Crohn’s disease and ulcerative colitis. These medications metabolize in the patient’s body into 6-thioguanine (“6-TG”). The different rates at which the medications metabolize make it difficult for physicians to determine whether a given dose is too high (and thus toxic) or too low (and thus ineffective). The Prometheus patents’ claims identify the range for safe and effective dosages as those which result in a concentration of 6-TG between about 230 pmol and about 400 pmol per 8x10⁸ RBC red blood cells (“RBC”). The patents claim no underlying biological process that accounts for the differences in metabolization.

The Supreme Court ruled that Prometheus’ claims were not eligible for patent protection, holding that Prometheus did nothing more than identify a law of nature. However, The Court’s analysis of the claim as a law of nature is based on a superficial understanding of the scientific status of laws of nature.