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USPTO Guidance Takes an Expansive View of Patent-Ineligible Subject Matter

Donald L. Zuhn, Jr. Ph.D.Spring 2014 (snippets)

On March 4, in a memorandum issued to the Patent Examining Corps by Deputy Commissioner for Patent Examination Policy Andrew Hirshfeld, the U.S. Patent and Trademark Office (“USPTO”) implemented a new procedure for determining the subject matter eligibility of all claims involving laws of nature/natural principles, natural phenomena, and/or natural products under 35 U.S.C. § 101. The memorandum, entitled “Guidance For Determining Subject Matter Eligibility Of Claims Reciting Or Involving Laws of Nature, Natural Phenomena, & Natural Products” (the “Guidance Memo”)[1], was intended to assist examiners on this issue in view of the Supreme Court’s decisions in Association for Molecular Pathology v. Myriad Genetics, Inc.[2] and Mayo Collaborative Services v. Prometheus Laboratories, Inc.[3] On March 19, the USPTO supplemented the Guidance Memo with additional training materials for patent examiners to help implement the Guidance Memo, which took the form of a presentation comprising nearly one hundred slides (the “Training Materials”).[4]

It is understandably a monumental challenge to draft any guidance for navigating the Supreme Court’s decisions in Myriad and Mayo. This challenge is further heightened when drafting patent examiner training documents, which require the articulation of objective standards or tests to be applied by examiners during the examination of applications. Some members of the patent community, however, have argued that by issuing the Guidance Memo and Training Materials, the USPTO has gone too far with tests that are unduly inflexible. Opponents of these documents contend that they promote inappropriate bright-line rules and tests that lack support in Supreme Court jurisprudence and at times may even conflict with precedent. The Guidance Memo, it is argued, has expanded the scope of patent-ineligible subject matter beyond the boundaries of Myriad and Mayo, producing reactions from the patent community that have been resoundingly negative. Some of the more controversial issues from the guidance documents are summarized in this article.

Overbroad Definition of Natural Products

The Guidance Memo and Training Materials provide a definition of “natural products” that is arguably overbroad. The Training Materials paradoxically define the “natural products” judicial exception as encompassing both “naturally occurring products; and non-naturally occurring products that are not markedly different from naturally occurring products.”[5] It is hard to imagine that the Supreme Court intended to define “natural products” in such a way that includes “non-natural products,” despite qualification.

This expansive definition of “natural products” may amount to a presumption of ineligible subject matter. This presumption is supported in several locations in the guidance documents. First, the Training Materials state that “[a] claim that covers both eligible and ineligible subject matter should be rejected under §101.”[6] Since the Guidance Memo mandates that all claims that cover any amount of ineligible subject matter (no matter how trivial) should be rejected, examiners may be encouraged to presume by default that a claim covers at least some ineligible subject matter. This posture is encouraged by the Guidance Memo, which states that “[i]f the claim recites or involves (or may recite or involve)” any judicial exception, it should be scrutinized according to the Guidance Memo’s analysis.[7] The examiner need not even be sure that a claim involves a natural product or law. The Guidance Memo mandates that if there is “any doubt as to whether the claim recites a judicial exception,” examiners are required to apply the Guidance Memo’s analytical framework.[8] As a result, examiners can presume that nearly any product claim in a biotechnology application involves a judicial exception and should be scrutinized under §101 by default. It is hard to imagine many claims that fail to meet this standard, which unfortunately could subject nearly every claim in the field of biotechnology to the problematic “substantially different” analysis detailed in the Guidance Memo.

The Significant Structural Difference Requirement

Another issue within the Guidance Memo and Training Slides concerns the analysis of whether a claim recites something significantly different than a judicial exception (e.g., a natural product or law of nature).[9] To establish a significant difference, the Guidance Memo and Training Materials require that the claimed product be structurally different from the product as it exists in nature.[10] With this requirement, the Guidance Memo essentially imparts a new and heightened standard for patent-eligibility.

The origin of this “structural difference” test appears to be rooted in the USPTO’s interpretation of Diamond v. Chakrabarty[11] and Funk Brothers Seed Co. v. Kalo Inoculant Co.[12] However, these cases were focused on the functional—not structural—differences between the claimed products and those existing in nature. In Chakrabarty, the Supreme Court noted that an altered bacterium comprised “markedly different characteristics from any [bacterium] found in nature, and one having the potential for significant utility.”[13] However, Chakrabarty did not mention any requirement for structural differences between the claimed bacteria and its natural counterpart. And in Funk Brothers, although it is true that the Supreme Court found that a mixture of bacteria had the same structure, function, and utility as the same bacteria individually as they existed in nature, the Court’s patent eligibility determination focused on differences in function, not structure.[14] Thus, neither Chakrabarty nor Funk Brothers provides any support for the structural difference test articulated in the Guidance Memo.

The Guidance Memo firmly prioritizes structural differences over functional differences—a departure from the holdings of Chakrabarty and Funk Brothers. According to the Guidance Memo, “a functional difference is not necessary in order to find a marked difference,” but “the presence of a functional difference resulting from the structural difference makes a stronger case that the structural difference is a marked difference.”[15] In this way, the Guidance Memo suggests that a claimed product cannot simply be functionally changed or improved to confer patent eligibility—a structural difference is necessary.

To illustrate these principles, the Training Materials analyze the effect of “purification” according to the significant differences test articulated in the Guidance Memo.[16] Examiners are instructed to ignore any purification of the natural product, unless it produces a structural or functional difference in the product.[17] The Training Materials use pasteurization of fruit juice as an example. Pasteurized grapefruit juice is recognized as non-naturally occurring, but it is still considered a “natural product” under the significant differences test because not all pasteurizations alter the structure or function of grapefruit juice.[18] On the other hand, pasteurized pomelo juice is found to be patent-eligible,[19] because in this example the specification describes the pasteurization process as damaging the chemical structure of the components of the juice.[20] Thus, due to this limitation on the effects of pasteurization disclosed in the specification, the claimed pasteurized pomelo juice is structurally, and thus significantly, different from pomelo juice as it exists in nature.

Purification of natural products is a critical innovative process in biology, and thus the USPTO’s structural differences distinction makes very little sense scientifically.[21] Generally, the goal of purification is to isolate a natural product from the context of the whole organism while retaining the beneficial function of the product. It is well-recognized in the biotechnology field that even subtle changes to the structure of a molecule can often result in substantial changes to the function of the molecule.[22] If the purified molecule must be structurally different for patent eligibility, this molecule is highly likely to have a different function than the natural product. This would frustrate the purpose of many purifications and discourage such research, particularly since the whole body of knowledge regarding the natural molecule could no longer definitively apply to the (patent-eligible) structurally different molecule.

Considerations for Patent Practice

Although the practical effect of the guidance documents has yet to be realized at the USPTO, there are ways for patent practitioners to anticipate and (theoretically) avoid the pitfalls that are presented. First, when drafting claims that involve a judicial exception like natural products, the claim drafter must keep in mind that the “significantly different” test applies to every conceivable embodiment covered by the claim. Therefore, if there is even a single embodiment that is not significantly different than the natural product, the claim will be found to be ineligible subject matter. This point is confirmed in the pomelo juice example presented in the Training Materials, where juice containing a non-natural preservative is patent-eligible, but juice containing a natural preservative is ineligible.[23] Both preservatives produce the same effect on the juice, yet somehow the use of a non-natural preservative “adds something significant” to the claim, while use of a natural preservative does not. This seemingly trivial distinction may have a substantial impact on the pharmaceutical industry because drug products are often compositions comprising both naturally-derived and non-naturally-derived components.[24] Thus, for naturally-derived products, it may be beneficial to emphasize the source of the differences between the natural and naturally-derived product in the specification. For example, any isolation, purification, or synthesis steps that modify the natural product should be emphasized, perhaps including an explicit definition for these modifying steps.  Since any possible embodiment that is not significantly different from the natural product could render the claim patent-ineligible, this strategy may help clarify that the claim does not cover these embodiments. For applications that are currently pending, it may be possible to exclude ineligible embodiments by way of “wherein” clauses or Markush claim listings pertaining to process steps. This technique is seen in Example E of the Guidance Memo,[25] where a claim recites specific limitations in every step of a PCR reaction, rather than claiming a more general term like “amplifying.”[26]

Second, a patent drafter may want to consider disclosing in the specification any and all functional differences between claimed products and their natural counterparts. As in the grapefruit juice example, if a patentee can articulate the chemical changes or functional differences introduced by the process of making the claimed product, this may allow even minor structural differences to be considered significantly different. All functional differences should theoretically be disclosed, for the Guidance Memo provides no requirement that the structural differences themselves be directly related to the primary function of the claimed invention. Under this reasoning, any structural difference yielding a functional difference from the natural product should be patent-eligible, even if the functional difference is minor.[27] Example B is illustrative, which finds patentable subject matter in a claimed molecule that is minimally different from the natural molecule in terms of structure (a single methyl group). However, the claimed molecule stimulates hair growth in addition to treating cancer, whereas the natural product molecule only treats cancer.[28] This functional difference is tangential to the claimed molecule’s true function as a cancer treatment, yet weighed heavily toward finding the claimed molecule to be significantly different.

Conclusion

The Guidance Memo and Training Materials have provided potent ammunition that examiners, anti-patent advocates, and even district court judges can use to invalidate biotechnology patent claims. The USPTO considers the scope of patentable subject matter for biotechnology applicants to be severely restricted as a result of Myriad and Mayo, and the scope of “natural product” provided in the Guidance Memo covers nearly every valuable molecule in the field of biotechnology.[29] It should be noted, however, that these guidance materials have no force of law, and will likely find their way to appeal at the Federal Circuit in relatively short order. If history is any guide, most bright line rules like those advocated in the Guidance Memo have been overturned on appeal.[30] Despite the USPTO’s attempt to design the tests to be “flexible to accommodate judicial developments and technological advancements,”[31] the resulting per se tests advocated in these materials overextend the scope of ineligible subject matter beyond the Myriad and Mayo decisions and should be revised.

Perhaps more significantly, as a result of criticism from members of the patent community, the USPTO has now begun to solicit public input regarding the guidance materials.[32] The USPTO has promised to provide additional claim examples and workshop training materials after it has received this public feedback.[33] Early input from the USPTO indicates that it intends to develop better examples than those presented in the Guidance Memo, and “update or modify the Guidance as needed.”[34]

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[1] The Guidance Memo, March 4, 2014, available at http://www.uspto.gov/patents/law/exam/myriad-mayo_guidance.pdf [last accessed April 10, 2014].

[2] 133 S. Ct. 2107 (2013).

[3] 132 S. Ct. 1289 (2012).

[4] USPTO, Evaluating Subject Matter Eligibility Under 35 USC § 101: March 2014 Update, March 19, 2014, available at http://www.uspto.gov/patents/law/exam/myriad-mayo_slides_20140319.pdf (the “Training Materials”) [last accessed April 10, 2014].

[5] Training Materials at Slide 25.

[6] Training Materials at Slide 12.

[7] Training Materials at Slide 30; Guidance Memo at p. 8.

[8] Training Materials at Slide 30; Guidance Memo at p. 3.

[9] Guidance Memo at p. 3-4.

[10] See, e.g., Training Materials at Slides 48-56.

[11] 447 U.S. 303 (1980).

[12] 333 U.S. 127 (1948).

[13] Id. at 2116-17.

[14] 333 U.S. at 131.

[15] Guidance Memo at p.8.

[16] Training Materials at Slides 43 (purified chemical from strawberry), 38 (genetically modified bacteria), 45 (metal alloy), 55 (glazed gunpowder), and 69 (fruit juice and a natural preservative).

[17] Training Materials at Slides 42 and 46.

[18] Training Materials at Slide 25.

[19] Training Materials at Slides 75-78.

[20] Training Materials at Slide 77.

[21] See In re Bergy, 596 F.2d 952 (CCPA 1979) (“In summary, soil contains a complex jungle of microorganisms. It is only by the discovery and skills of the microbiologist that biologically pure cultures of microorganisms come into existence.”).

[22] Another example are primer pairs, which are likely unpatentable under the Guidance Memo’s analysis (see Example E and Slide 53 of the Training Materials). If the patentee must change the primers enough to introduce “marked structural differences” between the primers and naturally occurring nucleic acids, the primers will no longer function. If the patentee merely introduces a minor change in the sequence of the primer, such that it still functions to bind the target DNA, this may turn out to be too small of a change to meet the “significantly different” standard.

[23] Training Materials at Slides 67-78.

[24] See Brinckerhoff, C., A First Look At The USPTO 101 Training Slides, Pharma Patents Weblog, March 24, 2014, available at http://www.pharmapatentsblog.com/2014/03/24/a-first-look-at-the-uspto-101-training-slides/ [last accessed April 20, 2014].

[25] Guidance Memo at p. 11-13.

[26] This approach should also help satisfy the machine-or-transformation test articulated in Factor (e) of the Guidance. Slide 63 of the Training Materials suggests that merely specifying the type of machine (e.g. a bench-top or high-speed flow cytometer) could be enough to satisfy this factor weighing toward patent eligibility.

[27] However, in Myriad, while evaluating the chemical changes in the claimed isolated DNA, the Court stated that “Myriad’s claims…[do not] rely in any way on the chemical changes that result from the isolation of a particular section of DNA.” 133 S. Ct. 2107, 2118. This may be since there were no changes to the actual structure of the DNA (e.g. the DNA sequence), only the covalent bonds between nucleic acids.

[28] Guidance Memo at p. 7-9 (Example B).

[29] Also see Guidance Memo at p. 3: [C]hemicals derived from natural sources (e.g., antibiotics, fats, oils, petroleum derivatives, resins, toxins, etc.); foods (e.g., fruits, grains, meats and vegetables); metals and metallic compounds that exist in nature; minerals; natural materials (e.g., rocks, sands, soils); nucleic acids; organisms (e.g., bacteria, plants and multicellular animals); proteins and peptides; and other substances found in or derived from nature . . . regardless of whether particular words (e.g., “isolated”, “recombinant”, or “synthetic”) are recited in the claim.

[30] Noonan, K., Thoughts on the USPTO’s Patent Eligibility Guidelines (and What to Do About Them), PatentDocs Weblog, March 18, 2014, available at http://www.patentdocs.org/2014/03/thoughts-on-the-usptos-patent-eligibility-guidelines-and-what-to-do-about-them.html [last accessed April 10, 2014].

[31] Training Materials at Slide 33.

[33] Training Materials at Slide 88.

[34] Zuhn, D., USPTO Tries to Address Public Misunderstandings Regarding Myriad-Mayo Guidance, PatentDocs Weblog, March 18, 2014, available at http://www.patentdocs.org/2014/04/uspto-tries-to-address-public-misunderstandings-regarding-myriad-mayo-guidance.html [last accessed April 20, 2014], also see http://www.uspto.gov/patents/announce/myriad-mayo.jsp.