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A Judicial Axe for Sharp Drafting: The “Natural Phenomenon” Dilemma
BEN MEE[*]
Much of the focus of the gene patent debate has been on the patentability of “genetic” products: isolated DNA sequences per se. Other papers in this issue consider legislative and case law developments in the area of product claims.[1] Less attention has been paid to method claims, which are potentially more insidious than product claims.[2] Legislators in states party to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) have limited scope to exclude in vitro methods of diagnosis from patentability. Further, the “ordre public” exception under Article 27(2) of TRIPS is also unlikely to ground a broad legislative exclusion of methods of genetic testing. While these exceptions are limited, the courts of member states have power to apply a further patentability “filter” to certain method claims through the threshold requirement that an “invention” be disclosed.
On 20 March 2012, the United States Supreme Court (the Court) delivered a unanimous opinion in Mayo Collaborative Services v Prometheus Laboratories Inc (“Prometheus”),[3] finding two patents which were concerned with the use of thiopurine drugs to treat autoimmune diseases to be invalid. It did so on basis that the claimed processes had not transformed “unpatentable natural laws into patent-eligible applications of those laws”.[4] The processes embodied in the patents related to correlations between levels of certain metabolites in the blood and the likelihood that a particular dosage of a thiopurine drug will prove either ineffective or cause harm. A reader of the patent specifications may intuitively get a sense that the patents would struggle to withstand a challenge on the basis of lack of inventive step/obviousness. However, the Court’s method of excising that which constitutes a “natural phenomenon” and attempting to identify an “inventive concept” in the balance of the claims as a threshold question of patentability substitutes a malleable judicial exercise in characterisation for the evidentiary inquiry required by an inventive step/non-obviousness analysis. In the field of gene patents, the decision has obvious implications for the assessment of method claims relying on “natural phenomena”. In the author’s opinion, the decision on remand in US AMP v Myriad (“Myriad 2”),[5] so far as it related to method claims, demonstrates the inherent uncertainty of the Prometheus approach. However, there are suggestions in the Myriad 2 opinions that the “natural phenomenon” reasoning applied in Prometheus may also extend to product claims, with uncertain and unpredictable results.
This paper critically analyses the Prometheus decision, against the backdrop of earlier decisions of the Court. It may be that the approach in Prometheus was informed by US-specific considerations (particularly the ability to avoid a jury trial on obviousness issues). However, such an approach, tentatively explored by the High Court of Australia in NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd[6] and earlier cautioned against in National Research Development Corporation v Commissioner of Patents,[7] ought not to be embraced by courts or patent offices in jurisdictions outside the US. If courts in other jurisdictions were to adopt the Prometheus approach and rationale, in the context of method or product claims, emerging and/or controversial technologies and subject matter may be subject to a less transparent analysis than that which has informed the development of the law in respect of more conventional subject matter. Gene patents are an obvious candidate. In the author’s opinion, any “threshold inquiry” into inventive ingenuity should not go beyond the face of the specification. Moreover, courts should only undertake substantive judicial investigation into whether a claimed invention involves a “sufficiently transformative” contribution having regard to what was known in the art, if at all, in circumstances where the patent otherwise meets the express requirements of the relevant domestic legislation, including inventive step.[8]
The patents in suit, US Patent No 6,355,623 and US Patent No 6,680,302, claimed a method of optimising dosages of thiopurine drugs in the treatment of autoimmune diseases. In particular, the patents relied on findings that, following administration of a particular dosage, concentrations of certain metabolites in a patient’s blood above or below a specified range[9] indicate that the dosage of the drug is likely too high (and potentially toxic) or too low (and potentially therapeutically ineffective) respectively. Each specification recited that:
Although drugs such as 6-MP and AZA have been used for treating IBD, non-responsiveness and drug toxicity unfortunately complicate treatment in some patients. Complications associated with 6-MP drug treatment include allergic reactions, neoplasia, opportunistic infections, hepatitis, bone marrow suppression, and pancreatitis. Therefore, many physicians are reluctant to treat patients with AZA because of its potential side effects, especially infection and neoplasia.[10]
Further, and as the Court noted,
[b]ecause the way in which people metabolize thiopurine compounds varies, the same dose of a thiopurine drug affects different people differently, and it has been difficult for doctors to determine whether for a particular patient a given dose is too high, risking harmful side effects, or too low, and so likely ineffective.[11]
The claims, of which the Federal Circuit and the Court considered claim 1 of the “623 Patent” to be typical, sought to embody a therapeutic use of the above correlations through the process of:
(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 a 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 a 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.[12]
Prometheus, the exclusive licensee of both patents, sold diagnostic tests embodying the above processes. Mayo bought and used those tests for some time, but in 2004 announced that it intended to begin using and selling its own test. Prometheus brought an action for infringement in the District Court for the Southern District of California.[13]
Among a series of interlocutory applications, Mayo filed a motion for summary judgment of patent invalidity under 35 USC §101, on the basis that the patents in suit claimed unpatentable subject matter. Section 101 provides that:
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.
Judge Houston granted summary judgment to Mayo, finding that although the test infringed the patents, the processes in substance claimed natural laws or natural phenomena, namely, the correlations between thiopurine metabolite levels and the toxicity and efficacy or thiopurine drugs, and were therefore unpatentable. Importantly, Prometheus unsuccessfully argued that the underlying factual issues[14] precluded summary judgment under §101. Judge Houston found that “these issues do not represent factual disputes, and instead concern interpretation of the claims and the proper application of section 101 to the facts of this case” and that the questions were “clearly questions of law, and are thus appropriate for summary judgment.”[15]
The Federal Circuit reversed the District Court’s decision, finding that the processes were patentable under the “machine or transformation” test.[16] The Federal Circuit agreed with Prometheus’s argument that the asserted claims were drawn to statutory subject matter, expressly noting that:
the only issue before us is whether the claims meet the requirements of § 101. This appeal does not raise any questions about lack of novelty, obviousness, or overbreadth, since those are separate statutory requirements for patentability under §§ 102, 103, and 112, respectively (citations omitted).[17]
Following its decision in Bilski v Kappos[18] (“Bilski”), the Court granted certiorari and vacated the Federal Circuit’s judgment in Prometheus, remitting the matter for reconsideration. The Federal Circuit reaffirmed its earlier conclusion, finding that the “machine or transformation” test, considered in light of the Court’s decision in Bilski, nonetheless led to the “clear and compelling conclusion” that the claims do not merely encompass laws of nature or pre-empt natural correlations.[19] It reaffirmed its findings that “Prometheus’s asserted claims recite transformative ‘administering’ and ‘determining’ steps” and that “Prometheus’s claims are drawn not to a law of nature, but to a particular application of naturally occurring correlations, and accordingly do not preempt all uses of the recited correlations between metabolite levels and drug efficacy or toxicity.”[20] The matter returned to the Court on certiorari. Justice Breyer delivered the unanimous opinion of the Court.
The Court’s finding of invalidity proceeded in four steps:
(a) Prometheus’s 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.
(b) A law of nature is not patentable.
(c) 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 monopolise the law of nature itself.
(d) The “administering” step, the “determining” step and the “wherein” step in the patents are not themselves natural laws but neither are they sufficient to transform the nature of the claim.[21]
The Court’s conclusion that the requisite “transformation” was lacking proceeded on the basis that,
the claims inform a relevant audience about certain laws of nature; any additional steps consist of well-understood, routine, conventional activity already engaged in by the scientific community; and those steps, when viewed as a whole, add nothing significant beyond the sum of their parts taken separately.[22]
The Court considered that the controlling precedents, most particularly Parker v Flook (“Flook”)[23] and Diamond v Diehr (“Diehr”)[24] reinforced its conclusion. As will be seen, the reasoning in Prometheus is largely in line with the reasoning adopted in Flook (properly understood), but goes beyond the holding in Diehr itself. Prometheus also traverses territory well outside the limited interpretation of Flook which was put forward by the majority in Diehr in order to justify the different results in the two cases.
In Flook, the Court framed the question as whether the identification of a limited category of useful, though conventional, post-solution applications of a novel and useful mathematical formula is patentable.[25] The respondent’s patent application described a three-step method for updating “alarm limits” in transient operating situations during catalytic conversion processes,[26] comprising:
• measuring the present value of a variable (eg temperature);
• use of an algorithm to calculated an updated alarm-limit value; and
• updating the actual alarm limit to the updated value so calculated.
As the Court acknowledged, the line between a patentable “process” and an unpatentable “principle” is not always clear.[27] The respondent expressly argued against an approach which improperly imports into the §101 analysis considerations of “inventiveness” or which engaged in “claim dissection” so as to be inconsistent with the proposition that a patent claim must be considered as a whole.[28] The Court responded with two propositions which clearly pervaded the analysis in Prometheus.
First, the Court stated that “[t]he rule that the discovery of a law of nature cannot be patented rests, not on the notion that natural phenomena are not processes, but rather on the more fundamental understanding that they are not the kind of ‘discoveries’ that the statute was enacted to protect.”[29] The “underlying notion” cited is that a scientific principle, such as that expressed in the respondent’s algorithm, reveals a relationship that has always existed. On that basis, the Court considered that “[t]he obligation to determine what type of discovery is sought to be patented must precede the determination of whether that discovery is, in fact, new or obvious.”[30]
Secondly, the Court found that the process was unpatentable under §101 not because it contains a mathematical algorithm as one component, but because once that algorithm is assumed to be within the prior art, the application, considered as a whole, contains no patentable invention. On this basis, the discovery of a phenomenon of nature or mathematical formula “cannot support a patent unless there is some other inventive concept in its application.”[31] The Court did not consider its approach to be inconsistent with the view that a patent claim must be considered as a whole. An important factor perhaps influencing the result in Flook is that the patent application did not explain matters such as how to select or identify the relevant variables in the formula including margin of safety and the relevant time interval that should elapse between updates. As noted below, this absence was expressly adverted to in the majority opinion in Diehr as a means of differentiating that case.
Justice Stewart, joined by Burger CJ and Rehnquist J, issued a dissenting opinion. His Honour considered the case to be a “far different one” from Gottschalk v Benson (“Benson”),[32] cited by the majority as the controlling precedent. In Benson, a method for converting numerical information from binary-coded decimal numbers into pure binary numbers was held unpatentable. The Court took the view that the process claim was “so abstract and sweeping as to cover both known and unknown uses of the [binary coded decimal] to pure-binary conversion”.[33] The Court’s opinion in Benson also cited O'Reilly v Morse (“Morse”),[34] in which Morse’s claim to the use of “electro-magnetism, however developed, for marking or printing intelligible characters, signs, or letters, at any distance” was held to be patent-ineligible. Judge Monroe’s opinion in Morse observed that,
[i]f this claim can be maintained, it matters not by what process or machinery the result is accomplished. For aught that we now know some future inventor ... may discover a mode of writing or printing at a distance by means of the electric or galvanic current, without using any part of the process or combination set forth in the plaintiff’s specification.[35]
In Flook, Stewart J took the view that the holding of the Court of Customs and Patent Appeals that Benson was inapplicable was “wholly in conformity with basic principles of patent law.”[36] His Honour considered that “thousands of processes and combinations have been patented that contained one or more steps or elements that themselves would have been unpatentable subject matter.”[37] He concluded that the majority opinion struck a “damaging blow at basic principles of patent law by importing into its inquiry under [§101] the criteria of novelty and inventiveness.”[38] As will be seen below, the High Court proceeded along similar lines of reasoning in the National Research Development Corporation v Commissioner of Patents[39] (“NRDC case”).
In Diehr,[40] the claimed invention was a process for moulding “raw, uncured synthetic rubber into cured precision products”[41] using a mould for shaping and curing the uncured material under heat and pressure. The point at which a product will be properly cured can be calculated using the “Arrhenius equation”, which concerns the relationship between time, temperature and constants dependent on measurements of a particular batch of compound and the geometry of the mould.[42] The respondents characterised the contribution to the art as the process of constantly measuring the actual temperature inside the mould. Those measurements could be automatically fed into a computer which repeatedly recalculates the cure time by use of the Arrhenius equation, and signals the device to open when the actual time elapsed equals the recalculated cure time.[43]
The patent examiner had rejected the claims under §101, on the basis that the steps carried out by a computer constituted non-statutory subject matter pursuant to Benson and that the remaining steps of installing the rubber in the press and closing the press were “conventional and necessary to the process and cannot be the basis of patentability”.[44] The Court reaffirmed that laws of nature, natural phenomena and abstract ideas are excluded from patent protection under §101, citing, inter alia, Flook.[45] Although the composition of the Bench was identical in Flook and Diehr, the three dissentients in Flook were joined by White and Powell JJ in Diehr (Rehnquist J delivering the opinion of the Court).[46]
The Court distinguished the patent protection sought in Diehr from that in Flook, accepting that it is “now commonplace that the application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection.”[47] The Court cited the observation of Stone J in Mackay Radio & Telegraph Co v Radio Corp of America that: “While a scientific truth, or the mathematical expression of it, is not a patentable invention, a novel and useful structure created with the aid of knowledge of scientific truth may be.”[48]
The majority opinion considered that statement to take it “a long way toward the correct answer in this case”[49] and that although the Arrhenius equation is not patentable in isolation, a process for curing rubber which “incorporates in it a more efficient solution of the equation, that process is at the very least not barred at the threshold by §101”.[50] The Court considered it inappropriate to dissect the claims into old and new elements and then to ignore the presence of the old elements in the analysis, and 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 §101.[51] It noted that §101 serves as a “general statement of the type of subject matter that is eligible for patent protection”,[52] and that specific conditions for patentability follow.[53] The Court accepted that where a claim recites a mathematical formula, scientific principle or phenomenon, an inquiry must be made into whether the claim is seeking patent protection for that formula in the abstract. It cited Flook as authority that a formula “as such” is not patentable and cannot be circumvented by attempting to limit the use of the formula to a particular technological environment.[54] The Court clearly recognised the potential tension with its reasoning in Flook, asserting in a substantive footnote that:
• its reasoning in Flook is in no way inconsistent with its reasoning in Diehr;
• a mathematical formula does not simply become patentable subject matter simply by having the applicant acquiesce to limiting the reach of the patent for the formula to a particular technological use; and
• similarly, a mathematical formula does not become patentable subject matter merely by including in the claim for the formula token post-solution activity such as the type claimed in Flook. The Court reiterated that it had been careful to note in Flook that the patent application did not purport to explain how the variables used in the formula were to be selected, nor did the application contain any disclosure relating to chemical processes at work or the means of setting off an alarm or adjusting the alarm limit.[55]
Justice Stevens’s dissent in Diehr expressly embraced the “dissection” approach in Flook whereby the algorithm (or, by analogy, the natural phenomenon or scientific principle) should be treated for §101 purposes “as though it were a familiar part of the prior art”[56] and the balance of the claim then examined to determine whether it discloses “some other inventive concept”.[57] His Honour took the view that the majority’s approach “trivializes the holding in Flook, the principle that underlies Benson, and the settled line of authority reviewed in those opinions.”[58]
The attempted synthesis of Flook and Diehr to support the Court’s outcome in Prometheus is, with respect, not entirely convincing. The Court effectively embraced Stevens J’s interpretation of Flook, and made central to the analysis an inquiry into whether there is some “inventive concept” superimposed on the “natural phenomenon” in question. The Court suggested that the cases warn 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. In particular, the Court considered that the cases “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.”[59] In respect of the patents under consideration in Prometheus, the Court concluded that the steps in the claimed processes, apart from the natural laws themselves, involve “well-understood, routine, conventional activity previously engaged in by researchers in the field”.[60] The Court did so by separating the three steps of the process.
In respect of the “administering” step, the Court noted that “doctors used thiopurine drugs to treat patients suffering from autoimmune disorders long before anyone asserted th[e] claims”.[61] In respect of the “wherein” step, the Court considered that the relevant clauses “tell the relevant audience about the laws while trusting them to use those laws appropriately where they are relevant to their decision making”.[62] The “determining” step was said to tell doctors “to engage in well-understood, routine, conventional activity previously engaged in by scientists who work in the field.”[63] The Court reaffirmed that “’[p]urely conventional or obvious’ ‘[pre]-solution activity’ is normally not sufficient to transform an unpatentable law of nature into a patent-eligible application of such a law.”[64] Finally, the Court considered that taking the three steps as an ordered combination “adds nothing to the laws of nature that is not already present when the steps are considered separately”.[65]
The Court’s analysis of Diehr sheds the most light on its incorporation of obviousness considerations into the §101 analysis. Accepting that the process in Diehr was held patentable, the Court put forward the fact that the majority in Diehr “nowhere suggested that all these steps, or at least the combination of those steps, were in context obvious, already in use, or purely conventional.”[66] So as to distinguish the outcome in Diehr from that in Flook, the Court relied on the point put forward by the majority in Diehr, namely, that the patent in Flook did not explain how the variables used were to be selected, nor did it contain any disclosure relating to chemical processes at work or the means of setting off an alarm or adjusting the alarm limit.[67] Further, it placed reliance on the fact that, once dissected, the “super-added” elements of the invention entailed no inventive concept.[68] It took the view that the case for patentability was weaker than the claim in Diehr, and “no stronger” than the claim in Flook.[69]
The larger question that arises is what, if anything, should courts in other jurisdictions take from Prometheus when grappling with untested areas patent law in the context of new and emerging technologies. The author accepts that the patent applications in both Flook and Prometheus, at face value, raise an intuitive sense of scepticism as to inventive merit. It may even be accepted for the purpose of argument that each entailed little (if any) more than an obvious application of a natural phenomenon, correlation or relationship. The Prometheus approach would, in a clear case, potentially have the advantages of efficiency and simplicity in the resolution of disputes. However, the thesis of this paper is that the Flook/Prometheus approach is flawed or, at least, unhelpful in dealing with emerging technologies which rely on “natural phenomena”, and should not be adopted by courts in other jurisdictions, such as Australia. First, for a court to identify and excise natural phenomena or correlations from a claimed invention, then undertake an examination of the balance through an obviousness or inventive ingenuity lens, distorts the statutory framework and substitutes a malleable, intuitive process for an evidentiary and technical approach traditionally undertaken in a non-obviousness/inventive step analysis. Secondly, even if one accepts that there may be a case where some threshold unpatentability by virtue of subject matter is the only basis on which a patent might be invalidated, doing so as a threshold question rather than a last resort undermines certainty and transparency in the process. That is, the question of whether a “bad” patent is invalidated as suffering from some threshold uninventiveness, or for lacking an inventive step through the eyes of a person skilled in the art, is not simply one of technicality.
The two core propositions which supported the reasoning in Flook[70] sit uncomfortably with the approach adopted (and the outcome) in the High Court of Australia’s watershed NRDC decision. In that case, McInerney QC argued for the Commissioner that “the claim is only for a discovery of a bio-chemical reaction; there is no control of it and the result is identical with the discovery”.[71] The invention claimed was a method for eradicating weeds from crop areas by applying a particular class of herbicides which had a selective effect on the weeds. The High Court did not ultimately appear to agree with McInerney QC’s argument that the result was “identical” with the discovery, and in any event considered irrelevant the proposition that “once the discovery was made that the chemicals produce a lethal reaction when applied to the weeds and produce no such reaction when applied to the crops there was no more ingenuity required in order to show how the process might be performed”.[72] The High Court considered that “[t]he point that matters is that a weed-killing process is claimed which is distinguished from previously known processes by a feature the suggestion of which for such a process involved a step plainly inventive.”[73] Thus the High Court rejected an approach whereby the application of a natural phenomenon (in this case, the differential effect of the chemical on weeds and crops) must itself involve some ingenuity or inventive concept. The patent in NRDC arguably “revealed a relationship which has always existed”[74] (but was previously unknown), and claimed the application of that relationship to its most logical context. The holistic approach adopted by the High Court arguably accords with Stone J’s comments in Radio Corp of America directed to the patentability of “novel and useful structure[s] created with the aid of knowledge of scientific truth”,[75] as distinct from novel and useful “superstructures” developed upon a basis of scientific truth.
The author contends that the Court’s approach in Prometheus, reflected in Flook,[76] represents an undesirable approach to validity analysis. As argued above, it creates uncertainty by supplanting the evidence-based screening role of novelty and non-obviousness/inventive step inquiries with an ambiguous judicial filter. This could effectively be employed in respect of any patent, as all inventions in some way rely on, incorporate, or make use of natural laws, correlations and phenomena. Such a malleable approach to a technically complex inquiry such as this ought, if at all, only to be employed after a conventional inventive step analysis has been undertaken with the benefit of expert evidence. As Frankfurter J warned in his concurring opinion in Funk Bros Seed Co v Kalo Inoculant Co (“Funk Bros”):
It only confuses the issue to introduce such terms as ‘the work of nature’ and the ‘laws of nature’. For these are vague and malleable terms infected with too much ambiguity and equivocation. Everything that happens may be deemed ‘the work of nature’, and any patentable composite exemplifies in its properties ‘the laws of nature’. Argument drawn from such terms for ascertaining patentability could fairly be employed to challenge almost any patent.[77]
This passage was cited by Dixon CJ and Kitto and Windeyer JJ in NRDC,[78] where their Honours noted that “the distinction between discovery and invention is not precise enough to be other than misleading in this area of discussion.”[79] Discovering a law of nature is not, in a literal sense, inventive, even in circumstances where it involves extensive research (and failed/abandoned attempts by others) over significant periods of time and is of great significance. Nonetheless, a holistic analysis of what is claimed may nonetheless reveal that the invention meets the requirements of the Act.
In CCOM Pty Ltd v Jiejing Pty Ltd[80] (“CCOM”), the Full Federal Court was critical of passages in the trial judge’s decision which “suggest he was influenced in the determination of the issue as to ‘manner of manufacture’ by asking whether what was claimed involved anything new and unconventional in computer use”.[81] The Full Court reaffirmed the approach, derived from NRDC, which accepts that “in so far as ‘manufacture’ suggests a ‘vendible product’, this is to be understood as covering every end produced or artificially created state of affairs which is of utility in practical affairs and whose significance thus is economic.”[82] In expressing these views, the Full Court was mindful of the historical significance of the treatment of discovery of laws or principles of nature as unpatentable:
A distinction also has been drawn between the discovery of laws or principles of nature and the application thereof to produce a particular practical and useful result. A reason why the former has not been treated as a proper subject of patent according to the principles developed pursuant to the Statute of Monopolies was considered as long ago as 1852 in Carpmael, ‘The Law of Patents for Inventions’ (5th ed), pp 42-43:
Let it not however be supposed that the minds of the individuals making such discoveries of principles are underrated, on the contrary, the highest respect is due to both, but it will be evident that their discoveries are not of that kind which should secure to them the right of toll on all future practical applications of such principles; such a course would lead to endless difficulties, and tend to prevent those rapid strides to improvements by which the existence of the present law has been marked.[83]
The Full Court in CCOM noted that counsel for the respondents, who had initially made broad submissions on the “manner of new manufacture” ground on the basis of the Full Federal Court’s decision in Mirabella,[84] resiled from relying on that decision “in so far as issues more apt to obviousness may have intruded into the consideration of the concept of manner of manufacture”[85] and “accepted that many of the old cases which may have been treated in the texts under the heading of ‘manner of new manufacturer’ would now be treated as decisions upon degree of inventiveness, that is to say obviousness.”[86] The Full Court also rejected a narrower proposition that “there could be no manner of manufacture in identifying ‘basic characteristics’ or ‘desiderata’ and ‘to claim all ways of achieving them’”.[87] It held in respect of the CCOM claims that unless such a claim lacks novelty, is obvious, or lacks utility, or there is a failure to comply with one or other of the limbs of s 40 because, for example, the invention is not fully described or the claim is not clear and succinct, there does not remain an independent ground of objection as to patentability, within the sense of s 18(1)(a) of the Act.[88]
Although the discussion in CCOM predated the High Court’s decision in Mirabella (and may have been framed slightly differently in light of that decision), the “residual requirement of inventiveness” accepted by the High Court in that case, as explained in Advanced Building Systems Pty Ltd v Ramset Fasteners Pty Ltd[89] and subsequent cases, is confined to the narrow circumstances where there is an effective “admission” of non-inventiveness on the face of the specification.[90] It does not, in the author’s submission, permit a court to venture, on its own initiative and unaided by evidence, beyond the bounds of the specification into the world of the skilled addressee in order to make a “threshold” assessment of the “caliber” of inventive ingenuity through that addressee’s eyes without the benefit of evidence. As framed in Bristol-Myers Squibb Co v F H Faulding & Co Ltd:
if the body of prior knowledge disclosed by the specification is insufficient to deprive what is claimed of the quality of inventiveness, then the only additional knowledge or information which will be taken into account is knowledge or information of a kind described in s 7(2) of the 1990 Act ... It is ... the only approach which does not, in practical terms, render s 18(1)(b)(ii) otiose.[91]
Whatever the scope of that “threshold” requirement, it is not an inquiry concerned with what is known to those in the art, and whether contributions above the “natural phenomenon” would be considered inventive in their eyes. It also would not, in the author’s submission, extend to a case such as Prometheus because a lack of inventiveness is not “admitted” on the face of the specifications, even in circumstances where the “super-added” contribution to the correlations recited, and the claimed processes as a whole, might appear relatively straightforward. That is not to say that some relatively simple expert evidence addressing the same criticisms made by the Court of the “three step process” of the patents could not easily invalidate the patents on some other ground such as obviousness (assuming they would even make it through the Australian examination process). However, the practice of judicial usurpation of the role of the skilled addressee through the guise of a test of “threshold inventive ingenuity” sets a dangerous precedent for future analysis in less straightforward cases.
The framework of analysis is significant because it affects how the court reaches its determination as to patentability. In effect, every invention in some way embodies natural laws and processes. As much was recognised in NRDC and Funk Bros. The difference is that an obviousness inquiry takes, as its starting point, what was known in the field pre-solution and relies on evidence of experts in that field to assist the Court in determining whether the invention is non-obvious. It thereby provides a degree of transparency and objective evidentiary support for the conclusions reached.
As Lord Hoffmann noted in Biogen Inc v Medeva Plc,[92] the Patents Act 1977 (UK) contains no definition of invention, and the four conditions in section 1(1) of that Act (effectively novelty, inventive step, industrial applicability[93] and the specified exceptions, including discoveries, scientific theories and mathematical methods as such) in his Lordship’s opinion “do a great deal more than restrict the class of ‘inventions’ which may be patented. They probably also contain every element of the concept of an invention in ordinary speech.”[94] Lord Hoffmann considered that an approach which takes “threshold inventiveness” as a preliminary question would “be a mistake and cause unnecessary difficulty” in most cases.[95] Of particular relevance to the present discussion is the suggestion that, “One can of course imagine cases in which the alleged subject-matter is so obviously not an invention that it is tempting to take an axe to the problem by dismissing the claim without inquiring too closely into which of the conditions has not been satisfied.”[96]
However, his Lordship opined that most cases will be more difficult, and cautioned that “[j]udges would therefore be well advised to put on one side their intuitive sense of what constitutes an invention until they have considered the questions of novelty, inventiveness and so forth.”[97] Indeed, in the related area of the patentability of “abstract ideas”, Breyer J himself joined in Stevens J’s opinion in Bilski, which criticised the primary opinion in that case on the basis that:
[t]he Court, in sum, never provides a satisfying account of what constitutes an unpatentable abstract idea ... the Court essentially asserts its conclusion that petitioners’ application claims an abstract idea. This mode of analysis (or lack thereof) may have led to the correct outcome in this case, but it also means that the Court’s musings on this issue stand for very little.[98]
In summary, the Prometheus approach potentially offers a “short cut” for courts to deal with patents that can, with the benefit of hindsight, be said to be “straightforward” applications of natural phenomena. But as one moves along the spectrum from cases such as Prometheus and Flook to those like Diehr, decisions will have be made as to where lines should be drawn on what claims will constitute claims to “significantly more” than the natural law itself. In the author’s opinion, those lines can be more reliably drawn with the aid of expert evidence by way of an obviousness inquiry, than by a malleable approach based on what constitutes a “natural phenomenon”. That argument becomes somewhat more compelling in light of the added technical complexity in areas such as gene patents. In such matters, judges (and litigants) should arguably have the benefit of the skilled addressee’s evidence on questions related to “obviousness”, so that overly broad “categories” of claims are not rendered unpatentable because of one “bad” patent dealing with similar subject matter.
On 16 August 2012, the Federal Circuit issued its decision on remand in Myriad 2,[99] reaching exactly the same substantive result as its previous decision (issued 29 July 2011): that Myriad’s diagnostic method patents are invalid, but its gene patents are valid. Although a comprehensive analysis of the Myriad litigation is beyond the scope of this paper, the different interpretations placed on Prometheus in the three opinions in Myriad 2 is illuminating.
In respect of the method claims, the Court unanimously ruled that Myriad’s claims to “comparing” or “analysing” the BRCA sequences to a human sample were patent-ineligible, on the basis that they were limited only to the abstract mental process of comparison. The Court rejected Myriad’s argument that one should “read in” to the existing claims the additional allegedly transformative steps of extracting DNA from a human sample and sequencing the BRCA DNA molecule. However, Judge Lourie’s reasons suggest that method claims which expressly included such steps may not necessarily be patent-ineligible.[100] In respect of the method claim for screening potential cancer therapeutics via changes in cell growth rate, the Court again found this to be patent-eligible, reasoning that the claim “applies certain steps to transformed cells that, as has been pointed out above, are a product of man, not of nature.”[101]
Myriad 2 also provides some insight into the ramifications of the Prometheus decision for product patents. Judge Lourie considered that Prometheus “does not control the question of patent-eligibility of [claims to isolated DNA molecules]”,[102] albeit it provides “valuable insights and illuminate[s] broad, foundational principles”.[103] Judge Lourie considered that although the remand of the case for reconsideration in light of Prometheus “might suggest” that the composition claims are “mere reflections of a law of nature”, his Honour held that they are not. His Honour went on to expressly state that in this context, the Court considered patent-eligibility, and not patentability.[104]
Judge Moore agreed that Prometheus did not control the outcome of the case, it was “instructive regarding the scope of the law of nature exception.”[105] Her Honour rejected the view that Chakrabarty, Funk Bros or Prometheus “leads inexorably to the conclusion that isolated DNA molecules are not patentable subject matter”[106] and declined “the invitation to broaden the law of nature exception.”[107] Judge Moore joined in Judge Lourie’s opinion regarding the patentability of cDNA sequences, but had more difficulty in respect of the patentability of isolated DNA sequences identical to naturally occurring sequences, in light of Prometheus:
If I were deciding this case on a blank canvas, I might conclude that an isolated DNA sequence that includes most or all of a gene is not patentable subject matter. The scope of the law of nature/manifestation of nature exception was certainly enlarged in Prometheus. But we do not decide this case on a blank canvas. Congress has, for centuries, authorized an expansive scope of patentable subject matter. Likewise, the United States Patent Office has allowed patents on isolated DNA sequences for decades, and, more generally, has allowed patents on purified natural products for centuries. There are now thousands of patents with claims to isolated DNA, and some un-known (but certainly large) number of patents to purified natural products or fragments thereof. As I explain below, I believe we must be particularly wary of expanding the judicial exception to patentable subject matter where both settled expectations and extensive property rights are involved.[108]
Judge Bryson, dissenting as to the validity of the gene patents, accepted that, as a method case, Prometheus was not decisive as to the product claims under consideration in Myriad. However, his Honour laid out an approach by which analogous reasoning might be applied to a product claim:
Just as a patent involving a law of nature must have an ‘inventive concept’ that does ‘significantly more than simply describe ... natural relations,’ Mayo, 132 S. Ct. at 1294, 1297, a patent involving a product of nature should have an inventive concept that involves more than merely incidental changes to the naturally occurring product. In cases such as this one, in which the applicant claims a composition of matter that is nearly identical to a product of nature, it is appropriate to ask whether the applicant has done ‘enough’ to distinguish his alleged invention from the similar product of nature. Has the applicant made an ‘inventive’ contribution to the product of nature? Does the claimed composition involve more than ‘well-understood, routine, conventional’ elements? Here, the answer to those questions is no.[109]
A petition to the Supreme Court for a writ of certiorari was filed by the American Civil Liberties Union on 24 September 2012 — it remains to be seen whether the Supreme Court will follow the road map laid out by Judge Bryson.
The 9-0 decision in Prometheus is arguably an example of bad patents making bad law. There are certainly arguments available that, at face value, the specifications intuitively appear unlikely to withstand a properly mounted validity inquiry or challenge on an orthodox inventiveness analysis. There may, in theory, be procedural and efficiency advantages in allowing a “threshold” inquiry in such a case. Those advantages may be more compelling in the United States, where the Seventh Amendment right to trial by jury in certain civil cases makes more attractive (to an alleged infringer and, arguably, the judiciary) an approach which allows an alleged infringer to obtain summary judgment against a patentee and thereby bypass a trial on obviousness involving a jury.[110] Indeed, in the District Court Mayo filed a motion to strike Prometheus’s jury demand two days prior to filing its motion for summary judgment.[111]
However, a malleable intuitive approach to identifying threshold validity on the basis of claim dissection and an assessment of the inventive ingenuity behind “non-natural” aspects of the claim is contrary to the approach embraced in NRDC, and poses particular difficulty in emerging technological environments. On that basis, the author submits that such an approach provides little assistance in the Australian context, and should not be adopted outside the US. A full discussion is beyond the scope of this paper, but one can imagine the relevant process in Prometheus being claimed in respect of more sophisticated environments than the mere administration of a dosage, measurement of metabolite levels and interpretation of those levels. For example, the process might be adapted in respect of an automated continual-release system, or incorporated into nanotechnology as a self-regulating system. If the court is permitted to go beyond the specification, at what point does any supposed “lack of inventive quality” cease? Other sectors which might be particularly affected include personalised medicines and business methods/systems. The prophylactic effect of a vaccine or the therapeutic effect of a drug, once identified, can be said to be a “natural phenomenon”. The super-added contribution of directing its use to the prevention or treatment of a condition to which it is suited would seem unlikely to constitute a sufficiently impressive aura of “inventive ingenuity”. By contrast, a meritorious patent over any of the processes described above could, considered as a whole, arguably be described as being “distinguished from previously known processes by a feature the suggestion of which for such a process involved a step plainly inventive.”[112] The Prometheus patents may fail this same test, but they would do so by virtue of the totality of what is claimed, not through an artificial excision of that which is “natural” from that which supposedly represents the balance of the contribution. In any event, there is no reason to bypass the ordinary obviousness inquiry, informed by evidence from those skilled in the art, simply because particular patents might instil an intuitive sense of scepticism in the decision-maker. The Prometheus approach is exactly the kind of judicial axe of which Lord Hoffmann warned, and in the author’s opinion, is too blunt and imprecise a tool for the majority of cases. The Supreme Court may have already crossed the Rubicon, but it remains to be seen whether other jurisdictions follow suit.
[*] BSc-LLB (Hons) (Tasmania). Lawyer, Allens. The views expressed by the author are not necessarily the views of Allens.
[1] Dianne Nicol and John Liddicoat, “Legislating to Exclude Gene Patents: Difficult and Unhelpful, or Useful and Feasible?” (2012) 22(1) Journal of Law, Information and Science.
[2] Some commentators have suggested that, when compared to claims to DNA sequences per se, claims relating to methods of diagnosing genetic conditions are more often difficult or impossible to invent around: I Huys, N Berthels, G Matthijs and G Van Overwalle, “Legal Uncertainty in the Area of Genetic Diagnostic Testing” (2009) 27 Nature Biotechnology 903, cited in D Nicol, “Implications of DNA Patenting: Reviewing the Evidence” (2011) 21(1) Journal of Law, Information and Science 7.
[3] (US, No 10-1150, 20 March 2012) slip op.
[4] Ibid 3.
[5] 689 F 3d 1303, (2012).
[7] [1959] HCA 67; (1959) 102 CLR 252.
[8] This will depend in part on the pleadings in a given case. However, it would be an unusual (and risky) approach for a party who alleges “threshold uninventiveness” by virtue of matters beyond the specification itself to fail to plead lack of inventive step.
[9] Specifically, 6-thioguanine levels between 230-400 pmol per 8x108 red blood cells and 6-methyl-mercaptopurine levels below 7000 pmol per 8x108 red blood cells correlate to an “optimal” dosage.
[10] Seidman et al, “Method of Treating IBD/Crohn’s Disease and Related Conditions Wherein Drug Metabolite Levels in Host Blood Cells Determine Subsequent Dosage” US Patent No 6 355 623 B2 (issued 12 March 2002).
[11] Prometheus, (US, No 10-1150, 20 March 2012) slip op 4.
[12] Ibid 5-6.
[13] Prometheus Lab Inc v Mayo Collaborative Services (SD Cal, WL 878910, 28 March 2008).
[14] These were “(1) whether the claims at issue claim a ‘natural phenomenon’; (2) whether the claims at issue transform an article into a different state or thing; (3) whether the claims at issue produce a useful, concrete, and tangible result; and (4) whether the claims at issue ‘wholly preempt’ all uses of the inventors’ correlation”: Ibid, 14.
[15] Ibid citing AT & T Corp 172 F 3d 1355 as authority that whether a patent claim is invalid under section 101 is a question of law appropriate for summary judgment.
[16] Prometheus Laboratories Inc v Mayo Collaborative Services, 581 F 3d 1336 (Fed Cir, 2009).
[17] Ibid 1345.
[18] (US, No 08-964, 28 June 2010) slip op. Bilski relevantly found that the “machine or transformation” test is not a definitive test of patent eligibility.
[19] Prometheus Laboratories Inc v Mayo Collaborative Services 628 F 3d 1347, 1355 (Fed Cir, 2010).
[20] Ibid 1355.
[21] Prometheus, (US, No 10-1150, 20 March 2012) slip op, 8-9.
[22] Ibid 11.
[23] [1978] USSC 129; 437 US 584 (1978).
[24] [1981] USSC 40; 450 US 175 (1980).
[25] [1978] USSC 129; 437 US 584, 585 (1978).
[26] Ibid. As the Court explained, where particular process variables (such as temperatures) exceed a predetermined “alarm limit”, an alarm may signal the presence of an abnormal condition. Although fixed alarm limits may be appropriate for steady operation, periodic “updating” of alarm limits may be appropriate in transient situations such as start-up: at 585.
[27] Ibid 589.
[28] Ibid 592, 594.
[29] Ibid 593.
[30] Ibid.
[31] Ibid 594.
[32] [1972] USSC 223; 409 US 63 (1972).
[33] Ibid 68.
[36] [1978] USSC 129; 437 US 584, 599 (1978).
[37] Ibid.
[38] Ibid 600.
[39] [1959] HCA 67; (1959) 102 CLR 252.
[40] [1981] USSC 40; 450 US 175 (1980).
[41] Ibid 175.
[42] Ibid 177-178.
[43] Ibid 178-179.
[44] Ibid 180-181.
[45] As outlined above, the Court noted in Diehr that the application in Flook was effectively limited to the mathematical formula itself, as it did not explain how to select the relevant variables and actually use the formula to compute the updated “alarm limit”: Ibid at 186-187.
[46] In Flook, Stevens J’s majority opinion was joined by Brennan, White, Marshall, Blackmun and Powell JJ. Stewart J’s dissent was joined by Burger CJ and Rehnquist J. In Diehr, Stevens J’s dissent was joined by Brennan, Marshall and Blackmun JJ.
[47] Diehr[1981] USSC 40; , 450 US 175, 187 (1980), citing, inter alia, Funk Bros Seed Co v Kalo Inoculant Co [1948] USSC 22; 333 US 127 (1948).
[48] [1939] USSC 29; 306 US 86, 94 (1939) (“Radio Corp of America”) cited in Diehr[1981] USSC 40; , 450 US 175, 188 (1980).
[49] Diehr[1981] USSC 40; , 450 US 175, 188 (1980).
[50] Ibid.
[51] Ibid 189.
[52] Ibid.
[53] Ibid.
[54] Ibid 191.
[55] Ibid 192.
[56] Ibid 204.
[57] Ibid.
[58] Ibid 205.
[59] Prometheus, (US, No 10-1150, 20 March 2012) slip op, 3.
[60] Ibid 4.
[61] Ibid 9.
[62] Ibid.
[63] Ibid 10.
[64] Ibid.
[65] Ibid 10.
[66] Ibid 12.
[67] Ibid 12-13.
[68] Ibid 13.
[69] Ibid.
[70] Arguably correctly identified by Stevens J in dissent in Diehr.
[71] NRDC[1959] HCA 67; , (1959) 102 CLR 252, 259.
[72] Ibid 265.
[73] Ibid.
[74] Flook[1978] USSC 129; , 437 US 584, 593 n 15 (1978).
[75] [1939] USSC 29; 306 US 86, 94 (1939).
[76] At least to the extent that Stevens J’s analysis of that decision in Diehr is correct.
[77] [1948] USSC 22; 333 US 127, 134-135 (1948).
[78] [1959] HCA 67; (1959) 102 CLR 252, 263-264. As noted in Ayres, Owen Dixon (2007 ed), 141, Sir Owen formed a strong friendship with Frankfurter J during his time as Australia’s Minister to the United States, described by Blackshield as the “most enduring of Dixon’s Washington friendships”: “Strict Logic and High Technique”, Australian Book Review, June/July 2003, 8; That relationship casts some light on the apparent influence of Frankfurter J’s concurring opinion in Funk Bros on the development of the NRDC judgment.
[79] [1959] HCA 67; (1959) 102 CLR 252, 264. Although the context of the NRDC decision is slightly different in that the subject matter consisted of an unknown use of a previously known substance, the discussion is directed to the same issue.
[80] [1994] FCA 396; (1994) 51 FCR 260.
[81] Ibid 291.
[82] Ibid.
[83] [1994] FCA 396; (1994) 51 FCR 260, 292.
[84] NV Philips Gloeilampenfabrieken v Mirabella International Ply Ltd [1993] FCA 404; (1993) 44 FCR 239. The decision was, at the time, pending hearing in the High Court following a grant of special leave.
[85] Ibid 294.
[86] Ibid.
[87] Ibid.
[88] Ibid.
[89] [1998] HCA 19; (1998) 194 CLR 171.
[90] See further Commissioner of Patents v Microcell Ltd [1959] HCA 71; (1959) 102 CLR 232; Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (No 2) [2007] HCA 21; (2007) 235 CLR 173, 211 [106]; Merck & Co Inc v Arrow Pharmaceuticals Ltd [2006] FCAFC 91; (2006) 154 FCR 31, 51-53; Dura-Post (Aust) Pty Ltd v Delnorth Pty Ltd [2009] FCAFC 81; (2009) 177 FCR 239, [31].
[91] [2000] FCA 316; (2000) 97 FCR 524, 536 [30] (Black CJ and Lehane J). An excellent summary of the authorities is set out in SNF (Australia) Pty Ltd v Ciba Speciality Chemicals Water Treatments Ltd [2011] FCA 452, [212]-[224].
[92] [1996] UKHL 18; [1997] RPC 1, [44].
[93] The author recognises the need for “some care” in dealing with 1977 Act authorities, adverted to by the Full Federal Court in CCOM Pty Ltd v Jiejing Pty Ltd [1994] FCA 396; (1994) 51 FCR 260, noting that “[t]hat which would have been considered a manner of manufacture under the previous law will not necessarily have capacity for industrial application”: at 268; Further, Lord Hoffmann’s discussion on this point was not an aspect of the Biogen decision considered to be of questionable relevance to Australian law by Gleeson CJ, Gaudron, Gummow and Hayne JJ in Aktiebolaget Hassle v Alphapharm Pty Ltd [2002] HCA 59; (2002) 212 CLR 411, 429-430 [38]-[40].
[94] Biogen Inc v Medeva Plc [1996] UKHL 18; [1997] RPC 1, [44].
[95] Ibid [43].
[96] Ibid [46].
[97] Ibid.
[98] (US, No 08-964, 28 June 2010) slip op, 9 (Stevens J).
[99] 689 F 3d 1303, (2012);
[100] Ibid 1335 (Lourie J).
[101] Ibid 1336.
[102] Ibid 1325.
[103] Ibid 1326.
[104] Ibid 1333.
[105] Ibid 1340 (Moore J).
[106] Ibid 1347.
[107] Ibid.
[108] Ibid 1343.
[109] Ibid 1355 (Bryson J).
[110] On the issue of the (increasing) role of juries in patent trials, see eg, Tindell, “Toward a More Reliable Fact-Finder in Patent Litigation” (2009) 13 Marquette Intellectual Property Law Review 309; Weisenberger, “Juries and Patent Obviousness” (2010) Vanderbilt Journal of Entertainment and Technology Law 641.
[111] Prometheus did not oppose the motion, and Judge Houston subsequently granted the motion and struck the jury demand: Prometheus Lab Inc v Mayo Collaborative Services (SD Cal, WL 878910, 28 March 2008) n 2.
[112] NRDC [1959] HCA 67; (1959) 102 CLR 252, 265.
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