©2019. Published in Landslide, Vol. 12, No. 2, November/December 2019, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.
December 01, 2019 Feature
Patenting Nature
Rochelle C. Dreyfuss
In May 2019, Senators Thom Tillis and Chis Coons proposed legislation that would overturn judicially created exceptions to § 101 of the Patent Act for laws of nature, natural phenomena, and abstract ideas.1 Although nonstatutory, these exceptions to patentable subject matter have deep roots in U.S. law and have long required courts to engage in the difficult task of distinguishing between an insight about nature and a “valuable application of it to the arts.”2 The problem is episodic in that it arises whenever science makes a significant advance.3 However, in recent years the issue has surfaced in a particularly virulent form. The current batch of exciting discoveries are in the life sciences and personalized medicine, where the desire for advancement is acute, the cost of bringing products to market is high, and the public’s interest in access is particularly urgent. In addition, now that universities have entered the patent business, the pressure to patent upstream inventions—fundamental science discovered in academia—has increased, as has the frustration of many scientists.4
These factors converged in two U.S. Supreme Court cases. The first, Mayo Collaborative Services v. Prometheus Laboratories, Inc.,5 invalidated a patent on a diagnostic for identifying the appropriate treatment of certain autoimmune diseases. The second, Association for Molecular Pathology v. Myriad Genetics, Inc.,6 held that isolated, naturally occurring DNA associated with early-onset breast cancer was not eligible for patent protection. Both cases involved areas where research institutions were especially active: the result in Mayo allowed the Mayo Clinic to engage in work to improve the diagnostic; the patents at issue in Myriad were based on discoveries made at the University of California, and, as in Mayo, the Court’s decision allowed university researchers to continue to pursue that line of research. However, when these cases are coupled with two contemporaneous Supreme Court cases on abstract ideas,7 the concern is growing that the breadth of these judicially created exceptions presents a significant threat to the incentive system supporting innovation—hence the proposal to eliminate them.
This article discusses the rationales underlying the judicial decisions to create and expand exceptions to patent eligibility and then describes the problems produced by the current case law. It ends with a critique of the Tillis-Coons proposal.8
The Rationales
It is easy to understand why judges might seek to prevent anyone from patenting laws and phenomena of nature. Nature furnishes the essential building blocks on which every technological innovation rests. Since it cannot be invented around and because it is unlikely that the first to make a discovery will have the technical capacity and resources to fully exploit it, patents on nature risk preempting further innovation. As Justice Breyer put it, “sometimes too much patent protection can impede rather than ‘promote the Progress of Science and useful Arts.’”9
Experience suggests that preemption concerns are not misplaced. During the period prior to Myriad and Mayo, when gene and diagnostic patents were common, right holders sometimes cleared research markets and prevented scientists from engaging in follow-on work.10 Moreover, enforcement activity severely impinged on health care. Studies by the Health and Human Services Secretary’s Advisory Committee on Genetics, Health, and Society (SACGHS) found that centralizing genetic testing led to breakdowns with insurance companies and eliminated access to second opinions.11 Exclusivity also reduced the incentive to improve tests to keep them current with advances in science and made it impossible to monitor quality through interlaboratory comparisons. Exclusive rights in truths about the world (and individuals) also raised issues with constitutional overtones sounding in due process and First Amendment values.12
Mayo and Myriad responded to these concerns. Mayo invalidated a patent on a method for determining whether the dosage of a pharmaceutical was within a specified therapeutic window by measuring blood levels of one of the drug’s metabolites. The Court reasoned that the relationship between dose and effect is a natural law to which nothing more than “well-understood, routine, conventional activity previously engaged in by researchers in the field” had been added, and concluded that the patent would block more refined treatment recommendations.13 In Myriad, the Court stressed the informational content of DNA sequences.14 It then held that naturally occurring DNA was not patentable, but nonetheless decided that complementary DNA (cDNA) synthesized to exclude noncoding material was patent eligible.15
Confirming the conclusions of the SACGHS, immediately after the decisions, new laboratories announced they would enter the diagnostics field and provide cheaper and more comprehensive tests.16 Dr. Francis Collins, director of the National Institutes of Health, claimed the Myriad decision “represent[ed] a victory for all those eagerly awaiting more individualized, gene-based approaches to medical care.”17
The Problems
The aftermath of the Supreme Court cases has not been as rosy as Dr. Collins predicted. Although the Supreme Court created law on what is not patentable, it neglected to explain how to determine what is patentable. Indeed, both cases created considerable confusion. Because synthetic DNA contains the same information as natural DNA, the distinction drawn in Myriad did not assuage concerns about preemption. Many advances in the life sciences rely on slight alterations of natural substances,18 yet the Court never stated how different material had to be in order to constitute patentable subject matter. The metabolite in Mayo depended on the administration of a foreign substance, making it hard to see how the correlation constituted a natural phenomenon. Moreover, the patent covered only the therapeutic window identified by the patentee, a claim the Court acknowledged was drawn to a “narrow law[] that may have limited applications.”19 But if that is enough to destroy eligibility, many patents would appear vulnerable.
Unsurprisingly, the U.S. Patent and Trademark Office (USPTO) and the courts have had a difficult time implementing these decisions. The Federal Circuit began by taking a dim view of all diagnostics. For example, in Ariosa Diagnostics, Inc. v. Sequenom, Inc.,20 the inventors had discovered that paternally inherited cell-free fetal DNA (cffDNA) circulates in a pregnant woman’s blood. They found ways to detect it and to use it to determine fetal characteristics. Although this was a major breakthrough in prenatal care, and reduced the need to rely on amniocentesis, which poses significant risks, the court held that the diagnostic was based on a law of nature and was not patentable.21 The Federal Circuit is currently distinguishing between claims to diagnostics and claims to methods of treatment,22 but it remains to be seen whether adding a fairly straightforward application step will alter a diagnostic claim’s patentability.23 Meanwhile, the USPTO keeps refining its guidelines on when a product is markedly different from nature, what constitutes adding significantly more, and how unconventional a step must be to escape the exceptions.24 However, its decisions can be highly unpredictable.25 As a result, some investors may be shying away from funding life sciences research.26 There is also increasing reliance on trade secrecy, which can be even more detrimental to progress than patents.27
Complicating matters, foreign countries have not followed in the footsteps of the U.S. Supreme Court. Australia comes the closest in that it had its Myriad moment and invalidated the Australian counterparts to the breast cancer patents.28 However, there is no Australian Mayo; IP Australia continues to award patents in the diagnostics area.29 For example, in 2019, the Federal Court of Australia upheld the counterpart to the patent at issue in Ariosa.30 The members of the European Patent Convention,31 operating under the EU Biotechnology Directive,32 recognize gene and diagnostic patents, as apparently do China and Canada, where the limits on patent eligibility have not been tested.33 By virtue of international law, all patent holders face the same global incentives. Nonetheless, the difference in national laws could lead researchers to migrate to places more hospitable to patenting.34
The Proposal
Given these problems, there is a growing call for legislation to revise patent eligibility. Unfortunately, the Tillis-Coons proposal currently before Congress would appear to fix neither uncertainties concerning the availability of patents nor the problems of preemption or patient access.
Applying the proposed statute would be difficult in that it explicitly overturns all of the law related to the judicial exceptions.35 Instead, it adds a definition to “useful,” requiring proof of a “specific and practical utility in any field of technology through human intervention.”36 However, there is no explanation of the term “field of technology” and no case law to draw upon to interpret it. Worse, the phrase “human intervention” elides the key question of how different an invention must be from nature to be patent eligible—the precise question at issue in Mayo and the one with which the USPTO is struggling. Additionally, the proposal removes the term “new” from § 101. The intent is likely to avoid the need to consider what constitutes “well-understood, routine, conventional activity previously engaged in by researchers in the field” when determining whether an invention constitutes patentable subject matter. But removing a term that has been in the statute since at least 1836 is hazardous, as the effect is difficult to predict.37
The proposal also tilts the scales by announcing that § 101 “shall be construed in favor of eligibility.”38 To deal with the preemptive effects of this expansion, the proposal relies on the novelty, nonobviousness, and disclosure requirements, but these measures would not filter out newly discovered and adequately described products or phenomena of nature. Moreover, as Judge Dyk has noted, “[n]or do these other provisions typically allow early stage resolution of the ‘threshold’ issue of patent eligibility necessary to avoid the costs of lengthy litigation.”39 Indeed, the inadequacy of these requirements is presumably why the judicially created exceptions were adopted in the first place and then emphasized in the Supreme Court’s recent jurisprudence. The new definition of “useful” is also insufficient to protect follow-on innovation, for as long as applicants can recite a single use, they will enjoy control over every application of their insights. The proposal attempts to narrow the scope of these patents by revamping the law on functional claiming,40 but the Federal Circuit’s jurisprudence on this issue does not hold much promise that this strategy will work in a meaningful way.41
In truth, it is unlikely that attempts to change eligibility standards will be sufficient to deal with all the problems around patenting nature. Significantly, countries with more generous approaches to patentable subject matter draw on multiple mechanisms. They address Justice Breyer’s concerns about impeding progress with research exceptions42 and limitations on patent scope.43 They have antitrust law or compulsory licensing regimes to unlock blocking situations (the issue that may have worried the Mayo Court).44 They protect patients (the concerns that led to Myriad) with national health care and price controls.45 If Congress plans to expand the scope of patentable subject matter, it should simultaneously consider provisions such as these. And because so many life science inventions occur in academia and other research institutions funded by the federal government, Congress should also consider limitations on how the technology developed with this funding is transferred. Demands are being made on the National Institutes of Health to limit the price of pharmaceuticals developed with federal funds.46 By the same token, the Association of University Technology Managers (AUTM) has established licensing practices to improve access to university-based research;47 its work could form the basis of a response to the problems the Supreme Court identified. Until the United States considers a multipronged approach along these lines, claims drawn to natural products and phenomena will, one way or another, remain deeply troubling.
Endnotes
1. Press Release, Thom Tillis, U.S. Senator for N.C., Sens. Tillis and Coons and Reps. Collins, Johnson, and Stivers Release Draft Bill Text to Reform Section 101 of the Patent Act (May 22, 2019), https://www.tillis.senate.gov/2019/5/sens-tillis-and-coons-and-reps-collins-johnson-and-stivers-release-draft-bill-text-to-reform-section-101-of-the-patent-act.
2. O’Reilly v. Morse, 56 U.S. 62, 132 (1853) (citing English precedents, e.g., Neilson v. Harford (1841) 151 Eng. Rep. 1266).
3. See, e.g., Parker v. Flook, 437 U.S. 584 (1978); Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948); The Telephone Cases, 126 U.S. 1 (1888); Tilghman v. Proctor, 102 U.S. 707 (1880); Le Roy v. Tatham, 63 U.S. 132 (1859).
4. Arti K. Rai & Rebecca S. Eisenberg, Bayh-Dole Reform and the Progress of Biomedicine, 66 L. & Contemp. Probs. 289 (2003).
5. 566 U.S. 66 (2012).
6. 569 U.S. 576 (2013).
7. Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208 (2014); Bilski v. Kappos, 561 U.S. 593 (2010).
8. For further discussion of these issues, see Rochelle C. Dreyfuss, Jane Nielsen & Dianne Nicol, Patenting Nature—A Comparative Perspective, 5 J.L. & Biosciences 550 (2018) [hereinafter Dreyfuss et al.]; and Dianne Nicol, Rochelle C. Dreyfuss, E. Richard Gold, Wei Li, John Liddicoat & Geertrui Van Overwalle, International Divergence in Gene Patenting, 20 Ann. Rev. Genomics & Hum. Genetics 519 (2019) [hereinafter Nicol et al.].
9. Lab. Corp. of Am. Holdings v. Metabolite Labs., Inc., 548 U.S. 124, 126–27 (2006) (Breyer, J., dissenting from the dismissal of certiorari, quoting U.S. Const. art. I, § 8, cl. 8).
10. See, e.g., Ellen Matloff, A Genetic Counselor Explains How Gene Patents Harmed Her Patients, Breast Cancer Action (June 27, 2013), https://bcaction.org/2013/06/27/a-genetic-counselor-explains-how-gene-patents-harmed-her-patients.
11. Dep’t of Health & Human Servs., Gene Patents and Licensing Practices and Their Impact on Patient Access to Genetic Tests: Report of the Secretary’s Advisory Committee on Genetics, Health, and Society (2010), https://osp.od.nih.gov/wp-content/uploads/2013/11/SACGHS_patents_report_2010.pdf; Robert Cook-Deegan & Christopher Heaney, Gene Patents and Licensing: Case Studies Prepared for the Secretary’s Advisory Committee on Genetics, Health, and Society, 12 Genetics in Med. S1 (Supp. 2010); James P. Evans, Putting Patents before Patients, 12 Genetics in Med. 204 (2010).
12. Sapna Kumar, Life, Liberty, and the Pursuit of Genetic Information, 65 Ala. L. Rev. 625 (2014).
13. Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 86–87 (2012).
14. Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 593 (2013).
15. Id. at 594–95.
16. Andrew Pollack, After Patent Ruling, Availability of Gene Tests Could Broaden, N.Y. Times (June 13, 2013), https://www.nytimes.com/2013/06/14/business/after-dna-patent-ruling-availability-of-genetic-tests-could-broaden.html.
17. Press Release, Nat’l Insts. of Health, Statement by NIH Director Francis Collins on U.S. Supreme Court Ruling on Gene Patenting (June 12, 2013), https://www.nih.gov/about-nih/who-we-are/nih-director/statements/statement-nih-director-francis-collins-us-supreme-court-ruling-gene-patenting.
18. See Dan L. Burk, The Curious Incident of the Supreme Court in Myriad Genetics, 90 Notre Dame L. Rev. 505, 509 (2014).
19. Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 86 (2012).
20. 788 F.3d 1371 (Fed. Cir. 2015).
21. Id. at 1377–78; see also Athena Diagnostics, Inc. v. Mayo Collaborative Servs., LLC, 915 F.3d 743 (Fed. Cir. 2019) (holding invalid a patent on a method for diagnosing myasthenia gravis, a neurological disorder, by detecting antibodies to the protein muscle-specific tyrosine kinase, which had not previously been associated with any disease).
22. Vanda Pharm. Inc. v. West-Ward Pharm. Int’l Ltd., 887 F.3d 1117 (Fed. Cir. 2018).
23. A petition for certiorari in Vanda awaits the views of the solicitor general. Hikma Pharm. USA Inc. v. Vanda Pharm. Inc., 139 S. Ct. 1368 (2019).
24. See, e.g., 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019).
25. Mateo Aboy et al., Mayo’s Impact on Patent Applications Related to Biotechnology, Diagnostics and Personalized Medicine, 37 Nature Biotechnology 513 (2019); Mateo Aboy et al., After Myriad, What Makes a Gene Patent Claim “Markedly Different” from Nature?, 35 Nature Biotechnology 820 (2017).
26. See, e.g., Johnathon Liddicoat et al., The Effects of Myriad and Mayo on Molecular Test Development in the US and Europe: Interviews from the Frontline, Vand. J. Ent. & Tech. L. (forthcoming 2019), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3381553.
27. Robert Cook-Deegan et al., The Next Controversy in Genetic Testing: Clinical Data as Trade Secrets?, 21 Eur. J. Hum. Genetics 585 (2013); Bhaven Sampat & Heidi L. Williams, How Do Patents Affect Follow-On Innovation? Evidence from the Human Genome, 109 Am. Econ. Rev. 203 (2019).
28. D’Arcy v Myriad Genetics Inc. [2015] HCA 35 (Austl.).
29. See Dreyfuss et al., supra note 8.
30. Sequenom, Inc. v Ariosa Diagnostics, Inc. [2019] FCA 1011 (Austl.).
31. Convention on the Grant of European Patents, Oct. 5, 1973, 1065 U.N.T.S. 199.
32. Directive 98/44/EC of the European Parliament and of the Council of 6 July 1998 on the Legal Protection of Biotechnological Inventions, 1998 O.J. (L 213) 13.
33. See Nicol et al., supra note 8.
34. Rochelle Cooper Dreyfuss, Reconsidering Experimental Use, 50 Akron L. Rev. 699 (2016); Pamela Samuelson, Intellectual Property Arbitrage: How Foreign Rules Can Affect Domestic Protections, 71 U. Chi. L. Rev. 223 (2004); see also The State of Patent Eligibility in America: Part I: Hearing before the Subcomm. on Intellectual Prop. of the S. Comm. on the Judiciary, 116th Cong. (June 4, 2019) (statement of David J. Kappos, former Under-Secretary of Commerce for Intellectual Property and Director, USPTO), https://www.judiciary.senate.gov/imo/media/doc/Kappos%20Testimony.pdf.
35. Press Release, Thom Tillis, supra note 1 (proposed additional legislative provisions, para. 2).
36. Id. (proposed 35 U.S.C. § 100(k)).
37. Patent Act of 1836, ch. 357, 5 Stat. 117.
38. Press Release, Thom Tillis, supra note 1 (proposed additional legislative provisions, para. 1).
39. Athena Diagnostics, Inc. v. Mayo Collaborative Servs., LLC, No. 2017-2508, 2019 WL 2847219, at *4 (Fed. Cir. July 3, 2019) (Dyk, J., concurring in the denial of the petition for rehearing en banc) (citation omitted).
40. 35 U.S.C. § 112(f).
41. Eileen M. Woo, Enabling Life, 91 N.Y.U. L. Rev. 1060 (2016).
42. World Intellectual Prop. Org. [WIPO] Standing Comm. on the Law of Patents, Exceptions and Limitations to Patent Rights: Experimental Use and/or Scientific Research, WIPO Doc. SCP/20/4 (Nov. 18, 2013), https://www.wipo.int/edocs/mdocs/patent_policy/en/scp_20/scp_20_4.pdf.
43. Case C-428/08, Monsanto Tech. LLC v. Cefetra BV, 2010 E.C.R. 7.
44. Joined Cases C-241 & C-242/91P, Radio Telefis Eireann (RTE) v. Comm’n, 1995 E.C.R. I-743.
45. See Dreyfuss et al., supra note 8.
46. Jacquie Lee, Tax-Funded Drug Research Should Spell Cheaper Drugs: Advocates, Bloomberg L. (July 9, 2019), https://news.bloomberglaw.com/pharma-and-life-sciences/tax-funded-drug-research-should-spell-cheaper-drugs-advocates.
47. In the Public Interest: Nine Points to Consider in Licensing University Technology, Ass’n Univ. Tech. Managers (Mar. 6, 2007), https://autm.net/about-tech-transfer/principles-and-guidelines/nine-points-to-consider-when-licensing-university.