The Federal Circuit vacated and remanded a District Court decision denying a preliminary injunction to patentee Sequenom over the claims of U.S. Patent No. 6,258,540. While the Court rendered its decision based on traditional principles of claim construction and the lower court's balancing of the equitable factors considered for granting preliminary injunctions in patent cases, the decision also bears consideration in view of the panel's mention of whether the claims at issue were patent eligible under the Supreme Court's recent AMP v. Myriad Genetics decision.
The claims of the '540 patent (owned by Isis Innovation Limited and exclusively licensed to Sequenom) are directed towards detecting paternal DNA sequences derived from a fetus in maternal circulation from a pregnant woman. Claim 1 is representative:
A method for detecting a paternally inherited nucleic acid of fetal origin performed on a maternal serum or plasma sample from a pregnant female, which method comprises
amplifying a paternally inherited nucleic acid from the serum or plasma sample and
detecting the presence of a paternally inherited nucleic acid of fetal origin in the sample.
(emphasis in the opinion). Sequenom's commercial product (and Aria's) is directed to diagnosing trisomy disorders (Down's, Edwards and Patau) in the fetus by detecting these disorders from "non-nucleated free-floating fetal DNA (cffDNA) in maternal blood. This test is much less invasive than traditional amniocentesis (and poses no risk to the developing child, unlike amniocentesis) and avoids the necessity of isolating the "rare nucleated [fetal] cells" that can be found in maternal blood. Fortuitously, it appears that women bearing a trisomy-affected child have more cffDNA in their blood than women bearing an unaffected child. As the result of these biological phenomena the test is not only safer but also more reliable in providing a diagnosis.
Aria (now, Ariosa) Diagnostics filed a declaratory judgment action that its genetic test, termed "Harmony," did not infringe Sequenom's claims, and Sequenom counterclaimed for patent infringement and asked for a preliminary injunction, which the District Court denied.
The Federal Circuit opinion, by Chief Judge Rader, joined by Judges Dyk and Reyna, begins with the standard for appealing denial of a preliminary injunction: not only that at least one of the District Court's factual finding was clearly erroneous, but that the court abused its discretion in denying the injunction, citing Reebok Int'l Ltd. v. J. Baker, Inc., 32 F.3d 1552, 1555 (Fed. Cir. 1994). While the parties disagreed over the extent to which claim construction is determinative in the preliminary injunction context (the opinion invites a comparison between Chamberlain Group, Inc. v. Lear Corp., 516 F.3d 1331, 1340 (Fed. Cir. 2008), and Int'l Cmty. Materials v. Ricoh Co., 108 F.3d 316, 318-19 (Fed. Cir. 1997)), here "the court need not reach out to comment on those alternative approaches to the question" because "[e]ven under the ostensibly more relaxed standard, the district court erred in its claim construction" and "[a]s a consequence, the district court erred in finding a substantial question of noninfringement." In this regard the panel reviewed construction of the terms "paternally inherited nucleic acid" and "amplifying" in the claims. With regard to the term "paternally inherited nucleic acid," the District Court held the term to mean "DNA sequence known [in advance] to be received only from the father which is not possessed by the mother." (Note that while the District Court did not include the bracketed [in advance] in its claim construction order it is undisputed that it must be known "in advance" that the sequence is derived from the father and not the mother for the test to be diagnostic.) Thus, for infringement to arise the user must know the father's genotype, and this requirement renders the District Court's claim construction incorrect according to the panel.
The reason for this determination by the Court is that this requirement is not part of the plain meaning of the term "paternally inherited nucleic acid," nor is it supported by the specification; indeed, the panel opinion asserts that this interpretation is based on a single sentence from the '540 patent specification: the "method according to the invention can be applied to the detection of any paternally-inherited sequences which are not possessed by the mother." The opinion does not find this sentence to be limiting but rather an expansive statement "reflect[ing] the broad meaning of 'paternally inherited nucleic acid' that is found in the claims -- a meaning which does not limit them to those known in advance to have come from the father." In the panel's opinion the term encompasses any paternal characteristics by comparison to maternal characteristics (emphasis in opinion), not a limitation only to those paternal nucleic acids identified in advance.
The Court also found that this construction was not consistent with other portions of the specification, particularly the examples. For instance, Example 3 expressly recites a prior determination of the mother's RhD negative status but is silent as to a similar determination of the father's RhD gene; although this example detects the RhD gene allele inherited by the fetus from the father there is no teaching that the father's RhD gene was known in advance. Thus, even if the claims were limited to what was expressly disclosed in the examples (an outcome the panel specifically points out is not the claim construction standard), Example 3 illustrates embodiments of the invention falling outside the District Court's construction of the term.
Regarding the prosecution file history, the Court also found no support for limiting the "paternally inherited nucleic acid" term to paternal DNA known in advance. The panel assessed three incidents asserted in support of the District Court's construction. First, the claims were amended to recite the "paternally inherited nucleic acid limitation" during prosecution to secure an allowance, but the Court found that this portion of the prosecution history does not require prior knowledge of the paternally inherited sequence. Second, during prosecution of a related continuation application Isis argued that the claims should not be limited to paternally inherited nucleic acids, citing instances where DNA distinct for the fetus (such as due to "spontaneous" or "chance" changes or mutations or other fetus-specific differences between fetal and maternal nucleic acids. However the Court did not find these arguments to "approach the clear and unequivocal statement needed before prosecution history can operate to extinguish subject matter otherwise within the claims." Third, with regard to those continuation application claims, the examiner asserted that the specification did not enable detection of chromosome 21 "caused by maternal inheritance or genetic mutation," but the panel found these statements to be too ambiguous to support Ariosa's arguments or the District Court's claim construction (as well as being directed to an issue, enablement, not considered by the District Court).
Because the District Court erred in imposing this limitation on the claims, the Federal Circuit held that the District Court erred in finding that Ariosa had raised a substantial question of noninfringement precluding grant of a preliminary injunction to Sequenom.
Regarding the term "amplifying," the District Court construed the term to mean "increasing the concentration of a paternally inherited nucleic acid relative to the other DNA in the sample." Under this construction, only paternally derived DNA would be amplified, not the fetal DNA as a whole. This was error, according to the Federal Circuit, because the plain meaning of the claims require that paternally derived nucleic acid is amplified "without any mention of an effect on the quantity of other nucleic acid" and thus the claims would be infringed "whether, or not, other nucleic acid is amplified." The specification is contrary to the District Court's construction, according to the panel, citing passages from the specification that distinguish between "amplification" and "enrichment" of paternally inherited nucleic acid. The panel concluded that "the specification does not support, but instead points away from the district court's claim construction, which already is at odds with the plain language of the claim." And the prosecution file history is no less availing: the examiner's statements cited to support the District Court's construction of the "amplifying" term are directly related to enrichment rather than amplification according to the panel because "[t]he examiner could not have been objecting to lack of support for amplification, because amplification was described through traditional PCR and other methods." As with its erroneous construction of the "paternally inherited nucleic acid" term, the Federal Circuit found that the District Court had incorrectly construed the "amplifying" term and thus erred in concluding that Ariosa had raised a substantial question of noninfringement.
Finally, the District Court had found that there was "a substantial question over whether the subject matter of the asserted claims was to eligible subject matter." Noting the intervening decision by the Supreme Court in the Myriad case, the panel's remand instructs the District Court to consider the subject matter eligibility question. However:
To be clear, this court offers no opinion as to whether there is or is not a substantial question regarding the subject matter eligibility of the asserted claims. This court merely concludes that in light of Myriad and the different claim construction, this court would benefit from the district court's initial and further consideration. On remand, the district court may once again consider this issue, as well as whether there is a substantial question of validity of the asserted claims under other defenses raised by Ariosa but not reached previously by the district court.
To be equally clear, the claims of the '540 patent do not claim isolated paternally inherited nucleic acid per se and thus should fall outside the ambit of the Supreme Court's Myriad decision. The question that will need to be addressed is whether these claims recite diagnostic method claims that remain patent eligible under the Court's Mayo v. Prometheus Labs. decision, both a different question and one for which it is much harder to predict an outcome.
The Court also provided "additional guidance" to the District Court with regard to its application of the other equitable factors (irreparable harm, balance of the hardships and the public interest) should the lower court find in Sequenom's favor on the "likelihood of succeeding on the merits" prong of the preliminary injunction test. Concerning the "irreparable harm" prong, the District Court found that "price and market erosion would occur," these being factors that can be used to support a preliminary injunction (for example, under Celsis in Vitro, Inc. v. CellzDirect, Inc., 664 F.3d 922, 930 (Fed. Cir. 2012)). The District Court cited four reasons why Sequenom's showing of harm was not sufficient to satisfy this prong of the test. First, the Court found that the market and price erosion were not "irreparable" because Sequenom's superior product (if it turned out to be so) would recover the market and receive damages for any infringement. The panel found this to be an assumption rather than a fact and said that "[i]n the face of that kind of universal assumption, patents would lose their character as an exclusive right as articulated by the Constitution and become at best a judicially imposed and monitored compulsory license." Second, the Court found that Sequenom's expert witness had not demonstrated the "degree" of price and market erosion adequately, because he had not considered other, potentially rival tests. In addition to the contingent and speculative nature of this assessment, the panel noted that the "'fact that other infringers may be in the marketplace does not negate irreparable harm,"' citing Pfizer, Inc. v. Teva Pharm. USA, Inc., 429 F.3d 1364, 1381 (Fed. Cir. 2005). Next, the District Court found that granting a preliminary injunction "would put Ariosa out of business." While such a showing can be a factor (see Intel Corp. v. ULSI Sys. Tech., Inc., 995 F.2d 1566, 1568, 1570 (Fed. Cir. 1993)) it does not control the "balance of the hardships" prong of the standard, citing Bell & Howell Document Mgmt. Prods. Co. v. Altek Sys., 132 F.3d 701, 708 (Fed. Cir. 1997). The panel indicated that the District Court will need to educe evidence of the balance of the hardships (i.e., on Sequenom if the injunction is denied as well as Ariosa if it is granted) to properly establish where the balance of the hardships lies. Finally, the Court noted that at least some of the grounds used by the District Court in finding in favor of Ariosa on the public interest prong was that Ariosa marketed its Harmony test to both "high- and low-risk women" (approximately 3.5 million) while Sequenom made its test available only to high-risk women (e.g., over 35 years of age and amounting to about 750,000 women). The panel noted that more recently "an expert organization had warned that cffDNA tests should not, yet, be used in low-risk women. Am. Coll. of Obstetricians and Gynecologists Comm. on Genetics, Noninvasive Prenatal Testing for Fetal Aneuploidy, Op. No. 545 (Dec. 2012). This report raises questions that the panel should consider when rendering its decision on Sequenom's preliminary injunction motion on remand.
Aria Diagnostics, Inc. v. Sequenom, Inc. (Fed. Cir. 2013)
Panel: Chief Judge Rader and Circuit Judges Dyk and Reyna
Opinion by Chief Judge Rader