Federal Circuit Hears Oral Argument in AMP v. USPTO Remand

[author: Kevin E. Noonan]

MyriadThe Federal Circuit heard oral argument in Association for Molecular Pathology v. U.S. Patent and Trademark Office (the Myriad case) on Friday, and the cast of characters remained mostly the same.  On the panel were Judge Lourie, Judge Bryson, and Judge Moore.  Representing Myriad was Gregory Castanias from Jones Day, and Chris Hansen reprised his role as ACLU/AMP advocate.  New to the proceedings was Melissa Patterson for the U.S. government, in place of former Acting Solicitor General Eric Katyal who has left the government for private practice.  Each side had a nominal twenty minutes to argue, with Mr. Hansen conceding half his time to Ms. Patterson.

Castanias, GregoryMr. Castanias (at left) began his argument as he would end it, citing Diamond v. Chakrabarty as the seminal authority on the patent-eligibility of product claims and stating that the Supreme Court's decision in Mayo v Prometheus did not change this.  Taking the argumentative bull by the horns, he addressed the issue of "preemption" (which would be a theme in both Mr. Hansen's and Ms. Patterson's arguments) by saying that preemption is a proxy for whether there is an invention.  Judge Lourie posed the contrast between a law of nature (in Mayo) and an isolated natural material (here) in instances where there was only a "small move" from the naturally occurring molecule.  Mr. Castanias answered in a manner that would raise philosophical issues for Myriad later, citing to the expert declarations by the inventors and others on the question of how small the step actually was.  Here, his point was that there was a great deal of human ingenuity involved in producing the isolated genomic DNA encompassed by the claims, and that contributes to its inventiveness.

Mr. Castanias then reminded the Court of Judge Bryson's analogy regarding making a baseball bat from wood (and the judge included sculpting a statue of David from marble), which were patent-eligible, and Judge Bryson then asked about whether isolating genomic DNA was like cutting off the branches and roots of a tree and then claiming a trunk (illustrating again that bad analogies make bad law), with the wrinkle that the trunk was produced using a laser that caused chemical changes.  Mr. Castanias agreed that this would not be patent-eligible but because it is not an invention, being just a new way to make an old thing.  With a gene, he emphasized that it is unknown until an inventor identifies, and in some sense, defines it.  Citing the '282 patent, he pointed to Figure 10 and to columns 19 and 24 of the specification, for the teaching that what the patent defines as a "gene" includes the coding sequences, the intervening sequences (or "introns" to the coding sequences "exons") and regulatory sequences that could themselves encompass 100 kilobases (100,000) of DNA.  The inventors defined this as the BRCA1 gene, which required an enormous amount of inventive effort, according to Mr. Castanias (making it very unlike a tree trunk).  Judge Lourie leant a hand by remarking that the gene is thus "the product of human ingenuity."

Judge Lourie then did Myriad and Mr. Castanias no favors by broaching the issue of claim 20 of the '282 patent and asking him to distinguish this claim from the patent-ineligible claims in Mayo.  Mr. Castanias started well, pointing out that, unlike in Mayo, this claim does not encompass the "principle of the holy trinity of well-understood, routine and conventional," as in Mayo, but with something that is not well-understood, routine or conventional, namely the transformed cell.

But then Mr. Castanias and the bench spent what everyone recognized was a few unfruitful minutes discussing whether claim 20 was properly before the Court.  Mr. Castanias repeated Myriad's contention from its brief, that AMP not only had not included this claim in its certiorari petition but had affirmatively stated that the method claims were not being appealed.  Judge Bryson said that was not the point, and that he (and presumably his colleagues) believed that the Court's "task" was not limited by plaintiffs' certiorari petition (his argument having a strong flavor of not letting the inmates run the asylum).  Judge Bryson characterized the current state of the case as a "do-over" where "the vacated judgment is in the same position as it was last year."  He then asked for any authority for Myriad's position and Mr. Castanias was unable to provide any (Mr. Hansen, during his argument, was happy to provide the Court with Lockheed Martin Corp. v. Space Systems/Loral, Inc. for authority to the contrary).

Judge Bryson also voiced confusion over the meaning of certain claim language, illustrating again the unusual posture of the case where the claims have never been construed.  Mr. Castanias and the Court were unable to parse out the language "causing cancer" in the phrase "growing a transformed eukaryotic host cell containing an altered BRCA1 gene causing cancer in the presence of a compound suspected of being a cancer therapeutic," which is not surprising:  the claim is not clearly written, and the word "transform" has two meanings in the art easily conflated.  First, a "transformed" cell can mean a cell into which an exogenous DNA has been introduced (most likely the meaning intended in the claim), but it can also mean a cell that has been "oncogenically" transformed to be, inter alia, immortalized so that cell lines can grow indefinitely in vitro.  Again, Mr. Hansen came to the rescue, stating properly that his interpretation of the claim was that the BRCA gene in a form associated with cancer in vivo.  And Judge Moore chimed in asking whether claim 20 comprising the transformed cell would be patent-eligible if the panel found the isolated DNA claims not to be patent-eligible.  For her, "transformation" (unclear whether in the biological or legal sense) was irrelevant.

Hansen, ChristopherMr. Hansen (at right) began his argument by noting what he called the "stunning breadth" of the composition of matter claims, and the "preemptive effect" of such claims, but Judge Lourie interrupted by noting that breadth is properly a concern under Section 112 and not Section 101 of the Patent Act.  Mr. Hansen proceeded to read the laundry list of types of nucleic acids recited in the '282 specification, but Judge Lourie again interrupted and asked about the relevance of this to the issues raised in Mayo.  In response to Judge Lourie's assertion that the "law of nature" argument in Mayo was not directly relevant to composition claims, Mr. Hansen asserted a "law of nature"/"product of nature" exclusion (the latter being completely fantastical as far as actual case law is concerned), saying that these should be "available to everyone" under Supreme Court precedent.  Judge Moore noted that his breadth argument undercut his preemption argument, because if preemption the issue, breadth is irrelevant under Mayo.  She indicated that preemption is a "bright line prohibition" and thus this argument is "a waste of time and space."

Wisely, Mr. Hansen took the opportunity to move on to claim 20.  In this argument he produced the wildest of wild hair arguments (which is saying something in this case), asserting that Myriad "bought the transformed cell off the shelf" and that "it wasn't their invention."  (Reality check:  it would have been impossible to produce a recombinant (or "transformed") cell comprising a cancer-causing BRCA gene variant until such a gene was isolated by Myriad.)  Judge Lourie pointed out that in Mayo the claims recited administering and determining and the Supreme Court demanded something more, significantly more, asking whether that was not provided in claim 20 (presumably, the transformed cell).  Mr. Hansen was able to argue it did not, because having falsely negated the inventiveness of the BRCA transformed cell he could concentrate on the rest of the claim, which recited "[growing said transformed eukaryotic host cell] in the presence of a compound suspected of being a cancer therapeutic, growing said transformed eukaryotic host cell in the absence of said compound, determining the rate of growth of said host cell in the presence of said compound and the rate of growth of said host cell in the absence of said compound and comparing the growth rate of said host cells."  Then the claim directs the practitioner to "see what happens," and moreover, with anything -- "salt, sugar, water, oil" as opposed to the non-naturally occurring drug in Mayo -- and without any recitation of the type of "precise numbers" the Supreme Court rejected in Mayo.  Judge Moore pointed out that the transformed cell is not found in nature and asked how this differs from Chakrabarty's bacterium.  Mr. Hansen merely reminded the Court that the drug in Mayo had not been found in nature.  Judge Lourie then raised the example of Penicillin G, which was a natural product and asked whether it should be patent-eligible.  Mr. Hansen stated that it depended on "the degree to which it is transformed" (presumably from its natural state) but said that the rule has to be that it doesn't matter for method claims -- "administering and looking to see what happens is not patentable."  Judge Lourie sounded skeptical of this reasoning, mentioning that Penicillin G was not patented and there was "a lag" between when it was discovered by Fleming and when it was commercially available.

Mr. Hansen then said that it is well-accepted that patents are not rewarded for being the product of great effort, saying that E=mc2 might have taken great effort but was not patent eligible.  Judge Bryson said that wasn't his understanding of AMP's argument and returned the questioning back to claim 20, asking if Mr. Hansen agreed that "if all you did was to put PenG next to bacterium and tested and it worked better than water, then that isn't patentable," which, of course, he did.

Department of Justice (DOJ) SealLast to speak was the government, represented by Melissa Patterson.  Her argument proved that, although former Acting Solicitor General Katyal may be gone, his arguments (and his magic microscope) remain.  Ms. Patterson started as Mr. Hansen did, with an argument regarding the "unduly preemptive" scope of Myriad's composition of matter claims.  Judge Moore raised the magic microscope, asking whether the government still thought that was a useful test.  Ms. Patterson, with the benefit of hindsight characterized it as a metaphor rather than a test, but stated that the government still considered it "useful" as such.  The government's position was that the Supreme Court had voiced a "concern" in Mayo regarding the extent to which claims preclude public access to a product of nature; in this version of the government's view, the preemption issues raised for process claims in Mayo are directly applicable to the preemptive issues the government -- and, coincidentally, the ACLU -- raise here.  Judge Bryson raised the issue of whether the views of the U.S. government included the views of the Commerce Department and the USPTO, and Mr. Patterson stuck to the "unitary Executive" stance espoused (to some skepticism from Judge Moore) in the previous oral argument in this case.

Turning back to the merits, Ms. Patterson stated that the government did not consider this a "close case," analogizing (badly) Myriad's claims to patenting an electron or a quark (or a Higgs boson, noted Judge Lourie).  She then said that the government did not believe there should be a "huge wall" between the law of nature and product of nature and that the government was seeking to assert a general rule not a rule specific for DNA.  She went on to say that changes in a product of nature "incidental to its extraction" raised preemption concerns, citing coal as an example.

Judge Moore raised the issue of "settled expectations" as she had at the previous oral argument, noting that an industry had arisen during the "decades" in which the government (through the USPTO) had granted these patents.  Ms. Patterson raised Bilski as an example of where "thousands" of patents had been invalidated and said that the "settled expectations" provided "no reason to alter how a court looks at Section 101," asking the Court to make general (and preclusive) rules on patent eligibility.

Ms. Patterson then turned to a more potentially pernicious portion of her argument, saying that products of nature that differ "only by changes that are incidental to extraction" too broadly preempt the public's ability to study and otherwise use them.  Judge Moore raised the issue of primers and probes, which Ms. Patterson dismissed as "depend[ing] on the inherent properties of basepair complementarity" (thus presumably relegating anything that occurs naturally to be patent-ineligible so long as it continues to evince "inherent properties").  Judge Moore continued, asking about Chakrabarty's bacterium and the Court's rubric of things being "distinct and markedly different," to which Ms. Patterson returned to coal and uranium -- as properties discovered but not "invented."

In his rebuttal time, Mr. Castanias clarified the language of claim 20 and disputed Mr. Hansen's allegations that the transformed cell was something Myriad "got of the shelf, like a test tube."  He also attacked the government's argument as establishing "no principled line" for making the distinction between patent eligibility and ineligibility, and said that Chakrabarty draws the line.  He also distinguished his earlier remarks as not being a "sweat of the brow analysis" for patent eligibility but being the product of "work and inventive judgment."

Judge Moore asked Mr. Castanias to distinguish isolating a gene from extracting coal from rock, which he admitted would not be patent eligible, and mentioned the additional utilities present in an isolated gene, including re-introducing the gene into a cell that had a defective copy.  Utility had not been litigated in this case, he reminded the Court, the plaintiffs' having conceded that the isolated DNA had utility.

Judge Bryson returned to his kidney hypothetical from the previous oral argument, and Mr. Castanias attempted to distinguish without much success.  Judge Lourie ended this line of questioning by reminding the panel that a kidney is an organ, not a chemical compound, and that the analogy breaks down when that is taken into account.

Mr. Castanias ended his rebuttal argument by rebutting a point persuasive to Judge Bryson in his dissent from the now-vacated decision:  that "whole genome sequencing" was not impacted by Myriad's isolated DNA claims.  He mentioned that Professor Watson had had his whole genome sequenced without infringement liability.  After some additional questions regarding the importance of "where to make the cut" (and some colloquy from Judge Lourie that some of these considerations sound in obviousness, which was not before the Court), Mr. Castanias ended with his most persuasive argument:  that Chakrabarty is the answer and Mayo doesn't change it.

One thing is clear from this argument.  The danger in AMP's preemption argument, and even more so in the government's argument, is something hinted at in the now-vacated Federal Circuit majority opinion.  That is the argument, expressed frankly by the government, that merely isolating something from nature was "not enough" to render it patent eligible.  Part of the problem is the government's avowed purpose for setting out "general rules" (one shudders to think of the implications for "bright line" rules made by people who don't understand the implications).  Another is the failure to discuss the inseparable impact on what is claimed and how it is claimed.  Using one of the examples raised with regard to claim 20, what of the patent-eligibility of penicillin?  That question varies with the nature of the claim:

1.  Penicillin.

2.  An isolated preparation of penicillin having a purity of greater than 99% and capable of killing one million bacterial cells per microgram.

3.  A pharmaceutical preparation of penicillin suitable for injecting into a human being to treat a bacterial infection.

Philosophically (while we are talking general principles), the government's position that claims should not be allowed that will preempt a "product of nature" is a good way to create a "tragedy of the commons," because there is no incentive to identify, isolate/extract, test, and produce a drug from a naturally occurring source if its source precludes patent eligibility.

What the government (or that portion of the government populated by the scientifically illiterate or their opposites, the scientific elite who have little appreciation for the legal and practical implications of their positions) does not recognize is that there is a good reason to make the distinction between natural law as in Mayo (even as marginally as the logic of that case is laid out) and isolated products from nature.  Patenting a natural law restricts development of any future application of that law during the lifetime of the patent, whereas patenting a chemical compound from nature is limited to that compound.  Indeed, it has always been the case that "the public" is free to find new uses for compounds made by others and to patent them, which the original product patentee cannot practice without a license.  Thus, product patents by their nature do not have the breadth of method patent claims and do not raise the same issues due to the specificity of what is claimed in a composition of matter claim.  That distinction renders much of what the government argues as irrelevant, or at least not tethered to any legitimate policy concern regarding the availability of "products of nature" to the "public."

No matter how the Federal Circuit decides this case, what is at stake is a larger principle.  The old aphorism (raised to an anthem by John Cougar Mellancamp) is that if you don't stand for something, you fall for anything.  What the Court needs to stand for is the Congressional intent that "anything under the sun made by man" is eligible for patenting.  If the Supreme Court indulges in judicial nullification of this intent, so be it (and even the Court recognizes that Congress can amend the law to overcome all but the most fundamental grounds for patent ineligibility).  But the Federal Circuit spent a generation under the leadership of Judge Rich, and Judge Markey, and all the other Chiefs and other judges, in fulfilling its mandate of being the court that understands technology and patent law and thus is in the best position to interpret that law and apply it to the cases before it.  It should continue to do so.