Earlier this summer, in Ariosa Diagnostics, Inc. v. Sequenom, Inc., the Federal Circuit affirmed a decision by the District Court for the Northern District of California granting summary judgment of invalidity of the asserted claims of U.S. Patent No. 6,258,540 (see "Ariosa Diagnostics, Inc. v. Sequenom, Inc. (Fed. Cir. 2015)"). Last month, Sequenom filed a petition for rehearing en banc, arguing that the panel's decision in June was inconsistent with the Supreme Court's decisions in Diamond v. Diehr, 450 U.S. 175 (1981), Mayo v. Prometheus Laboratories, 132 S. Ct. 1289 (2012), and Association for Molecular Pathology v. Myriad Genetics, 133 S. Ct. 2107 (2013), and that the panel's decision poses a threat to patent protection in multiple fields of invention. On August 27, twelve amicus curiae briefs were filed in support of Sequenom's petition for rehearing en banc. Over the next few weeks, Patent Docs will examine these amicus briefs. Here, we review the brief submitted by the Bioindustry Association.
In the brief's Statement of Interest, the amicus states that it is a "United Kingdom trade association of over 300 member organizations working in research and development ("R&D") and manufacturing in the bioscience sector." The association's members "include emerging and established biotechnology companies, pharmaceutical companies, academic research and philanthropic organizations," which are "responsible for over ninety per cent of biotechnology-based medicines currently in clinical development in the UK; they are at the forefront of innovative scientific developments targeting areas of unmet medical need." The amicus asserts that the issues in this case are of "great importance" because "[t]he majority of BIA's members are small and medium size enterprises" and thus "the ability to raise R&D funding or attract larger companies to collaborate heavily depends on the strength of their intellectual property, primarily patents." Without patent protection, the ability of BIA members to bring to life new and improved treatments" is "severely hinder[ed] and, in many cases, [is] impossible." Unique to the amicus briefs that have been filed, this brief makes the point that the U.S. represents 47% of the biotech market globally and that about 50% of U.S. biotech applications are filed by foreign companies (putatively to inform the Court of why a foreign trade association is concerned with the panel's interpretation of U.S. law).
The brief cites stark facts: that the panel decision is at odds with patent eligibility standards throughout the rest of the world and is contrary to (and harms) efforts to harmonize patent law among industrialized nations. The panel's interpretation of U.S. law also disadvantages foreign and multinational companies because inventions not patentable in the U.S. under the unique standards applied by the panel forces these companies to choose between getting patent protection abroad or keeping the technology as a trade secret globally. The brief counsels that "the unintended consequence of the Sequenom decision may be an exodus of investment and businesses from the US market or the life science industry in general."
The brief then sets forth its evidence and arguments regarding how outside the bounds of accepted patent eligibility standards the panel decision is, beginning with the statement that "[t]he Supreme Court could not have intended a general exclusion denying patent protection to meritorious inventions merely because they are based on a discovery of something that occurs in nature." What is "critical," according to this amicus, is "to delineate with clarity when a patent-ineligible discovery becomes sufficiently transformed" to become patent eligible. Too broad an interpretation of Supreme Court precedent leads to the "unfortunate result[]" that "even an acknowledged ground-breaking meritorious invention is denied patent protection merely because it originates from a discovery of a natural phenomenon." The brief then provides a concrete example for comparison: European Patent No. EP 994 963, which is the counterpart of the Sequenom patent at issue in this case (U.S. Patent No. 6,258,540) which was granted having claims almost identical to the one invalidated by the District Court. The brief notes that this patent was opposed in the EPO but survived, and cites decisions of the EPO Board of Appeals affirming the patentability of these claims (which were not challenged in eligibility grounds in Europe). And the brief sets for the EPO Guidelines for comparison:
If a new property of a known material or article is found out, that is mere discovery and unpatentable because discovery as such has no technical effect and is therefore not an invention within the meaning of Art. 52(1). If, however, that property is put to practical use, then this constitutes an invention which may be patentable. For example, the discovery that a particular known material is able to withstand mechanical shock would not be patentable, but a railway sleeper made from that material could well be patentable. To find a previously unrecognized substance occurring in nature is also mere discovery and therefore unpatentable. However, if a substance found in nature can be shown to produce a technical effect, it may be patentable. An example of such a case is that of a substance occurring in nature which is found to have an antibiotic effect.
EPO Guidelines for Examination (emphasis added).
Specifically, the brief identifies the "significantly more" requirement enunciated by Mayo as having "no equivalent in the patent laws of other industrialized countries."
Using these discrepancies as context, the brief then argues that the decision "frustrates" efforts to harmonize patent law globally. More importantly, the brief also asserts that the panel's application of the Supreme Court's Mayo/Alice precedent is also contrary to U.S. treaty obligations (and, of course, contrary to the constitutional basis of Congress's exercise of the patent power). With regard to the treaty aspects, the brief goes back to the Paris Convention of 1883 as the beginning of harmonization efforts, and includes the creation of WIPO (1967), the Patent Cooperation Treaty (1970), and GATT/TRIPS (1995) to illustrate these harmonization efforts, evidenced by the overwhelming majority of countries that have acceded to these treaties. The brief than takes a short detour to argue that the panel decision is also inconsistent with provisions of the Leahy-Smith American Invents Act, insofar as the Act was directed at harmonizing U.S. patent law with the rest of the world and in particular how the AIA did not change § 101 (except for expressly precluding claims to a human organism in superposition to the 13th Amendment). Insofar as the panel decision has effects contrary to this push towards harmonization, the brief argues that "the panel decision threatens the innovativeness and competitiveness of the US economy," something the Supreme Court could not have contended.
Finally, the amicus argues that the traditional alternative to eschewing patent protection, trade secret, is not available to foreign and multinational companies because of the disjunction between U.S. patent eligibility standards the rest of the world. Such companies face the choice of filing only in the U.S. and requesting no publication, and then keeping the invention as a trade secret if unsuccessful, or filing everywhere and having patent protection globally but no protection (patent or trade secret) in the U.S. The result: "a consequence of the panel's decision in Sequenom is the de facto abolition of intellectual property protection in the United States for many foreign and multinational companies who were able to procure patents abroad."
The thrust of the arguments made by this amicus may be more persuasive to Justice Breyer than they will be to the Federal Circuit; the Justice has received a fair amount of press (both good and bad) over his assertions in a recent book (The Court and the World: American Law and the New Global Realities, Knopf, 2015) that the Court should look to the laws of other nations in making its decisions.
This amicus were represented by Konstantin Linnik, Lana Gladstein and Isaac Hubner of Nutter McClennen & Fish.
For additional information regarding this topic, please see:
• "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: WARF, Marshfield Clinic, and MCIS, Inc.," September 17, 2015
• "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: BIO and PhRMA," September 16, 2015
• "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: Amarantus Bioscience Holdings, Personalis, Inc., and Population Diagnostics, Inc.," September 15, 2015
• "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: Coalition for 21st Century Medicine," September 14, 2015
• "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: IPO," September 8, 2015
• "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: Professors Lefstin and Menell," September 6, 2015
• "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: 23 Law Professors," September 3, 2015
• "Amici Support Sequenom's Petition for Rehearing En Banc," August 28, 2015
• "Sequenom Requests Rehearing En Banc," August 18, 2015
• "Ariosa Diagnostics, Inc. v. Sequenom, Inc. (Fed. Cir. 2015), June 22, 2015
