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 Biotechnology Industry Organization and the Pharmaceutical Research and Manufacturers of America.

In the brief's Statement of Interest, amicus states that it is "the world's largest biotechnology trade association, with over 1,100 members worldwide involved in the research and development of innovative healthcare, agricultural, industrial, and environmental biotechnology products."  As for PhRMA, it is "a voluntary, nonprofit association representing the nation's leading research-based pharmaceutical and biotechnology companies," which companies "are dedicated to discovering medicines that enable patients to lead longer, healthier, and more productive lives."  Amici are filing this brief because they are "concerned that the development and commercialization of a range of biotechnologies will be impeded if this Court does not address the mounting uncertainty currently afflicting patentable subject matter jurisprudence."

The brief makes three arguments in favor of en banc reconsideration:  first, that the panel decision has "exacerbated uncertainty" on the question of the extent to which biotechnological innovation is patent eligible; second, that the Federal Circuit should "clarify the contours" of the framework enunciated by the Supreme Court in its Mayo decision; and third, that there is a need for the Federal Circuit to provide a "coherent articulation of the policy basis for the patent eligibility requirement" in the first place, "consistent with the overarching objectives of the patent system.

Regarding the first argument, the brief notes that the growth of the biotechnology industry in America was spurred by the expansive reading of patent eligibility provided by the Diamond v. Chakrabarty decision (447 U.S. 303 (1980)), but reminds the en banc Court that more recent Supreme Court decisions have been interpreted by the Patent Office and inferior courts in such a way that there is "a level of uncertainty about the scope of patent-eligible subject matter that is unprecedented in the history of biotechnology."  In addition to this change in longstanding policy, the brief notes that America's "trading partners are growing concerned about a widening U.S. departure from internationally prevailing standards for patent eligibility of at least some biotechnologies" due to how these decisions are being interpreted.  This is particularly true in the Patent Office, where "[w]ith each new PTO guidance, biotech companies have observed an increasing rate of claim rejections" for inventions comprising inter alia "novel antibiotic molecules, industrial enzymes, diagnostic processes, and crop protection products."  This uncertainty has spilled over to the courts, where "[e]ven if a biotechnology firm succeeds in overcoming a rejection on patent-eligibility grounds in the PTO, the unsettled state of the law creates doubt about whether such issued patents would withstand challenge."  Indeed, the brief argues that the "vast majority" of decisions have resulted in patent invalidation on subject matter eligibility grounds (citing the Office's own "July 2015 Update: Subject Matter Eligibility" report, where twenty-two of twenty-four subject matter eligibility decisions before the Federal Circuit results in all claims being deemed patent ineligible (thankfully, not all of which are for biotechnology or pharmaceutical inventions).  This situation amounts to a "dark cloud overshadowing thousands of [] biotechnology patents," with a resulting disruption of expectations for past investors and a chilling effect on the attractiveness of investment in future inventions.  The brief cites former Chief Judge Rader's dissent in In re Bilski, for his point that investors can and will put their money into inventions more certain than the "discovery of 'scientific relationships' within the body that diagnose breast cancer or Lou Gehrig's disease or Parkinson's []."  545 F.3d 943, 1014 (Fed. Cir. 2008).

The brief then turns to the root source of the problem, the need for the Federal Circuit (in the first instance; it is Pollyannaish to think this story will end anywhere other than the Supreme Court) to clarify what the High Court meant in setting out the analytical framework in Mayo as "explained" in Alice v. CLS Bank.  These amici argue that the very nature of the test indicates that the Court expected the first step to perform a "meaningful gatekeeping function," and that the panel "missed an opportunity to clarify if and how this gatekeeping function operates in biotechnology."  The brief cites the panel's infamous rationale that the claims are "directed to detecting the presence of a naturally occurring thing or natural phenomenon" as satisfying step I of the Mayo/Alice test, arguing that "it is difficult to see how any analytical or detection method would ever not satisfy Step I, so long as that method is designed to detect something that occurs naturally."  This "uncritical" assessment renders Step I "superfluous for a vast array of technologies," including of course diagnostic method claims but "also forensic, geological or atmospheric testing, petrochemical or metallurgical analysis, and even radioisotope dating in archaeology."  And the distinctions fostered by the panel's application of the Supreme Court's precedents makes no sense, the brief contrasting detecting "man-made toxic contaminants in drinking water" (putatively patent eligible) from "waterborne natural pathogens (which would not).  The brief also warns of the negative effects the panel's ruling would have on personalized medicine, because this technology "inherently rely on the detection or evaluation of a patient-specific trait, or on a patient's physiological response to a treatment," which of course would be considered to be "directed to" a natural phenomenon according to the panel's "uncritical or undifferentiated application of Step I."

The panel's decision does not fare any better with regard to Step II of the Mayo/Alice test according to these amici.  The brief maintains that the panel confused "the interplay of analysis for 'inventive concept' and 'preemption,'" because these two concepts "are not connected" and "threaten to drive the development of patent eligibility doctrine in different directions."  This argument is illustrated by an example of how applying a biological natural phenomenon may be "the only practical use of the phenomenon apparent at the time of invention" and thus being completely preemptive, despite the existence of an inventive concept.  On the other hand, the brief asks whether avoiding preemption by including conventional steps should remove the need for an inventive concept.

Regarding how the panel interpreted "Inventive concept" is "likewise problematic" according to these amici.  They point out that it will frequently be the case that just those types of inventions that have advanced biotechnology can be readily "deconstructed into a mere combination of natural phenomena and known techniques" as the panel did to Sequenom's claims.  They point out that these types of inventions "translate nascent technology into commercial products that provide meaningful benefits to society."  But frequently the clinical tests that are the basis for diagnostics, while being "extremely important innovations" "generally involve the use of conventional techniques" (such as those in Sequenom's claims, "such as polymerase chain reaction (PCR) and electrophoresis" for amplifying and analyzing DNA.  It makes "good sense" to develop reliable diagnostic tests using these methods, but in the context of recent case law (including this case) the amici argue that courts "could generally preclude patent eligibility for diagnostic tests simply because the most practical means for administering the tests involves the use of conventional techniques."

The brief perhaps gives the Mayo Court too much credit for being concerned with saving "meritorious" inventions in the way the decision did not reverse Diamond v. Diehr; according to the amici "the Supreme Court apparently assumed the existence of limiting principles that would maintain patent eligibility for truly meritorious inventions."  (It is at least equally likely that the Court was willing to sacrifice such inventions regardless of their merit provided that inventions the Court considered ineligible were precluded from patentability.)  Nevertheless, the brief discerns in the Mayo opinion a consideration that the Mayo Court acknowledged an inventive concept in the Diehr claims based on the objectives of patent law wherein "that when these objectives are satisfied, a claim reciting the application of an excluded law of nature with conventional and well-known process steps can be patent eligible."  And the lack of preemption in the Diehr claims noted by the Mayo Court was "given short shrift" by the panel, another source of its analytical error.

The conclusion of this section of the brief puts the lie to the specious suggestion that diagnostic method claims that recite "some new methodology for analyzing DNA" as a way to avoid the purported subject matter eligibility deficiencies found by the panel.  This suggestion ignores the commercial realities that such claims would be of little value, say these amici, because they would "permit competitors to perform equivalent diagnostic tests using conventional methodology without any liability."

In its boldest pronouncement, the brief states that:

En banc reconsideration would allow this court to address the nature of the limiting principles suggested in Mayo.  Alternatively, if this court finds that Supreme Court precedent does not provide for limiting principles that provide a meaningful opportunity for patenting important biotechnology innovations, that would suggest a need for the Supreme Court to readdress the contours of patent eligibility in the context of biotechnology.  This case would be an appropriate vehicle to alert the Supreme Court to the urgent need for this clarification.

And the brief concludes by reminding the Court that precisely those claims Judge Bryson identified as being patent eligible alternatives to the diagnostic method claims the District Court found were patent ineligible (the Supreme Court noting these alternatives with approval in its Myriad decision) were later declared ineligible on subject matter grounds in University of Utah Research Foundation v. Ambry Genetics Corp., 774 F.3d 755 (Fed. Cir. 2014).

These amici were represented by Li Westerlund of Bavarian Nordic Inc. and Christopher M. Holman of Hovey Williams LLP and the University of Missouri-Kansas City School of Law.

For additional information regarding this topic, please see:

• "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