Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: Novartis AG

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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 Novartis AG.

In the brief's Statement of Interest, the amicus states that they are "a global healthcare company whose mission is to discover, develop and successfully market innovative products to prevent and cure diseases, to ease suffering and to enhance the quality of life for patients across the world."  The company's interest in the panel's decision is that it is "at heart an innovation company, relying primarily on our substantial investment in our own research and development (R&D) -- $9.9 billion in 2014 alone -- to fuel the ingenuity and high-stakes work that it takes to invent, develop and deliver new medicines."  Accordingly, the company relies on patenting to protect its investment "in spite of the high costs and risks inherent in biopharmaceutical R&D."  And the amicus notes that, for most of the 220 years of the U.S. patent system these protections have been successful in encouraging investment in innovation because patent protection was extended to "anything under the sun made by man [] subject only to limited judicial exceptions."  The brief characterizes Section 101 as a "Janus," "with the power to begin entire fields of useful Arts -- or, if the gates are closed, to end them as abruptly."  Being a business dependent on patent protection, the company asserts that the "critical role" of Section 101 as a gatekeeper has motivated it to follow the recent Supreme Court decisions "with concern over the certain and uncertain ways that it might impact the direction of our R&D, and have provided comments to the U.S. Patent and Trademark Office regarding the Guidances the Office has promulgated in an attempt to adapt government patent policy to those decisions.  The continued viability of the Court's "seminal cases" (including Diamond v. Chakrabarty and Diamond v. Diehr), says this amicus, have provided "reassurance" in the face of the questions raised by these cases about the boundaries of patent eligibility, as has the Court's "repeated admonitions to interpret those holdings narrowly, lest they 'eviscerate patent law'" (citing Mayo).

This reassurance has "slipped away," according to Novartis, with the panel's "erroneous" decision, which "ignores the case 'most directly on point' (Diehr), misinterprets the framework of the principal case on which it relies (Mayo) and dangerously expands the judicial exceptions further than any decision in history" (a passage that most succinctly states the position of most of the amici, Sequenom and most of the biotech patent bar).  The brief argues that Section 101 is intended to be a broadly interpreted threshold of "possibly patentable subject matter" (citing Diehr) and not as a door that forecloses what the "stricter" substantive patent law provisions of the statute would allow (saying colorfully that "such a door cannot be correctly construed as a vanishing portal that shrinks in scope with every step of the 'Progress of Science and the useful Arts'").

This is precisely what the panel decision does, however according to the brief, an outcome caused by "a fundamental misreading" of Mayo.  And (perhaps even more dangerously) "the decision goes well beyond merely finding that a particular invention that applies 'manmade tools of biotechnology' in a 'revolution[ary]' way is ineligible for patenting": citing Judge Linn's soi-disant concurrence, "the decision threatens to signal to other courts and the USPTO to expand its flawed reasoning to untold numbers of other inventions."  The panel decision threatens Novartis's "own inventions related to personalized medicine, biomarkers and point-of-care testing" as well as third party tests that may be of interest to Novartis in future. The consequences are dire indeed: "[i]f these inventions are no longer patent-eligible, the incentives to develop them may well disappear, or move overseas, or push us and others to rely on trade secrets, marking the death of a system in which the "public good fully coincides . . . with the claims of the individuals," citing The Federalist No. 43 (James Madison).  And the decision might also bleed over to threaten "methods of treatment, medical therapies [and drug development]," having a "devastating" effect on medicine.  Accordingly, this amicus concludes that the panel decision "deserve[s] another look" by the court en banc.

With this explication of the situation as prelude, Novartis makes three arguments in favor of reconsideration (and reversal) of the panel decision.  The first of these is that the panel "impermissibly narrow[ed] the eligibility test for method claims by failing to consider the "claims as a whole."  According to this brief, the second step in the Mayo/Alice test for patent eligibility not only "does not compel" the panel's result but indeed "leads readily to the opposite" one (emphasis in the brief).  This assertion is based on the command from Mayo that the second step mandates that a court "consider whether 'other elements or a combination of elements, sometimes referred to as an "inventive concept"' transform the claim into a patent-eligible application [of a judicial exception]."  The error was not in deciding that cffDNA was a natural phenomenon in applying the first step of the test, but instead by "completely excising these natural phenomena from the claim, asking only whether what remained (e.g. PCR) was 'inventive' on its own."  PCR could not be considered inventive per se in 1997, but performing PCR on cffDNA from material blood "surely was," according to the brief.  This situation is sanctioned (in the good way) by Mayo, being either an inventive "combination of elements" or by considering the claim as a whole.  This "second layer of analysis," arose in Diehr and was cited with approval by the Court in Mayo and quoted in the brief as standing for the principle that the Court rejected the "rigid 'additional elements' approach applied by the panel:

[It is argued that] if everything other than the [patent-ineligible concept] is determined to be old in the art, then the claim cannot recite statutory subject matter.  The fallacy in this argument is that we did not hold in Flook that the [patent-ineligible concept] could not be considered at all when making the §101 determination.  To accept [that] analysis . . . would, if carried to its extreme, make all inventions unpatentable because all inventions can be reduced to underlying principles of nature which, once known, make their implementation obvious.

According to the brief's interpretation of the Court's Mayo decision, this was the "secondary check" on step 2 of its patent eligibility test, applied after the Court had determined that none of the steps recited in the claim by themselves contained an inventive concept.  The brief then argues that "in line with Diehr, the Court's secondary analysis indicates that it was searching for an inventive concept in the way that the inventor arranged the known elements in the claim as a whole, including the natural phenomenon."  It was the panel's failure to perform this assessment that lead it to error as argued in this brief.

A second argument proposed by Novartis is that the panel decision applies Section 101 more restrictively than the other statutory sections, contrary to the "broader patent law."  Cited as an example of this conflict is the likelihood that a claim could contain an inventive step (non-obviousness) sufficient to pass muster under Section 103 but lack an inventive concept sufficient to confer patent eligibility.  Acknowledging that what the Court meant by the term "inventive concept" (insofar as the term is different from non-obviousness) is still being developed, the brief finds conflict in the language of the statute, specifically that patents shall be granted on eligible subject matter "subject to the conditions and requirements of this title."  35 U.S.C. § 101 (emphasis added).  The brief repeats the point that the Supreme Court considers Section 101 to be a threshold test, and that Congress intended the section to be construed broadly ("anything under the sun made by man").  Using language from the panel opinion recognizing that the invention was "a significant human contribution that "combined and utilized man-made tools of biotechnology in a new way that revolutionized prenatal care," the brief asserts that the opinion satisfies the hypothetical raised earlier that a claim could be simultaneously non-obvious and ineligible, an outcome the brief argues is contrary to the statute and "broader" patent law precedent.  Simply put, here the brief argues that a claim cannot be both non-obvious and patent ineligible so long as the criteria for eligibility includes the existence of an inventive concept.

Finally, the brief argues that the panel opinion turns the judicial exceptions into "moving targets" and as a result "creat[es] needless uncertainty [that] undermin[es] the objectives of the patent system."  (The basis of this in reality stems from Justice Breyer's reincorporation of inventive concept" into Section 101 sixty years after Giles Rich and P.J. Federico thought they had relegated this requirement to Section 103.)  But Novartis has a point when it states that the panel's application of the eligibility test makes what is an exception depend on the "constantly-changing state of the art" and that this is in conflict with how the Court has defined and (until now at least) applied the judicial exceptions.  Novartis argues that the exceptions are exceptions because they are "universal constants" that are "outside the reach of human intervention" and hence do not change over time.  Logic dictates that "what amounts to a 'natural phenomenon' at a given time cannot become an invention later, nor can a human invention become a 'natural phenomenon' with the passage of time."  One illustrative basis for this idea is PCR:  the panel determined that amplifying cffDNA using PCR was not "enough" to infuse the claim with an inventive concept because the technique was known in the art.  The brief then notes that "implicit in this reasoning is that the use of PCR would be patent-eligible if the technique were new, as it was when Kary Mullis invented (and indeed patented) the process in 1983."  While this may make sense under a novelty (Section 102) or obviousness (Section 103) analysis, the brief argues that it not only should not but "logically cannot be" under the judicial exceptions to patent eligibility under Section 101.  "If the broad application of PCR to any form of DNA was not an ineligible 'natural phenomenon in 1983 [as presumptively it was not because Mullis was awarded a patent on the method], it cannot have become one 14 years later when applied to a more specific form of DNA in an admittedly 'revolution[ary]' way," the brief concludes.

Novartis was represented on the brief by Corey A. Salsberg.

For additional information regarding this topic, please see:

• "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: Paul Gilbert Cole," Setember 22, 2015
• "Amicus Briefs in Support of Sequenom's Petition for Rehearing En Banc: Bioindustry Association," September 20, 2015
• "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

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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