Key Points
- Federal Circuit Reverses Finding of Patent Ineligibility for Genetically Engineered Host Cells. The court held that host cells containing recombinant nucleic acid molecules are patent-eligible because splicing sequences from different organisms creates human-made constructs "markedly different" from anything in nature.
- District Court's Reliance on Funk Brothers Was Misplaced. Splicing sequences from separate species into a new molecule and transforming a host cell to incorporate it is materially different from merely combining natural components like bacterial strains into a mixed bacterial culture, wherein the natural components remain unaltered.
- Potentially broad Implications for the Biotechnology Industry. The ruling is expected to impact patents across biotechnology platforms that combine naturally occurring sequences into human-made constructs, including cellular immunotherapy, gene editing systems and vaccines.
In a significant decision for the biotechnology sector, the Federal Circuit provided much needed clarity on the patent eligibility of genetically engineered compositions.
The Federal Circuit held that the genetically engineered host cells claimed in REGENEXBIO’s U.S. Patent No. 10,526,617 are products of “human intervention” and therefore patent eligible subject matter (REGENXBIO, Inc. v. Sarepta Therapeutics, Inc., No. 24-01408 (Fed. Cir. 2026)). The Federal Circuit reversed the District Court of Delaware’s grant of summary judgement, holding that the claims were patent ineligible because they were directed to natural occurring subject matter. While this precedential decision relates to gene therapy compositions, it will likely have wider impact in a variety of biotechnology platforms and products that combine naturally occurring sequences from different sources into human-made constructs, including for example, cellular immunotherapy, gene editing systems and vaccines.
Technology Background
The patent relates to gene therapy, which can modify the expression of a gene to treat or prevent disease by several different mechanisms: replacement of a disease-causing gene with a functional copy; silencing a disease-causing gene; editing/repairing a disease-causing gene; or introduction a new therapeutic gene.
Gene therapy can be delivered to patient cells by multiple methods. Recombinant adeno-associated viruses (AAV) vectors have emerged as a leading gene therapy delivery tool, with seven AAV gene therapy products approved by the FDA as of December 2025.1 AAV are naturally occurring viruses that are highly specialized for introducing genetic material into cells and sustain long-term gene expression. When AAV is used as a gene therapy delivery vehicle, the viral genetic material is replaced by a therapeutic transgene that encodes a healthy human gene, gene silencer, gene editing/repair system, etc. and packaged inside an AAV capsid shell.
Patent at Issue
The claims of U.S. Patent No. 10,528,617 are directed to host cells that have been genetically engineered to contain a recombinant nucleic acid molecule comprising an AAV capsid sequence and a heterologous non-AAV sequence.
Representative Claim 1 reads:
1. A cultured host cell containing a recombinant nucleic acid molecule encoding an AAV vp1 capsid protein having a sequence comprising amino acids 1 to 738 of SEQ ID NO: 81 (AAVrh.10) or a sequence at least 95% identical to the full length of amino acids 1 to 738 of SEQ ID NO: 81, wherein the recombinant nucleic acid molecule further comprises a heterologous non-AAV sequence.
The recombinant nucleic acid molecule is created by chemically splicing together nucleic acid sequences from two different organisms. The engineered host cells may be used as factories for producing the recombinant AAV gene therapy products to be delivered to patient cells.
Case Background
REGENXBIO filed suit in the District Court of Delaware accusing Sarepta of infringing claims 1-9, 12, 15, and 18-25 of the ‘617 patent. The District Court granted Sarepta’s motion for summary judgement and held that the claims of the ‘617 patent were patent ineligible subject matter under 35 U.S.C. §101 because they are directed to a natural phenomenon.
The District Court determined that none of the individual, naturally occurring components in the claims, namely the AAVrh.10 sequence and the heterologous non-AAV sequence, had been changed, and that “combin[ing] natural products and put[ting] them in a host cell does not make the invention patentable under §101.” See REGENXBIO Inc. v. Sarepta Therapeutics, Inc., No. 20-cv-1226-RGA, 2024 WL 68278, at *5 (D. Del. Jan. 5, 2024). The District Court likened the claimed genetically engineered host cells to the ineligible claims directed to mixed bacterial cultures in Funk Brothers Seed Co. v. Kalo Inoculant Co., reasoning that “[t]aking ‘two sequences from two different organisms and put[ting] them together’ is no different than taking two strains of bacteria and mixing them together.”
As the District Court found that the claimed invention was directed to a patent ineligible concept, step two under the Alice/Mayo two-step test was applied to determine whether the claim contains an inventive concept sufficient to transform the claimed abstract idea into a patent-eligible application. The District Court determined that the claims failed the Alice/Mayo second step because “the claimed invention is made using well-understand, routine, and conventional step.”
REGENXBIO appealed the District Court’s decision to the Federal Circuit.
Appeal Highlights
The Federal Circuit determined that eligibility should be analyzed through the framework of Diamond v. Chakrabarty, 447 U.S. 303 (1980), i.e., whether the engineered host cells have “markedly different characteristics” and have “the potential for significant utility” compared to what is naturally occurring. In arriving at the Chakrabarty test, the Federal Circuit emphasized the uncontested fact that the claims require splicing of a “recombinant nucleic acid” comprising an AAV sequence and a “heterologous” non-AAV sequence together “to create new, human-made sequences.” The Federal Circuit defines a recombinant nucleic acid molecule as “markedly different from anything occurring in nature.” Thus, the claimed host cells are “not patent-ineligible claims to naturally occurring subject matter.”
The Federal Circuit found that the District Court’s reliance on Funk Brothers was based on a misunderstanding of the underlying technology. In Funk Brothers, the patentee discovered certain strains of root-nodule bacteria that did not inhibit each other and combined them into a mixed bacterial culture, a repackaged product of nature that does not transform the bacteria strains therein. In contrast, the subject claims require “[g]enetically engineering two nucleic acid sequences from separate species into a single molecule and transforming a host cell to incorporate that new molecule into it” thus generating a cell containing a “molecule that could not form in nature on its own.” The technology is distinguishable from co-culturing multiple strains of bacteria where none of the bacteria are changed from their natural state.
Although the Federal Circuit found the subject claims eligible on structural grounds alone, it also held that unclaimed functional distinctions can be considered under the Chakrabarty test, even if the utility is implicit. Here, it is undisputed that the claimed compositions “are beneficial for gene delivery to selected host cells and gene therapy patients.”
Since the claims are not directed to a natural phenomenon under the first step of the Alice/Mayo two-step test, the Federal Circuit found no need to proceed to the second step of Alice/Mayo. Thus, whether the claimed invention is made using “well-understood, routine, and conventional steps” is not relevant for an inquiry under §101.
The Federal Circuit reversed the District Court’s grant of summary judgement that the claims of the ‘617 patent were patent ineligible subject matter, and the case was remanded to the District Court for further proceedings.
Takeaways
This decision offers several practical considerations for patent applicants and practitioners working with engineered products in the biotechnology space.
- A claimed composition must be evaluated as a whole to determine whether it is non-naturally occurring rather than focusing on whether each component is markedly different from its naturally occurring counterpart. Accordingly, arguments that individual components are not markedly different from their naturally occurring counterparts should be challenged.
- Consistent with this framework, recombinant nucleic acid molecules and genetically engineered host cells comprising such molecules are, by definition, non-naturally occurring subject matter. Of note:
- Claims should be drafted to emphasize “heterologous” components and “recombinant” or “genetically engineered” nature of claimed compositions.
- Arguments that the composition as a whole is well-understood, routine, and conventional should be rejected as irrelevant to the patent eligibility inquiry.
1Park et al. Bioeng Transl Med (2025) 11:e70106
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