Patent Eligibility for “Natural” Food and Beverage Ingredients and Products

by King & Spalding
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Since the Supreme Court’s decision in Association for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576 (2013), there has been considerable uncertainty regarding what constitutes patentable subject matter. In a unanimous decision, the Court invalidated Myriad’s claims to an isolated human gene—agreeing with AMP, the lead plaintiff, that the act of separating a gene from its natural environment was not an act of invention and that isolated gene sequences were products of nature, not eligible for patenting. As a result, Myriad would no longer have an (effective) monopoly on testing for the breast cancer genes, BRAC1 and BRAC2.

The outcry from the life sciences industry was immediate, as the decision effectively invalidated thousands of existing gene patents. But the implications of Myriad were broader still. Would any substance isolated from nature be considered unpatentable going forward? If so, the Myriad decision posed a significant threat to patenting practices across industries—including the food and beverage industry.

Why?

The natural world has long served as a source of products of commercial value. Historically, many pharmaceutical agents have been extracted or derived from plants. Despite advancement in drug discovery methods, nature still serves as an important source of new medicines. As one example, the FDA recently approved Epidiolex®, a marijuana-derived drug, for the treatment of seizures associated with two rare and severe forms of epilepsy. Natural sources have also provided many ingredients used in food and beverages. The plant Stevia rebaudiana, for example, is the source of numerous steviol glycoside compounds used (or in development) as sugar substitutes.

Moreover, the concept of “natural” is appealing to many consumers, even if the product consumed is a step (or several) removed from the natural source. And that appeal is only growing—as consumers become increasingly aware of the health, safety, and even social benefits of consuming natural or at least relatively unprocessed products.

Further, the practice of patenting isolated and purified compounds was well-established at the time of the Myriad decision. The four types of subject matter eligible for patenting are identified in 35 U.S.C. §101, which broadly states:

Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter…may obtain a patent therefor, subject to the conditions and requirements of this title.

While the courts had long interpreted §101 to exclude certain types of subject matter from patentability—“laws of nature, natural phenomena, and abstract ideas” (Diamond v. Diehr (450 U.S. 175, 185) (1981)), —they had consistently recognized that compounds isolated and purified from a natural source are eligible for patent protection. Moreover, the United States Patent and Trademark Office (USPTO), until Myriad, explicitly recognized the “isolated” DNA format for claims.

Post-Myriad, other types of patent claims remained available to protect isolated and purified compounds (e.g., methods of using the compound, methods of making the compounds). Yet, composition of matter coverage (i.e., a claim to the compound itself) is fundamental from an enforcement standpoint.

Concerns over the potential impact of Myriad only grew when, in 2014, the USPTO issued patent examination guidelines that identified “natural products” as a new category of what the agency would consider non-patentable subject matter. Put simply, the USPTO read the Myriad decision as completely eliminating the isolated and purified exception to patentability—even though, on its face, the decision was limited to isolated human genes.

Specifically, the guidelines required examiners to determine whether a patent application includes claims “directed to” products that (i) are naturally occurring (step one) or (ii) are not naturally occurring but have characteristics that are not “markedly different” from a naturally occurring counterpart fall within an exception (law of nature or natural phenomena) (step two). The guidelines included several examples of claims directed to non-patentable subject matter. Example 30 (“dietary sweeteners”) considered the subject matter eligibility of a claim reciting a dietary sweetener comprising 1–5 percent texiol and at least 90 percent water. Finding the claim directed to a nature-based product, the guidelines then compared the subject matter to its closest naturally occurring counterpart (sap, or more specifically, the occurring texiol-water mixture in the sap) to determine whether it had “markedly different” characteristics, finding:

 

Although the combination as claimed is novel and does not occur in nature, there is no indication that mixing them in the recited amounts (i.e., 1-5 percent texiol and at least 90 percent water) changes the structure, function, or other properties of the texiol or water in any marked way. Instead, the texiol retains its naturally occurring structure and properties (e.g., its sweetness and bitter aftertaste), and is merely located in water, which also retains its naturally occurring structure and properties (e.g., its liquid form at room temperature). These characteristics are also the same as the naturally occurring texiol and water in the sap, which is also a sweet liquid at room temperature. Thus, the claimed mixture as a whole does not display markedly different characteristics compared to the closest naturally occurring counterpart.

 

Moreover, the USPTO has characterized subject matter eligibility as a question of law and stated that factual support is unnecessary not only for the determination of whether a claim is “directed to” a judicial exception, but also for the “something more” analysis—given the patent examiner’s expertise.

While the courts are not bound by the USPTO guidelines, they had an immediate and negative impact on patent applicants. The number of patentable subject matter/§ 101 rejections increased dramatically—across all technologies, but particularly for those units at the USPTO that issue patents for the life sciences and the food and beverage industry. Specifically, art unit 1790 (food) rejected nearly 13 percent of all claims as directed to patent-ineligible subject matter. The courts also began to apply Myriad, often with negative results.

Yet, five years after Myriad, there is reason to be cautiously optimistic. The Federal Circuit recently issued a decision that conflicts with the USPTO’s position that “judicial notice” fact-finding is sufficient for subject matter eligibility rejections. In Berkheimer v. HP, Inc., No. 17-1437 (Fed. Cir. 2018), the Court explained that the legal question of subject matter eligibility involves underlying, subsidiary fact questions precluding summary judgment, stating that “whether a claim recites patent eligible subject matter is a question of law which may contain underlying facts.” Shortly thereafter, the USPTO issued a memorandum noting that an Examiner should only conclude (in connection with a subject matter eligibility analysis) that an element represents a well-understood, routine or conventional activity as a factual matter, with reference to written source (e.g., a publication) or by taking official notice only when the Examiner is certain, based on his or her own personal knowledge, that is the case.

The Federal Circuit has also recently taken a more nuanced approach to claims with a genetic component. In Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals Int’l Ltd., No. 16-2707 (Fed. Cir. 2018), the court affirmed the subject matter eligibility of a claim reciting a method that requires genotyping a subject to determine whether that subject possesses “a CYP2D6 poor metabolizer genotype,” and administering a particular drug (iloperidone) at either the conventional dose or a reduced dose if the subject is a poor metabolizer. The court recognized that the invention was based on the discovery of the relationship between genetic makeup and metabolism of the drug, but found that the claims were “directed to” an application of that relationship and not to the relationship itself. In June 2018, the USPTO issued another memorandum, advising Examiners that method claims applying a natural relationship are considered subject matter eligible without regard to non-routine or unconventional steps.

Finally, in addition to this flurry of encouraging updates, the USPTO recently testified before Congress regarding subject matter eligibility issues, stating that the agency “will continue to engage stakeholders and the public about ways to reduce the uncertainty around this critical area of patent law.”

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