Patent Eligible Subject Matter in the District Courts: Ariosa Genetics v. Sequenom (N.D. Cal. 2013)

by McDonnell Boehnen Hulbert & Berghoff LLP

Ariosa DiagnosticsLast Wednesday, Judge Susan Illston of the Northern District of California granted summary judgment to declaratory judgment plaintiff Ariosa Diagnostics Inc. in Ariosa Diagnostics v. Sequenom.  The legal basis of the court's decision was an application of the Supreme Court's patent eligible subject matter jurisprudence under Section 101 of the Patent Act, and as one might expect it didn't go so well for the patentee.  But it is important to remember at times like this that "[o]ne swallow does not a summer make, nor one fine day . . . " and to take what lessons we can from the decision.

SequenomThe technology at issue is non-invasive prenatal diagnosis of sex determination, blood typing, other genetic disorders and detection of pre-eclampsia, using a simple blood test that reduces or eliminates the need for amniocentesis and chorionic villus sampling (which incur risks to both mother and child).  Sequenom Inc. is the exclusive licensee of U.S. Patent No. 6,258,540 originally obtained by Isis Inc.; there are three independent claims attacked by Ariosa and asserted by Sequenom in its patent infringement counterclaims:

1. A method for detecting a paternally inherited nucleic acid of fetal origin performed on a maternal serum or plasma sample from a pregnant female, which method comprises
    amplifying a paternally inherited nucleic acid from the serum or plasma sample and
    detecting the presence of a paternally inherited nucleic acid of fetal origin in the sample.

24. A method for detecting a paternally inherited nucleic acid on a maternal blood sample, which method comprises:
    removing all or substantially all nucleated and anucleated cell populations from the blood sample,
    amplifying a paternally inherited nucleic acid from the remaining fluid and subjecting the amplified nucleic acid to a test for the Paternally [sic] inherited fetal nucleic acid.

25. A method for performing a prenatal diagnosis on a maternal blood sample, which method comprises
    obtaining a non-cellular fraction of the blood sample
    amplifying a paternally inherited nucleic acid from the non-cellular fraction and
    performing nucleic acid analysis on the amplified nucleic acid to detect paternally inherited fetal nucleic acid.

Ariosa's DJ action was filed December 19, 2011 and this summary judgment motion filed after Myriad decided.  The district court previously denied Sequenom's motion for preliminary injunction (on July, 2012), based on substantial question of invalidity under Section 101 (those with a refined temporal sense will recognize that this was before the Supreme Court's Myriad decision, and under prevailing Federal Circuit law where both genomic and cDNA was patent eligible).  The Federal Circuit vacated the court's denial of Sequenom's preliminary injunction motion for reconsideration under the Myriad decision.  In addition, the Federal Circuit also construed the claims, wherein the appellate panel (Chief Judge Rader joined by Judges Dyk and Reyna) reversed the district court's sub silentio construction of the claim term "paternally inherited nucleic acid" to mean "DNA sequence known [in advance] to be received only from the father which is not possessed by the mother."  (Chief Judge Rader's opinion recognizes that the bracketed phrase was not expressly recited by the district court but the court and parties acknowledged it as an essential component of the district court's claim construction.)  The court's opinion also reversed the district court's construction of the term "amplifying" to require preferential amplification of paternally inherited DNA, stating that:

[T]he claim as written stands infringed without regard to whether, or not, other nucleic acid is amplified. A party that amplifies paternally inherited nucleic acid satisfies this claim limitation without regard to amplification beyond other nucleic acid. The claim does not state that paternally inherited nucleic acid is "selectively" or "only" amplified.

On remand and in deciding to grant Ariosa's summary judgment (and deny cross-motion for summary judgment of infringement by Sequenom), the district court did not further construe the claims.

In setting forth its patent eligibility analysis, the court recognized that exceptions to patent eligibility under the statute are to be narrowly construed according to both the Federal Circuit and Supreme Court:

The Federal Circuit has explained that these exceptions should be applied narrowly. Ultramercial, Inc. v. Hulu, LLC, 722 F.3d 1335, 1342 (Fed. Cir. 2013); see also Prometheus, 132 S. Ct. at 1293 ("The Court has recognized . . . that too broad an interpretation of this exclusionary principle could eviscerate patent law. For all inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.").

The court then set forth its understanding of the "relevant" Supreme Court precedent (or at least that precedent from 1940 onward); this exercise loses to comprehensiveness any coherent application of relevant law (i.e., this is a dicta-fest) as follows:

Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 129 n.3 (1948):

"If there is to be invention from such a discovery, it must come from the application of the law of nature to a new and useful end." Id. at 130. The Court recognized that the aggregation of select strains of the species of bacteria into one product is an application of a newly-discovered natural principle, but explained that the application of that principle "is hardly more than an advance in the packaging of the inoculants."

Gottschalk v. Benson, 409 U.S. 63, 64 (1972):

The Supreme Court held that the claims were ineligible subject matter because the formula for converting BCD numerals to pure binary numerals was an abstract idea. See id. at 71. The Court explained: "The mathematical formula involved here has no substantial practical application except in connection with a digital computer, which means that if the judgment below is affirmed, the patent would wholly pre-empt the mathematical formula and in practical effect would be a patent on the algorithm itself." Id. at 71-72.

Parker v. Flook, 437 U.S. 584, 585 (1978):

The Court noted that "[t]he only difference between the conventional methods of changing alarm limits" and the claimed method "rests in the second step – the mathematical algorithm or formula." Id. at 585-86

The Supreme Court explained that "[t]he only novel feature of the method is a mathematical formula," id. at 585, and the discovery of a phenomenon of nature or mathematical formula "cannot support a patent unless there is some other inventive concept in its application." Id. at 594

The Court recognized that the invention did not wholly preempt the formula, but explained that "'if a claim is directed essentially to a method of calculating, using a mathematical formula, even if the solution is for a specific purpose, the claimed method is nonstatutory.'" Id. at 595 (quoting In re Richman, 563 F.2d 1026, 1030 (CCPA 1977)); see also id. at 590 ("The notion that post-solution activity, no matter how conventional or obvious in itself, can transform an unpatentable principle into a patentable process exalts form over substance. A competent draftsman could attach some form of post-solution activity to almost any mathematical formula; the Pythagorean theorem would not have been patentable, or partially patentable, because a patent application contained a final step indicating that the formula, when solved, could be usefully applied to existing surveying techniques.").

Diamond v. Diehr, 450 U.S. 175, 177 (1981):

The Court held that "a physical and chemical process for molding precision synthetic rubber products falls within the § 101 categories of possibly patentable subject matter." Id. at 184. . . . The Court recognized that "the process admittedly employs a well-known mathematical equation, but [the patentees] do not seek to pre-empt the use of that equation. Rather, they seek only to foreclose from others the use of that equation in conjunction with all of the other steps in their claimed process." Id. at 187.

Bilski v. Kappos, 130 S. Ct. 3218, 3223 (2010):

The Supreme Court held that the claims were unpatentable under Benson, Flook, and Diehr because the claims "are attempts to patent abstract ideas." Id. at 3230.  . . . "Allowing petitioners to patent risk hedging would preempt use of this approach in all fields, and would effectively grant a monopoly over an abstract idea." Id.

Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012):

At the time of the invention, scientists already understood that the levels of certain metabolites in a patient's blood were correlated with the likelihood that a particular dosage of a thiopurine drug could cause harm or prove ineffective. Id.

The Court explained that "Prometheus' patents set forth laws of nature – namely, relationships between concentrations of certain metabolites in the blood and the likelihood that a dosage of a thiopurine drug will prove ineffective or cause harm." Id. at 1296. "If a law of nature is not patentable, then neither is a process reciting a law of nature, unless that process has additional features that provide practical assurance that the process is more than a drafting effort designed to monopolize the law of nature itself. A patent, for example, could not simply recite a law of nature and then add the instruction 'apply the law.'" Id. at 1297.  Therefore, the Court concluded that although the patents recited additional steps in addition to the law of nature, the additional steps were insufficient to transform the character of the claims. See id. at 1297-98 ("[T]he claims inform a relevant audience about certain laws of nature; any additional steps consist of well understood, routine, conventional activity already engaged in by the scientific community; and those steps, when viewed as a whole, add nothing significant beyond the sum of their parts taken separately.").

Association for Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107 (2013):

The Supreme Court held that "a naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated, but that cDNA is patent eligible because it is not naturally occurring." Id. at 2111. . . . "To be sure, [Myriad] found an important and useful gene, but separating that gene from its surrounding genetic material is not an act of invention." Id. at 2117.

The district court then explains how it synthesized this case law into a decision.  It first set forth Ariosa's (convincing) argument:

"Ariosa argues that claims 1, 2, 4, 5, 8, 19-22, 24, and 25 of the '540 patent are not drawn to patent eligible subject matter because paternally inherited cffDNA is a natural phenomenon and the claims of the '540 patent merely add well-understood, routine, conventional activity in the field to that natural phenomenon."

And then set forth some of the relevant "facts" (which the court says are what must be established by clear and convincing evidence):

The parties agree that neither cffDNA nor the discovery of cffDNA in maternal plasma or serum is patentable, because the presence of cffDNA in maternal plasma or serum is a natural phenomenon.

However, the '540 patent does not claim as an invention the discovery of cffDNA in maternal plasma or serum. The '540 patent claims methods of detecting paternally inherited cffDNA in maternal plasma or serum.

The issue (according to the court):

Therefore, the issue before the Court is whether the steps of the claimed methods in the '540 patent, applied to that natural phenomenon, are sufficient to render the claims patentable.

The court comes down in the side of patent-ineligibility, based on the following considerations:

A process or method is not unpatentable simply because it contains a law of nature, a natural phenomenon, or an abstract idea. Prometheus, 132 S. Ct. at 1293; Flook, 437 U.S. at 590

But, to be patentable, a process that focuses upon the use of a natural law, a natural phenomenon, or an abstract idea must contain other elements or a combination of elements, sometimes referred to as an "inventive concept," sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the natural law, natural phenomenon, or abstract idea itself. Prometheus, 132 S. Ct. at 1294 (this statement nicely illustrates the problem of judicial subjectivity that enters into the assessment of patent eligibility under the Supreme Court's case law).

As in Prometheus, the court requires that "the claimed process – apart from the natural law, natural phenomenon, or abstract idea – must involve more than "well-understood, routine, conventional activity," previously engaged in by those in the field. Prometheus, 132 S. Ct. at 1294, 1299.

Ariosa's argument was simple:  the claims at issue did not "add enough" to the natural phenomenon to render the claims patent eligible.  Because the additional limitations "either apply well-understood, routine, and conventional activity to the natural phenomenon or limit the natural phenomenon to specific types of the natural phenomenon, which are also unpatentable."

This is that the court agreed with.  The question is why, and the court sets forth its reasoning as follows.  According to the opinion, amplifying and detecting DNA from plasma or serum was well known at the time the invention was made, based on "evidence" in the specification.  However, this interpretation seems to be a misreading of the specification, which states that amplification was achieved using standard techniques, not that amplifying DNA from plasma or serum was itself a standard technique.  The prosecution history was cited for the same point with regard to detecting DNA, but the use of standard techniques to detect DNA does not make detecting DNA from plasma or serum standard.  This understanding was aided by Sequenom's expert, Dr. Evans, who "also acknowledged that others before the inventors had amplified and detected nucleic acid in plasma or serum."

In a footnote, the court illustrates another problem stemming from a revitalization of Funk Bros., to the effect that new discovery is not enough, something that could unnecessarily preclude a large amount of patentable subject matter:

Dependent Claims 5, 8, 19, and 20 merely limit the natural phenomenon of paternally inherited cffDNA to specific types of that natural phenomenon, such as requiring that the cffDNA is from a Y chromosome or requiring that the cffDNA is at least a certain percentage of the total DNA. See '540 Patent at 25:1-3, 25:8-10, 25:39-26:3. A specific type of a natural phenomenon is still a natural phenomenon and, thus, is not patentable. See Myriad, 133 S. Ct. at 2116; Prometheus, 132 S. Ct. at 1293.

The court then illustrates the difficulties that arise when patent eligibility is assessed element–by-element rather than by looking at the claim as a whole:

Because the claimed processes at issue -- apart from the natural phenomenon of paternally inherited cffDNA -- involve no more than well-understood, routine, conventional activity, previously engaged in by those in the field, they are not drawn to patent eligible subject matter and are invalid under § 101.

And the decision illustrates how important where you start (eligible or not) determines where you end up:

The Supreme Court has never stated that any use of a natural phenomenon is patentable. To the contrary, the Supreme Court has held that "simply appending conventional steps, specified at a high level of generality, to laws of nature, natural phenomena, and abstract ideas cannot make those laws, phenomena, and ideas patentable." Prometheus, 132 S. Ct. at 1300. It is only an innovative or inventive use of a natural phenomenon that is afforded patent protection.

Thus the conclusion is reached:

But, based on the undisputed facts before the Court, the only inventive part of the patent is that the conventional techniques of DNA detection known at the time of the invention are applied to paternally inherited cffDNA as opposed to other types of DNA. Thus, the only inventive concept contained in the patent is the discovery of cffDNA, which is not patentable.

Amazingly, the court does not state the obvious, that this case can be fitted within the contours of the Supreme Court's Mayo decision (which would have been understandable).  Instead the court says:

The Court's conclusion conforms with the relevant Supreme Court case law, in particular Flook and Myriad. The patent in Flook, like the present patent, claimed methods that utilized an abstract idea or a natural phenomenon -- a mathematical algorithm in Flook, paternally inherited cffDNA in the present case.

(In another footnote, the court justified this "Waring blender" approach to patent eligibility analysis by saying that "the Supreme Court has never drawn a distinction between natural phenomena, laws of nature, and abstract ideas in determining patent eligibility.")

This has consequences:

Sequenom argues that its use of cffDNA is inventive because prior to the invention, no one had started with the mother's plasma or serum to detect paternally inherited fetal DNA. Docket No. 223 at 7, 16. Even assuming this true, the same argument could be made for the claims in Flook. Prior to the invention in Flook, no one had used that particular mathematical formula to update alarm limits. Despite this, the Supreme Court held that the claims in Flook were not drawn to patent eligible subject matter. Thus, use of a newly discovered natural phenomenon, law of nature, or abstract idea will not render a claim patentable if the use of that natural phenomenon, law of nature or abstract idea is the only innovation contained in the patent.


As explained in Flook, "the Pythagorean theorem would not have been patentable, or partially patentable, because a patent application contained a final step indicating that the formula, when solved, could be usefully applied to existing surveying techniques." 437 U.S. at 590. The Court similarly concludes that paternally inherited cffDNA is not patentable simply because the claims contain steps indicating that it may be detected using existing DNA detection methods.

It is a statistical certainty that somewhere there is a universe where this logic makes sense, but it isn't this one.

The court also finds that the Myriad decision supports its conclusion (seemingly ignoring Section III of the decision, which says, at least, that the holding in the case does not apply to method claims generally or to methods employing the knowledge of the chromosomal location or sequence of the human BRCA genes).  But in the application of the Myriad decision, the court asserts that, to be patent eligible, Sequenom needed to invent novel ways of detecting cffDNA. ("Similarly, had the inventors of the '540 patent created an innovative method of performing DNA detection while searching for paternally inherited cffDNA, such as a new method of amplification or fractionation, those claims would be patentable."), based on dicta from the Myriad case.

The court's answer to the charge that it is merely (and improperly) "engaging in a step-by-step dismantling of the claims (citing Diehr, that "[i]n determining the eligibility of respondents' claimed process for patent protection under § 101, their claims must be considered as a whole. It is inappropriate to dissect the claims into old and new elements and then to ignore the presence of the old elements in the analysis. This is particularly true in a process claim because a new combination of steps in a process may be patentable even though all the constituents of the combination were well known and in common use before the combination was made") and Ultramercial is that:

[T]he Court has not dissected the claims into their individual limitations and then determined whether the individual elements are old or new. Rather, the Court has considered the claimed processes as a whole. The unrebutted evidence does not merely show that the individual steps of fractionation, amplification and detection were well-understood, routine, and conventional activity at the time of the invention. The evidence shows that it was well-understood, routine, and conventional activity to combine these steps to detect DNA in serum or plasma.

The court does not even recognize that is doesn't know what it has done, much less know what it is doing; it has read the subject matter of the amplified DNA out of the claim, something that is not "routine, well-understood and conventional" but that the court does not consider.  Reading the claim as a whole, the question is whether what was "routine, well-understood and conventional" was amplifying cffDNA from blood plasma and serum, wherein then (and only then) the correlation between the detection of this DNA and fetal pathology might be merely the natural phenomenon that was claimed (and even then the argument that such a claim should not be patent eligible is doctrinally unsound).  But those are not the claims at issue here, and by ignoring this distinction the court comes to the wrong conclusion.

As to preemption (which the court reads Flook as saying can condemn a claim but not save one if it doesn't completely preempt):

In support of this argument, Sequenom has presented the Court with scientific articles describing methods for detecting cffDNA. Ariosa argues that even if these articles disclose alternative methods of detecting cffDNA, Sequenom has failed to present any evidence showing that any of these alternative methods are practical and commercially viable. In response, Sequenom argues that it is only relevant that the alternative methods can be practiced, not that they are commercially viable alternatives. The Court disagrees. If the alternative methods are not commercially viable, then the effect of the patent in practice would be to preempt all uses of the natural phenomenon. It is important to note that the '540 patent does not merely claim uses or applications of cffDNA, it claims methods for detecting the natural phenomenon. Because generally one must be able to find a natural phenomenon to use it and apply it, claims covering the only commercially viable way of detecting that phenomenon do carry a substantial risk of preempting all practical uses of it. It is also important to note the age of the patent. The '540 patent was issued in July 2001. That twelve years have passed since the issuance of the patent but Sequenom does not present the Court with any evidence of a commercially viable alternative method of detecting cffDNA reflects the broad scope of the '540 patent's claims and the great risk that the patent could preempt the use of cffDNA. Indeed, Sequenom itself has acknowledged the preemptive effect of its patent. (albeit supported by some improvident statements by Sequenom in the record).

(citations to the record omitted)

The court cites no precedent, because there is none, that the preemption standard is commercially viable alternatives.  Indeed, Quest's allegations in its declaratory judgment action against Myriad illustrate the incentive broad patents provide (when they don't totally preempt), because Quest can now purportedly practice Myriad's methods without infringing their claims, due to Quest's efforts to design around using advances in technology in the 15 years since Myriad applied for its patents.  The court doesn't appreciate this, either:

Further, the articles cited by Sequenom were published after the issuance of the patent and wellafter the date of the invention. Therefore, even assuming that the articles disclose alternative methods of detecting cffDNA, Sequenom has failed to show that any alternative methods existed at the time of the invention or at the time of issuance of the patent. Thus, it appears that the effect of issuing the '540 patent was to wholly preempt all known methods of detecting cffDNA at that time. Accordingly, the Court concludes that the claims at issue pose a substantial risk of preempting the natural phenomenon of paternally inherited cffDNA and that the preemption inquiry supports the Court's conclusion that the claims are not drawn to patent eligible subject matter.

Under the district court's view, the only patent eligible method claim would be one that could be practiced without infringing at the time the invention was made.  It is hard to discern any advantage to patenting (as opposed to holding new methods as trade secrets) under this standard, because it would provide no benefit if the claims recited a specific method that one of ordinary skill in the art would understand could be circumvented using another known method.  Under this standard, there would be little incentive to disclose, an outcome directly contrary to the Constitutional mandate to "promote the progress . . . of the useful arts."

This case illustrates the uncertainty that comes from enunciating a standard that raises a court's subjective opinion on patent eligibility to be dispositive, as illustrated by the Court's finding of a substantial question before the Supreme Court's Myriad decision came down.

Most of this anti-patent animus stems from two sources:  first, an "inverted telescope" view of what the patentee gets from her "monopoly" versus what the public gets from disclosure, wherein an excessive focus on private benefits thwarts the benefits to the public; and second the Goldilocks idea that a court's role is to ensure the proper balance between too much and too little patenting.  Judge Illston has evinced her anti-patent animus in the past:  according to Price-Waterhouse Coopers report, 2013 Patent Litigation Study, patentees never prevail at summary judgment before her.  This case just demonstrates the consequences of deciding cases wherein judicial prejudices under the guise of law are used to decide what should and shouldn't be patent eligible.


Written by:

McDonnell Boehnen Hulbert & Berghoff LLP

McDonnell Boehnen Hulbert & Berghoff LLP on:

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