Chao and Womack on Patentable Subject Matter Rejections at the PTO

An article published last month on Law360 (behind paywall) discusses recent developments in the law of patent eligibility, which is enforced through Section 101 of title 35. We have covered patent eligibility issues on this blog before in connection with diagnostic patents and patents on isolated DNA, and these posts (and others) have a great deal of helpful background information on the applicable law. By way of a brief recap, Section 101 limits patent eligibility to processes, machines, manufactures, and compositions of matter. The courts have held, however, that even if a patent claim nominally falls into one of these categories, the claim is not patent eligible if it is directed to a law of nature, a product of nature, or an abstract idea. The courts have recently explained that, to survive a patent eligibility challenge, the claim must be directed to an inventive application of a law of nature or abstract idea. And if the material is alleged to be a product of nature, it must be markedly different from the natural counterpart.

The authors of the article, Professor Bernard Chao of University of Denver Sturm School of Law and Lane Womack of Kilpatrick Townsend & Stockton LLP, briefly survey the landscape of Section 101 case law and go on to discuss a few patent applications that the U.S. Patent and Trademark Office (PTO) recently rejected on patent eligibility grounds. Although the highest-profile patents are those that have been the subject of court cases, Chao and Womack—though based on an “admittedly unscientific and small sample”—show how the law works on the ground. The authors focus on rejections of composition of matter claims under the product of nature doctrine. In particular, they document a PTO rejection of claims to isolated human monoclonal antibodies that “neutralize[] a HIV-1 virus in vitro” because these antibodies are not markedly different from antibodies amplified from patient B-cells. The authors also discuss a patentable subject matter rejection of claims to compositions that include peptides for interfering with replication of cancer.

To be sure, many of these rejections are not “final” (i.e., the patent applicant has a chance to argue the rejections with the patent examiner), and some of them were made pursuant to a PTO patent eligibility guidance that has recently been superseded. In fact, in a recent filing, the applicant in the cancer treatment case argued that the rejection should be withdrawn based on the new guidance, which purportedly makes it easier to patent composition of matter claims directed to materials isolated from natural sources. (The argument is publicly available on the PTO Public PAIR website—see applicant filing in the case with publication number 20130084303 made on December 17, 2014). Nonetheless, only time will tell whether the new guidance makes enough of a difference to result in withdrawals of these rejections. Indeed, although the new guidance appears to open the door for arguments that functional (and not merely structural) differences between naturally occurring and isolated materials should render the latter patentable, a recent Federal Circuit decision (involving patents stemming from the discovery of locations and sequences of the BRCA1 and BRCA2 genes that were also addressed by the Supreme Court in 2013), rejected arguments for patentability where the claimed compositions “do not perform a significantly new function.” As a side note, it appears evident that the extent of functional (and structural) difference between natural and isolated materials are quintessential questions of fact—and the full sentence from the Federal Circuit opinion from which this phrase was taken reads, “[i]n fact, the naturally occurring genetic sequences at issue here do not perform a significantly new function.” But the courts treat patent eligibility questions as pure questions of law, which means that judicial review of PTO determinations of functional and structural differences for purposes of patent eligibility is without deference to the agency.

Chao and Womack find these developments to be unwelcome. They argue that denying patent protection to HIV vaccines and cancer treatments “is unwise, if not dangerous” because this is likely to result in underinvestment in potentially life-saving medicines. The authors further contend that, while the courts have denied patents to natural phenomena, products of nature, and the like “to prevent patents from claiming too broadly, too vaguely or to avoid undue preemption,” the recently elucidated patentable subject matter tests “do not actually appear to rely on these policy concerns.” In other words, the patentable subject matter requirement in its new form appears to invalidate patents whose perceived social harms—for example, to downstream innovation—may be outweighed by their benefits. Accordingly, Chao and Womack call on the courts or Congress to rethink this recent case law.