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1


Intellectual Property Issues Impacting
t
he Future of Personalized Medicine

Being Prepared for AIPLA’s MidWinter Institute for CLE Credits for a Panel Session
Titled “IP Value for
Personalized Medicine”

2:00


3:30 P.M., Thursday, January 31, 2013

Judith A. Roesler, Moderator

Judith A. Roesler

Roesler Law Offices, PLLC

1000 Centre Green Way, Suite 200

Cary, NC 27513

(919) 2
2
8
-
6321

roeslerlaw@gmail.com


Lynn C. Tyler
, M.S.

Barnes &
Thornburg

11 South Meridian Street

Indianapolis, Indiana 46204
-
3535

(
317
)
231
-
7392

lynn.tyler@BTLaw.com


Karen
S.
Canady
, Ph.D.

canady & lortz

LLP

3701 Wilshire Blvd.
,
Suite 508

Los Angeles, California 90010

(310) 966
-
9400

karen@canadylortz.com


Ling
Zhong
, Ph.D

RatnerPrestia

1235 Westlakes Drive, Suite 301

Berwyn
, PA 19
312

(610)
993
-
4237

lzhong@ratnerprestia.com


Outline

I.

Introduction

................................
................................
................................
................................
...................

2

II.

The “Safe Harbor” from Patent Infringement

................................
................................
...................

4

A.

Scope of 35 U.S.C. §271(e)(1) Exemption

................................
................................
.........................

4

1.

Personalized Medicine

................................
................................
................................
..................

5

2.

Classen v. Biogen IDEC, et al.

................................
................................
................................
.......

5

3.

Momenta Pharma v. Amphastar Pharma

................................
................................
................

6

4.

Current State of the Law

................................
................................
................................
...............

7

B.

Proposed Exemption for Confirmatory Genetic Testing

................................
.........................

7

1.

Personalized Medicine

................................
................................
................................
..................

9

2.

Mandated Study under ‘
America Invents’ Act

................................
................................
.......

9

3.

Current State of the Law

................................
................................
................................
............

10

C.

Conclusion

................................
................................
................................
................................
..............

10

III.

Gene Patents After
Myriad

&
Mayo

................................
................................
................................
....

10

A.

The Patent Claims

................................
................................
................................
................................

11

B.

The C
AFC Decisions in
Myriad

................................
................................
................................
........

12

C.

Standing

................................
................................
................................
................................
...................

12

D.

Remand in View of
Mayo v. Prometheus

................................
................................
......................

13

1.

Judge Lourie’s Majority Opinion

................................
................................
.............................

14

IP Issues Impacting the Future of Personalized Medicine





2

2.

Judge Moore’s Concurrence

................................
................................
................................
.....

14

3.

Judge Bryson’s Dissent

................................
................................
................................
...............

15

E.

Implications for Gene Patents

................................
................................
................................
.........

16

1.

Would the Supreme Court Agree?

................................
................................
.........................

17

F.

Implications for Diagnostic Methods

................................
................................
...........................

18

G.

Conclusion

................................
................................
................................
................................
..............

19

IV.

Mayo v. Pr
ometheus

and Bioinformatics

................................
................................
..........................

20

A.

Mayo v. Prometheus

................................
................................
................................
.............................

20

1.

Two
-
Step Evaluation of Process Claim

................................
................................
................

22

B.

Case Law Development

................................
................................
................................
.....................

23

1.

Bancorp Services, L.L.C. v. Sun Life Assur. Co. of Canada

................................
.................

23

2.

Association for Molecular Pathology v. U.S. Patent and Trademark Office

..............

24

3.

PerkinElmer, Inc. v. Intema Ltd.

................................
................................
...............................

24

4.

Case Law Summary

................................
................................
................................
.....................

26

C.

USPTO Guidance

................................
................................
................................
................................
...

26

D.

Conclusion

................................
................................
................................
................................
..............

27

V.

Divided Inf
ringement

................................
................................
................................
..............................

28

A.

Akamai Techs., Inc. v. Limelight Networks, Inc.

................................
................................
..........

28

B.

McKesson Techs., Inc. v. Epic Systems Corp.

................................
................................
.................

29

C.

Federal Circuit
En Banc

Opinion

................................
................................
................................
....

30

1.

Majority

................................
................................
................................
................................
............

31

2.

Dissent

................................
................................
................................
................................
..............

32

D.

Relevance to Diagnostic Companies

................................
................................
.............................

33

E.

Alternative Analysis

................................
................................
................................
............................

34

F.

Conclusion

................................
................................
................................
................................
..............

36

VI.

A Patent Practitioner’s Position on Gene Patents and the Public Good

..............................

37


I.

Introduction
1


Advanced tests based on genetics and molecular mechanisms have provided a pathway
for personalized medicine.
2

As a result, medical practitioners will become increasingly reliant



1

Chapter
authored
by Judith Roesler,
Esq.,
Roesler Law Offices, PLLC, 1000 Centre Green Way, Suite 200, Cary,
NC 27519,

Phone:
(919) 228
-
6321,

E
-
mail:

roeslerlaw@gmail.com
.



IP Issues Impacting the Future of Personalized Medicine





3

on patient testing prior to making
therapeutic decisions.
3


Drug companies have already moved
toward an increased use of genetic and molecular based testing in developing targeted
therapeutics and identifying responders, or in some cases, identifying patients at a heightened
risk for devel
oping side effects.
4

In addition to providing more precise information for selecting
optimal therapy and appropriate dosages of therapeutics, personalized medicine introduces the
ability to provide predictive information for patients before clinical symp
toms appear.
5


While no one can dispute the benefits provided by personalized medicine, the future of
the related intellectual property rights has become
progressively
uncertain.
Public opinion has
fueled the controversy of whether
p
atent

protection
sh
ould be available
for g
enes, biomarkers,
and diagnostic methods.
6


As new technologies
emerge,
concerns
have
deepen
ed
regarding
how
patents
may

restrict the
practice

of personalized medicine.


For example,
n
ext generation
sequencing technologies

that depend upon reference genetic information
to
identify sequence
variants associated with
a
disease

may be considered as infringing multiple gene patents if
sections of the reference genetic information are patented.
7

Similarly,
there are concerns tha
t

patents may encumber

the discovery of

new treatment paradigms for complex diseases such as
c
ancer
.

For example, s
tudies of non
-
responders with sets of potential biomarkers may lead to a
better understanding of the

mechanism and efficacy of a

therapeutic

long after

regulatory

approval of the therapeutic.
8



P
ost
-
market
test
ing

of

the approved therapeutic
s

with

patented






2

See

Hamburg, M.A. and Collins, F.S., “T
he
p
athway to
p
ersonalized
m
edicine,”
N. Engl. J. Med
., 363: 301
-
304
,
(2010)
.


3

See generally

Ross, Jeffrey S., Ginsburg, Geoffrey, S., “The integration of molecular diagnostics with therapeutics:
Implications for drug development and pathology practice,”
Am. J. Clin. Pathol.

119:26
-
26 (2003).


4

See

“Personalized medicine by the numbers,”
Persona
lized Medicine Coalition
, October 2011,
Cross Reference
:
Tufts Center for the Study of Drug Development. “Personalized medicine is playing a growing role in development
pipelines,”
Impact Report
, 12:6 (2010). (
Facts and figures support that personalize
d medicine represents a
significant segment of current pharmaceutical development efforts and spending, where investment has increased
seventy
-
five percent during the past five years.
).


5

See

The Case for Personalized Medicine
, 3
rd

Edition (2011), availab
le at
www.personalizedmedicinebulletin.com
.


6

See
Sonini, S., et al., “Patenting and licensing in genetic testing: ethical, legal and social issues,”
European Journal
of Human Genetics
, 16:S10
-
S50 (2008).
See also,

Fore, Joe, Jr., et al., “The effects of

business practices, licensing,
and intellectual property on development and dissemination of the polymerase chain reaction: case study,”
Journal
of Biomedical Discovery and Collaboration
, 1:7, (2006).

See also
, Cook
-
Deegan, R., et al. “Impact of Gene Pa
tents
and Licensing Practices on Access to Genetic Testing for Inherited Susceptibility to Cancer: Comparing Breast and
Ovarian Cancers to Colon Cancers,”
Genet Med
, 12(4 Suppl.): S15
-
S38 (2010).


7

See

e.g
. Ray, Turna, “Whole
-
Genome Sequencing Poses ‘Serious Challenge’ to U.S. Patent System, HHS Finds.”
www.genomeweb.com
, December 10, 2008. (HHS Secretary’s Advisory Committee on Genetics, Health, and
Society advised that full genome sequence analysis repr
esents a serious challenge to the current system of patents on
individual genes and exclusive licenses. Exclusive licenses may hamper the ability of personal genomics firms to
conduct multiplex testing.),
but see also
, Holman, Christopher M. “Will gene p
atents derail the next generation of
genetic technologies?: A reassessment of the evidence suggests not”,
UMKC Law Review

80(3): 563, 2012.
See
generally,

Metzker, Michael, “Sequencing technologies


the next generation,”
Genetics
, 11:31
-
46, (2010).


8

S
ee

generally
, Gerlinger, M., Rowan AJ, Horswell, S., Larkin J., Endesfelder, D., et al. “Intratumor heterogeneity
and branded evolution revealed by multi
-
region sequencing,”
N. Engl. J. Med
., 366:883
-
892 (2012).

IP Issues Impacting the Future of Personalized Medicine





4

biomarkers
, however,

may be considered
an infringing activity

falling outside of the “safe
harbor” as provided by current U.S. patent law
.
9



The following chapters

will provide an analysis of the current state of patent law in the
context of personalized medicine.
Topics covered include
the “safe harbor” from patent
infringement; gene patents; bioinformatics; and divided infringement. A p
osition chapter
from a
patent practitioner’s perspective
on gene patents and the public good will conclude this paper.

II.

The “Safe Harbor” from Patent Infringement
10


Because the common law experimental use exemption to patent infringement has been
limited to

“activities performed for amusement, to satisfy idle curiosity, or for strictly
philosophical inquiry,


the statutorily created “safe harbor” provision

through the Hatch
Waxman Act

provides the only immunity available for research and clinical study activ
ities.
11


In the enactment of the Hatch Waxman Act in 1984, public policy concerns played a role
in creating the “safe harbor
,
” as codified under 35 U.S.C. §271(e)(1).
12

The provisions of the
Hatch Waxman Act were directed to balancing protection afforded

by patents on drugs with the
incentive to allow generic drugs on the market in a timely manner once the patents on the drugs
expired. Otherwise infringing activities associated with testing of the generic drugs became
immune from action under the law if
the activities related to the pursuit of Federal approval of a
drug product.
13

Current public policy concerns have also prompted a study under the
Leahy
-
Smith ‘America Invents’ Act

that may result in extending a “safe harbor” of patent immunity to
confirm
atory genetic tests.
14


A.

Scope of 35 U.S.C. §271(e)(1) Exemption

The language of 35 U.S.C. §271(e)(1) is directed to the “development and submission of
information under a Federal law which regulates drugs or veterinary biological products.”
Since
enactment, the scope of the “safe harbor” has continued to evolve with courts actively engaged in



9

See
Classen Immunotherapies, Inc. v. Bio
gen Idec, et al.,

App. 2006
-
1643, 1649 (Fed. Cir. 2011).


10
Chapter authored by Judith Roesler.


11

See

Madey v. Duke University, 307 F.3d 1351, 1362
-
63 (Fed. Cir. 2002);
See also
, Hagelin, Ted, “The
Experimental Use Exemption to Patent Infringement: Infor
mation on Ice, competition on hold,” Florida Law
Review, Vol. 58, No. 3, pp. 483
-
560, July 2006.


12

See

H.R. Rep. 98
-
857, pt. 2, at 2714 (Aug. 1, 1984)(The Hatch Waxman Act set up a statutory system to “balance
the need to stimulate innovation against the

goal of furthering the public interest.”).


13

See

35 U.S.C.
§

27
1(e)(1) (
It shall not be an act of infringement to make, use , offer to sell, or sell within the
United States or import into the United States a patented invention…solely for uses reasonably

related to the
development and submission of information under a Federal law which regulates the manufacture, use or sale of
drugs or veterinary biological products.
).


14

See

Section 27, Leahy
-
Smith America’s ‘Invents Act’ to amend Title 35, United States

Code, 112
th

Congress, 1
st

Session, H.R. 1249 (September 16, 2011).


IP Issues Impacting the Future of Personalized Medicine





5

defining what types of studies will be covered under the law.
15

Although Hatch Waxman
focused on pharmaceuticals,
in 1990
,

the Supreme Court interprete
d
that
the
immunity
provision
extend
s

to the testing of Class III medical devices.
16

In 1997, the Federal Circuit further
interpreted
that
the “safe harbor”
provision
applies

to Class II medical devices

as well
.
17

As the
majority of diagnostic tests fall
within the
definition of either
Class II or Class III medical
device
s
, the “safe harbor” immunity also applies to

studies concerning

diagnostic tests.
18


1.

Personalized Medicine

By identifying genes, proteins or pathways disrupted by disease, personalized m
edicine
technologies have the potential to enhance the safety and efficacy of drugs long after the drugs
have been approved for marketing.
19

FDA approvals may also include post
-
marketing
commitments for further study.
20

Staged development phases for biop
harmaceuticals may
involve subsequent clinical studies to identify biomarkers or assays to expand the label by testing
the negative biomarker population following the initial FDA approval.
21

Two recent decisions
by the U.S. Court of Appeals for the Federa
l Circuit (Federal Circuit) suggest that the availability
of the “safe harbor” for post
-
market studies of drugs or post
-
marketing studies of combinations
of drugs is somewhat uncertain, as discussed below.
22


2.

Classen v. Biogen IDEC, et al.

In
Classen v.
Biogen IDEC
,
et al.,

the patent holder charged a number of vaccine
companies with infringement based on activities relating to post
-
market studies to determine



15

See
generally
Thomas, J.R.,
Pharmaceutical Patent Law
, Second Edition, The Bureau of National Affairs, Inc.,
669
-
687 (2010).


16

See

Eli Lilly &

Co. v. Medtronic Inc., 496 U.S. 661, 669, (1990).
See also
, Title 21 Code of Federal Regulations
Part 800
-
1200 (21 CFR Parts 800
-
1299).


17

See
Abtox v. Exitron
, 122 F.Ed 1019
, corrected on reh’g
, 131 F.3d 1009 (Fed. Cir. 1997).


18

See
21 CFR Part 812
; Medical Devices, Overview of Device
Regulation

(available on FDA website).


19

See e.g.

Albain, K.S., et al. “Prognostic and predictive value of the 21
-
gene recurrence score assay in
postmenopausal women with node
-
positive, oestrogen
-
receptor
-
positive bre
ast cancer on chemotherapy: a
retrospective analysis of a randomized trial,”
The Lancet Oncology
, 11:1, 55
-
65 (January 2010).


20

See e.g.
Biologics license to Genentech for Trastuzumab (Herceptin), Department of Health & Human Services,
Food and Drug Admi
nistration, FDA Reference No. 98
-
0369 (September 25, 1998) (Item 7. To assess the clinical
outcome of patients selected for treatment on the basis of the DAKO test and other HER2 diagnostics in the context
of Herceptin clinical trials.).


21

See

Simon, R.
, “Clinical trial designs for evaluating the medical utility of prognostic and predictive biomarkers in
oncology,”
Per. Med
., 7:485
-
496 (2012).


22

Compare
Classen Immunotherapies, Inc. v. Biogen Idec, et al.,

App. 2006
-
1643, 1649 (Fed. Cir. 2011)
(CAFC
p
anel members were Judge Newman and Chief Judge Rader for the majority and Judge Moore dissenting.)
with
Momenta Pharmaceuticals, Inc., et al. v. Amphastar

Pharmaceuticals, Inc., et al., Slip. Op. 2012
-
1062,
-
1103,
-
1104
(Fed. Cir. 2012)(CAFC panel members

were Judge Moore and Judge Dyk for the majority and Chief Judge Rader
for the dissent.).


IP Issues Impacting the Future of Personalized Medicine





6

possible side effects of the vaccines.
23

The patent holder asserted that the defendants infringe
d
his patents by conducting studies “to evaluate suggested associations between childhood
vaccinations…and the risk of developing Type 1 diabetes; and to determine whether timing of
vaccination influences risk.”
24

The district court granted a summary judg
ment based on the
grounds that the activities by the vaccine companies fell within the “safe harbor” provision of
§271(e)(1).
25

The Federal Circuit reversed the summary judgment on August 31, 2011.
26


In holding that the “safe harbor” exception did not a
pply in
Classen
, the Federal Circuit
reasoned that “the statute does not apply to information that may be routinely reported to the
FDA, long after marketing approval has been obtained.”
27

The Federal Circuit distinguished the
Supreme Court’s broader inter
pretation of §271(e)(1) in
Merck KGaA v. Integra Lifesciences I,
Ltd
. (“
Merck KGgA
”), 545 U.S. 193, 207 (2005)
,

by contrasting that the research in
Merck
KGgA

was preclinical research.
28

In so reasoning, the Federal Circuit noted that the activities of
t
he defendants in
Classen
were not related to producing data for an Investigational New Drug or
a New Drug Application and not a “phase of research” possibly leading to marketing approval.
29


3.

Momenta Pharma v. Amphastar Pharma

In August 2012, the Federal C
ircuit distinguished the finding in
Classen

and found that
the infringement exemption under §271(e)(1) would extend to data collected post
-
market if the
information was necessary for the continued approval of an Abbreviated New Drug
Application.
30

In
Mome
nta Pharma v. Amphastar Pharma
, No. 2012
-
1062 (Fed. Cir.), the
patent holder asserted a patent that generally related to an analytical method used in the
manufacturing of a generic version of Lovenox (enoxaparin), a low molecular weight version of
heparin.
31

The molecular diversity of the enoxaparin raised a potential problem in establishing
that the generic equivalent was the bioequivalent to the reference drug.
32

The defendant was



23

See

Classen Immunotherapies, Inc. v. Biogen Idec, et al.,

App. 2006
-
1643, 1649 (Fed. Cir. 2011),
130 S. Ct. 3541
(2010) (Grant, Vacate, Remand of Federal Circuit D
ecision in 2008)
,
No. WDQ
-
04
-
2607, 2006 WL 6161856 (D.
Md. Aug. 16, 2006); 381 F. Supp. 2d 452 (D. Md. 2005)
.


24

See

id.

at slip. op. 26 (quoting Am Compl ¶7 in
Classen
, 381 F. Supp. 2d at 455).


25

See
id.
at

slip op. 4. (District court granted summary judgment that the claims were not infringed based on
Classen’s failure to allege facts sufficient to establish infringement by Merck, and based on the safe
-
harbor
provision as to the other defendants.).


26

See i
d.

at slip op. 4.


27

See id.
at

slip op. 27.


28

See
id.
at slip op. 29. (In Merck KGaA, the Supreme Court applied the limitation that the uses of the information
must be “reasonably related to the development and submission of information” although “reason
ably related” does
not mean that the use of the patented invention must necessarily result in submission of the information to the FDA.)


29

See id.


30

See
Momenta Pharmaceuticals, Inc., et al. v. Amphastar

Pharmaceuticals, Inc., et al., Slip. Op. 2012
-
1062,
-
1103,
-
1104 (Fed. Cir. 2012).


31

See
id.


32

See
id.

at slip. op. 4.

IP Issues Impacting the Future of Personalized Medicine





7

accused of using the analytical method for post
-
market submissions to the
FDA to show the
identity and strength of the active ingredient for each batch of enoxaparin rather than for pre
-
market approval.
33

Although each batch record was not submitted to the FDA, regulations
require that the records be retained for at least one ye
ar.
34

In the opinion, the Federal Circuit
reasoned that the defendant’s activities in
Momenta
could be distinguished from those of the
accused infringers in
Classen

because the information could be said to have “been gathered
solely for submission to the F
DA and not, as in
Classen
, primarily for non
-
FDA purposes.”
35


The Federal Circuit went on to refuse the pre
-
/post
-

approval distinction used by the district court
because “
Classen

did not turn on this artificial distinction, and the plain language of the
statute is
not restricted to pre
-
approval activities.”
36


4.

Current State of the Law

The Federal Circuit has reached seemingly contradictory holdings in assessing the
availability of the “safe harbor” for post
-
market studies of therapeutics.

37

While the opinion in
Momenta
went to some length in distinguishing the facts of the case from those in
Classen
, it is
noteworthy that two different panels of appellant judges decided
Classen

and
Momenta
.
38

Because two panels of judges appear to be on t
he opposite side of the issue, an
en banc

hearing
before the full Federal Circuit or an appeal to the Supreme Court seems imminent. Given that
the Solicitor General has been asked to advise the Supreme Court in the pending appeal of
Classen
, it would appe
ar that the Supreme Court may provide further interpretation of the scope
of “safe harbor” in the foreseeable future.
39

Based on the holdings of
Classen

and
Momenta
,
there is some question on whether the scope of the “safe harbor” would be available to po
st
-
market studies of marketed therapeutics. The importance of the issue could impact the strategies
within the pharmaceutical industry, particularly on designing clinical studies.

B.

Proposed Exemption for Confirmatory Genetic Testing

Section 27 of the
L
eahy
-
Smith ‘America Invents’ Act
(
AIA
)

sets forth a provision
requiring the Patent Office to study genetic testing. Specifically, the
AIA

mandates that the
Patent Office report to Congress the results of a study that entails ways to provide independent,
c
onfirming genetic diagnostic test activity where gene patents and exclusive licensing for the







33

See

id.
at slip. op. 18.


34

See
id.

at slip. op. 19.


35

Id
.


36

See
id.

at slip. op. 19
-
20.


37

See supra
note
22
.


38

See
id
.


39

See

Order List: 567 U.S. Order in Pending Case 11
-
1078 GlaxoSmithKline v. Classen Immunotherapies, Inc.
(June 25, 2012).


IP Issues Impacting the Future of Personalized Medicine





8

genetic diagnostic tests exist.
40

The mandated study requires an examination of at least the
following:

(1) The impact that the current lack of independent second

opinion
testing has had on the ability to provide the highest level of
medical care to patients and recipients of genetic diagnostic testing
and on inhibiting innovation to existing testing and diagnosis;

(2) The effect that providing independent second
opinion genetic
diagnostic testing would have on the existing patent and license
holders of an exclusive genetic test;

(3) The impact that current exclusive licensing and patents on
genetic testing activity has on the practice of medicine, including
the i
nterpretation of testing results and performance of testing
procedures; and

(4) The role that cost and insurance coverage have on access to and
provision of genetic diagnostic tests.
41


As provided by Section 27

of the
AIA
,

the Patent Office will provide
recommendations to
Congress based on the findings of the study that address the availability of independent
confirming genetic diagnostic test activity.
42


Section 27 was sponsored by Representative Debbie Wasserman
-
Schultz (D
-
Florida)
following her person
al experience with BRCA genetic testing after a diagnosis of breast cancer.
43

Upon discovering she was a carrier of the BRCA
-
2 gene mutation, she found that she had no
access to an independent second opinion for the genetic test.
44

The study mandated unde
r
Section 27 is expected to influence Congress on whether to take action to amend 35 U.S.C.
Section 287 to include a “safe harbor” for otherwise infringing activities if the activities relate to
independent confirmatory genetic testing. To date, Represent
ative Wasserman
-
Schultz and
Representative Lamar Smith (R
-
Texas) have
both
proposed

statutory

language to exempt genetic
test providers from infringement for confirmatory testing.
45




40

See

Leahy
-
Smith America’s Invents Act to amend Title 35, United States Code, 112
th

Congress, 1
st

Session, H.R.
1249 at 142
-
144 (Sept
ember 16, 2011).


41

See id.
at 142
-
144.


42

See

i
d.

See also “
Genetic Testing,”

AIA

Studies and Reports,
http://www.uspto.gov/aia implementation/aia
studies reports.jsp
.
See also
Testimony of Representative Debbie Wasserman Schultz,
USPTO
Transcript of P
ublic
Hearing
, San Diego, CA Friday, March 9, 2012,

http://www.uspto.gov/aia_implementation/120309
-
genetic_transcript.pdf
.


43

See

“Wasserman Schultz’s legislation ensuring access to second opinions for patients signed into law,”
http://wassermanschultz.ho
use.gov

(September 21, 2011).


44

See id
.


45

See
Managers Amendment to H.R. 1249,
Congressional Record
, Vol. 157, No. 84 (June 13, 2011).



IP Issues Impacting the Future of Personalized Medicine





9

1.

Personalized Medicine

The BR
CA
-
1 and BR
CA
-
2 genetic tests, as well as the
majority of the genetic tests for
approximately 2,500 diseases listed on the NIH Genetic Testing Registry, represent a segment of
diagnostic tests commonly sold under the designation of a laboratory developed test (LDT).
46

The FDA regulatory status of gene
tic tests ties into the issue of access for second opinions
because a LDT designated genetic test may only be conducted in the laboratory where the
genetic test was developed.
47

Developers of a LDT genetic test, such as the BRCA
-
1 and
BRCA
-
2 tests offered

by Myriad Genetics, must conduct testing of the LDT exclusively within
the laboratory setting where the development of the test occurred

because commercial
distribution of a diagnostic test is not permitted absent full FDA approval
.
48

If the patent holder

offering the LDT genetic tests determines that there is commercial advantage in holding the
patents exclusively, then no other testing laboratory may repeat the test without infringing the
patents under the current law.

2.

Mandated Study under ‘
America
Invents’ Act


The United States government has struggled with issues relating to genetic testing for
decades, and the study mandated by the
AIA

is not the first study to address the impact of gene
patenting and licensing practices.
49

Although the Patent

Office was expected to deliver the
AIA

study and associated recommendations to Congress in June 2012, the finalization of the report
has been delayed.
50

The Patent Office recently indicated that an additional public hearing will
occur in
early 2013

before

the study will be finalized.
51

Comments filed in response to the first
Notice earlier
in 2012

illustrate the complexity of the issue and the diversity of opinions and
suggestions on what, if any, changes should occur.
52





46

See
Frequently Asked Questions, Genetic Testing Registry, National Institutes of Health,
http://oba.od.nih.gov
.


47

See

generally
, “Transcript from Public Meeting on Oversight of Laboratory Developed Tests,” U.S. Department
of Health and Human Services, Food and Drug Administration, July 19
-
20, 2010;
See

also,
Katsanis, SH, Javitt G.,
Hudson K:
A case study of
personalized medicine, Science,

2008:320:53
-
54
. (
The Centers for Medicare and
Medicaid Services (CMS) under the Clinical Laboratories Amendments of 1988 (CLIA) are the regulatory authority
for LDT designated tests rather than the FDA. In contrast to the
FDA approval process which requires a review of
clinical data, the CMS regulation focuses on reviewing the quality of the laboratory performing the test and
analytical data rather than clinical data review. For those companies and laboratories choosing th
e LDT designation,
the compromise is that LDT test may not be commercially distributed.)
.


48

See
Gold, E. Richard and Carbone, Julia, “Myriad Genetics: In the eye of the policy storm,”
Genet Med
. 2010
April: 12 (4ASuppl): S39
-
S70.


49

See

2010 Report by

Secretary's Advisory Committee on Genetics, Health, and Society

(SACGHS) at
http://oba.od.nih.gov/oba/SACGHS/reports/SACGHS_patents_report_2010.pdf
.


50

See
AIA Studies and Reports at
http://www.uspto.gov/aia_implementation/aia_studies_reports.jsp
.


51
See

id.


52

See

Federal Register, Vol. 71, No. 16, Wednesday, January 25, 2012, Notices, 3748
-
3750.
See also
, “Genetic
Testing


Public Comments,” AIA Studies and Reports,
http://www.uspto.gov/aia implementation/aia studies
reports.jsp
.


IP Issues Impacting the Future of Personalized Medicine





10

3.

Current State of the Law

The fut
ure of gene patents remains uncertain thus impacting the significance of the
AIA

Study and the possibility of
a
legislative provision for a confirmatory genetic testing exemption.
If gene patents are ultimately struck down as covering patent ineligible s
ubject matter under 35
U.S.C. §101, then Congress may consider the issue of
the
confirmatory genetic testing
exemption as less of a priority for legislative action. Although the Federal Circuit recently
upheld the validity of the claims drawn to genes in
Association for

Molecular Pathology, et al. v.
United States Patent and Trademark Office and Myriad Genetics (“Myriad”)
,
53

the Supreme
Court has granted a
writ of certiorari

to reconsider the issue of patent eligibility of genes.
54


Until such time as the Court makes the final decision on gene patents, the
AIA
Study remains an
important consideration as there appears to be bipartisan support for passing a bill providing for
a patent exemption for confirmatory genetic testing. The
AIA

Study will likely influence the
language and scope of any genetic testing bill.

C.


Conclusion

The “safe harbor” for immunity against patent infringement in the area of pharmaceutical
research continues to be defined by courts. A new “safe harbor” to prov
ide immunity for
secondary confirmatory genetic testing is currently under study by the Patent Office and
scheduled for delivery to Congress later this year. As a result, clinical study agreements,
freedom to operate opinions, research and development col
laborations and overall new product
development strategies for therapeutics and genetic tests must provide for the contingency that
the scope of immunity against patent infringement may change within the next several years.

III.

Gene Patents After
Myriad

&
Mayo
55


The patentability of genes and DNA sequences, long considered a settled matter, has
come back into the public spotlight and stirred up controversy. Some patient advocates and

academics oppose

patents that claim DNA sequences
, regarding such patents

as an impediment
to ongoing research in genetic testing and as a hindrance to patient access to these tests.


Many in
the field of biotechnology and personalized medicine, however, view these patents as essential to
the development of genetic testing. Pa
tents protect the substantial financial investment required
for the research, development and commercialization of biotechnology products and services.

Thus, both those favoring gene patents and those opposing gene patents fear t
hat an unfavorable
decisio
n by the courts could

restrict the availability of needed diagnostic tests and medical
treatments.





53

See
Association
for Molecular Pathology, et al. v. United States Patent and Trademark Office and Myriad
Genetics
,. 2012 WL 3518509,
---
F.3d
---

(2012).


54
See

Supreme Court Docket CA 12
-
298 (On November 30, 2012, Court granted
cert
.)


55

Chapter authored by Dr. Karen Canad
y, Esq., canady & lortz LLP, 3701 Wilshire Blvd., Suite 508, Los Angeles,
California 90010, Phone: (310) 966
-
9400, E
-
Mail:
karen@canadylortz.com
.
An earlier version of this section,
focusing primarily on DNA claims, was published in

New Matter
, Vol. 37,

No. 4, pp. 14
-
18, 2012.


IP Issues Impacting the Future of Personalized Medicine





11

This most recent decision has been appealed again to the Supreme Court
,
56

which has
granted
certiorari
. The appeal is from the

August 16, 2012,
decision b
y the
Court of Appeals for
the Federal Circuit (CAFC)

in “the
Myriad

case.

In
Myriad
,
a

divided panel

reversed once again
the trial court holding that Myriad Genetics


patent claims to isolated DNA are not drawn to
patent
-
eligible subject matter under 35
USC § 101
.
57


The case had been appealed to the
Supreme Court after the first CAFC decision
.
58

The Supreme Court granted
certiorari
, vacated
the earlier judgment, and remanded the case back to the CAFC to reconsider the previous panel
opinion in light of it
s decision in
Mayo v. Prometheus
.
59


The Supreme Court, on its second look
at this case, will only consider the question: “Are human genes patentable?” and leave the
earlier appellate decisions on the method claims intact.
60


A.

The Patent Claims

Myriad’s
patents claim isolated genes, BRCA1 and BRCA2, containing mutations that
can be used to detect a woman’s predisposition to breast and ovarian cancer, as well as related
methods of detecting such mutations and screening for relevant drugs.
61

The
p
laintiffs,

which
included a number of clinicians, scientists and patients,
62

sought a declaratory judgment that
fifteen claims from seven patents assigned to Myriad Genetics were drawn to subject matter that
is patent
-
ineligible under 35 U.S.C. § 101
.
63


The challenge
d claims were directed to isolated
DNA molecules encoding human
BRCA

proteins and certain mutations associated with a
predisposition to breast and ovarian cancers, and related methods. The claimed methods include
a method of detecting a mutation associate
d with cancer via "analyzing" or "comparing" a
patient's
BRCA

DNA sequence with the wild
-
type sequence, and a method of screening potential



56

Plaintiffs

file
d

a

petition for
certiorari

on September 24, 2012, stating that the case raises three questions: (1) Are
human genes patentable? (2) Did the court err in upholding a method claim “irreconcilable” with the ruling in
Mayo
? (3) Did the court err in holding that petitioners who are deter
red by patents lack standing to challenge those
patents absent evidence they have been personally threatened with an infringement suit?.

57

Association for Molecular Pathology v. Myriad Genetics, Inc.
,
689

F.3d
1303 (Fed. Cir. 2012)
.

Judge Lourie
wrote the opinion for the court. Judge Moore joined the opinion for the court with respect to most issues but
concurred in part, namely with respect to the patent eligibility of the claims to isolated DNA sequences. Judge
Bryson concurred w
ith respect to the patent eligibility of the claims to cDNA and methods but dissented with
respect to the patent eligibility of the claims to isolated genes and gene fragments.

58

653 F.3d 1329 (Fed. Cir. 2011) (Lourie, J.).

59

Mayo Collaborative Services v.

Prometheus Laboratories, Inc
.
,
566 U.S. ___,
132 S. Ct. 1289
, 182 L. Ed. 2d 321

(2012)

(reversing a panel decision authored by Judge Lourie).

60

See id
.
, supra

note 54.

61

The BRCA1 and BRCA2 genes are referred to as the "breast cancer genes" (
BR
east
CA
ncer
) because mutations
in these genes correlate with an increased risk of breast cancer and ovarian cancer in women.

62

Plaintiffs include the Association For Molecular Pathology, The American College Of Medical Genetics, The
American Society For Clinical Path
ology, The College Of American Pathologists, Haig Kazazian, MD, Arupa
Ganguly, PhD, Wendy Chung, MD, PhD, Harry Ostrer, MD, David Ledbetter, PhD, Stephen Warren, PhD, Ellen
Matloff, M.S., Elsa Reich, M.S., Breast Cancer Action, Boston Women’s Health Book C
ollective, Lisbeth Ceriani,
Runi Limary, Genae Girard, Patrice Fortune, Vicky Thomason, and Kathleen Raker.

63

35 U.S.C.
§
101 de
fin
es
patentable
subject matter: "
[w]
hoever invents or discovers any new and useful process,
machine, manufacture, or
composition of matter, or any new and useful improvement thereof, may obtain a patent
therefore, subject to the conditions and requirements of this title."

IP Issues Impacting the Future of Personalized Medicine





12

cancer drugs using a cell modified with the mutant DNA sequence.

B.

The CAFC Decisions in
Myriad

The CAFC’s earlier de
cision in this case found the claims directed to the isolated DNA
encoding the breast cancer markers, as well as

the claims directed to

a method of screening for
cancer drugs using those genes, to be patent
-
eligi
ble subject matter.


The claims to methods o
f
analyzing the gene sequences from a patient sample were not.


While all three judges agreed on
most issues, there was a striking difference of opinion on the patent
-
eligibility of isolated DNA
and DNA fragments. Judge Lourie wrote for the majority, Judg
e
Moore
’s concurrence offered a
different basis for finding DNA sequences patent
-
eligible, while Judge Bryson dissented with
respect to the patent eligibility of isolated DNA and shorter DNA fragments. Notably, all three
judges agreed that cDNA (which enc
odes the protein but excludes naturally
-
occurring non
-
coding sequence) is
patent
-
eligible subject matter.


The primary question before the court on remand was whether the panel should come to a
different conclusion on the patent
-
eligibility of these gene p
atent claims.

Upon reconsideration
of the case after remand, all three judges came to the same conclusions they had reached in the
earlier decision. Each addressed
Mayo
, but only Judge Moore indicated that
Mayo

led her to
modify her reasoning.

C.

Standing

A

threshold issue was whether any of the plaintiffs had standing to bring a declaratory
judgment suit challenging the validity of the patents. In finding that at least one plaintiff, Dr.
Ostrer, had standing, the court rejected arguments raised by both sid
es. Myriad’s arguments that
there was no immediacy or reality of any controversy because a number of years had passed
since enforcement activity had taken place were rejected. The court
explained

that any notion of
“laches” argued by Myriad was irrelevant to an action for prospective relief.
64


The court also
noted that it was affirming the district court decision on jurisdiction on narrower grounds,
reversing the holding that plaintiffs other than

Dr. Ostrer had standing. For example, the specific
organizations named as plaintiffs had not been targets of enforcement action.

The individual
patients alleging an injury based on their inability to gain access to affordable genetic testing
because of
Myriad’s patent dominance of such services also did not have standing.


The court
noted that these plaintiffs had not raised denial of health services as an independent ground for
standing, nor had they demonstrated how the inability to afford a patented i
nvention could
establish an invasion of a legally protected interest for purposes of standing.
65

The standing of at
least one plaintiff, however, was sufficient to allow the case to go forward.


The holding on standing clarifies the constraints on those
who may seek to challenge
patents that relate to diagnostic tests. The CAFC has foreclosed declaratory judgment action
brought by patients claiming lack of access to patented tests (at least based on affordability), as
well as by interest groups who have
not been subject to enforcement action. The Federal Circuit
did raise the possibility that a patient who had been denied health services because of a patent
might have standing.




64

Myriad
,
supra
at
1321, note 57.

65

Id.

at
1323, note 57
.

IP Issues Impacting the Future of Personalized Medicine





13

D.

Remand in View of
Mayo v. Prometheus

The fact that the Supreme Court sent the

case back to the CAFC implies that the justices
believe a different outcome may be appropriate, or at least that the reasoning applied to the
CAFC’s decision must be consistent with the Supreme Court’s decision in
Mayo v. Prometheus
.


In
Mayo v. Prometheu
s
, the claims at issue were directed to methods of optimizing the dose of
thiopurine drugs used in the treatment of certain conditions.


The claims were held invalid
because they impermissibly claim the natural relationship between an administered drug and

its
metabolites.


The reasoning provided in the Mayo decision creates much uncertainty as to how that
holding might apply to other cases. For example, the decision contains a suggestion that one
might tease apart the claim elements that relate to a law o
f nature and examine whether the
remainder of the claim involves anything more than well
-
known, conventional steps. On the
other hand, some moorings are provided by the Court’s recognition that
Diamond v. Diehr
66

and
Parker v. Flook
67

remain good law. In
D
iehr
, claims that included use of an algorithm (an
unpatentable abstract idea) to guide the timing of the release of a press used in molding rubber,
was held patent eligible because the claims were directed to an application of the abstract idea
without pr
eempting all uses of the algorithm.
Flook
, on the other hand, claimed a method for
updating alarm limits in a catalytic conversion process using a smoothing algorithm, wherein the
Court regarded the identification of a limited category of useful, though c
onventional, post
-
solution applications of the formula as “merely insignificant extra
-
solution activity.”
68

The
Court characterizes the claim at issue in
Mayo v. Prometheus

as presenting “a case for
patentability that is weaker than
Diehr
’s patent
-
eligible claim and no stronger than
Flook
’s
unpatentable one.”
69

The message is at least this clear: method claims that look more like those
of Flook or Prometheus are likely considered patent
-
ineligible. What is not clear is how the
concept of
significant extra
-
solution activity (using the language of
Flook
) or transformation of
an unpatentable natural law into a patent
-
eligible application of the natural law (in the language
of
Mayo
) applies to product claims.
70


In response to the Supreme Court
’s order, the CAFC requested the interested parties to
submit briefs on the question: “
[w]
hat is the applicability of the Supreme Court’s decision in
Mayo

to Myriad’s isolated DNA claims and to the method [of screening for drugs]?”

On this
key question, a
t least with respect to the DNA claims, the three judges on the panel each arrived
at a different answer. Judge Lourie concluded that the
Mayo

decision had no bearing on product
claims. Judge Moore found the
Mayo
decision, while not controlling the outco
me in this case,
“nonetheless instructive regarding the scope of the law of nature exception
.

71

She concurred in



66

450 U.S. 175 (1981).

67

437 U.S. 584 (197
8).

68

Id.

at 590.

69

Mayo
, supra
note
57
,

at
1292.

70

Mayo

at 1297 (framing the question presented as whether “the patent claims add
enough

to their statements of the
correlations to allow the processes they describe to qualify as patent
-
eligible processes t
hat
apply

natural laws?”)
.

71

Myriad
,
supra
note 57,
at
1340.

IP Issues Impacting the Future of Personalized Medicine





14

the finding that the DNA claims were patent eligible, but based her decision in part on
her

reluctance to upset settled expectations and subst
antial property rights. Judge Bryson, on the
other hand, maintains his view that a “human gene is not an invention
.

72

1.

Judge Lourie’s Majority Opinion

The opinion

for the court
, authored by Judge Lourie, begins by clarifying that the issue
before the

panel

was patent eligibility, not patentability. It also stated that the case before the

panel

was not about whether individuals suspected of having an increased risk of developing
breast cancer are entitled to a second opinion, nor whether the patentees had a
cted improperly in
their licensing or enforcement of the patents, nor whether is it desirable for one company to hold
a patent covering a test that may save lives and exclude other companies from the market, noting
that the basic right provided by a patent

is to exclude others from practicing the patented
invention. The majority then adds that “patents on life
-
saving material and processes, involving
large amounts of risky investment, would seem to be precisely the types of subject matter that
should be su
bject to the incentives of exclusive rights.

But disapproving of patents on medical
methods and novel biological molecules are policy questions best left to Congress
.

73


The majority held that the composition claims and the method claim directed to screening
drugs were patent eligible, while the method claims to detecting and screening via steps of
"analyzing" and "comparing" were not. As for the claims to isolated DNA, t
he majority
dismissed the recent
Mayo

decision as not controlling the patent eligibility of these claims.

Judge Lourie stated that the claimed DNA molecules are products of human ingenuity made in
the laboratory and not found in nature. He acknowledged t
hat they are ultimately derived from
natural materials, but they are different from them. In this regard, Judge Lourie draws on the
distinction between the patent
-
eligibility of man
-
made inventions as set forth in
Diamond v.
Chakrabarty
,
74

a case involving

engineered bacteria, and the ineligible products of nature found
in
Funk Brothers

Seed Co. v. Kalo Inoculant Co
,
.
75

a case that dealt with mixed bacterial
cultures.

2.

Judge Moore’s Concurrence

The
opinion by Judge Moore

offered a different basis for finding claims to isolated DNA
patent
-
eligible. Judge Moore agrees that
Mayo

is not controlling, but does find it instructive with
regard to these claims. She sees no reason why discussion of laws of nature as applied to pr
ocess
claims would not apply equally to manifestations of nature applied to composition claims. She
thus rejected Myriad’s argument that
Mayo v. Prometheus
is constrained to methods.


Judge Moore considered
that
the holdings of
Funk Brothers
and
Chakrabar
ty,
in
conjunction with
Mayo,

lead to a conditional test. Under this test, laws of nature and
manifestations of nature are not patent
-
eligible

subject matter, unless a second condition is met.
Under the second condition, a composition of matter with “mar
kedly different characteristics”
from that found in nature with the potential for significant utility is directed to patentable subject



72

Myriad
,
supra
note 57,
at
1348
.

73

Id.

at
1325
.

74

Diamond v.

Chakrabarty
, 444 U.S. 1028 (1980).

75

Funk Bros. Seed Co. v. Kalo Inoculant Co.
,

333 U.S. 127 (1948).

IP Issues Impacting the Future of Personalized Medicine





15

matter. Applying this “expanded utility” analysis, she found the genomic DNA sequences and
shorter fragments to raise c
oncern
s because they
manifest the
same

sequence
as

that found in
nature. She found these two categories of DNA fared differently under the second condition.

She rejected the reasoning offered by Judge Lourie, that the breaking of covalent bonds when
DNA
is isolated suffices to make these sequences patentable subject matter. The shorter
fragments, useful as primers and probes, are patent eligible because they offer utilities not
provided by the identical sequences as they exist in nature. She did not fin
d the longer fragments
and full genomic DNA sequence to qualify under this expanded utility analysis, because, in her
view, these sequences perform the same utility as the same sequences in their natural form. Any
literal chemical difference did not lead
to a different, or enlarged, utility beyond the encoding of
the same protein.


Judge Moore regards
Mayo

as having enlarged the scope of subject matter that is not
eligible for patenting. She made it clear that she might conclude that the longer DNA sequen
ces
would not be patent eligible were it not for the decades
-
long practice of granting patents in this
area, particularly in view of Congress’ authorization of an expansive scope of patent
-
eligi
ble
subject matter (
which has lasted
for “centuries”). In thi
s context, she point
ed

out the large
number of patents not just to isolated DNA sequences but also to purified natural products or
fragments thereof. She also point
ed

out the significant litigation that has occurred over patents in
this area, noting the e
xample of the erythropoietin patent relating to a product responsible for
billions of dollars in sales. In the context of this background, Judge Moore lays out the case for
why only Congress, and not the courts, can revoke these substantial property right
s and upset the
settled expectations based on decades of established patent rights.

3.

Judge Bryson’s Dissent

Judge Bryson
concurred in part and dissented in part from the opinion for the court. He
began

his dissent by cautioning that the majority’s decision

“will likely have broad
consequences, such as preempting methods for whole
-
genome sequencing, even though
Myriad’s contribution to the field is not remotely consonant with such effects.”
76


He views the
case as addressing whether an individual can obtain p
atent rights to a human gene, and offers
what he characterizes as the common sense observers’ answer that, of course not, as “a human
gene is not an invention
.

77

Despite his distaste for the patenting of human genes, Judge Bryson
agrees with the majority
when he states that
Mayo v. Prometheus

does not control the issue of
patent
-
eligibility of the DNA claims.


Judge Bryson does not see the isolated DNA sequences as man
-
made inventions, despite
any chemical differences between the isolated and natural forms
; yet he does consider the cDNA
sequences to be patent
-
eligible

subject matter
.
T
he breaking of covalent bonds to create a
distinct chemical entity in the form of isolated DNA is,

to Judge Bryson
, clearly
insufficient to
distinguish this man
-
made molecule

from the gene found in nature
.


On the other hand,

he has no
problem deciding that
a cDNA
,

which differs from th
e natural

molecule only in the exclusion of



76

Myriad, supra
note 57, at 1348.
See

also

Christopher M. Holman, “Will Gene Patents Derail the Next Generation
of Genetic Technologies?: A Reassessment of the Evidence Suggests Not”,
UMKC Law Review

80(3): 563, 2012,
which disputes

the notion that gene patents would pr
e
-
empt whole genome sequencing.

77

Id
.

IP Issues Impacting the Future of Personalized Medicine





16

the non
-
coding sequence
,

is

a patent
-
eligible
invention. In both cases, minor chemical changes
are

made by human intervention, but each carries the same genetic information as its natural
counterpart. Both examples involve a human selection of which material to keep and which to
discard when preparing the isolated form of the DNA sequence, and both re
tain the coding
portion that is useful for making the protein in a non
-
natural setting.


Judge Bryson’s distinction between cDNA and other isolated DNA molecules is harder to
reconcile when considering the case law cited in his dissent. He discusses prece
dent dealing
with purified products, noting that such products are only patentable if the purification results in
a product with such distinct characteristics that it becomes “for every practical purpose a new
thing commercially and therapeutically.”
78

His

distinction rests instead on his

analogy
comparing an isolated

DNA sequence to snapping a leaf from a tree. Yet the analogy is a weak
one, as it implies that a specific DNA sequence encoding a molecule of interest is as easy to
identify, isolate and remo
ve from its source, as a leaf on a tree.

The analogy completely
overlooks the importance of knowing which leaf to snap from the tree as well as knowing what
use can be made of the particular leaf chosen.

The DNA encoding a useful protein must first be

id
entified and

isolated before it is transformed into an entity useful for
ex vivo

production of
protein.


In this sense, it is difficult to understand why Judge Moore does not consider isolated
DNA that encodes a protein to meet the “e
xpand
ed utility”
standard she has added to the
“markedly different characteristics” test for patent
-
eligible products derived from natural
sources. The notion that a gene performs the same function in isolation as it does in its natural
location is misguided. A gene that

has not been isolated cannot be used to generate significant
quantities of useful protein.

E.

Implications for Gene Patents

To be patent
-
eligible, claims that relate to products derived from natural sources or
methods making use of natural relationships must

be more like
Chakrabarty
or

Diehr

than
Funk
Bros.
or

Flook
. Claims must limit their scope to specific applications of natural phenome
n
a. As
to method claims, both
Myriad
and
Mayo

point toward a line that is drawn between method
claims that recite only mental steps (“comparing” and “analyzing”) and method claims that recite
“transformative steps” (“extracting” and “sequencing”). As to product claims,
Myriad

suggests
that the line
might be drawn between a product that is essentially unchanged when isolated from
its natural source versus one that, as claimed, is made only through human intervention.
79

The



78

Myriad
,
supra

note 57, at 1328 (c
iting
Parke
-
Davis & Co. v. H.K. Mulford Co.
,

189 F. 95, 103 (C.C.S.D.N.Y.
1911)

(holding that adrenalin extracted from animal tissue is patentable although it differs from previous

preparations only in its degree of purity from other portions of the tissue)
and

Merck & Co. v. Olin Mathieson
Chem. Corp
.
, 253 F.2d 156, 161
-
64 (4th Cir. 1958) (holding that a purified composition of vitamin B
-
12 was
patentable because the purification
process resulted in a product that was therapeutically effective, whereas the
natural form was not)
)
.

79

Arguably, the combination of bacteria at issue in
Funk Bros
.

may have been a combination that only occurred
through human intervention in the form of se
lecting and combining particular elements
, as noted by the dissent in
that case
. While the majority opinion emphasized the lack of inventiveness of claims to a composition of bacterial
species that function exactly as nature provided, the concurrence

by J
ustice Frankfurter

cautions against suggesting
that novel combinations that create useful inventions be excluded from patentability.

For example, compare this
IP Issues Impacting the Future of Personalized Medicine





17

key to such an ana
ly
sis, of course, would lie in whether any change, or some cr
itical minimal
change, created by the human intervention is required.


It may be as simple as requiring claim language that narrows the subject matter so that it
cannot read on the product in its natural form or on a natural phenomenon in the absence of
co
ncrete actions performed using identified materials. Reciting active step
s and the materials
involved may

prevent
method
claims from involving nothing more than abstract ideas or mental
steps. For example, rather than claiming the method steps of “determ
ining the presence of a
biomarker, wherein presence of the marker is indicative of cancer” one could claim “contacting a
specimen with assay reagents that bind to the biomarker” (or emit a detectable signal upon
contact with the marker). These steps could

be construed as confining the reach of the patent
claims to a particular application of any natural laws relating to the method.

As discussed in the
next chapter, however, the recent
PerkinElmer

case
80

shows that diagnostic claims reciting
“measuring” and

“determining” presence of a biomarker, at least without specifying a particular
assay and/or a particular biomarker, are not valid under §101.

1.

Would the Supreme Court
Agree?

In
Myriad
, t
he CAFC appears to have followed the same reasoning the Supreme Court

applied in
Mayo v. Prometheus
, at least with res
pect to the method claims. T
hus
,

the CAFC’s
line between patent
-
ineligibility of “mental step” claims and patent eligibility of
“active
application” claims

remain
s

good la
w. These “mental steps” claims

are

those directed to
“comparing” and “analyzing” material such as biological specimens used for diagnosis. The
“active application” claims are like those that recite specific cells
transformed

with specific
genes and grown in the presence or absence of a
specific type of therapeutic.

Other examples of
“active application” claims might include those that recite “contacting” a specimen with
specified reagents or instruments. It can be argued that these active steps apply the relevant
natural relationship i
n a manner similar to the steps recited in the claims found patent
-
eligible in
Diehr
. Alternatively, it may be that the recitation of growing transformed cells was
essential

to
the court finding
that
the one method claim
was
patent eligible, as this case
did not directly parse
the requisite features.

The United States Patent and Trademark Office (PTO) appears to have
adopted the latter view.
81



Less certain is how the Court would regard claims to isolated DNA. This hinges on
whether DNA that has been i
solated from its natural source is considered a new product, or if it
is considered identical to its naturally
-
occurring form. Judge Bryson has argued that any
differences between natural and isolated DNA are inherently created by the isolation process, a

line of reasoning that is circular and unhelpful. Judge Lourie considered the chemical identity of
isolated DNA to be sufficiently different because it was a detached segment of the naturally
-






statement from the majority: “
[t]
hey serve the ends nature originally provided and act quite ind
ependently of any
effort of the patentee”
w
ith this from the concurrence: “
[a]
rguments drawn from such terms [“laws of nature” and
“work of nature”] for ascertaining patentability could fairly be employed to challenge almost every patent.”


80

PerkinElmer, Inc. v. Intema Ltd.,
2012 WL 5861658 (Fed. Cir. 2012).

81

See
2012 Interim Procedure for Subject Matter Eligibility Analysis of Process Claims Involving Laws of Nature
,
Memorandum issued July 3, 2012, by Andrew Hirshfeld, Deputy Commissioner
for Patent Examination Policy at
the USPTO (
“Interim

Guidance”, discussed in greater detail in next section).

IP Issues Impacting the Future of Personalized Medicine





18

occurring DNA molecule, whereas Judge Moore focused on the dif
ferent and valuable use of
DNA in its isolated form.


All three opinions, however, could be used to argue for patent eligibility of isolated
DNA.

It is difficult to reason that an entity that has a different and valuable use is chemically
identical to its

naturally
-
occurring counterpart. If isolated DNA were the same chemical entity
as that found in nature, there would be no need to isolate it, and one could readily avoid
infringement of claims to isolated DNA by skipping the isolation step. Just as this

proposition
makes no sense in the technical realm, so does the assertion that isolated DNA is no different and
performs the same function as the product in its natural form.

Moreover, the technical reality is
that, when working with isolated DNA, one doe
s not use literally the same DNA sequence that
came from the natural source. Instead, the literally isolated natural DNA is amplified into a large
number of copies (“clones”). Thus, recombinant proteins are made from copies of the natural
sequence, typic
ally cDNA, and do not use the original source DNA.


Some purified products become patent eligible due to advantageous characteristics of the
new product, and likewise isolated DNA sequences that open up new uses should be patent
eligible.

Even a human cel
l that makes a protein product does not make that product in a form
and quantity that enables the uses of a protein made from isolated DNA using recombinant
methods. On the other hand, the value of the recombinantly
-
produced protein is that it can be
used

for the same functions as its naturally
-
occurring counterpart.

The question remains as to
whether the Supreme Court would give more weight to the differences or the similarities
between isolated DNA and natural DNA.

F.

Implications for Diagnostic Methods

The decision on the method claims, now that it has been allowed to stand by the Supreme
Court, settles the question of patent
-
eligibility for two categories of gene
-
related method claims.
First, methods of
detecting and screening

for a medical condition

v
ia steps of "analyzing" and
"comparing"

(without more)

are not patent eligible subject matter as they are regarded as
directed to a natural relationship. Whether similar methods that are claimed using steps that
arguably integrate the natural relationship

into specified activities and/or recite specific assays
can be patented, remains unresolved. Second, methods of screening for new drugs that
incorporate use of a human
-
made product, such as a genetically modified cell, are patent eligible.


Whether use

of a human
-
made product that otherwise meets the standard for novelty and
nonobviousness is required for patent
-
eligibility of such a method is not yet clear. In other
words, the line between patent
-
ineligible claims to natural relationships and patent
-
e
ligible
claims that apply such relationships has not yet been clearly defined. One proposal for
interpreting the case law in this area would draw this line between “observing” and “applying”
natural relationships as turning on whether human
-
made elements
are employed (e.g., recited in
the claims) in order to apply the principle. This proposal allows one to exclude the possibility of
infringing a method claim merely by thinking about the relevant natural relationship.


An example of an unpatentable natural

relationship would be the rise in body temperature
that occurs when one has an infection. A claim that read: “comparing the body temperature of a
test subject to the body temperature of a normal, healthy subject, wherein an increase in the body
IP Issues Impacting the Future of Personalized Medicine





19

temperat
ure of the test subject relative to the normal subject is indicative of a fever” would be
similar to the method claim found patent
-
ineligible in
Mayo
. On the other hand, a claim the
required contacting the test subject with a thermometer and using the
thermometer to measure
the subject’s temperature to determine the presence or absence of infection might be patent
-
eligible (leaving novelty and nonobviousness aside for separate analysis). Under the current
USPTO Interim Guidance
82
, the patent
-
eligibility

of the latter example may hinge on whether the
recited thermometer was a specific type of thermometer and did not read on all possible
temperature
-
measuring devices. Another approach might be to evaluate whether it was routine
and conventional to apply t
he recited thermometer in the recited context.


For example, if the “comparing” and analyzing” steps were problematic because they
were regarded as reciting the natural relationship at a high level of generality, further cases will
need to resolve how much

and what kind of specificity is sufficient. If a specific assay (e.g.,
immunoassay) is recited, one could argue that this assay is not performed in nature. On the other
hand, one could argue that the assay is routinely performed by those skilled in the
field. It may
be that one can overcome the latter argument if an immunoassay directed to a specific biomarker
was not routinely performed to diagnose the specific condition recited in the claim (which takes
us back to a standard analysis under novelty and

nonobviousness). Alternatively, this strategy
could be viewed as impermissibly preempting all means of observing the natural relationship,
and would only succeed if the claims recite a specific subset of possible means for detecting the
relevant biomarke
rs. The panel deciding the
PerkinElmer
case found the “measuring” steps of
the claims at issue insufficient because they read on any method of measuring the relevant
biomarkers. The decision also noted that the specification taught that the measurements
could be
obtained through known methods, thereby
"well
-
understood, routine, conventional activity
previously engaged in by scientists who work in the field."
83

G.

Conclusion

A prudent practice at this time of uncertainty would be to include a variety of method

claims that recite varying levels of specificity with respect to assay reagents and/or devices to be
used in carrying out the claimed method. Where possible, the recitation of a novel, human
-
made
component (analogous to the transformed cell used in the M
yriad Genetics screening method) is
helpful. Support in the specification and/or arguments presented during prosecution can be used
to clarify the novelty of applying the recited method steps and/or components in the context
relevant to the claimed method
. This support could be important to distinguish between routine,
conventional activity previously engaged in by those in the field, and activity that is being
applied in a novel and inventive context. In other words, the method steps and the reagents ma
y
be routine and conventional, but may not have been previously applied to the problem addressed
by the invention. It may also be important to establish that the methods recited in the claims do
not pre
-
empt all possible means of measuring the relevant bi
ological activity or marker.




82

Ibid.

83

PerkinElmer
,

supra,

note 80, at 11
-
12

IP Issues Impacting the Future of Personalized Medicine





20

IV.

Mayo v. Prometheus

and Bioinformatics
84



Since biology and computer science started to converge more than a decade ago,
bioinformatics
, also
known as
computational biology,

has developed into a discipline
full
of
promise and hope.
As hundreds
of
and thousands of biomarkers have been identified to be
associated with various traits and full
individual
genomic seq
uencing is becoming affordable,
bioinformatics is

making it possible to
personalize
medical treatment
to a patient’s
genotype
for
maximum
individual therapeutic effects with reduced adverse events.


Many
inventions
in
personalized medicine
are made based on discovery of

a
natural
correlation
between
a
gen
e
tic
profile of a person and
an
optimized treatment
of that person

using computational methods and
biological data
.
Two years after
its
Bilski
decision
on patent ineligibility of a business method
claim as directed to
an abstract idea
,
85

the U.S. Supreme Court
(“the Court”)
held
unanimously
in
Mayo
Collaborative Services v. Prometheus Laboratories, Inc.
86

that process claims
reciting a
natural correlation

were not patent eligible
.
As a result, p
atent protection of personalized
medicine innovations
, especially those involving a natural correlation,

ha
s
now
become more
challenging than ever.

A.

Mayo v. Prometheus

In
Mayo
, the Court invalidated the process claims of Prometheus’ two patents as not
patent eligible because the claimed processes have not transformed the unpatentabl
e natural laws
into
patent
-
eligibil
ity applications of those laws. In particular, the Court
found
that “the steps in
the claimed processes (apart from the natural laws themselves) involve[d] well
-
understood,
routine, conventional activity previously engaged in by researcher
s

in the field.”
87

The Court
further found that “upholding the patents would risk disproportionately tying up the use of the
underlying natural laws, inhibiting their use in the making of further discoveries.”
88


The Court started its opinion by reciting the

definition of patentable subject matter under
section 101 of the Patent Act
:

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

35 U.S.C. § 101
.
“The term ‘process’ means process, art or method, and includes a new use of a
known process, machine, manufacture, composition of matter, or material.”
89

The Court

reiterated
its l
ong
-
held position that “‘
laws of nature, natural phenomena, and abstract ideas




84
Chapter authored by Dr. Ling Zhong, Esq., RatnerPrestia, 1234 Westlakes Drive, Suite 301, Berwyn,

PA 19312,
Phone: (610) 993
-
4237, E
-
mail:
lzhong@ratnerprestia.com
.


85

Bilski v. Kappos

130 S.Ct. 3218 (2010)
.

86

132 S.Ct. 1289 (2012
)
.

87

132 S.Ct. at 1294.

88

Id
.

89

35 U.S.C. § 10
0
(b).

IP Issues Impacting the Future of Personalized Medicine





21

[we
]
re

not patentable.”
90

Recognizing that “[f]or al
l

inventions at some level embody, use,
reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas,”
and that “
a
process is not unpatentable simply because it contains a law of nature or a mathematical

algorithm,
” the Court emphasized that the
question

wa
s “whether the claimed process
es

ha[d]

transformed these unpatentable natural laws into patent
-
eligible applications of those laws.”
91


According to the Court, “Prometheus’ patents set forth laws of nature


namely,
relationships between concentrations of certain metabolites in the blood and t
he likelihood that a
dosage of a thiopurine drug will prove ineffective or cause harm.”
92

The Court took claim 1 of
Prometheus’ U.S. Patent No. 6,355,623
(“the ‘623 Patent”)
as a representative claim, and
examined its patent eligibility in light of its prec
edents on this issue. Claim 1 of the ‘623 Patent
recites:

1. A method of optimizing therapeutic efficacy for treatment of an immune
-
mediated gastrointestinal disorder, comprising:

(a) administering a drug providing 6
-
thioguanine to a subject having said
immune
-
mediated gastrointestinal disorder; and

(b) determining the level of 6
-
thioguanine in said subject having said immune
-
mediated gastrointestinal disorder,

wherein the level of 6
-
thioguanine less than about 230 pmol per 8x10
8

red blood
cells indicate
s a need to increase the amount of said drug subsequently
administered to said subject and

wherein the level of 6
-
thioguanine greater than about 400 pmol per 8x10
8

red
blood cells indicates a need to decrease the amount of said drug subsequently
administer
ed to said subject.

According to the Court,

[w]hile
it takes a human action (the administration of a
thiopurine drug) to trigger a manifestation of this relation in a particular person,” “the relation
itself exists in principle apart from any human action
,” and “[t]he relation is a consequence of the
ways in which thiopurine compounds are metabolized by the body
-

entirely natural processes.”
93

In reaching its conclusion, the Court focused on the steps in Prometheus’ method claims at issue,
apart from what

it considered a statement of a natural law (e.g., a natural relationship or
correlation), and considered whether these additional steps involve
d

an “inventive concept” or a
“well
-
understood, routine, conventional activity.”

The Court reinforced its conclusion by going over in detail its precedents on patentable
subject matter in connection with process claims involving abstract ideas, and an English case, in
which the claimed processes involved laws of nature. Without diffe
rentiating process claims
involving natural laws from those involving abstract ideas, the Court stated that “simply



90

Mayo
, 132 S.Ct.

at 1293.

91

Id.
at 1293
-
4 (internal quotation
marks omitted).

92

Id.
at 1296.

93

Id.
at 1297.


IP Issues Impacting the Future of Personalized Medicine





22

appending conventional steps, specified at a high level of generality, to laws of nature, natural
phenomena, and abstract ideas
[could not]

make those laws, phenomena, and ideas patentable.”
94


1.

Two
-
Step Evaluation of Process Claim

In essence, t
he
Mayo

test
requires a two
-
step evaluation of a process claim for patent
eligibility. First, remove its recitation of a law of nature, a natural phen
omenon
or
an abstract
idea. And second, look for an “inven
tive concept” in what remains.

T
he Court
provided little guidance
as to what constituted

an “inventive concept.”

In
response to the Government’s arguments other statutory provisions such as 35 U
.S.C. §§ 102,
103 and 112 can screen for patentable application of
an
unpatentable law of nature, the Court
conceded that “in evaluating the significance of additional steps, the § 101 patent
-
eligibility
inquiry and, say, the § 102 novelty inquiry might so
metimes overlap,” but insisted that “to shift
the patent
-
eligibility inquiry entirely to these later sections [102, 103 and 112] risk
[ed]

creating
significantly greater legal uncertainty, while assuming that those sections
[could]
do work that
they
[we]
re
not equipped to do.”
95


It is unclear how the requirements of an “inventive concept”
under the
Mayo
test differ from the well
-
establ
ished § 102
novelty requirements or § 103
nonobviousness requirements.


Thus,
there remains uncertainty as to how to determin
e
whether
additional steps in a process claim are sufficient to
meet the
“inventive concept”
requirement
under the
Mayo
test.

T
he Court expressed
repeatedly
concerns
about preemption of the use of a natural law
underlying a
process
claim. “
T
he laws of nat
ure at issue
here
are narrow laws th
at may have
limited application,” and
“[the process claims that embody the
se

laws of nature

will
]

tie up the
doctor’s subsequent

treatment decision whether that treatment does, or does not, change in light
of the inference he
h
as drawn using the correlations,” and “threaten to inhibit the development of
more refined treatment recommendations (like that embodied in Mayo’s test), tha
t combine
Prometheus’ correlations with later discovered features of metabolites, human physiology or
individual patient characteristics.”

Such “refined treatment recommendations” indeed contribute
to personalized medicine.
Further, d
espite
its admission

that Prometheus’ process claims
recite
narrow laws having
limited application
, the Court nevertheless rejected these claims for failure to
“confine their reach to particular applications of those laws.”
96

It is puzzling
to what extent a
process
claim
embo
dying a natural law
must to be confined to become patent eligible
under the
Mayo
test.

Despite
the
detailed analysis of Prometheus’ representative process claim and compari
son

with it
s

precedents
, the Court
provide
d

not much
guidance on a number of
key
issues
involved in
the
Mayo
test, for example,
the “inventive concept”
requirement
and
the
preemption

concern
.
The
Mayo
test
appears to
have
create
d

more uncertainty than clarity for patent protection of
innovations made based on bioinformation
in
persona
lized medicine.




94

Id.
at 1301.


95

Id.
at 1302
-
4
.



96

Id.


IP Issues Impacting the Future of Personalized Medicine





23

B.

Case Law Development

As bioinformation is often obtained
using
biotechnologies and computer technologies,
patent protection of personalized medicine inventions based on bioinformation faces challenges
from both aspects.
Since the
Court’s
unanimous
Mayo
decision, the Court of Appeals for the
Federal Circuit (“the Federal Circuit”)
has issued
several
opinions on patent ineligibility of
process
claims
.
97


T
hese decisions

provide insight as to how
the Federal Circuit
has and will
follow

the
Mayo
decision

in determining patent eligibility of personalized medicine inventions
involving a natural correlation and possibly computer implementation.

1.

Bancorp Services, L.L.C. v. Sun Life Assur. Co. of Canada

In
Bancorp
,
the Federal Circuit
affirmed the district court’s holding of invalidity of
Bancorp’s asserted claims as directed to a patent
-
ineligible abstract idea of managing a stable
value protected life insurance policy.
98

While the asserted claims included
system

claim
s
,
computer
-
reada
ble medium claims, and method claims, t
he Federal Circuit found that the district
court correctly treated the asserted system and medium claims no different from the method
claims for patent eligibility purposes
.
99

Citing
Mayo
, the Federal Circuit stated
that “a recitation
of ineligible subject matter [did] not become patent
-
eligible merely by adding the words ‘apply
it.’”
100

“To salvage an otherwise patent
-
ineligible process, a computer must be integral to the
claimed invention, facilitating the process in

a way that a person making calculations or
computations could not.

101


T
he computer required b
y some of Bancorp’s claims is

employed
only for its most basic function, the performance of repetitive

calculations, and as such does

not
impose meaningful limit
s on the scope of those claims.”
102


T
he district court correctly held that
without the computer limitations nothing remains in the claims but the abstract idea of managing
a stable value protected life insurance policy by performing calculation
s and manipu
lating the
results,” and “Bancorp’s claimed abstrac
t idea impermissibly ‘preempt[s
]’ the mathematical
concept of managing a stable value protected life insurance policy.”
103

In view of
Bancorp
,
seeking patent protection of computer or medium claims as alter
natives to
process
claims
to
avoid patent ineligibility
might not be
desirable
any more
while

imposing significant computer
limitations to
a process claim might transform a patent ineligible abstract idea into a patent
eligible application of the abstract
idea.




97

See
,
e.g.
,
Bancorp Services, L.L.C. v. Sun Life Assur. Co. of Canada (U.S.)
, 687 F.3d 1266 (Fed. Cir. 2012);
Association for Molecular Pathology v. U.S.
Patent and Trademark Office
, 689 F.3d 1303 (Fed. Cir. 2012)
(hereinafter referred to as
Myriad
);
PerkinElmer, Inc. v. Intema Ltd.
, 2012 WL 5861658 (Fed. Cir. 2012).


98

See Bankcorp
, 687 F.3d at 1280
-
1.


99

See id.
at 1277.


100

Id.
at 1276.


101

Id.

at 1278.


102

Id
.


103

Id.
at 1280.


IP Issues Impacting the Future of Personalized Medicine





24

2.

Association for Molecular Pathology v. U.S. Patent and Trademark
Office

I
n
Association for Molecular Pathology v. U.S. Patent and Trademark Office
,
(hereinafter referred to as
Myriad
)
,

the Federal Circuit affirmed

the district court’s grant of
summa
ry judgment
[of invalidity under section 101] with regard to
Myriad’s method claims
directed to comparing or analyzing gene sequences
” and
reversed

the district court’s grant of
summary judgment
[of invalidity under section 101]
with regard to
Myriad’s me
thod claim to
screening potential cancer therapeutics via changes in cell growth rates of novel, man
-
made
transformed cells.”
104

“Myriad’s claimed methods of comparing or analyzing nucleotide
sequences are only directed to the abstract mental process of com
paring two nucleotide
sequences”
while
Myriad’s screening method

f
or cancer treatment

“is tied to specific host cells
transformed with specific genes and grown in the presence or absence of a specific type of
therapeutic.”
105

Detailed discussion of
Myriad
is set forth above

in Chapter III
.

3.

PerkinElmer, Inc. v. Intema Ltd.

In
PerkinE
lmer
,
the Federal Circuit affirmed summary jud
gment to PerkinElmer because
Intema’s

asserted claims
were ineligible under section 101 for reciting an ineligible mental step
and
natural law
.
106

The asserted claims were drawn to
methods to determine th
e risk of fetal
Down’s syndrome, requiring, for example, two “measuring steps” and a “determining” step.

No action beyond the comparison is required.

107

Representative claims 1 and 2
0
of U.S. Patent
No. 6,573,103 read
:

1. A method of determining whether a pregnant woman is at an increased risk of
having a fetus with Down's syndrome, the method comprising the steps of:

measuring the level of at least one screening marker from a first t
rimester of
pregnancy by:

(i) assaying a sample obtained from the pregnant woman at said first
trimester of pregnancy for at least one first biochemical screening
marker; and/or

(ii) measuring at least one first ultrasound screening marker from an
ultras
ound scan taken at said first trimester of pregnancy;

measuring the level of at least one second screening marker from a second
trimester of pregnancy, the at least one second screening marker from the
second trimester of pregnancy being different from th
e at least one first
screening marker from the first trimester of pregnancy, by:

(i) assaying a sample obtained from the pregnant woman at said second
trimester of pregnancy for at least one second biochemical screening
marker; and/or




104

689 F.3d 1303
,
1337 (Fed. Cir. 2012)
.


105

Id.
at 1335, 1337.


106

2012 WL 5861658 at *6.


107

2012 WL 5861658 at *5.

IP Issues Impacting the Future of Personalized Medicine





25

(ii) measuring at l
east one second ultrasound screening marker from an
ultrasound scan taken at said second trimester of pregnancy; and

determining the risk of Down's syndrome by comparing the measured levels
of both the at least one first screening marker from the first
trimester of
pregnancy and the at least one second screening marker from the second
trimester of pregnancy with observed relative frequency distributions of
marker levels in Down's syndrome pregnancies and in unaffected
pregnancies.


20. A method of determ
ining whether a pregnant woman is at an increased risk of
having a fetus with Down's syndrome, the method comprising the steps of:

measuring the level of at least one first screening marker from a first trimester
of pregnancy by:

(i) assaying a sample ob
tained from the pregnant woman at said first
trimester of pregnancy for at least one first biochemical screening
marker; and/or

(ii) measuring at least one first ultrasound screening marker from an
ultrasound scan taken at said first trimester of pregnanc
y;

determining a first risk estimate of Down's syndrome by comparing the
measured level of the at least one first screening marker level from the
first trimester of pregnancy with observed relative frequency distributions
of marker levels in Down's syndro
me pregnancies and in unaffected
pregnancies;

comparing the first risk estimate with a predetermined cut
-
off level to initially
classify the pregnant woman as screen
-
positive or screen
-
negative based
on the comparison; and

if the pregnant woman is initially classified as screen
-
negative:

measuring the level of at least one second screening marker from a second
trimester of pregnancy, the at least one second screening marker from the
second trimester of pregnancy being diffe
rent from the at least one first
screening marker from the first trimester of pregnancy, by:

(i) assaying a sample obtained from the pregnant woman during said
second trimester of pregnancy for at least one second biochemical
screening marker; and/or

(ii
) measuring at least one second ultrasound screening marker from an
ultrasound scan taken during said second trimester of pregnancy; and

determining the risk of Down's syndrome by comparing the measured level of
both the at least one first screening marke
r from the first trimester of
pregnancy and the at least one second screening marker from second
trimester of pregnancy with observed relative frequency distributions of
IP Issues Impacting the Future of Personalized Medicine





26

marker levels in Down's syndrome pregnancies and in unaffected
pregnancies.

Following
the
Mayo
decision, the Federal Circuit found that

Intema
[]
claim
[
ed
]

a law of
nature: the relationship between screening marker levels and the risk of fetal Down’s syndrome
,”
and “[t]
hat an increased risk o
f fetal Down’s syndrome produce[d]

certa
in analy
tical results
[was]

a natural
process, an eternal truth that ‘
exist
[ed]

in princip
le apart from any human
action.’”
108

“Looking to the claims as a whole, the steps in combination do not make the
ineligible mental step and natural law patent
-
eligible.”
109

The

Federal Circuit further
d
istinguished the asserted claim

from the
patent eligible
claims in
Myriad

as follows:

… The claimed method [held patent eligible in
Myriad
] consisted of “comparing”
the growth rates of two sets of host cells that had been altered
with a cancer
-
causing human gene


one set was treated with the potential therapeutic and the
other was untreated … Th
e comparison was an ineligible
mental step. But the
host cells did not occur naturally; they were man
-
made and, thus were themselves
pate
nt
-
eligible subject matter. So, according to the panel [in
Myriad
], their
inclusion in the process made the claims patent
-
eligible despite the reference to an
otherwise ineligible mental step.
Here, the challenged claims include no patent
-
eligible subjec
t matter along with the ineligible concepts.

They include only
“conventional steps, specified at a high level of generality,” which are
insufficient
.
110

However, the Federal Circuit failed to indicate
how
a process claim apart from a recitation of a
natural

law, natur
al phenomenon or abstract idea c
ould meet the “inventive concept” requirement
to transform the claim patent eligible without reciting a novel patent eligible subject matter.

4.

Case Law Summary

In summary, f
ollowing
the
Mayo

decision
,
the Federal Circuit has
so far
held
only
one
of
Myriad’s
process claim
s patent eligible.


As
emphasized by the Federal Circuit
in
PerkinElmer
,
this patent eligible method claim
in
Myriad
is directed to a method for
screening potential cancer
therapeutics v
ia changes in cell growth rates of novel, man
-
made transformed cells.
Without
elaborating
what constitutes an “inventive concept” under the
Mayo
test

or addressing whether
novelty is essential to meet the “inventive concept” requirement
,
the Federal Circuit has yet to
bring back hope to patent protection of personalized medicine innovations
based on
bioinfor
mation
.

C.

USPTO Guidance

Three months after the
Mayo
decision, the United States Patent and Trademark Office
(the “USPTO”) issued a gui
dance memo titled
2012 Interim Procedure for Subject Matter
Eligibility Analysis of Process Claims Involving Laws of Nature
(“2012 Interim

Mayo
Guidance
”) for use by the USPTO personnel in determining subject matter eligibility of process
claims
in which a

law

of nature
, a natural phenomenon, or naturally occurring relation or



108

Id.
at *5 (quoting
Mayo
, 132 S.Ct. at 1297).


109

Id.

at *6.


110

Id.
at *6 (internal citations omitted).

IP Issues Impacting the Future of Personalized Medicine





27

correlation (collectively referred to as a

natural principle


in the guidance)

is a limiting element
or

step,
under 35 U.S.C. § 101

in view of the
Mayo
decision.
While the
Interim
Guidance for
Determining Subject Matter Eligibility for Process Claim in View of Bilski v. Kappos

(“2010
Interim
Bilski
Guidance”) remain
s

applicable to examination of patent eligibility
of process
claims directed to abstract ideas,
the 2012 Interim
Mayo
Guidance
provides:

In summary, process claims having a natural principle as a limiting element or
step should be evaluated by determining whether the claim includes additional
elements/steps or a combination of elements/steps that integrate the natural
pri
nciple into the claimed invention such that the natural principle is practically
applied, and are sufficient to ensure that the claim amounts to significantly more
than natural principle itself.

If the claim as a whole satisfies this inquiry, the
claim is

directed to patent
-
eligible subject matter. If the claim as a whole does not
sat
isfy this inquiry, the claim should be
rejected under
35 U.S.C. § 101 as being
directed to non
-
statutory
subject matter….

The 2012
Interim
Mayo
Guidance
further
provides a li
st of relevant factors
for analysis in
determining
whether a process claim
recites a patent
-
eligible practical application of a natural
principle. Factors in favor of patent
in
eligibility incl
ude appending conventional steps

to a
natural principle
;

steps that amount to instructions that are well
-
understood, routine,
conventional activity, previously en
gaged in by those in the field; uses of
a natural principle that
can be performed thr
ough an

existing or future
-
devised machinery
,

or even without any

apparatus;
features that limit the application of a natural principle to a certain technology
environment, which would cover every substantial practical application in that field;
additional
limitations necessary for a
ll practical applications of a

natura
l principle; a machine or
transformation that is merely nominally, insignificantly, or tangentially related to the steps or
elements, e.g., data gathering or data storage; complete absence of a machine
-
or
-
transformation
in a claim;
and a mere statement of
a general concept (natural principle).
Exemplary f
actors in
favor of patent eligibility
are

a particular machine or transformation reci
ted in more than general
terms
; a particular machine or transformation

showing how a

natural principle is integrated into a
practical application

or how the transformation relates to or implements the natural principle
; and
a tangible implementation with elements or steps recited with specificity such that all substantial
applications are

not covered.

Following the
Mayo
decision

closely
, the 2012 Interim
Mayo
Guidance reiterates the
Mayo
test

and provides limited guidance to apply the
Mayo
test without fully addressing
the
uncertainties surrounding the
Mayo
test
,

including key issue
s such as an “inventive concept.”
F
uture patent
applicants

on innovations
based on

bioinformation would be well advised to
describe

and define claim elements or steps that cannot

or may not

be characterized as a law of
nature or an abstract concept
so as
to differentiate them

from “well
-
understood,

routine,
conventional activity” and support
a proposition
that the
se

elements or steps in a process claim
(apart from what may be characterized as a statement of a natural law, a natural phenomenon or
an abstrac
t idea)
provide
an inventive, and patentable, concept.

D.

Conclusion

The unanimous decision by the Court in
Mayo

has made
p
atent protection of
personalized
medicine
innovations
based on bioinformation
more challenging

than ever
. Many personalized
medicine
innovations
based on discovery

of a
natural
correlation between
a genetic profile
of a
IP Issues Impacting the Future of Personalized Medicine





28

person and an optimized treatment of the pe
rson

are

often made using “well
-
understood, routine,
conventional activity previously engaged in by researchers in the field.”

In view of the
uncertainties surrounding the
Mayo
test, h
ow to maximize patent protection of personalized
medicine innovations remain
s

to be developed.

V.

Divided Infringement
111



Another hot topic in patent law relevant to personalized medicine is the iss
ue of divided
infringement, that is, how to analyze infringement of a method claim when all the steps are
performed, but not by a single party.

The Federal Circuit addressed this question in its
en banc

decision in
Akamai Techs., Inc. v. Limelight Network
s, Inc., and McKesson Techs., Inc. v. Epic
Systems Corp
.
112


The issue sharply divided the eleven judge
en banc

panel, which issued a
per
curiam

opinion and two dissenting opinions, one by Judge Newman and one by Judge Linn,
joined by Judges Dyk, Prost and O’Malley.

The majority expressly declined to decide whether
there is direct infringement under 35 U.S.C. § 271(a) in such a case and held that

the defendants
could be liable for inducing infringement under 35 U.S.C. § 271(b): “[W]e hold that all the steps
of a claimed method must be performed in order to find induced infringement, but that it is not
necessary to prove that all the steps were com
mitted by a single entity.”
113


The majority
overruled
BMC Resources, Inc. v. Paymentech, L.P.
,
114

at least to the extent it held to the
contrary.
115


A.

Akamai Techs., Inc. v. Limelight Networks, Inc.

Akamai’s patent, U.S. Patent No. 6,108,703, “covers a method f
or efficient delivery of
web content.”
116


Under the method, some of the content of a website is placed on a set of
replicated servers and web browsers are programmed to retrieve the content from those servers.
Limelight provides a network of servers and all
ows customers to place some of their content on
its servers, but Limelight does not modify its customers’ web pages itself.

Rather, Limelight
instructs its customers on the steps required to modify their pages.
117


According to Judge Newman, claims 19 and 3
4 are representative of the claims asserted
by Akamai at trial:

19.

A content delivery service, comprising;




111

Chapter authored by Lynn C. Tyler, Esq., Barnes & Thornburg, 11 South Meridian Street, Indianapolis, Indiana
46204
-
3535, Phone: (317) 231
-
7392; E
-
mail:
lynn.tyler@BTLaw.com
.


112

692 F.3d 1301 (Fed. Cir. 2012).


113

692 F.3d at

1306.


114

498 F.3d 1373 (Fed. Cir. 2007)
.


115

Id
.


116

Id
.


117

Id
.

IP Issues Impacting the Future of Personalized Medicine





29

replicating a set of page objects across a wide area network of content servers
managed by a domain other than a content provider domain;

for a given pa
ge normally served from the content provider domain, tagging
the embedded objects of the page so that requests for the page objects
resolve to the domain instead of the content provider domain;

responsive to a request for the given page received at the con
tent provider
domain, serving the given page from the content provider domain; and

serving at least one embedded object of the given page from a given content
server in the domain instead of from the content provider domain.


34.

A content delivery
method, comprising:

distributing a set of page objects across a network of content servers managed
by a domain other than a content provider domain, wherein the network of
content servers are organized into a set of regions;

for a given page normally serve
d from the content provider domain, tagging at
least some of the embedded objects of the page so that requests for the
objects resolve to the domain instead of the content provider domain;

in response to a client request for an embedded object of the page:

resolving the client request as a function of a location of the client
machine making the request and current Internet traffic conditions to
identify a given region; and

returning to the client an IP address of a given one of the content servers
with the
given region that is likely to host the embedded object and
that is not overloaded.
118



Following a jury trial at which Akamai relied on a theory of direct infringement rather
than inducement, the jury found infringement and the district court initially den
ied Limelight’s
motion for judgment as a matter of law.

After the Federal Circuit rendered its decision in
Muniauction, Inc. v. Thomson Corp.
119

the district court entered JMOL in favor of Limelight
because it did not perform all the steps of the patented m
ethods and did not direct or control the
actions of its customers.

A panel of the Federal Circuit affirmed.

B.

McKesson Techs., Inc. v. Epic Systems Corp.

McKesson’s patent, U.S. Patent No. 6,757,898, covers “a method of electronic
communication between heal
thcare providers and their patients.”
120


Epic licenses its software to



118

692 F.3d at 1333
-
34.

119

532 F.3d 1318 (Fed. Cir. 2008).

120

Id
. at 1306.


IP Issues Impacting the Future of Personalized Medicine





30

healthcare organizations which, among other things, allows healthcare providers to communicate
electronically with patients. Epic does not perform any of the steps of McKesson’s claimed
methods; rather, a patient performs the first step by initiating a communication with a healthcare
provider, who performs the rest of the steps.
121


McKesson asserted claim 1 of the ‘898 patent which reads as follows:

1.

A method of automatically and electronic
ally communicating between at
least one health
-
care provider and a plurality of users serviced by the health
-
care
provider, said method comprising the steps of:

initiating a communication by one of the plurality of users to the provider for
information, wh
erein the provider has established a preexisting medical
record for each user;

enabling communication by transporting the communication through a
provider/patient interface over an electronic communication network to a
Web site which is unique to the provi
der, whereupon the communication
is automatically reformatted and processed or stored on a central server,
said Web site supported by or in communication with the central server
through a provider
-
patient interface service center;

electronically comparing
the content of the communication with mapped
content, which has been previously provided by the provider to the central
server, to formulate a response as a static or dynamic object, or a
combined static and dynamic object; and

returning the response to th
e communication automatically to the user’s
computer, whereupon the response is read by the user or stored on the
user’s computers

said provider/patient interface providing a fully automated mechanism for
generating a personalized page or area within the
provider’s Web site for
each user serviced by the provider; and

said patient
-
provider interface service center for dynamically assembling and
delivering custom content to said user.
122

McKesson pursued an inducement theory against Epic, but the district cour
t relied on
Muniauction
and

BMC

to enter summary judgment against McKesson. A panel of the Federal
Circuit again affirmed, on the basis that no single actor performed all the steps of the patented
method.

C.

Federal Circuit
En B
anc

Opinion

The Federal Circuit
’s
en banc

opinion resolved both cases
.
The majority opinion notes
early on, somewhat anti
-
climactically, that “[i]t is not necessary for us to resolve” the issue to
which “[m]uch of the briefing in these cases has been directed,” namely, “whether direct
infringement can be found when no single entity performs all of the claimed steps of the



121

Id
.


122

532 F.3d 1318, 1335
-
36 (Fed. Cir. 2008).


IP Issues Impacting the Future of Personalized Medicine





31

patent.”
123


The majority stated that prior cases have not found direct infringement where
multiple actors combine to infringe a method claim because direct infringement

is a strict
liability tort and finding liability in those circumstances “would ensnare actors . . . who had no
way of knowing that others were acting in a way that rendered their collective conduct
infringing.”
124


It was unnecessary to resolve that issue i
n this case, however, because “these
cases and cases like them can be resolved through an application of the doctrine of induced
infringement.”
125


1.


Majority

The majority agreed with Judge Linn’s dissent that direct infringement requires one party
to perfor
m all the steps of a method claim, either itself or vicariously,
126

and that liability for
induced infringement requires at least one instance of actual infringement.
127


The majority and
the Linn dissent parted company, however, on whether a single party mus
t be liable for direct
infringement when serving as the predicate act for inducing infringement. The majority noted
that, from the perspective of the patentee, it makes no difference if an inducer persuades one
person to perform all the steps or induces mo
re than one person to combine their efforts to
perform all the steps.
128


Similarly, if a defendant performs some steps itself and induces one or
more others to perform the remaining steps, the impact on the patentee is the same as if one
person performed al
l the steps.
129


The majority supported its decision by relying on legislative history from the 1952 Patent
Act
--
primarily testimony of Giles S. Rich, who co
-
authored the Act and later became a highly
-
respected federal judge on the Federal Circuit.
130


The maj
ority also relied on analogies to
liability for inducement under criminal and tort law.
131


The majority acknowledged the Supreme
Court’s statement in
Aro Mfg. Co. v. Convertible Top Replacement Co.
132

that “if there is no
infringement of a patent there c
an be

no contributory infringer

133

but distinguished the case
because it involved a product claim and the liability of a single defendant under the repair or



123

Id
. at 1306.


124

Id

at. 1307.


125

Id
. at 1306.


126

I
d
. at
1307
.


127

Id
. at 1308.


128

Id
. at 1309.


129

Id.


130

Id
. at 1309
-
11.


131

Id
. at 1311
-
13.


132

365 U.S. 336 (1961).


133

I
d
. at 345
.


IP Issues Impacting the Future of Personalized Medicine





32

replace doctrine.
134


Finally, the majority relied on some pre
-
1952 Patent Act cases that it stated
found
liability for contributory infringement notwithstanding the absence of a single direct
infringer.
135


For both
Akamai

and
McKesson
, the majority remanded their cases to the district court
and stated that the defendants could be liable if they knew of the ass
erted patent and either
performed some steps themselves and induced another to perform the remaining steps (
Akamai
)
or induced others to perform all the steps (
McKesson
).
136

2.

Dissent

Judge Newman rejected the premise that a method claim can only be infringed
if one
party performs all the steps.
137

She pointed to the word “whoever” in § 271(a) and noted that 1
U.S.C. § 1 states that “words importing the singular include and apply to several persons, parties,
or things.”
138


Thus, “when more than one party performs
all of the steps [of a method claim], the
claim is infringed” because “[i]nfringement is not a question of how many people it takes to
perform a patented method.”
139


Judge Newman agrees that induced infringement can only exist
where there is also direct inf
ringement and her approach solves this problem.
140

Judge Newman would rely on traditional tort law to apportion liability among joint
infringers.
141


For example, she cited the Restatement of the Law Torts: Apportionment of
Liability, § 8 (2000), as identifyin
g factors such as “the nature of each person’s risk
-
creating
conduct” and “the strength of the causal connection between the person’s risk
-
creating conduct
and the harm.”
142


Judge Newman also made the practical point that patentees typically sue
competitors
, not consumers such as patients or users of the Internet.
143


On every major point, Judge Linn’s dissent engaged and disagreed with the majority. The
Linn dissenters argued that § 271(a) defines infringement,
144

so the meaning must be the same
for §§ 271(b) a
nd (c).
145


The majority found that infringement had different definitions in



134

Akamai,
692 F.3d at 1315
-
16
.


135

Id.
at 1317
-
18
.


136

Id
. at 1318
-
19.


137

692 F.3d at 1322
.


138

Id.
at 1322
-
23.


139

Id
. at 1322
-
23.


140

Id
. at 1328
-
29
.


141

Id
. at 1331
-
32
.


142

Id
. at 1331
.


143

Id
. at 1332
.


144

Id
.

at 1338
.


145

Id
. at 1338
-
39.

IP Issues Impacting the Future of Personalized Medicine





33

different parts of the statute, such as §§ 271(e)(2) and 271(f), so that it did not have to have the
same meaning in §§ 271(a) and (b).
146


Judge Linn stated that the majority opinio
n ignored the
Supreme Court’s decision in
Aro,
147

that there can be no indirect infringement without direct
infringement,
148

whereas the majority distinguished
Aro

on the grounds noted above. Judge Linn
disagreed with the majority’s reading of Judge Rich’s Congressional testimony, and in any event
noted that because he was not a member of Congress, his testimony was not entitled to any
weight.
149


Judge Linn rejected

the majority’s analogies to inducement liability under criminal
and tort law.
150

Judge Linn’s analysis can perhaps be summarized with the syllogism: (1) direct
infringement requires that one actor performs each and every element or step of a claim; (2) ther
e
can be no induced infringement without direct infringement; therefore, (3) there can be no
induced infringement unless one actor performs each and every element or step of a claim. Judge
Linn recognized that two or more parties can be found liable though

under traditional principles
of vicarious liability,
i.e.,

when one party directs or controls the other or when the parties are
engaged in a joint enterprise.
151

The Linn dissenters would have affirmed both of the judgments below that there was no
liability

for infringement because no single party performed all the steps of the method either by
itself or vicariously.
152


D.

Relevance

to Diagnostic Companies

The
Akamai/McKesson

decision should be generally, but not unequivocally, good news
for diagnostic companie
s. Diagnostic patents often include method claims with steps that are
performed by more than one person.

It is not at all uncommon for a method claim to include a
step of obtaining a sample (of blood or some other tissue) that may be performed by one pers
on
and other steps of processing and/or analyzing the sample to make a diagnosis which are
performed by one or more other people.

Under
BMC Resources
,
Muniauction
, and other cases, it
was virtually impossible to prevail in an infringement case over such c
laims. Under
Akamai

and
McKesson
, the patentee has a chance to prevail on an inducement theory. Of course, the patentee
must prove the other elements of inducement, including knowledge of the patent and intent to
induce infringement.
153


Although these eleme
nts are not always easy to prove, some chance is







146

Id.

at 1314.


147

Supra
.


148

I
d
. at 1340
-
41
.


149

Id
. at 1341.


150

Id
. at 1343
-
47
.


151

Id
. at 1348
-
49
.


152

Id
. at 1350
-
51
.


153

See Global
-
Tech Appliances, Inc.
v. SEB S.A.,

___ U.S. ___, 131 S. Ct. 2060, 2068
-
69 (2011) (inducement
requires knowledge that induced acts constitute patent infringement; knowledge means at least willful blindness).

IP Issues Impacting the Future of Personalized Medicine





34

better than no chance.

Also, the majority expressly left the issue of direct infringement
unresolved, so it provides another opportunity for success in an appropriate case.

E.

Alternative Analysis

It is r
espectfully submitted that there may be a better approach to these issues that leads
to a better result


a result that (1) is based on the text of §271(a) and precedent, (2) satisfies both
the single actor rule and the requirement that direct infringement

must exist for induced
infringement to exist, yet (3) holds joint infringers liable for their conduct.

Under 35 U.S.C. §
271(a), “whoever without authority makes, uses, offers to sell or sells any patent and invention,
within the United States . . . infr
inges the patent.” Because § 271(a) uses the disjunctive “or,” a
party that performs any one of the prohibited acts


“makes, uses, offers to sell or sells”


is
guilty of infringement.
154

None of the Court’s opinions considers the meaning of “uses” and “sells” in § 271(a) and
how those meanings might impact the
Akamai

and
McKesson

cases.

In the well
-
known case
involving the Blackberry,
NTP, Inc. v. Research in Motion, Ltd.,
155

the Court (Lin
n, J.), wrote:

In terms of the infringing act of “use,” courts have interpreted the term “use”
broadly. In
Bauer & Cie v. O’Donnell
, 229 U.S. 1 … (1913), the Supreme Court
stated that “use,” as used in a predecessor to title 35, is a “comprehensive term
an
d embraces within its meaning the right to put into service any given
invention.”
156

..
. The few courts that address the meaning of “use” have
consistently followed the Supreme Court’s lead in giving the term a broad
construction.
157

The statutory terms “uses”

and “sells” “have an established judicial interpretation; that
interpretation is a broad one.”
158


As to the system claims at issue, in
NTP,

the Federal Circuit held that RIM “used” the
claims within the U.S. (even though a relay station was located in Cana
da) because “[t]he use of
a claimed system under section 271(a) is the place at which the system
as a whole

is put into
service, i.e., the place where the control of the system is exercised and beneficial use of the
system obtained.”
159









154

E.g., Roche Prod., Inc. v. Bolar Pharmaceutical Co.
, 733 F.2d 858, 8
61 (Fed. Cir.) (“well
-
established . . . that the
use of a patented invention, without either manufacture or sale, is actionable),
cert. denied
, 469 U.S. 856 (1984).


155

418 F.3d 1282 (Fed. Cir. 2005).


156

Id
. at 10
-
11
.


157

418 F.3d at 1316
-
17.


158

Hughes
Aircraft Co. v. United States
, 29 U.S.P.Q.2d 1974, 1995 (Ct. Cl. 1993) (holding that attitude control
system on spacecraft was being “used” by Government upon launch, even though system was never activated).
See
also Olsson v. United States
, 25 F. Supp. 49
5, 498 (Ct. Cl. 1938) (Government “used” howitzers for national defense
even though they were disassembled and never fired),
cert. denied
, 307 U.S. 621 (1939).


159

Id
. at 1317 (emphasis added).

IP Issues Impacting the Future of Personalized Medicine





35

For NTP’s method
claims, the Federal Circuit reached a different conclusion:

Because a process is nothing more than the sequence of actions of which it is
comprised, the use of a process necessarily involves doing or performing each of
the steps recited. This is unlike use

of a system as a whole, in which the
components are used collectively, not individually. We therefore hold that a
process cannot be used “within” the United States as required by section 271(a)
unless each of the steps is performed within this country.”
160

Because RIM performed at least one step of NTP’s claimed method in Canada, there was no
infringement as a matter of law.

So far this does not seem too promising for method claims and the owners of patents
containing them, but one potential way for patentee
s to improve their position is already
apparent.

If prosecution remains open or reissue is still an option, patentees can consider adding
system claims to their patents.

For example, it is easy to imagine McKesson’s patent including
claims to an electron
ic communications system between healthcare providers and patients and
involving personal computers and software.

Under
NTP
, infringement of the system claim is
evaluated based on use of the system
as a whole

and should not require that one person operate

every component of the system.

Further, under a broad definition of “use,” owners of patents on diagnostic methods may
be able to establish direct infringement even when the steps of the method are performed by
more than one person.

For example, “use” sp
ecifically includes providing a patented invention
to one’s customers, even when this is done without charge. In
Trans
-
World Mfg. Corp. v. Al
Nyman & Sons
, Nyman provided customers eyeglass display cases that Trans
-
World claimed
infringed its patents.
161



The Federal Circuit affirmed the entry of injunctive relief:

Nyman argues that since only its customers use the eyeglass racks, an injunction
against Nyman’s use was unnecessary and would be a meaningless act.
Nyman,
however, is using the racks by furnish
ing them to its customers to aid the latter in
selling eyeglasses
.
162

Under this broad definition of “use,” in the
Akamai

case Limelight was using the patented
method by providing its customers with access to its servers and with programming instructions
tha
t allowed its customers to use the method to efficiently deliver web content.

In
McKesson
,
Epic was using the method by furnishing its customers with software to allow them (healthcare
providers) to make electronic communications with their patients.

Alth
ough less likely, the owner of a diagnostic method patent may also be able to
establish direct infringement based on the “sells” prong of § 271(a).

In
NTP
, the Court analyzed
the meaning of “sells” and, while casting doubt on its application to method cla
ims, concluded:
“We need not and do not hold that method claims may not be infringed under the ‘sells’ and







160

Id
. at 1318.


161

Trans
-
World Mfg. Corp. v. Al Nyman & Sons
, 7
50 F.2d 1552
, 1555

(Fed. Cir. 1984)
.


162

Id.

at 1565 (emphasis added).

IP Issues Impacting the Future of Personalized Medicine





36

‘offers to sell’ prongs of section 271(a).”
163


Without specifying whether it qualified as a use or
sale, courts have held that licensing an infringing

device or method qualifies as infringing
conduct.
164


The majority opinion in
Akamai/McKesson

expressly states that Epic “licenses” its
software to healthcare organizations.
165


Although not stated in any of the
en banc

opinions, it is
likely Limelight licen
ses access to its server network to its customers.

Under this approach to finding direct infringement based on a broad definition of “uses”
or “sells,” a single entity commits all the acts necessary for direct infringement,
i.e
., using or
selling the paten
ted method, even though a single entity may not perform all the steps of the
method.


Because there is a direct infringer, there may also be a basis for finding induced
infringement if the other elements are satisfied.

The approach is based on the langua
ge of
§271(a) and at least the cases discussed above.

Further, it appears that this approach could
reconcile the positions of the majority and the Linn dissenters in the
Akamai

and
McKesson

cases, although the
Akamai/McKesson

majority may distinguish thes
e cases because they
involved products, one of the grounds on which it distinguished the Supreme Court’s
Aro

decision.

Of course, the Supreme Court may eventually decide whether that is a valid distinction
of
Aro

too.

In any event, as long as one entity
can be found who has “used” or “sold” the
patented method within the meaning of the definitions above, it is also consistent with Judge
Newman’s view that the number of people it takes to perform the steps does not matter.

F.

Conclusion

In sum, for now
at least the issue of divided direct infringement was expressly left
unresolved by the majority.

On the bright side, owners of method patents were given a viable
theory of induced infringement to try to remedy instances of divided infringement if they can

satisfy the other elements.

Such owners no longer have to establish that one actor controls the
others via an agency relationship or otherwise.

As always, we will have to wait to see if one or
more of the parties to the two cases seeks Supreme Court rev
iew and, if so, whether the Supreme
Court takes the case and issues its own opinion addressing these issues.


It seems likely at least
one of the parties to the two cases will seek review and, given that the issue has come up several
times now and the Fede
ral Circuit is divided over the proper analysis, there is a better
-
than
-
average chance that the Supreme Court will take the case.






163

Id
. at 1320
-
21.


164

See, e.
g., Moseley v. U.S. Appliance Corp
.
, 155 F.2d 25, 27 (9th Cir.) (“act of licensing . . . was itself an act of
infringement”),
cert. denied
, 329 U.S. 762 (1946);
H.K. Porter Co. v. Gates Rubber Co.
, 187 U.S.P.Q. 692, 718 (D.
Colo. 1975) (licensor of rights to make infringing products had “interest as an infringer”);
Leesona Corp. v. Cotwool
Mfg. Corp
.
, 201 F. Supp. 472, 474 (W.D.S.C. 1962) (“
licensing” included among matter “adjudged infringing
conduct”).


165

Akamai slip op.

at 11.


IP Issues Impacting the Future of Personalized Medicine





37

VI.

A
Patent Practitioner’s
Position on
Gene Patents and the Public Good
166


The United States Supreme Court’s decision to revie
w the breast cancer gene patent case
(AMP v. Myriad Genetics) presents an opportunity to affirm the importance of patents as a tool
to promote advances in technology and medicine. The patents before the Court claim isolated
genes containing mutations that

can be used to detect a patient’s predisposition to breast and
ovarian cancer. The Court has agreed to consider the specific question of whether human genes
are patentable.

The simple answer to the question, as phrased by the petitioners, is “no”. Human

genes
are not, nor have they ever been, patentable. A key point, however, is what is meant by “human
genes.”

The Patent Office has been issuing patents that relate to genes, human and otherwise, for
about 30 years. The Patent Office has always limited such patent claims, however, to exclude
genes as they occur in nature. This is true for any naturally occurring

material, not just human
genes.

The claims at issue in the
AMP v. Myriad Genetics

case are directed to isolated genes that
contain certain mutations associated with breast cancer. These genes cannot be isolated merely
by reaching into the body and simp
ly plucking the gene out of its natural environment the way a
leaf is plucked from a tree. Isolation of a gene involves a lengthy series of technical steps that
begin with identifying where in the chromosome the gene of interest lies and includes
sequenci
ng, transcription, cleaving and splicing the key portions of DNA. Thus the patent
claims are not directed to “human genes” per se, but rather to genetic material derived from
human genes.

The relevant patents include claims to genomic DNA and claims to co
mplementary DNA
(referred to as “cDNA”), as well as other claims that relate to primers and probes, shorter DNA
pieces useful for making copies of and identifying the presence of larger DNA molecules.
Genomic DNA includes both the portions of DNA that enc
ode a protein (known as “exons”) and
intervening, non
-
coding portions (known as “introns”). Most patent claims directed to genes,
however, claim cDNA, which omits the introns and includes only the portion needed to make the
protein using recombinant techn
iques. In the breast cancer gene example, BRCA1 has 100,000
base pairs in its genomic sequence, and only 5,914 base pairs in its cDNA, exemplifying the
substantial difference between genomic DNA and the corresponding cDNA.

A key point addressed by the gen
e patent case has been whether a gene as claimed in its
isolated form is significantly different from that gene as it occurs in nature. Even the three
judges on the appellate panel considering this question could not agree on this point, at least with
res
pect to genomic DNA (all three appellate judges agreed that cDNA was patent eligible).

The dispute over whether isolated DNA is sufficiently different from what is found in
nature begs the question: why would a patent claiming a gene have any value if i
t is essentially
the same as the gene in its natural form?

Its value derives from the features it has in isolated form, allowing the DNA to be
replicated and put to use. If it were the same chemical entity as that found in nature, there would



166

Chapter authored by Karen Canady.


IP Issues Impacting the Future of Personalized Medicine





38

be no need

to isolate it, and one could readily avoid infringement of patent claims to isolated
DNA by skipping the isolation step. The technical reality is that, when working with isolated
DNA, one does not use literally the same DNA sequence that came from the na
tural source.
Instead, the natural DNA is amplified into a large number of copies (“clones”). Thus,
recombinant proteins are made from copies of the natural sequence and do not use the original
source DNA derived from nature. The isolated DNA molecules
are not produced in nature, but
are the product of human effort and ingenuity.

Some purified products have been deemed patent eligible due to advantageous
characteristics of the new product, and likewise isolated DNA sequences that open up new uses
should
be patent eligible. Even a human cell that makes a protein product does not make that
product in a form and quantity that enables the uses of a protein made from isolated DNA using
recombinant methods. On the other hand, the value of the recombinantly pr
oduced protein is
that it can be used for the same functions as its naturally occurring counterpart, as with the
recombinant production of insulin for treatment of diabetics.

There are many side issues that can distract us from whether material derived
from
natural genes should be eligible for patenting. Fears that gene patents impede research or patient
access to needed tests are unfounded and, more importantly, can be more appropriately and
effectively addressed by Congress. Legislative action can be

taken to clarify the research
exemption to patent infringement or to require insurance companies to cover patient testing.
Alarmist cries that corporations can own the genes in our bodies mislead the public about the
realities of existing restrictions on

patentable subject matter.

The Supreme Court should direct its attention to the key differences between isolated
DNA and natural DNA, and all of the benefits that isolated DNA brings to society. We should
not remove the long
-
standing incentives to develo
p technologies and bring new medical
advances to market. Patent claims properly directed to DNA in its isolated and useful form, as
well as to methods that apply the use of biomedically important information, should be upheld so
long as they meet the addi
tional requirements for patentability such as novelty and
nonobviousness. This method of encouraging technological advances has, and will continue, to
serve us well.