Protecting Biotech And Pharma Innovations Under New Uspto Guidelines
By Noel Day, Ph.D., Partner At Law Firm Honigman Miller Schwartz And Cohn, Llp
In two recent decisions (see below), the United States Supreme Court issued opinions that have a drastic impact on the biotechnology and biomedical industries. The impact of the cases, which involved claims to diagnostic methods and gene patents, were originally anticipated to be limited to these industries.
However, the resulting United States Patent and Trademark Office (USPTO) guidelines made final on March 4, 2014 are extremely broad and will have a detrimental effect on the pharmaceutical industry, as well as any business with intellectual property involving “natural products.”
In order to obtain a patent, a claimed invention must meet the requirements of Title 35 of the United States Code. An initial question is whether the claimed invention meets the requirements of subject matter eligibility under 35 U.S.C. § 101. Only after a positive determination has been made does the analysis for the novelty and nonobviousness requirements begin. In a previous Supreme Court decision involving genetically modified organisms, the § 101 requirement was interpreted to include anything “touched by the hand of man” as patentable subject matter.
On March 20, 2012, in what would seem to be a change of position, the Supreme Court decision in Mayo Collaborative Services v. Prometheus, Inc., held claims to a diagnostic method unpatentable under 35 U.S.C. § 101, because the claims merely observed a correlation that was the result of a law of nature. On June 13, 2013, a little more than a year later, the Supreme Court issued a unanimous opinion in Association for Molecular Pathology v. Myriad Genetics, Inc., in which it held that naturally occurring “isolated” DNA is not patent eligible subject matter under 35 U.S.C. §101, finding that isolated DNA falls within the law of nature exception.
In Myriad, the Court noted that the holding applies only to isolated DNA. Claims to methods, new applications of knowledge regarding genetic sequences, or DNA in which the order of the naturally occurring nucleotide sequences has been altered were not addressed by the court, and synthetically created complementary DNA (cDNA) was held to be patent eligible under § 101. Nonetheless, in response to these decisions, the USPTO drafted guidelines for its examiners, titled Guidance for Determining Subject Matter Eligibility of Claims Reciting or Involving Laws of Nature, Natural Phenomena, & Natural Products, which extend the holding to all claims involving “natural products” or natural principles. The guidelines were not open to comment from the public before being finalized; however, the USPTO held a forum on May 9, 2014, during which it became undeniably clear that patent practitioners, industry organizations, and biotech and pharmaceutical companies all have serious concerns about the new examining procedures.
Why the Guidelines have Garnered Criticism
The basis of the concerns is that the guidelines are overly broad and complicated, such that they improperly restrict the ability of innovators to protect their inventions and often make it difficult to determine from the outset what will and will not be patentable-eligible material. While the law regarding patentable subject matter in the United States provides that “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter ... ” may obtain a patent, the new guidelines have written the discovery component out of the law by making natural products and natural laws ineligible. According to the guidelines, a natural product must be “markedly different” from how it appears in nature to rise to the level of patent-eligible subject matter. It was revealed during the USPTO forum mentioned above that the USPTO’s definition of “markedly different” requires a difference in structure and that a difference in function will not suffice. The USPTO has clearly stated that a combination of multiple natural products is not patent-eligible simply because the combination does not exist in nature. To demonstrate this, the USPTO materials reference a pair of primers having two different sequences. A claim to the pair is not patent-eligible, because the primers are not markedly different (meaning structurally different) once they are combined. In another example provided by the USPTO, a claim to a beverage composition comprising: a) pomelo juice; and b) a preservative is discussed. The USPTO first notes that the term “preservative” could cover both naturally occurring and non-naturally occurring preservatives. The office analyzes the potential argument that a combination with a naturally occurring preservative would be patentable because it is a non-natural combination, as pomelo juice does not naturally contain the preservative. According to the USPTO materials, this argument is not persuasive because “A marked difference requires a product to be both (1) non-naturally occurring and (2) markedly different in structure.” Presumably, the outcome would be the same for a pharmaceutical composition containing a natural active ingredient and a preservative.
Another particularly problematic result of the guidelines is that a product that occurs in nature will not be patenteligible even if it is made synthetically. For example, vitamin B was first found in nature but is now made by a synthetic process; the synthetic product would not be patent-eligible if vitamin B were discovered today. In fact, the list of synthetically derived natural products that would not meet the new requirements for patentable subject matter includes many antibiotics, cancer therapeutics, and treatments for cardiac afflictions.
One issue with the guidelines is that the determination is overly complicated and cannot easily be predicted when business decisions are being made as to whether to pursue developing a technology and how to protect it as intellectual property. From another perspective, it may also be difficult to determine when a license is necessary if another party holds the rights to an invention that is being used in the course of a company’s business. The reason is that the guidelines do not provide a definition of “markedly different”; rather, they provide several factors for narrowing claims to attain eligible subject matter. The problem this raises is that the decision rests on the opinion of the examiner, which could vary from one examiner to the next and could even be motivated by factors that are irrelevant to the case being examined. A demonstration of the unpredictability of the analysis can be seen in Example F of the guidelines, where it states that the claim element of contacting a blood sample with antibody XYZ and using flow cytometry does not satisfy factor E, which is the machine or transformation factor. Additional materials prepared by the USPTO explain that while flow cytometry inherently recites a machine, the claim is not particular or specific, because it does not specify whether the flow cytometer is a bench top machine, high speed, etc.
What to Remember For Protecting Innovations under the Guidelines
It is important to note that the current guidelines are only for the U.S. However, many other jurisdictions look to the U.S. for guidance, so similar changes in some countries can be expected in the future. Some jurisdictions are historically very independent and will likely not revise their system based on changes made by the U.S., but others are likely to follow suit in the near future.
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"One issue with the guidelines is that the determination is overly complicated." Noel Day, Ph.D. |
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The potential ramifications in the U.S. include the possibility that companies will stop pursing patent protection on their discoveries related to natural products and may choose to maintain the discoveries as trade secrets whenever possible. A more extreme, yet quite conceivable and very unfortunate, possibility if the guidelines remain in place and are strictly implemented is that there could be a reduction in innovation and some biotech and pharmaceutical companies may choose to relocate to jurisdictions that are not as restrictive.
There is hope for a more reasonable interpretation of the Supreme Court’s decisions in the future. However, when and in what form the change will come is yet to be determined. In the meantime, it is important not to surrender any subject matter that may be patentable in other jurisdictions or as a result of more reasonable future guidelines in the U.S. It is highly recommended to layer claims such that the disclosure of the natural product is not sacrificed when drafting and prosecuting applications in light of the guidelines. Whenever possible, patent counsel should provide details that will allow the claims to be narrowed to achieve patent-eligible subject matter in the U.S. and to distinguish a product from its natural counterpart where practical. For example, when claiming a biomarker for patient selection, it may eventually be required to indicate a particular antibody or other specific method for detecting the biomarker in order to obtain patentability.