Category: Supreme Court

Biotech Industry Has Reason to be Concerned About Supreme Court’s Patent Ruling

Posted Jun.30, 2012 under Bionanotechnology, Nanobiotechnology, Nanomedicine, Patents, Research, Supreme Court

On March 20, 2012, the U.S. Supreme Court handed down its decision in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289 (2012).  A year ago, when the Court decided to hear the case, I wrote about it in this blog.  Now – a little belatedly – I am discussing the Court’s decision, as it has given the biotech industry reason to be concerned about its scope.

Prometheus was the sole and exclusive licensee of certain patents on methods for determining the optimal dosage of thiopurine drugs used to treat autoimmune diseases.  When Prometheus sued Mayo for patent infringement, Mayo argued that the patents in question were invalid because they claimed subject matter unpatentable under the Patent Act, 35 U.S.C. § 101. Specifically, Mayo argued that the patents impermissibly claimed natural phenomena – i.e. the correlations between drug metabolite levels and efficacy and toxicity – and not patentable inventions.  The district court had agreed with Mayo, but the Federal Circuit Court of Appeals reversed and held the patents valid.  In a unanimous opinion written by Justice Breyer, the Supreme Court reversed the Federal Circuit, stating that the Prometheus patents were invalid under § 101 because the process incorporates the unpatentable laws of nature and “well-understood, routine, conventional activity previously engaged in by researchers in the field.”  (p. 1294)  The Court stated:

    “If a law of nature is not patentable, then neither is a process reciting a law of nature, unless that process has additional features that provide practical assurance that the process is more than a drafting effort designed to monopolize the law of nature itself.” (p. 1297)

The Court determined that the patent in question in this case did not have such “additional features.”  The Court was especially concerned that future innovation could be stifled by allowing patents on certain uses of the laws of nature.  The Court said that the measurement processes at issue in this case stated such a broad use of conventional procedures that they could be read to monopolize the field, making them unpatentable subject matter.  The Court stated:

    “We need not, and do not, now decide whether were the steps at issue here less conventional, these features of the claims would prove sufficient to invalidate them. For here, as we have said, the steps add nothing of significance to the natural laws themselves. . . .The presence here of the basic underlying concern that these patents tie up too much future use of laws of nature simply reinforces our conclusion that the processes described in the patents are not patent eligible . . . .” (p. 1302)

Not surprisingly, the decision has raised red flags in the biotech industry, particularly in the areas of medical diagnostics and personalized medical treatments.  In an article in the most recent issue of the ABA Journal, author Steven Seidenberg examined the impact that the Mayo decision is likely to have on such innovation.  The experts consulted for the article all had concerns about the breadth of the decision and the chilling effect it might have on future innovation.  See Steven Seidenberg, New Laws of Nature Law:  Ruling Questions Scientific Patents,ABA Journal (Jul. 2012), at 20-21.

There are some issues that may need resolution going forward:

●  When a procedure is “less conventional” than the procedure at issue in Mayo, will it be patentable?  Or must it be “unconventional” to be patentable?

●  What exactly is a “conventional procedure”?

●  To what degree does the case represent a broadening of the “laws of nature” exception to §101?Those in the biotech industry will need to mull over this decision as new innovations are developed.

Those in the biotech industry will need to mull over this decision as new innovations are developed.

The Supreme Court’s decision is available at

www.supremecourt.gov/opinions/11pdf/10-1150.pdf

 The ABA Journal article is available at

www.abajournal.com/magazine/article/new_laws_of_nature_law_ruling_questions_scientific_patents/

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The Bigger Picture: Thinking About Technology, Nano and Otherwise

Posted Sep.25, 2011 under Environment, Evidence, Government Agencies, Litigation, Products Liability, Supreme Court, Toxic Torts
usalawyerstoday.com

usalawyerstoday.com

Wondering where we’ve been for the past month?

 My summer was spent thinking and writing about technology – all sorts of technology.  It got me thinking about how technology has changed our lives and how it is poised to change all aspects of the law.  Let me share with you my summer projects, which go well beyond nanotechnology issues.  I hope it will enable me to put the legal issues of nanotechnology in a broader context going forward.

 1.  Neuroscience and Tort Law.  I and my co-author (and co-blogger) Eric Laury embarked upon a project more than a year ago to examine how the so-called “new neuroscience” will impact tort law.  By “new neuroscience” we mean mostly functional neuroimaging (fMRI and SPECT), but also any other neuroscientific methods to examine the human brain, including brain wave technology.   Our approach to this extensive law review article was both doctrinal (i.e. how the new neuroscience will eventually change the rules of tort doctrine) and practical (i.e. the problems of incorporating it in tort litigation, particularly under the rules of evidence).  We spent a lot of time predicting the effect that the new neuroscience will eventually have in the courtroom.  Professor Stephen Morse at UPenn Law School has pointed out that much of what we currently know as legal doctrine is based upon “folk psychology” – that is, what we believe causes people to act the way they do.  The new neuroscience will eventually change the law by changing our understanding of human behavior.

 2.  Cell Phones.  I also found myself writing a piece on cell phones and product liability.  In particular, I looked at whether actions claiming the telecommunications industry should be marketing cell phones with headsets to protect against the hazards of radio frequency (“RF”) emissions should be allowed, or whether they are preempted by regulations granting the FCC the authority to set radiation standards for cell phones.  The question, it turns out, it much more complicated than one might think and involves several federal statutes and regulations, including the two major statutes governing the wireless networks in this country.  The Supreme Court will consider a petition for certiorari in Farina v. Nokia, 625 F.3d 97 (3d Cir. 2010), early in the new term.  Even if cert is not granted, this topic likely will continue to make waves in the courts.  My article appears on the BNA subscription service at 39 Prod. Safety & Liab. Rep. (BNA) 871 (Aug. 5, 2011) and 26 Toxics L. Rep. (BNA) 949 (Aug. 10, 2011).  It also appears in U.S. Law Week at 80 U.S.L.W. 321 (Sept. 13, 2011).

 3.  Nanotechnology and the Environment.   I also wrote a short article to be published in the “Insight” section of the upcoming Natural Resources & Environment journal, which is the journal of the ABA Environmental Law Section.  My goal was to alert attorneys to some of the regulatory initiatives either in the works or in the pipeline.  The piece focuses on TSCA, FIFRA, OSHA, and foreign initiatives (EU, Australia).  It was interesting to look at the impact of nanomaterials exclusively from the environmental (outdoors and indoors) perspective.

So while I may not have been spending a lot of time blogging about nanotechnology and the law, I was busy getting the bigger picture on technology.

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U.S. Supreme Court to Address an Issue Left Open in Bilski

Posted Jul.21, 2011 under Bionanotechnology, Litigation, Nanomedicine, Patents, Statutes, Supreme Court

supctIn 2010, the U.S. Supreme Court issued a closely-watched decision on patentable subject matter under § 101 of the Patent Act, Bilski v. Kappos, 130 S. Ct. 3218 (2010).  The Court has now granted cert in another case on patentable subject matter – Prometheus Laboratories, Inc. v. Mayo Collaborative Services, in which the Federal Circuit Court of Appeals held in 2010 that certain medical inventions met the requirements of patentable subject matter in § 101.  Prometheus was the sole and exclusive licensee of certain patents that claim methods for determining the optimal dosage of thiopurine drugs used to treat gastrointestinal and non-gastrointestinal autoimmune diseases.  When Prometheus sued Mayo for patent infringement, Mayo filed a motion for summary judgment of invalidity, arguing that the patents in question were invalid because they claimed subject matter unpatentable under the Patent Act, 35 U.S.C. § 101. Specifically, Mayo argued that the patents impermissibly claimed natural phenomena – i.e. the correlations between drug metabolite levels and efficacy and toxicity – and not patentable inventions.  In 2008, the district court granted Mayo’s motion for summary judgment of invalidity.

In 2009, the Federal Circuit reversed and upheld the patents under the “machine or transformation” test (the sole test at the time).  The U.S. Supreme Court then decided Bilski v. Kappos, which we discussed in this blog a year ago.  In Bilski, the Court rejected the “machine or transformation” test as the definitive test of patentability, relegating that test to one factor – “a useful and important clue, an investigative tool, for determining whether some claimed inventions are processes under § 101.”  130 S. Ct. at 3227.  The Supreme Court then granted Mayo’s petition for certiorari in the Prometheus lawsuit, vacated the Federal Circuit’s 2009 decision, and remanded the case for further proceedings consistent with Bilski.  The Federal Circuit decided the case on briefs, without further oral argument, and held, in light of Bilski, that Prometheus had recited patentable subject matter under § 101.  628 F.3d 1347 (Fed. Cir. 2010).  Once again, the Supreme Court granted certiorari, and the Court will hear the case in the term that begins in October, 2011.

Although the Supreme Court has consistently construed § 101 broadly, the section does have limits.  The Federal Circuit described one limitation as follows:

The Supreme Court has . . . established that while a law of nature, natural phenomenon, or abstract idea cannot be patented, “an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection.”

628 F.3d at 1354 (quoting Bilski, 130 S.Ct. at 3230) (emphasis added).  This is the core of the issue to be decided by the Supreme Court. 

As my co-blogger, Eric Laury, now J.D., stated in his earlier post about Bilski, “biotech and nanotech patents are not theoretically involved with . . . a machine nor do they transform matter.”  Bilski was good news for the bionanotech industry, but the case left loose ends.  Now it appears that the Supreme Court will take another step in the direction of defining patentable subject matter for the brave new world of modern inventions.  Nanotech firms, particularly those working in the area of biotechnology, should be closely watching the Supreme Court’s next move.

Mayo presented the following question in its cert petition:  “Whether 35 U.S.C. § 101 is satisfied by a patent claim that covers observed correlations between blood test results and patient health, so that the claim effectively preempts all uses of the naturally occurring correlations, simply because well-known methods used to administer prescription drugs and test blood may involve ‘transformations’ of body chemistry.”

I suspect the fact that the Court granted cert a second time in Mayo v. Prometheus may not be a good sign for Prometheus.  It may mean that the Court had been expecting the Federal Circuit to reach the opposite result and wants to set the record straight.  On the other hand, the Court may further refine its definition of patentable subject matter under § 101 in a way that may achieve middle ground between innovation and patent protection.

The Federal Circuit’s 2010 decision may be accessed at

http://www.cafc.uscourts.gov/images/stories/opinions-orders/08-1403.pdf

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Supreme Court Rules in Favor of i4i Limited Partnership in Closely Watched Patent Case

Posted Jul.13, 2011 under Bionanotechnology, Litigation, Patents, Statutes, Supreme Court

supctEarlier I reported here on Microsoft Corp. v. i4i Limited Partnership, then subsequently on the oral argument before the U.S. Supreme Court.  The case arose from a patent infringement dispute relating to the method for editing computer documents, but generated wide-ranging interest in the business community, including developers of nanotechnology-based inventions, because of the broad legal issue addressed.  i4i sued Microsoft for patent infringement, and Microsoft defended on the ground that i4i’s patent was invalid.  The federal district court gave a jury instruction that the invalidity of a patent had to be proved by “clear and convincing” evidence.  Despite Microsoft’s arguments that it should be easier to prove invalidity of a patent (such as by applying a preponderance-of-the-evidence standard) in patent infringement litigation, the federal district court, Federal Circuit Court of Appeals, and the U.S. Supreme Court (in an 8-0 decision) all decided that the clear and convincing standard applied.

Justice Sotomayor, writing for the unanimous Court, 131 S. Ct. 2238 (2011), based the Court’s decision squarely on Section 282 of the Patent Act, 35 U.S.C. § 282, which provides a presumption of validity to patents, and on longstanding common-law doctrines.  The Court deferred to the judgment of Congress in the Patent Act, saying that “[w]here Congress has prescribed the governing standard of proof, its choice controls absent ‘countervailing constitutional constraints.”  (p. 2244)  No such constraints existed here.  Addressing Microsoft’s other argument – that a preponderance standard should apply where, as here, not all evidence in the case had been before the PTO during the patent examination process – the Court said that information could be a factor in the jury’s decision, but did not warrant a different standard of proof.  (p. 2250-51).

For nanotechnology firms with existing patents on inventions or in the R&D process, the Court’s decision is good news.  It provides a strong measure of certainty and economic stability to stakeholders investing in and promoting the patented technologies.  It also allows firms to bring patent infringement claims while maintaining some sense of security about their own patent’s validity.  Taken together with the 2010 Supreme Court case of Bilski v. Kappos, 129 S. Ct. 2735 (2010), which retained a broad definition for patentable subject matter, Microsoft v. i4i should provide nanotech patent holders with plenty of reason to be pleased.

 The decision is available at

http://www.supremecourt.gov/opinions/10pdf/10-290.pdf

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Justices Consider Many Options in Microsoft v. i4i Patent Case Oral Arguments

Posted May.10, 2011 under Litigation, Patents, Statutes, Supreme Court

supctOn April 18, 2011, the U.S. Supreme Court heard oral arguments in Microsoft v. i4i Limited Partnership, a patent case I previously addressed in this blog.  The central issue before the Court involved the standard of proof used to determine the validity of a patent in patent infringement litigation.  The court below had held that a party sued for patent infringement who raises invalidity of the patent as a defense must prove invalidity by clear and convincing evidence.  Microsoft, the petitioner, argued that because Section 282 of the Patent Act, 35 U.S.C. § 282 – which provides a presumption of validity for a patent – does not specify a heightened standard, the standard should be a preponderance of the evidence, thereby making it easier to challenge the validity of a patent.  i4i argued that the clear and convincing evidence standard, which has been followed for decades, should continue to apply.  Chief Justice Roberts has recused himself from the case because of investments he holds in Microsoft.

Early in the argument, Justice Kagan noted that the early cases addressing the subject contained broad language suggesting a heavy burden of persuasion.  Justice Ginsberg further noted the absence of any attempt by Congress to clarify the standard in the Act.  Absent statutory language to the contrary, Justice Kagan suggested simply following precedent and applying the clear and convincing evidence standard.

Justice Breyer acknowledged that the Supreme Court could make a change to the procedural way this issue is resolved.  He framed the problem as an economic one, a need to achieve balance between providing legal protection for inventions that warrant it and preventing undeserving inventions from taking advantage of the protections of patent law.  One approach to the central issue in the case, he suggested, would be to ask the Patent Office for reconsideration.  Another would be to let the jury apply the clear and convincing standard to the “brute facts,” then allow the judge to make the ultimate decision about validity.

Much of the questioning involved Microsoft’s argument that a clear and convincing standard is not appropriate in a case in which the PTO did not previously consider the  prior art evidence introduced by the defendant in the infringement litigation.  The justices considered whether accepting that argument would mean that two different standards should apply, depending on whether the evidence had been considered by the PTO.  i4i countered with several justifications for applying the clear and convincing standard across the board.  One point was the unfairness of a lower standard, which would make it easier for a single non-expert jury to invalidate a patent when so many parties (inventor, investors, licensees) relied upon the patent at the time it was issued.  Along this vein, another approach considered by the Court during the argument was to instruct the jury to apply the clear and convincing evidence standard, but include a further instruction that the jury could consider, in appropriate circumstances, that the PTO had not considered the prior art.

The variety of suggestions discussed in the oral arguments make prediction of the ultimate result difficult.  It is still possible that the Court will find a clear answer in the language of Section 282.  Firms with patents on nanotechnology applications could be disappointed to find that the Court rejects an across-the-board use of the clear and convincing evidence standard.  If that happens, infringers will have an advantage over original inventors, and more patents will be held invalid in court.  The effect could be significant, perhaps having a chilling effect on advances in science and on investment in original inventions.

The transcript of the oral argument may be found at

http://www.supremecourt.gov/oral_arguments/argument_transcripts/10-290.pdf

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Patent Case Before U.S. Supreme Court Will Impact Nanotech Firms

Posted Apr.09, 2011 under Litigation, Patents, Statutes, Supreme Court

supctOn April 18, 2011, the U.S. Supreme Court will hear oral arguments in Microsoft Corp. v. i4i Limited Partnership, in which i4i accused Microsoft of patent infringement.  i4i won a verdict in the 2009 case, but Microsoft has pursued the matter on appeal, claiming, among other things, that i4i’s patent was not valid.  The Supreme Court is now being asked to address the standard of proof required to establish whether a patent is invalid in patent litigation.

 Section 282 of the Patent Act, 35 U.S.C. § 282, provides that “[a] patent shall be presumed valid” and imposes the burden of proving the invalidity of a patent on the party claiming that the patent is invalid.  But the Act does not indicate the strength of that presumption.  In 1984, the Federal Circuit Court of Appeals, in American Hoist & Derrick Co. v. Sowa & Sons Inc., 725 F.2d 1350 (Fed. Cir. 1984), held that invalidity must be proved by clear and convincing evidence.  This means that sometimes invalid patents will benefit from the gloss of validity because the standard of proving invalidity is so high.  Although the U.S. Supreme Court has not yet addressed this issue, Microsoft has pointed to the Court’s language in KSR International Co. v. Teleflex Inc., 550 U.S. 398 (2007), in support of its challenge to the clear and convincing language.  In KSR, the Court stated that at least under the circumstances of that case “the rationale underlying the presumption . . . seems much diminished.”

 If the Supreme Court were to reject the clear and convincing standard and impose one based upon, for example, a preponderance of the evidence, alleged infringers would have an easier time challenging the validity of the holder’s patent.  All participants in patent litigation would feel the impact, including patent holders, challengers, and judges.

 How will the Microsoft v. i4i decision impact nanotech firms?

 Patents incorporating nanotechnology often involve newer innovations, with the patent holders seeking to establish a place in commerce.  If a party challenging the patent’s validity must prove invalidity by clear and convincing evidence, the holder of the patent may have an advantage in litigation. And this litigation advantage could translate into a commercial advantage.  By contrast, if the Supreme Court lowers the threshold for the presumption of validity, holders of newer and more innovative patents could lose their competitive edge.  The impact in the nanotechnology field would be felt most strongly by smaller, upstart firms.

 I will report again on this matter after the oral arguments on April 18.

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