Classen: Has the Federal Circuit Lost Interest in Patentable Subject Matter?

Allison Williams Dobson is an attorney, scientist and lecturer in the Norfolk, Virginia area and is a regular GLR contributor.

But First: The Federal Circuit Has Denied the Plaintiff’s Motion for Rehearing in Myriad: This week, the Federal Circuit issued a one-word order—“Denied”—turning down both parties’ requests for rehearing by the three-judge panel that decided that case originally. The parties now have 90 days to file a certiorari petition asking for Supreme Court review.

This news is not surprising considering the Federal Circuit’s most recent treatment of patent-eligible subject matter under § 101 of the Patent Act. On August 31, 2011, another 2-1 divided panel issued its opinion (three very strong opinions, really) in Classen Immunotherapies, Inc. v Biogen Idec (pdf).

The majority finds that two of the three method patents in dispute claim subject matter that is patent-eligible under § 101. However, the court also emphasizes repeatedly that the two patents “may not” meet the other requirements for patentability imposed by §§ 102 (novelty), 103 (nonobviousness), and/or 112 (adequate written description). The thrust of the majority’s message is becoming a familiar mantra–the statutory role of § 101 is to act as a “coarse eligibility filter”–a gateway to the real tests–and not the “final arbiter of patentability.”

Method Patent Recap. Remember that in Bilski, the Supreme Court indicated that the proper inquiry in method patent cases is focused on whether the claims cover abstract processes (unpatentable) or specific applications of processes (patentable), and expressed particular concern about method patents that preempt all uses of an abstract process.

Two other cases involving biotech method claims, Prometheus and Myriad, have come before the Federal Circuit since the Supreme Court’s decision in Bilski. The Myriad method claims were split into two groups–therapeutic screening claims were found valid but methods of “comparing or analyzing” genetic information were invalidated on the basis that they recited “nothing more than the abstract mental steps.”

In Prometheus, which currently awaits Supreme Court review, the Federal Circuit has now twice upheld the patentability of a method of administering a drug, determining the level of the drug in a patient’s bloodstream, and then adjusting the dosage accordingly to maximize therapeutic efficacy. With these parallel cases in mind, we turn to the broad scope of subject matter in the methods claimed by Classen.

Classen in BriefClassen involves claims to methods of optimizing immunization schedules in order to lower the risk of developing chronic immune-mediated disorders. There are 230 total claims in the three patents in suit. A representative claim in the ’139 and ’739 patents, which survived, states a method of immunizing a mammal, including the following steps:

1) screening information on immunization schedules and the occurrence of chronic immune-mediated disease,

2) comparing the results from different schedules and identifying the lower risk schedule, and

3) administering the vaccine on that lower risk schedule.

The third patent (‘283), now invalidated by the court, essentially claims only steps 1 and 2 above–reviewing and comparing information to determine whether there is an immunization schedule that correlates with lower risk of developing chronic disease.

Classen sued a number of companies for infringing its patents in various aspects of their vaccination research. The defendants include Biogen Idec, GlaxoSmithKline, Merck, Chiron, and Kaiser Permanente. Strikingly, Classen alleged that a physician infringes the ‘283 patent simply by reviewing the literature on immunization schedules, even when no change in practice occurs after the review. In fact, the Federal Circuit opinion says, “Classen states that Merck induces direct infringement by parents when Merck provides and physicians distribute the book ‘What Every Parent Should Know About Vaccines’, because the book advises parents to understand vaccines and vaccination schedules.” This ‘283 patent did not survive Federal Circuit scrutiny in either round of review.

Abstract idea or specific application? In 2006, a federal district court judge in Maryland held all three patents invalid under § 101 “because they are directed to the ‘abstract idea’ that there is a relation between the infant immunization schedule for infectious diseases and the later occurrence of chronic immune-mediated (non-infectious) disorders.” On first appeal to the Federal Circuit, in 2008, the court strictly applied the machine-or-transformation test (then the Federal Circuit’s exclusive test; demoted to non-exclusive status by the Supreme Court in Bilski) and found the claims lacked a transformative step. Thus, it affirmed the district court’s holding that all three patents were invalid.

Now on remand from the Supreme Court after Bilski, Judge Newman writes for the majority, joined by Judge Rader. The opinion reiterates language from Bilski: “The §101 patent-eligibility inquiry is only a threshold test.” She stresses that §§ 102, 103, and 112 must also be considered to determine patent validity. This serves as the backdrop for the court’s change of position.

The majority now says that the third step above, administering the vaccine on the lower risk schedule, is sufficient to move the ‘139 and ‘739 patents “from abstract scientific principle to specific application” and thus gets these claims past the “coarse filter” of § 101. The opinion also cites a recent Federal Circuit computer case (Research Corporation) for the proposition that if the specified method is “functional and palpable,” the claims are drawn to statutory subject matter.

By contrast, the third patent, which is missing the final immunizing step, is abstract. “The abstraction of the ’283 claim is unrelieved by any movement from principle to application.” The majority also likens the ‘283 patent to the invalidated method claims of Myriad, concluding that:

Methods that simply collect and compare data, without applying the data in a step of the overall method, may fail to traverse the section 101 filter.

The patent challengers argued that the first steps are purely mental ones, and alleged that “any immunizing step is simply conventional activity.” They pointed out that the Supreme Court has indicated that insignificant post-solution activity may be insufficient to transform an unpatentable principle into a patentable process.

Unpersuaded, the majority cites a case from 1969 (Prater) for the proposition that “the presence of a mental step is not of itself fatal to §101 eligibility.” The opinion then returns to Research Corporation for three final points–the role of 101 as a “coarse eligibility filter,” a showing of how §§ 102, 103, and 112 could have successfully been argued instead of 101 to invalidate the claims, and the idea that commercial application of the technology is an indicator of patent-eligibility.

The dissent. A dissenting opinion authored by Judge Moore (who also wrote a 31-page explanation in Myriad of why isolated DNA is patentable) expresses outrage at the preemption of “the scientific method” by Classen’s claims. She reaches the same conclusion as in the original Federal Circuit review–that all three patents are invalid under § 101 for reciting patent-ineligible subject matter. Her emphasis is on the “staggering” claim breadth:

No limitations exist on the type of drug to immunize with, the schedules that should be used for the immunization, the type of chronic immune disorder to look for, or any limitation on the control group. It is hard to imagine broader claims. It is harder to imagine a more conceptually abstract claim in the immunization area.

Classen’s 227 other claims do name many of the specifics in the paragraph above–particular immunogens, schedules, and disorders. Classen urged that even if the representative claims are deemed to be unduly broad, the other claims are more specific and cannot be characterized as “abstract.”

But the court focuses on the representative claims for its analyses, and for Judge Moore this case is “not even close.” The claims impermissibly monopolize the scientific method, an abstract principle, and she sees the ‘139 and ‘739 claims as merely reciting the same steps as the ‘283 claims, but in reverse order.

Judge Moore also questions the majority’s use of the “functional and palpable” test, pointing out that it sounds very close to the now-rejected “useful, concrete, and tangible” test set out in the 1998 State Street Bank case. Indeed, the Supreme Court in Bilski advised against reliance on any single generalized test for patentable subject matter, making it more and more difficult to predict the result of a § 101 challenge.

But that’s not all. An interesting twist in this case is that all three judges appear to agree that none of the representative claims are likely to pass muster when the necessary additional sections of the patent act (102, 103, and 112) are applied. Very early in the majority opinion, the court notes that 1984 and 1991 studies for optimizing vaccination schedules are cited in the patents themselves. Because they include every aspect of the representative claims, these references appear to offer a much stronger basis for challenging the patents under § 102 (anticipation) and/or § 103 (obviousness).

However, those issues are not properly before the court, the opinion says. To drive home this point, Judge Rader also delivers a separate five-page opinion entitled “Additional Views,” joined by Judge Newman. The loud-and-clear message is that the recent onslaught of patent challenges based on subject matter under 101 is becoming tiresome. That well is usually going to be dry, he writes, and challengers need to look to the other sections of the Patent Act. Or as we have written here at GLR, get back to “nibbling around the edges.” That is, use the stringent requirements of those substantive sections–novelty, nonobviousness, full enablement, and definiteness of claim scope–as the preferred weapons for shooting down exceptionally broad claims or other subject matter that seems inappropriate for patent protection.

Judge Rader credits the broad view of patentable subject matter in the U.S. with fostering innovation in this country. By avoiding new categorical exclusions under § 101, he says, the courts promote a “hospitable” environment for research and patenting, and encourage preferential innovation investment in the United States. Citing specific cases and events in the past few decades, he writes that “while Europe imposed eligibility restrictions, the U.S. embraced strong patent protection.” As a result, Judge Rader says, the United States has become the “world leader in biotechnology invention,” but would lose this edge if new restrictions were imposed at the § 101 threshold.

The “safe harbor” provision of 35 USC 271(e). Classen alleged direct infringement of its patents by Biogen Idec and GlaxoSmithKline because both companies participated in studies of the relationship between certain childhood vaccinations and the development of type 1 diabetes (one of any number of chronic immune-mediated disorders), including studies of whether timing of vaccination influences risk.

The district court awarded the accused infringers summary judgment in their favor under the “safe harbor” provision of the Hatch-Waxman Act, section 271(e) of the Patent Act, which created an exception for activities “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.”

The Federal Circuit now reverses this determination, finding that “as enacted and intended, and as judicially interpreted,” the exception is limited to activities related to “pre-marketing approval of generic counterparts of patented inventions, before patent expiration.” Activities related to submission of information to the FDA “long after regulatory approval” do not qualify for this exception, the opinion says.

Judge Moore’s dissent also disputes the majority on this application of 271(e). Instead, she cites the 2005 Supreme Court opinion in Merck v. Integra Lifesciences, which seems to support a broader interpretation of the 271(e) exception to include any activities related to developing information required from the putative infringers by law or regulation.

Common threads. The consistent point among all of the recent method cases decided by the Federal Circuit is that mental steps, such as reviewing, comparing, analyzing, screening, selecting, and determining, will not be enough for patentability without at least one added step of tangible activity–the “specific application” in Classen.

A possible inconsistency arises in just how specific that application step must be to carry claims past the § 101 threshold. Both the Supreme Court and the Federal Circuit assure us that there is no one-size-fits-all test for this determination. The courts are thus forced to evaluate on a case-by-case basis, which in turn leads to a discrepancy of judicial viewpoints. Ironically, the resulting uncertainty could actually encourage more challenges based on § 101, rather than settling the matter as the Federal Circuit now purports to do.

As we noted several months ago, the Supreme Court will soon have its own shot to weigh in on these issues when it hears Prometheus during its next term (that case is currently scheduled for argument on December 7), and possibly a second time should it decide to grant the inevitable Myriad appeal.

Allison Williams Dobson

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