INVENTIVE STEP

In the US, patents must name the inventors of the claims of the patent.  Any individual who contributed to the conception of the invention recited in a single claim of the patent must be named as an inventor.  If the proper inventors are not named, the paent can be declared invalid.  In addition, if the improper addition or exclusion of a true inventor is done with deceptive intent, the patent can be unenforceable due to inequitable conduct.

What may be of greater significance, however, is the rights acquired by each true inventor.  Unless the inventors have assigned their rights to another entity, or are under and obligation to do so (such as as a condition of employment), each inventor of even one claim of the patent has an undivided ownership right in the patent.  As an owner, each true inventor has the right to assign, license, or otherwise dispose of his or her rights in the invention without the permission or consent of the other owners or inventors.

Falana v. Kent State University

Dr. Falana was hired by Prof. Seed of Kent State to synthesize chiral organic compounds for a research project.  The compounds were intended for use in LCD displays.  After developing some appropriate compounds, Dr. Falana left to take another position.  The University (and a related company) filed a patent application naming Prof. Seed and several others as inventors, but not naming Dr. Falana.  Prof. Seed, Dr. Falana, and the other inventors later published a journal article on the invention.

After the patent issued, Dr. Falana inquired as to why he was not named as an inventor in the application.  When he didn’t receive a satisfactory response, he filed suit against the owners and inventors of the patent asking the court to order the PTO to add his name to the patent as an inventor.  The district court determined that he did qualify as an inventor and issued the requested order.  The case then moved to the Federal Circuit.

The question before this court is whether a putative inventor who envisioned the structure of a novel chemical compound and contributed to the method of making that compound is a joint inventor of a claim covering that compound.

The defendants argued that that the conception of the method of making the compound was irrelevant to the question of inventorship of the compounds themselves.  The court disagreed.

Where the method requires more than the exercise of ordinary skill, however, the discovery of that method is as much a contribution to the compound as the discovery of the compound itself. This case is simply the application of the well-known principle that conception of a compound requires knowledge of both the chemical structure of the compound and an operative method of making it. Accord-ingly, this court holds that a putative inventor who envi-sioned the structure of a novel genus of chemical compounds and contributes the method of making that genus contributes to the conception of that genus.

The defendants tried another tactic, arguing that the particular commercial compound that embodies the claimed invention was not synthesized until after Dr. Falana left the position so he could not have been an inventor of that compound.  The court found this argument to be inapposite.  The claims were broader than the particular commercial compound.  The relevant inquiry is whether Dr. Falana contributed to the conception of the broad genus recited in the claims, not the particular compound that is used commercially.

Perhaps if the claims had been narrowly directed to the commercial compound, Dr. Falana would not be a proper co-inventor.  This is another issue to ponder when preparing patent applications and strategies for drafting claims.

The Federal Circuit ruled today that the claimed method of monetizing and distributing copyrighted products over the Internet is a patent eligible process in Ultramercial, LLC v. Hulu, LLC.

At issue in the case was claim 1 of U.S. Patent No. 7,346,545:

A method for distribution of products over the Internet via a facilitator, said method comprising the steps of:

a first step of receiving, from a content provider, media products that are covered by intellectual property rights protection and are available for purchase, wherein each said media product being comprised of at least one of text data, music data, and video data;

a second step of selecting a sponsor message to be associated with the media product, said sponsor message being selected from a plurality of sponsor messages, said second step including accessing an activity log to verify that the total number of times which the sponsor message has been previously presented is less than the number of transaction cycles contracted by the sponsor of the sponsor message;

a third step of providing the media product for sale at an Internet website;

a fourth step of restricting general public access to said media product;

a fifth step of offering to a consumer access to the media product without charge to the consumer on the precondition that the consumer views the sponsor message;

a sixth step of receiving from the consumer a request to view the sponsor message, wherein the consumer submits said request in response to being offered access to the media product;

a seventh step of, in response to receiving the request from the consumer, facilitating the display of a sponsor message to the consumer;

an eighth step of, if the sponsor message is not an interactive message, allowing said consumer access to said media product after said step of facilitating the display of said sponsor message;

a ninth step of, if the sponsor message is an interactive message, presenting at least one query to the consumer and allowing said consumer access to said media product after receiving a response to said at least one query;

a tenth step of recording the transaction event to the activity log, said tenth step including updating the total number of times the sponsor message has been presented; and

an eleventh step of receiving payment from the sponsor of the sponsor message displayed.

The district court had dismissed the infringement action holding that the claim was not directed to patent-eligible subject matter.  The Federal Circuit acknowledged that it has not provided a definitive rule that a claim be construed by the court prior to the patent eligibility determination, but strongly suggested that it may be helpful for courts to do so.

After once again reviewing the case law on patent eligibility from the Federal Circuit and Supreme Court, Chief Judge Rader, writing for the panel, easily found the claim to be a “process” within the meaning of the Patent Act and thus falls within a § 101 eligibility category.  The only issue is whether the claim falls within the abstract idea exception.

In its analysis of whether the claim is directed to an abstract idea, the court gave weight to the patent’s purported improvement of existing technology and that it invokes computers and applications of computer technology.  The claim does not merely recite the abstract idea that advertisement can be used as a form of currency, but relates to a practical application of this idea.  The various steps likely require intricate and complex computer programming, and specific application of the Internet and cyber-market environment.

Although the claim may not meet the other requirements for patentability under the Patent Act (novelty, non-obviousness, enablement, written description, etc.), it is not ineligible for patenting under § 101.

In December 2008, a Federal Circuit panel rejected claims concerning methods of immunization and determining an immunization schedule as not being directed to patentable subject matter.  The 70 word opinion authored by Judge Moore left many questions as to why the claim was so rejected.  After issuing its decision in Bilski v. Kappos, the Supreme Court issued a GVR order where it directed the Federal Circuit to reconsider its earlier opinion in light of Bilski.  The newly constituted panel included Chief Judge Rader and Judges Newman and Moore.

Today, the Federal Circuit issued a 57 page set of opinions to replace the original 70 word opinion.  This time, the court held that at least some of the claims are indeed directed to patentable subject matter.  Classen Immunotherapies, Inc. v. Biogen IDEC.

The case concerned 3 patents, the ’139, ’739, and ’283 patents.  Claim 1 of the ’283 patent states:

A method of determining whether an immunization schedule affects the incidence or severity of a chronic immune-mediated disorder in a treatment group of mammals, relative to a control group of mammals, which comprises:

immunizing mammals in the treatment group of mammals with one or more doses of one or more immunogens, according to said immunization schedule, and

comparing the incidence, prevalence, frequency or severity of said chronic immune-mediated disorder or the level of a marker of such a disorder, in the treatment group, with that in the control group.

Claim 1 of the ’739 is said to be representative of both the ’139 and ’739 patent.  It states:

A method of immunizing a mammalian subject which comprises:

(I) screening a plurality of immunization schedules, by

(a) identifying a first group of mammals and at least a second group of mammals, said mammals being of the same species, the first group of mammals having been immunized with one or more doses of one or more infectious disease-causing organism-associated immunogens according to a first screened immunization schedule, and the second group of mammals having been immunized with one or more doses of one or more infectious disease-causing organism-associated immunogens according to a second screened immunization schedule, each group of mammals having been immunized according to a different immunization schedule, and

(b) comparing the effectiveness of said first and second screened immunization schedules in protecting against or inducing a chronic immune-mediated disorder in said first and second groups, as a result of which one of said screened immunization schedules may be identified as a lower risk screened immunization schedule and the other of said screened schedules as a higher risk screened immunization schedule with regard to the risk of developing said chronic immune mediated disorder(s),

(II) immunizing said subject according to a subject immunization schedule, according to which at least one of said infectious disease-causing organism-associated immunogens of said lower risk schedule is administered in accordance with said lower risk screened immunization schedule, which administration is associated with a lower risk of development of said chronic immune-mediated disorder(s) than when said immunogen was administered according to said higher risk screened immunization schedule.

Majority Opinion

The court determined that the claims of the ’739 and ’139 patents are directed to patentable subject matter, while affirming the district court’s invalidity ruling regarding the claims of the ’283 patent.

In the opinion, Judge Newman was quick to note that issues regarding whether the claims meet the novelty, non-obviousness, or § 112 issues were not before the court, that is, the claims may still be invalid under another section of the Patent Act.

With respect to the patent-eligible claims, the district court held that the claims include mental steps.  The majority of the Federal Circuit held, however,  that the presence of a mental step is not fatal to patent eligibility.  Clearly, the immunization step cannot be performed within the mind.  These claims are directed to a specific, tangible application, and are thus patent eligible.

We conclude that the immunization step moves the ’139 and ’739 claims through the coarse filter of §101, while the abstraction of the ’283 claim is unrelieved by any movement from principle to application.

The court distinguished the ’283 patent claims from those at issue in Prometheus relating to methods of calibrating drug dosages.  The court found those claims to be patent eligible due to the transformation of the drugs within the body.  The ’283 claims, however, does not include such a transformation.

Judge Rader’s Additional Views

Chief Judge Rader provided an opinion styled ”Additional Views” on patentable subject matter that were joined by Judge Newman.  He argued that the court should decline to limit the broad scope of patent eligibility.  He provides a great deal of guidance for patent attorneys and applicants on claim drafting and patent eligibility.

Indeed it is difficult to “invent” any category of subject matter that does not fit within the four classes acknowledged by Title 35: process, machine, [article of] manufacture, or composition of matter.
***
[C]areful claim drafting or new claim forms can often avoid eligibility restrictions. Eligibility then becomes a game where lawyers learn ingenious ways to recast technology in terms that satisfy eligibility concerns.

Judge Rader cited Beauregard and Swiss style claims as examples of the type of claims that would be patent eligible.  As for Beauregard claims, perhaps he hasn’t read Cybersource?

In some countries, such as the European Union, claims directed to methods of treatment are not patent eligible.  Applicants use Swiss style claims to get around this prohibition.  Swiss style claims recite the use of a compound for the manufacture of a medicament for the treatment of a condition, rather than a method of treating the condition itself.  The claim scope is generally very similar, but by using the Swiss style format, applicants can avoid prohibitions on patenting methods of treatment.

Judge Rader calls these types of claim drafting techniques “gamesmanship” that do nothing but add to the cost of patent prosecution and litigation.  Further, many applicants have poorly drafted claims that do not meet the requirements of these ”games” and are thus excluded from obtaining a patent.

As an example of how this affects real word innovation, Judge Rader cited the field of biotechnology.  The US provides relatively strong protection to advances in biotechnology, while Europe imposes significant restrictions.  As a result, most biotechnology innovation takes place here and not in Europe.

The effect of eligibility restrictions can send innovation investment elsewhere.

Dissent

Judge Moore, the original opinion author, dissented, arguing that none of the claims of any of the patents are directed to patent eligible subject matter.  The claims instead relate to a fundamental scientific principle so basic and abstract as to be unpatentable subject matter.  She further argued that she sees no difference in the scope of the claims between the ’283 patent and the ’139 and ’739 patents.   Classen instead claims the scientific method itself as applied to the field of immunization. 

Because the claims contain no limitation 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 in the control group. the claims are way too broad to be patent eligible.

Classen’s whole ’739 patent claim is to compare any two schedules for any drug and choose the one with fewer incidence of any chronic immune disease and then immunize.

She considers the immunization step in the claim to be post-solution activity that does not affect patent eligibility.  Judge Moore cites extensively to the Supreme Court’s unfortunate LabCorp. dissent.  Oh, how it still plagues us.

Finally, Judge Moore criticizes Judge Rader’s Additional Views as improper.  Rather than gamesmanship, she believes the court’s subtle distinctions lead to more careful claim drafting and better notice to the public of a claim’s scope.  Policy decision regarding patent eligibility should be left to Congress.  The court must take the facts of the cases that come to it, and apply existing statutes and precedent to the facts to reach as decision.

The Debate Continues

The Supreme Court has already agreed to review Prometheus in the October 2011 Term.  This case could also very well be headed back to the Supreme Court, which explains Judge Moore’s extensive dissent and Chief Judge Rader’s “Additional Views.”

Last week in Cybersource Corp. v. Retail Decisions, Inc., the Federal Circuit panel of Judges Bryson, Dyk, and Prost overruled a large amount of precedent in holding that claims to computer-readable media are directed to non-patentable subject matter if the media contain code for methods that themselves are non-patentable subject matter.

The patent-at-issue in the case was directed to a ”method and system for detecting fraud in a credit card transaction between [a] consumer and a merchant over the Internet.”  The district court had granted summary judgment that both claims-at-issue in the case were invalid as directed to non-patentable subject matter.

Method Claim

Claim 3 of the patent was directed to the method:

3. A method for verifying the validity of a credit card transaction over the Internet comprising the steps of:
a) obtaining information about other transactions that have utilized an Internet address that is identified with the [ ] credit card transaction;
b) constructing a map of credit card numbers based upon the other transactions and;
c) utilizing the map of credit card numbers to determine if the credit card transaction is valid.

In the opinion by Judge Dyk, the Federal Circuit agreed with the district court that the method does not meet the machine-or-transformation test.  The patentee argued that the Internet constitutes a machine for purposes of the test.  The court held, however, that the Internet does not perform the step of detecting fraud, but is merely the source of the data. 

The court held that the claim was directed to an unpatentable “mental process.”  All of the steps can be performed by the human mind or by a human with a pencil and paper, as the claim is not limited to a particular algorithm.  Step (c) of the claim is “so broadly worded that it encompasses literally any method for detecting fraud based on the gathered transaction and Internet address data.”

Such a method that can be performed by human thought alone is merely an abstract idea and is not patent-eligible under § 101.

Computer-Readable Media Claim

The court next turned to claim 2, a Beauregard claim, directed to a computer readable medium that includes program instructions for performing a particular method.  Such claims have been considered patentable subject matter since at least 1995 when the Federal Circuit issued its opinion In re Beauregard.

2. A computer readable medium containing program instructions for detecting fraud in a credit card transaction between a consumer and a merchant over the Internet, wherein execution of the program instructions by one or more processors of a computer system causes the one or more processors to carry out the steps of:
a)obtaining credit card information relating to the transactions from the consumer; and
b)verifying the credit card information based upon values of plurality of parameters, in combination with information that identifies the consumer, and that may provide an indication whether the credit card transaction is fraudulent,
wherein each value among the plurality of parameters is weighted in the verifying step according to an importance, as determined by the merchant, of that value to the credit card transaction, so as to provide the merchant with a quantifiable indication of whether the credit card transaction is fraudulent,
wherein execution of the program instructions by one or more processors of a computer system causes that one or more processors to carry out the further steps of;
[a] obtaining information about other transactions that have utilized an Internet address that is identified with the credit card transaction;
[b] constructing a map of credit card numbers based upon the other transactions; and
[c] utilizing the map of credit card numbers to determine if the credit card transaction is valid.

The court characterized the claim as “nothing more than a computer readable medium containing program instructions for executing the method of claim 3.”  Within the parlance of § 101 of the Patent Act, claim 2 is directed to a “manufacture” rather than a “process.”  The court was not so moved.

Regardless of what statutory category (“process, machine, manufacture, or composition of matter,” 35 U.S.C. § 101) a claim’s language is crafted to literally invoke, we look to the underlying invention for patent-eligibility purposes.  Here, it is clear that the invention underlying both claims 2 and 3 is a method for detecting credit card fraud, not a manufacture for storing computer-readable information.

Incredibly, the court therefore chose to analyze claim 2 as a process claim instead of a manufacture claim.  The court held that the “computer readable medium” limitation was merely incidental to the claimed process and does not impart any patentable limitation to the claim.  The court attempted to distinguish several recent cases that had held otherwise on the basis that the processes involved steps that could not be performed entirely within the human mind.  Those methods were apparently more complex than the process claimed in Cybersource.

On the computer-readable media claim, the Federal Circuit overruled a great deal of precedent and is in conflict with a great deal more, including some that it attempted to distinguish.  The opinion calls into question literally tens of thousands of issued patents that were patentable under prior court precedent.  Some are even suggesting that this case could have implications for further review of Myriad.

Hopefully, the court will review this case en banc, as it is simply too sweeping a reversal of settled law to permit repudiation by a panel of the court.

As expected, the Federal Circuit reversed the district court’s determination that Myriad’s gene patents are not patentable, Association for Molecular Pathology v. Myriad Genetics, Inc.  The court did rule that many of the method claims are directed to abstract mental ideas and are thus not patentable.

The three judges on the panel each wrote a separate opinion relating his or her views of the case.  Judge Lourie wrote the opinion of the court.  Judge Moore wrote a lengthy concurring opinion, and Judge Bryson concurred in all parts of the court’s opinion except the portion about isolated genes.  He would hold isolated genes to not be patentable subject matter.

Standing

First, the Federal Circuit held that, of all the plaintiffs in the case, only Dr. Harry Ostrer has standing to challenge the patents-in-suit.  Only Dr. Ostrer has indicated that he seeks to undertake specific activities that might fall within the patent claims.  The other plaintiffs merely indicate more hypothetical “some day” intentions to do so.  This is not adequate to confer standing on them to challenge the patents.

Interestingly, only two days ago, plaintiff’s counsel submitted a letter to the court indicating that Dr. Ostrer was leaving his current position at NYU to join a new lab that does not offer, and is not qualified to offer, genetic testing.  Since standing must be maintained throughout litigation, it would seem that this letter would effectively end the case as no other plaintiffs meet the standing requirement.  The court did not address this development in its opinion.

HT:  Hal Wegner

Isolated DNA Molecules

Next, the court addressed whether isolated DNA molecules are patentable subject matter.  After analyzing several Supreme Court decisions, including Chakrabarty and Funk Brothers, the court concluded as follows.

The distinction, therefore, between a product of nature and a human-made invention for purposes of § 101 turns on a change in the claimed composition’s identity compared with what exists in nature. Specifically, the Supreme Court has drawn a line between compositions that, even if combined or altered in a manner not found in nature, have similar characteristics as in nature, and compositions that human intervention has given “markedly different,” or “distinctive,” characteristics.

The court then concluded that the isolated DNA claimed in this case do have markedly different chemical identity and nature from DNA found in the human body.  The court distinguished isolating DNA from purifying it.  Purifying merely removes impurities, but results in an identical molecule.  Isolated DNA, by contrast, has been cleaved from a much larger DNA molecule, resulting in a distinct chemical entity.

In so holding, the court rejected the government’s view that isolated DNA should not be patentable, pejoratively referring to the government’s position as advocating a “magic microscope” test. 

The court also briefly addressed the other hypotheticals raised in various amicus briefs, such as elemental lithium, mining minerals from the earth, atomic particles like electrons, and organs like kidneys.  None of these results in a compound having a distinct chemical identity.  The court dismissed arguments about the claims’ breadth by noting that only the issue of patent eligibility was before the court, not the adequacy of the description.  The PTO has granted patents like these for many years.  Any change in policy should come from Congress, not the courts.

Judge Moore wrote a separate opinion concurring in the court’s judgment.  She goes into much more scientific detail on the various types of DNA and genes in the case as she concludes that isolated DNA has markedly different characteristics and utility than DNA in the body.  Her opinion seems to have been written almost entirely as a rebuttal to Judge Bryson’s opinion dissenting on this issue.

She also cautions courts against adding further judicial exceptions to the law of patentable subject matter.  She cites a number of very old patents claiming isolated molecules and compounds.  The settled expectations of the biotechnology industry must be given deference.

Judge Bryson argues that the only changes to the isolated DNA from those occuring in the body are incidental to their removal from their natural environment.  He does agree with the court that cDNA molecules do not occur naturally in the body and are eligible for patenting. 

Methods of Comparing or Analyzing Sequences

Next, the court turned to the patent eligibility of the method claims in the case.  The court held that the claims to “comparing” or “analyzing” two gene sequences are directed to abstract mental processes and are therefore not patent eligible.

The court distinguished these claims from those at issue in Prometheus because the claims in that case required a transformation step.  The comparison in this case is the result of mere inspection alone.

Method of Screening Potential Cancer Therapeutics

The court held that this claim is directed to patentable subject matter because it includes the step of “growing” the cells prior to their comparison.  This growth results in a transformation of the cells.  Other manipulations are also involved.  Thus, the claim is not directed to abstract ideas.

Summary

It will be interesting to see what happens on the standing issue.  The court made clear that only Dr. Ostrer has standing to bring this case.  Therefore, once he no longer has standing, the case should end.  The remaining plaintiffs are asking the court to provide an advisory opinion.  This, federal courts cannot do.

If the standing issue does not end the case, however, the plaintiffs will undoubtedly petition the Supreme Court to review this case.  That was their goal all along.  I can’t see what they would gain by requesting en banc review.  I would expect a cert. petition to be filed soon.