Patent Law Changes and Rulings: Impact on UNC Patent Applications

1. Patent Law Changes and Rulings: Impact on UNC Patent Applications December 6, 2012 Steven J. Sarussi

2. Who’s involved • Supreme Court • Ownership of federally funded inventions under the Bayh-Dole Act • Court of Appeals for the Federal Circuit • Induced infringement by joint actors • Inventorship • Standard for inequitable conduct • Both Supreme Court and Federal Circuit • Patent eligible subject matter under 35 U.S.C. § 101 • Congress • America Invents Act • First to file provisions

3. Big Changes?? YES/NO?

4. Quiz 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 8x108 red blood cells indicates 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 8x108 red blood cells indicates a need to decrease the amount of said drug subsequently administered to said subject. • Patentable subject matter?

5. Quiz An isolated DNA coding for a BRCA1 polypeptide, said polypeptide having the amino acid sequence set forth in SEQ ID NO:2. • Patentable subject matter?

6. Quiz A method for detecting a germline alteration in a BRCA1 gene, said alteration selected from the group consisting of the alterations set forth in Tables 12A, 14, 18 or 19 in a human which comprises analyzing a sequence of a BRCA1 gene or BRCA1 RNA from a human sample or analyzing a sequence of BRCA1 cDNA made from mRNA from said human sample with the proviso that said germline alteration is not a deletion of 4 nucleotides corresponding to base numbers 4184-4187 of SEQ ID NO:1. • Patentable subject matter?

7. Quiz A method for screening potential cancer therapeutics which comprises: growing a trans-formed eukaryotic host cell containing an altered BRCA1 gene causing cancer in the presence of a compound suspected of being a cancer therapeu-tic, growing said transformed eukaryotic host cell in the absence of said compound, determining the • Patentable subject matter?

8. Quiz • Researcher signs agreement agreeing to assign rights in his inventions to University • Researcher later assigns his rights in Invention X to Company • Who owns the patents covering Invention X? • University? Company? • Does it matter if work resulting in Invention X was federally funded research under Bayh-Dole? • University? Company?

9. Quiz • Is Bill’s invention patentable? • Under old law? • Under new law?

10. Quiz • Who gets the patent? • Under old law? • Under new law?

11. Quiz • Is the public use prior art?

12. Quiz • Is the disclosure by Bill prior art to Amy?

13. Quiz • Is Amy’s publication prior art under new law against Bill’s application? • Is Bill’s application prior art against Amy under new law?

14. Patent eligible subject matter under 35 U.S.C. § 101

15. Mayo Collaborative Services v. Prometheus Labs., Inc. (S.Ct., 2012) • Supreme Court • Method of administering drugs to a patient and determining the proper dosage is not patent eligible subject matter under § 101 • Prometheus’s patents “involve well-understood, routine, conventional activity previously engaged in by researchers in the field.” • Patents cover laws of nature

16. Mayo Collaborative Services v. Prometheus Labs., Inc. (S.Ct., 2012) • All steps considered together do not transform the claims to something other than laws of nature • Administering step: refers to doctors who treat patients with the drug • Wherein clause: alerts doctors to the laws of nature to consider during treatment • Determining step: doctors may use any laboratory process, even well-known methods, for assessing metabolite level in blood

17. Association for Molecular Pathology v. USPTO(“Myriad”, Fed. Cir. 2012) • Patent eligibility of isolated human DNA (BRCA) and diagnostic tests for mutations under § 101 in light of Prometheus • Disputed claims: • Composition claims for isolated DNA sequences (BRCA1 and BRCA2 genes) • Method claims for comparing and analyzing sequences • Method claim for screening cancer therapeutics with transformed cells

18. Association for Molecular Pathology v. USPTO (“Myriad”, Fed. Cir. 2012) • Eligibility of claims for human gene sequences: • Chakrabartycontrols, not Prometheus • “isolated DNA molecules are not found in nature” and “the product of human ingenuity” • Plaintiffs argued that isolated and natural DNA share the same sequence, and are not “markedly different” • CAFC reasoned that although isolated DNA are functionally similar to natural DNA, isolated DNA are structurally distinct

19. Association for Molecular Pathology v. USPTO (“Myriad”, Fed. Cir. 2012) • Eligibility of method claims: • method claims for analyzing/comparing DNA sequences ineligible because it is an “abstract mental process” [Prometheus controls] • method of screening potential cancer therapeutics using transformed cells are eligible subject matter because they “arose from human effort” [Chakrabartycontrols]

20. Association for Molecular Pathology v. USPTO (“Myriad”, Fed. Cir. 2012) • Congress should determine policy questions surrounding patenting biological molecules • PTO has issued 2,645 patents on “isolated DNA” over past 29 years • Addressed preemption issue of others experimenting with BRCAby noting that “patents are rarely enforced against scientific research, even during their terms”

21. PerkinElmer Inc. v. Intema Ltd. (Fed. Cir. 2012) • 1. A method of determining whether a pregnant woman is at an increased risk of having a fetus with Down's syndrome… comprising…: • measuring the level of at least one screening marker from a first trimester of pregnancy… • measuring the level of at least one second screening marker from a second trimester of pregnancy; and • determining the risk of Down's syndrome by comparing the measured levels of both the … first screening marker … and the …second screening marker … with observed relative frequency distributions of marker levels in Down's syndrome pregnancies and in unaffected pregnancies.

22. PerkinElmer Inc. v. Intema Ltd. (Fed. Cir. 2012) • District Court • Denied PerkinElmer's motion for summary judgment of patent ineligibility under § 101 • Concluded that the claims were directed to a data-gathering method comprising measuring steps that satisfied the machine-or-transformation test • “the process of gathering data by taking blood samples and measuring ultrasounds is manifestly statutory subject matter. . . .”

23. PerkinElmer Inc. v. Intema Ltd. (Fed. Cir. 2012) • Federal Circuit Reverses • “Laws of nature, natural phenomena, and abstract ideas are not patentable.” • These exceptions make mental processes ineligible for patenting • But, all inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.”

24. PerkinElmer Inc. v. Intema Ltd. (Fed. Cir. 2012) • Federal Circuit Reverses • "The key distinction … is between claims that recite ineligible subject matter, and no more, and claims to specific inventive applications of that subject matter."  • Patentable process claims “must contain other elements or a combination of elements, sometimes referred to as an ‘inventive concept,’ sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the natural law itself.”

25. PerkinElmer Inc. v. Intema Ltd. (Fed. Cir. 2012) • Federal Circuit’s analysis • Claims recite a mental process of comparing data to determine a risk level • Data are gathered in the first trimester of pregnancy • Data are gathered in the second trimester of pregnancy • Those data are compared to known statistical information. • No action beyond the comparison is required.

26. PerkinElmer Inc. v. Intema Ltd. (Fed. Cir. 2012) • Federal Circuit’s analysis • That an increased risk of fetal Down’s syndrome produces certain analytical results is a natural process • “an eternal truth that ‘exists in principle apart from any human action.’ ” • Thus, claims recite mental processes and natural laws • So, do they add enough to the ineligible subject matter to direct the claims to applications of those concepts” We think not.

27. PerkinElmer Inc. v. Intema Ltd. (Fed. Cir. 2012) • Federal Circuit’s analysis • Because the claims recite mental processes and natural laws: • Do they add enough to the ineligible subject matter to direct the claims to applications of those concepts? • Do they possess or require an inventive concept? • Court: “No”

28. PerkinElmer Inc. v. Intema Ltd. (Fed. Cir. 2012) • Inventive concept? • Measuring steps: No • Merely tell the users of the process to measure the screening markers through whatever known method they wish. • “The individual measurements are obtained through known methods” • “Tell the user to engage in well understood, routine, conventional activity previously engaged in by scientists who work in the field.”

29. PerkinElmer Inc. v. Intema Ltd. (Fed. Cir. 2012) • Inventive concept? • Determining step: No • Requires ineligible mental step of “comparing” • Statistical information mentioned in the determining step? • “Well-understood, conventional information. • “[T]he necessary statistical distribution parameters … are known, being derivable from observed distributions …”. • Statistical calculation: also known and conventional

30. PerkinElmer Inc. v. Intema Ltd. (Fed. Cir. 2012) • “Inventive concept” • A hint? • “It is the ‘two data points are better than one’ concept which is the focus of the claims; that concept simply does not depend on the method by which the data points are obtained.”

31. Diagnostic method claims • Recommendations • Identify “natural laws” and “products of nature” • Need more than “measuring” and “correlating” • Claim strategies • Narrow, specific, encompassing particular assay and detection steps • Add some (any) patentable feature other than the naturally occurring correlation between a marker and disease • Novel transformative step, machine, composition, etc. • Isolated DNA molecules

32. Back to the Supremes Myriad questions presented to Supremes • Are human genes patentable? • Did the court of appeals err in upholding a method claim by Myriad that is irreconcilable with this Court's ruling in Mayo Collaborative Servs. v. Prometheus Labs? • Did the court of appeals err in adopting an inflexible rule that parties who have been deterred by Myriad's "active enforcement" of its patent rights nonetheless lack standing to challenge those patents absent evidence that they have been personally threatened with a lawsuit?

33. Ownership of federally funded inventions under the Bayh-Dole Act

34. Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc. (2011) • Employee of Stanford University developed a method for quantifying amounts of HIV in blood in collaboration with Cetus, a research company • Researcher “agreed to assign” the rights to his inventions to Stanford University, but also assigned his rights to Cetus • Roche acquired Cetus’s rights • Stanford sued Roche, claiming Stanford had superior rights under the Bayh-Dole Act because the research was federally funded • Roche claimed co-ownership of the HIV kit based on the assignment to Cetus

35. Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc. (2011) • Universities do not automatically own the rights to inventions conceived with federal funds • Rights do not “vest” with government contractor under Bayh-Dole • Reasoning: Bayh-Dole Act § 201(a) permits government contractors to “elect to retain title to any subject invention.” • Does not state that inventors are “deprived of their interest in federally funded inventions” • The Act “simply assures contractors that they may keep title to whatever it is they already have’”

36. Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc. (2011) • Federal Circuit interpretation of the licensing agreement language: • Stanford agreement: used the words “agree to assign” • promise to assign rights in the future • Cetusagreement: used the words “do hereby assign” • automatic transfer of rights once the invention was created

37. Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc. (2011) • Recommendations • Technology transfer department • Aware of all communications between inventors and third parties • Develop/approve collaborations • Review/approve agreements • Assignments or other conveyances! • Assignment of (potential) inventions: early • Record

38. Induced infringement by joint actors

39. Akamai Tech., Inc. v. Limelight Networks and McKesson Tech., Inc. v. Limelight Networks(Fed. Cir. 2012) • The court addressed the issue of joint infringement of method patents under 35 U.S.C. § 271(b) • Induced infringement § 271(b): “when a single actor induces another actor to commit all the elements of infringement, the first actor is liable” • Direct infringement § 271(a): “when a single actor commits all the elements of infringement

40. Akamai Tech., Inc. v. Limelight Networks and McKesson Tech., Inc. v. Limelight Networks(Fed. Cir. 2012) • Akamai • Method patent for efficient delivery of web content, including: • Placing some content on servers, and • Modifying content provider’s web pages • Limelight directly performed step 1, but instructed its customers to perform step 2 • Limelight found not liable by D.Ct. for induced infringement because customers performed one of the steps

41. Akamai Tech., Inc. v. Limelight Networks and McKesson Tech., Inc. v. Limelight Networks(Fed. Cir. 2012) • McKesson • Method patent covering electronic communication between healthcare providers and patients • Epic licensed software to healthcare companies • The steps of the patent were performed in part by patients and in part by healthcare providers – none of the steps were performed by Epic • Found not liable by D.Ct. for induced infringement

42. Akamai Tech., Inc. v. Limelight Networks and McKesson Tech., Inc. v. Limelight Networks(Fed. Cir. 2012) • Problem: induced infringement liability arises only if the “inducement give[s] rise to direct infringement” and “direct infringement must be committed by a single actor” BMC Resources, Inc. v. Paymentech, L.P. (Fed. Cir. 2007) • Requirement of direction and/or control by inducer

43. Akamai Tech., Inc. v. Limelight Networks and McKesson Tech., Inc. v. Limelight Networks(Fed. Cir. 2012) • Issue: whether a person may be liable for induced infringement if: • The person performed some steps of a claimed method and induced other parties to commit the remaining steps (Akamai); or • The person induced others to jointly perform all the steps of the claimed method, but no single person performed all of the steps (Mckesson) • Finding: Yes

44. Akamai Tech., Inc. v. Limelight Networks and McKesson Tech., Inc. v. Limelight Networks(Fed. Cir. 2012) • To prove • Knowledge of patent • Actions that induce performance of claimed method steps • Steps were performed • All steps need not be performed by same parties

45. Akamai Tech., Inc. v. Limelight Networks and McKesson Tech., Inc. v. Limelight Networks(Fed. Cir. 2012) • Recommendations • Although easier to prove induced infringement, still important to consider claim drafting strategies for method claims • How invention is to be used • Who will use it • What is sold • What is used • Where will it be used • What activities will infringe (or which will not)

46. Inventorship

47. Falana v. Kent State University(Fed. Cir. 2012) • Falana, a post-doc at Kent State University, developed the synthesis protocol to produce a previously unknown compound (Compound 7) • Collaborators synthesized Compound 9, a more desirable chemical of the same genus as Compound 7, using Falana’s protocol • Collaborators filed a patent claiming Compound 9, and disclosed Falana’s protocol and Compound 7 in the specification • Falana was not listed as an inventor and filed a § 256 action to correct the inventorship of the patent

48. Falana v. Kent State University(Fed. Cir. 2012) • Joint inventorship is a question of who conceived the subject matter of the disputed claims • Conception of chemical compounds: requires 1) knowledge of structure; and 2) synthesis method • Falana’s contribution was more than an exercise of ordinary skill, and deserved inventorship  • Holding:“a putative inventor who envisioned the structure of a novel genus of chemical compounds and contributes the method of making that genus contributes to the conception of that genus.”

49. Falana v. Kent State University(Fed. Cir. 2012) • Recommendations • Inventorship determination • Consider co-authors listed on publications

50. Standard for inequitable conduct