No. 08-964
================================================================
In The
Supreme Court of the United States
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BERNARD L. BILSKI AND RAND A. WARSAW,
Petitioners,
v.
JOHN J. DOLL, ACTING UNDER SECRETARY OF
COMMERCE FOR INTELLECTUAL PROPERTY AND
ACTING DIRECTOR OF THE UNITED STATES PATENT
AND TRADEMARK OFFICE,
Respondent.
----------------- ♦ -----------------
On Writ Of Certiorari To The
United States Court Of Appeals
For The Federal Circuit
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BRIEF OF AMICUS CURIAE
CARIS DIAGNOSTICS, INC.
IN SUPPORT OF PETITIONERS
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GIDEON A. SCHOR
Counsel of Record
VERN NORVIEL
RAY AKHAVAN
1301 Avenue of the Americas,
40th
Floor
New York, NY 10019
(212) 999-5800
Attorneys for Amicus Curiae
Caris Diagnostics, Inc.
================================================================
COCKLE LAW BRIEF PRINTING CO. (800) 225-6964
OR CALL COLLECT (402) 342-2831
i
TABLE OF CONTENTS
Page
INTEREST OF AMICUS CURIAE ........................
1
SUMMARY OF ARGUMENT ................................
5
ARGUMENT ...........................................................
8
I. THE FEDERAL CIRCUIT MISAPPLIED
THIS COURT’S PRECEDENTS, WHICH
HAVE NEVER HELD THE MACHINE-
OR-TRANSFORMATION TEST TO BE
THE EXCLUSIVE TEST FOR THE
PATENTABILITY OF CLAIMED PROC-
ESSES ..........................................................
8
II.
AN AFFIRMANCE WOULD CALL INTO
QUESTION INNUMERABLE PATENTS
FOR DIAGNOSTIC METHODS AND
WOULD CHILL FUTURE INNOVATION ... 18
CONCLUSION ....................................................... 32
ii
TABLE OF AUTHORITIES
Page
CASES
Classen Immunotherapies, Inc. v. Biogen IDEC,
No. 2006-1634, 2008 WL 5273107 (Fed. Cir.
Dec. 19, 2008) .......................................................... 21
Diamond v. Chakrabarty, 447 U.S. 303
(1980) ................................................... 8, 9, 10, 12, 31
Diamond v. Diehr, 450 U.S. 175 (1981) ............. passim
Festo v. Shoketsu Kinzoku Kogyo Kabushiki
Co., 535 U.S. 722 (2002) .......................................... 24
Funk Bros. Seed Co. v. Kalo Inoculant Co., 333
U.S. 127 (1948) .................................................. 10, 11
Gottschalk v. Benson, 409 U.S. 63 (1972) .......... passim
In re Bilski, 545 F.3d 943 (Fed. Cir. 2008) ......... passim
J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred Int’l,
Inc., 534 U.S. 124 (2001) ........................................... 9
KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398
(2007) ....................................................................... 12
King Pharms., Inc. v. Eon Labs, Inc., 593
F. Supp. 2d 501 (E.D.N.Y. 2009) ............................. 21
Lab. Corp. of Am. v. Metabolite Labs., Inc., 548
U.S. 124 (2006) .................................................. 18, 19
Mackay Radio & Telegraph Co. v. Radio of Am.,
306 U.S. 86 (1939) ................................................... 11
Parker v. Flook, 437 U.S. 584 (1978) ................. passim
iii
TABLE OF AUTHORITIES – Continued
Page
Payne v. Tennessee, 501 U.S. 808 (1991) .................... 24
Warner-Jenkinson Co. v. Hilton Davis Chemical
Co., 520 U.S. 17 (1997)............................................ 24
STATUTES
35 U.S.C. § 100(b) ......................................................... 9
35 U.S.C. § 101 ................................................... passim
35 U.S.C. § 102 ............................................................. 9
35 U.S.C. § 103 ....................................................... 9, 12
35 U.S.C. § 112 .............................................................. 9
35 U.S.C. § 287(c) ....................................................... 31
MISCELLANEOUS
5 Writings of Thomas Jefferson (Washington
ed. 1871) .................................................................. 12
Astrid Lievre et al., KRAS Mutations As an
Independent Prognostic Factor in Patients
With Advanced Colorectal Cancer Treated
With Cetuximab, 26 J. Clinical Oncology 374
(Jan. 20, 2008) ........................................................... 2
Christos S. Karapetis, M.D., et al., K-ras
Mutations and Benefit from Cetuximab in
Advanced Colorectal Cancer, 359 New Eng. J.
Med. 1757 (Oct. 23, 2008) ......................................... 2
Gina-Louise Monari, Pressure rises in cardio,
MedAd News, Feb. 2009 ......................................... 30
iv
TABLE OF AUTHORITIES – Continued
Page
Glen T. Giovannetti & G. Jaggi, Ernst & Young,
Beyond Borders – Global Biotechnology
Report 2009 (2009) .................................................. 30
John J. Love, Deputy Commissioner for Patent
Examination Policy to the Technology Center
Directors and Patent Examining Corps,
Memorandum dated January 7, 2009 .............. 21, 22
Kathleen Bragdon, Quality Assurance
Specialist, Technology Center 1600, USPTO,
A Look at Personalized Medicine ............................ 21
Lifetime Probability of Developing or Dying
from Cancer, American Cancer Society, July
13, 2009 ..................................................................... 4
Merck Plans More Cost-Cutting, N.Y. TIMES,
Dec. 16, 2005 ........................................................... 30
Paul H. Keckley, PhD et al., Deloitte Center for
Health Solutions, The ROI for Targeted
Therapies: A Strategic Perspective Assessing
the Barriers and Incentives for Adopting
Personalized Medicine (2009) ................................... 3
Roxanne Nelson, GICS 2009: Huge Cost
Savings From KRAS Testing in Metastatic
Colorectal Cancer, Medscape Medical News,
Jan. 16, 2009 ............................................................. 3
1
INTEREST OF AMICUS CURIAE1
Amicus curiae Caris Diagnostics, Inc. (“Caris”) is
a leader in personalized medicine, which is the
relatively new science of tailoring therapeutics for
individual patients through diagnostic tests for
genetic mutations known as biomarkers. By using
such molecular profiling techniques, Caris enables
patients to receive safe and effective drug therapies
for cancer and other serious illnesses.
For example, Caris’s laboratories examine
tumors to discover biomarkers that are associated
with drug resistance or toxicity. A recent study
showed that cetuximab (or Erbitux®), a standard
treatment for colorectal cancer, shrinks tumors in
40% of patients lacking a particular genetic mutation
1 Counsel for amicus appear in this matter in their
individual capacities and not on behalf of the law firm with
which they are affiliated. Counsels’ law firm represents many
technology companies operating in diverse business sectors,
including biotechnology, electronics, software, and internet
companies, and such companies may have different opinions on
the issues presented by the Federal Circuit’s decision below.
Nothing in this brief should be attributed or imputed to
counsels’ law firm or its clients, other than those specific ones on
whose behalf this brief is filed.
Counsel for all parties have consented to the filing of this
brief, and their consents have been lodged with the Clerk of this
Court. No counsel for any party had any role in authoring this
brief, and no person other than the named amicus and its
counsel has made any monetary contribution to the preparation
and submission of this brief. See Rule 37.
2
but is ineffective in patients possessing the mutation.2
Before the sequencing of the human genome and the
possibility of fast, affordable, and accurate tests for
individualized genetic profiles, the treatment would
be prescribed generally to colorectal cancer patients,
and only time would tell which subpopulation of
patients would have treatment-resistant tumors.
Now that biomarkers for resistance to the drug
have been discovered, and Caris has developed tests
for those biomarkers, an oncologist need not waste
valuable time with hit-and-miss treatment. Instead,
to obtain early validation of drug choices, the
oncologist sends a biopsy to Caris – one of thousands
of biopsies that Caris examines daily – which then
determines whether the particular patient’s tumor
has the biomarker associated with drug resistance.
Caris’s development and provision of such biomarker
tests3 thus enable doctors to devote critical months to
effective treatments. Caris’s work thereby saves lives
2 See Astrid Lievre et al., KRAS Mutations As an Inde-
pendent Prognostic Factor in Patients With Advanced Colorectal
Cancer Treated With Cetuximab, 26 J. Clinical Oncology 374, 375
(Jan. 20, 2008), available at http://jco.ascopubs.org/cgi/content/
full/26/3/374; see also Christos S. Karapetis, M.D., et al., K-ras
Mutations and Benefit from Cetuximab in Advanced Colorectal
Cancer, 359 New Eng. J. Med. 1757, 1757-65 (Oct. 23, 2008),
available at http://content.nejm.org/cgi/reprint/359/17/1757.pdf.
3 Such biomarker tests when used to diagnose a patient’s
illness or medical condition are known as diagnostics, and when
used to diagnose a patient’s resistance to a particular drug are
known as theragnostics. For simplicity, the term “diagnostics” as
used herein refers to both diagnostics and theragnostics.
3
– as well as the several hundred million dollars that
would otherwise be spent on useless, expensive
therapy.4
In patent terms, each biomarker test is a method
for determining the presence of the biomarker in a
given patient. A process patent provides the soundest
legal protection for the intellectual property under-
lying each such method, and thus provides the
strongest incentive for venture capitalists and large,
established companies to invest – and hence fund
research, development, regulatory approval, and
commercialization – in hopes of obtaining a return in
the marketplace. Since roughly half of Americans will
get cancer before dying, and about half of these will
4 Roxanne Nelson, GICS 2009: Huge Cost Savings From
KRAS Testing in Metastatic Colorectal Cancer, Medscape
Medical News, Jan. 16, 2009, available at http://www.medscape.
com/viewarticle/586946 (screening for KRAS mutations before
initiating treatment with cetuximab or related drugs could
result in drug cost savings of $604 million if annual American
population with metastatic colorectal cancer undergoes first-line
therapy with cetuximab-containing regimen). The savings to the
U.S. health care system from genetic profiling to optimize
treatment with a single drug are estimated to be more than $1
billion. See Paul H. Keckley, PhD et al., Deloitte Center for
Health Solutions, The ROI for Targeted Therapies: A Strategic
Perspective Assessing the Barriers and Incentives for Adopting
Personalized Medicine, at 5 (2009) (fig. 2), available at http://
www.personalizedmedicinecoalition.org/programs/roi_seminar_2009/
ROIforTargeted%20Therapies_DCHSstudy_FINAL.pdf (estimated
potential annual health care cost savings from individual dosing
of Warfarin based on genetic testing are $1.1 billion with a range
of $100 million to $2 billion for U.S. health care system).
4
die of their cancer,5 continued financing is important
not only to Caris and other diagnostics companies but
also to public health.
In
In re Bilski, 545 F.3d 943 (Fed. Cir. 2008),
which involved a claim for a business method, the
United States Court of Appeals for the Federal
Circuit held that the exclusive test for determining
whether a process claim recites patentable subject
matter under 35 U.S.C. § 101 is whether the claim is
(a) tied to a machine or (b) transforms an article into
a different state or thing. Only by misapplying this
Court’s precedents did the Federal Circuit reach its
holding. Further, by mandating the machine-or-
transformation test for all process claims (not just
business method claims), the Federal Circuit
drastically narrowed the scope of patentable subject
matter, undermined the settled expectations of
owners of process patents, raised doubt as to the legal
protection of new diagnostic and treatment methods,
and diminished the ability of biotechnology com-
panies to attract investment capital. Particularly in
an economy increasingly based on information and
biotechnology, the outmoded “machine tie” and
“transformation” analyses are too uncertain of
5 See Lifetime Probability of Developing or Dying from
Cancer, American Cancer Society, July 13, 2009, available at http://
www.cancer.org/docroot/CRI/content/CRI_2_6x_lifetime_probability_
of_developing_or_dying_from_cancer.asp (indicating about 1 in 2
males and 1 in 3 females will develop cancer in their lifetime,
and 1 in 4 and 1 in 5, respectively, will die from cancer).
5
application to provide such companies with genuine
legal protection. Moreover, the U.S. Patent and
Trademark Office (“USPTO”) has now adopted new
guidelines for review of life sciences patents and is
routinely rejecting patents based on the decision
below. Without such patent protection, Caris and
other biotechnology companies will face a shortage of
funding and hence will be unable to make critical
discoveries and to translate them into improved
patient care. It is not an overstatement to say that
biotechnology companies depend for their survival on
strong patent protection, as only the limited
exclusivity of patents will genuinely compensate such
companies and their investors for their significant
research and regulatory costs, and for assuming the
risk of biological obstacles and fierce marketplace
competition.
Accordingly, Caris has a strong interest in
ensuring that the decision below is reversed insofar
as it held the machine-or-transformation test to be
the exclusive test for patentable subject matter in
process claims.
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SUMMARY OF ARGUMENT
The judgment of the Federal Circuit should be
reversed insofar as it held the machine-or-
transformation test to be the exclusive test for the
patentability of claimed processes under 35 U.S.C.
§ 101. Subject matter is patentable if it fits into one of
6
the four statutory categories – process, machine,
manufacture, composition of matter – and is useful
and man-made. Nothing in the statute or this Court’s
precedents requires that, to be patentable, a process
must either be tied to a machine or transform an
article into a different state or thing. Only
fundamental principles – laws of nature, natural
phenomena, and abstract ideas – are unpatentable
subject matter, though an application of a funda-
mental principle is patentable if useful and inventive.
These flexible standards governing patentability
should not be replaced with a rigid, Industrial-Age
rule requiring the presence of machinery or physical
transformation. Such a rule would bar vast areas of
innovation from patent protection and would
therefore be contrary to Congress’s intent that
patentable subject matter be broad in scope.
Twice, this Court has ruled expressly that the
machine-or-transformation test is not the exclusive
test for the patentability of a process under § 101.
The Federal Circuit misinterpreted both decisions by
baselessly reading into them a directive of exclusivity
and by wholly ignoring the decisions’ express
rejection of exclusivity. The essential holding of the
decisions is that a process claim may not preempt a
fundamental principle, and not that machine imple-
mentation and transformation are the exclusive
means by which a process claim can avoid such
preemption.
7
The decision below dramatically weakens patent
protection for diagnostics and thus will chill invest-
ment and innovation. Although certain steps of some
diagnostic methods involve machines or trans-
formations, the focus of diagnostic methods is the
generation of information. Thus, it is unclear if
machine implementation and transformation are
sufficiently central to each method to satisfy the
machine-or-transformation test. Such doubt will
discourage investment by venture capitalists and
larger, mature companies, because of resulting
uncertainty as to whether future diagnostic
innovations will receive patent protection. Moreover,
the decision below applies the machine-or-
transformation test to all claimed processes –
including diagnostic methods – and not just business
methods. Consequently, diagnostic method claims are
already being rejected under Bilski, and many
already-issued patents are now subject to invalidity
defenses in infringement litigation.
Without the limited exclusivity of patent
protection, health care companies and their investors
will lose incentive to research, develop, and com-
mercialize new diagnostics. The decision below
constitutes the sort of fundamental change in settled
patent law that only Congress is equipped to make.
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8
ARGUMENT
I. THE FEDERAL CIRCUIT MISAPPLIED
THIS COURT’S PRECEDENTS, WHICH
HAVE NEVER HELD THE MACHINE-OR-
TRANSFORMATION TEST TO BE THE
EXCLUSIVE TEST FOR THE PATENT-
ABILITY OF CLAIMED PROCESSES
Under this Court’s precedents, patentable subject
matter under 35 U.S.C. § 101 consists of any man-
made and useful process, machine, manufacture, or
composition of matter, but must not be laws of
nature, natural phenomena, or abstract ideas. Lest
lower courts usurp Congress’s function, this Court
has warned that “courts should not read into the
patent laws limitations and conditions which the
legislature has not expressed.” Diamond v.
Chakrabarty, 447 U.S. 303, 308 (1980) (citation and
internal quotation marks omitted). Moreover, this
Court has twice held that subject matter may be
patentable even if it does not satisfy the machine-or-
transformation test. See Gottschalk v. Benson, 409
U.S. 63, 71 (1972); Parker v. Flook, 437 U.S. 584, 588
n.9 (1978). Contrary to the statute and these clear
holdings, however, the court below held that a process
claim cannot recite patentable subject matter under
35 U.S.C. § 101 unless it also satisfies the machine-
or-transformation test. That holding is erroneous and
should be reversed.
9
Section 101 is broadly worded:
Whoever invents or discovers any new and
useful process, machine, manufacture, or
composition of matter, or any new and useful
improvement thereof, may obtain a patent
therefor, subject to the conditions and
requirements of this title.
35 U.S.C. § 101 (emphasis added).6 According to the
plain statutory language, subject matter is patentable
as long as it fits into one of the four categories –
process, machine, manufacture, composition of matter
– and is useful and man-made.7 As the repeated use
of the term “any” indicates, “Congress plainly con-
templated that the patent laws would be given wide
scope.” Chakrabarty, 447 U.S. at 308. In J.E.M. Ag
Supply, Inc. v. Pioneer Hi-Bred Int’l, Inc., 534 U.S.
124 (2001), this Court stated that § 101 is “extremely
broad,” id. at 130, and is a “dynamic provision
designed to encompass new and unforeseen inven-
tions,” id. at 135. Nothing on the face of the statute
6 According to the statutory definitional provision, “[t]he
term ‘process’ means process, art or method, and includes a new
use of a known process, machine, manufacture, composition of
matter, or material.” 35 U.S.C. § 100(b).
7 Although § 101, which addresses patent eligibility of
subject matter, also uses the term “new,” it has long been held
that novelty and non-obviousness should be addressed under
§§ 102 and 103. 35 U.S.C. §§ 102, 103. 35 U.S.C. §§ 102, 103.
See, e.g., Diamond v. Diehr, 450 U.S. 175, 189-91 (1981). Addi-
tional safeguards against undeserved grants of patent protection
appear in § 112, which imposes the requirements of enablement,
written description, and definiteness. 35 U.S.C. § 112.
10
requires that, to be patentable, a process (i) be tied to
a machine (or, for that matter, to a manufacture or
composition of matter) or (ii) transform an article into
a different state or thing.8
This Court’s only limiting gloss on § 101 is that
fundamental principles – “laws of nature, natural
phenomena, and abstract ideas” – are not patentable
subject matter. Chakrabarty, 447 U.S. at 309. The
reason is that such principles, like mental processes,
“are the basic tools of scientific and technological
work.” Benson, 409 U.S. at 67; Flook, 437 U.S. at 589,
593 n.15; Funk Bros. Seed Co. v. Kalo Inoculant Co.,
333 U.S. 127, 130 (1948) (“[Fundamental principles]
are part of the storehouse of knowledge of all men.
They are . . . free to all men and reserved exclusively
to none.”). However, an application of a fundamental
principle can be patentable under § 101, provided the
application is useful and inventive. See Flook, 437
U.S. at 594 (“[E]ven though a phenomenon of nature
or mathematical formula may be well known, an
inventive application of the principle may be
8 The Federal Circuit itself acknowledged that the machine-
or-transformation test does not appear on the face of the statute.
Bilski, 545 F.3d at 956 n.11 (“the statute itself does not explicitly
mention machine implementation or transformation”). As one of
the dissents below stated, “The United States Supreme Court
has never held that ‘process’ inventions suffered a second-class
status under our statutes, achieving patent eligibility only
derivatively through an explicit ‘tie’ to another statutory
category.
.
.
. Yet second-class status is today engrafted on
‘process’ inventions.” Id. at 990 (Newman, J., dissenting).
11
patented.”); Funk Bros., 333 U.S. at 1309 (“He who
discovers a hitherto unknown phenomenon of nature
has no claim to a monopoly of it which the law
recognizes. If there is to be invention from such
discovery, it must come from the application of the
law of nature to a new and useful end.”).10 If the
fundamental principle cannot be applied except in a
single, limited fashion, then no patent may be
granted on the application; if granted, such a patent
would preempt the fundamental principle and hence,
in effect, be a patent on the principle itself. Benson,
409 U.S. at 71-72. If the claim is drawn so broadly, or
is so unrelated to any particular use of a fundamental
principle, that it preempts substantially all uses of
that principle, it is similarly unpatentable. Id. at 68-
69.
The question here is whether, in the case of a
process claim, the foregoing standards need to be
supplemented, or even supplanted, by an exclusive
and rigid rule for distinguishing between a
9 Although Funk Bros. concerned a product claim, its
holding applies to a process claim. Diehr, 450 U.S. at 188 n.11
(citing Benson, 409 U.S. at 68).
10 See also Diehr, 450 U.S. at 187 (“It is now commonplace
that an application of a law of nature or mathematical formula
to a known structure or process may well be deserving of patent
protection.”); Mackay Radio & Telegraph Co. v. Radio of Am.,
306 U.S. 86, 94 (1939) (“While a scientific truth, or the
mathematical expression of it, is not a patentable invention, a
novel and useful structure created with the aid of knowledge of
scientific truth may be.”).
12
fundamental principle and a patentable application
thereof. In Caris’s view, no such supplementation is
needed: The rule in question, the machine-or-
transformation test, would replace flexible standards
– whose merit lies in their ability to accommodate
new and unforeseen technologies – with an unduly
limited choice, conditioning patentability on the
presence of either machinery or physical transforma-
tion.11 The language of the test impermissibly looks
backward to the brute physicality of the Industrial
Age rather than forward to the subtle realities of the
Information Age. As articulated by Thomas Jefferson,
author of the nation’s first patent legislation, the goal
of the Patent Act is that “ ‘ingenuity should receive a
liberal encouragement.’ ” Chakrabarty, 447 U.S. at
308 (quoting 5 Writings of Thomas Jefferson 75-76
(Washington ed. 1871)). Mandating the machine-or-
transformation test would bar vast areas of
innovation from such encouragement and thus would
be contrary to congressional intent.
In assessing the patentability of process claims,
this Court has never required the machine-or-
transformation test and has twice ruled that it is not
the exclusive patentability test for such claims. In
Benson, the Court, after reviewing its decisions
11 This Court has recognized that rigid tests are often
inadequate for addressing patentability. See KSR Int’l Co. v.
Teleflex Inc., 550 U.S. 398, 415 (2007) (“We begin by rejecting the
rigid approach” used by lower court for determining pat-
entability under 35 U.S.C. § 103).
13
sustaining patents on the basis of a transformation
involving no machine, held:
It is argued that a process patent must either
be tied to a particular machine or apparatus
or must operate to change articles or
materials to a ‘different state or thing.’ We do
not hold that no process patent could ever
qualify if it did not meet the requirements of
our prior precedents.
409 U.S. at 71 (emphasis added).12 This express
holding that the machine-or-transformation test is
not the exclusive test for the patentability of claimed
processes was reaffirmed in Flook:
The statutory definition of “process” is
broad.
.
.
. An argument can be made,
however, that this Court has only recognized
a process as within the statutory definition
when it either was tied to a particular
apparatus or operated to change materials to
a “different state or thing.” . . . As in Benson,
we assume that a valid process patent may
issue even if it does not meet one of these
qualifications of our earlier precedents.
12 Inexplicably, the majority below called these statements
“equivocal.” 545 F.3d at 956. As Judge Newman’s dissent
observed, there is nothing equivocal about the phrase “We do not
hold . . . .” See id. at 979 (Newman, J., dissenting).
14
437 U.S. at 588 n.9 (emphasis added) (citations
omitted).13 Thus, the Court concluded that while
claims to processes have been upheld when the
process at issue was in fact tied to a machine or
transformed an article into a different state or thing,
nothing in the Court’s holdings has elevated either a
machine tie or a transformation into the sine qua non
of patentability or has turned such facts into legal
requirements.
In view of Flook and Benson, the principal basis
for the Federal Circuit’s holding may be quickly
rejected. The holding was based on the following
sentence from Benson, which the majority below
quoted three times: “Transformation and reduction of
an article ‘to a different state or thing’ is the clue to
the patentability of a process claim that does not
include particular machines.” Benson, 409 U.S. at 70;
see Bilski, 545 F.3d at 954, 955-56, 956. According to
the Federal Circuit, the Benson Court’s use of the
definite article “the” – instead of the indefinite article
“a” – before the word “clue” proved that the Court
meant the machine-or-transformation test to be the
exclusive test for the patentability of a process. See
Bilski, 545 F.3d at 955-56 & n.11. Moreover, the
Federal Circuit, noting that Diehr repeated Benson’s
“clue” sentence without repeating Benson’s and
Flook’s holding of non-exclusivity, essentially held
13 The majority below tendentiously omitted the phrase “An
argument can be made” from its quotation of this portion of
Flook. See 545 F.3d at 956.
15
that Diehr overruled these non-exclusivity holdings
sub silentio. For several reasons, the Federal Circuit’s
conclusions are fatally flawed.
First, if the Benson Court had wanted to make
transformation the exclusive legal test of patent-
ability for a process untied to a machine, it would
have used language far more definite than the
hesitant and unemphasized phrase “the clue.”
Second, the quite debatable sentence on which
the Federal Circuit relied appears in the same
Benson opinion as the explicit holding that a process
may be patentable even if it involves no machine
implementation or transformation. Because the Court
that authored the proposition relied on by the Federal
Circuit also held the proposition non-exclusive, any
argument for exclusivity is foreclosed.
Third, the Federal Circuit’s argument that Diehr
relied on Benson’s “clue” sentence but did not repeat
Benson’s holding of non-exclusivity, see Bilski, 545
F.3d at 956, proves nothing. The process at issue in
Diehr involved a machine – a rubber molding press –
and transformed raw rubber into cured rubber. 450
U.S. at 180, 184. The Court held the process
patentable. Id. But nothing in the holding remotely
stated that a process that involves neither a machine
nor a transformation cannot be patentable.14 That
14 An additional reason why Diehr did not hold that a
process involving no machine or transformation is unpatentable
under § 101 is that the process at issue there involved both a
(Continued on following page)
16
statement was so firmly rejected in Benson and Flook
that the rejection simply did not need repeating in
Diehr. Had the Diehr Court understood itself to be
overruling the explicit non-exclusivity holdings of
Benson and Flook, the majority opinion in Diehr
would surely have mentioned that understanding.
That it did not do so demonstrates that the non-
exclusivity holdings of Benson and Flook remain good
law after Diehr.
Fourth, the Diehr Court itself described Benson
and Flook as holding no more than that a
fundamental principle is unpatentable. 450 U.S. at
185. That is, the raison d’etre of a machine tie or a
transformation was to avoid patenting a fundamental
principle – meaning that if a process claim found
some other way to avoid claiming a fundamental
principle, then that claim would be patentable under
§ 101. See Bilski, 545 F.3d at 1013 (“The Supreme
Court stated that all of the transformation and
machine linkage explanations simply restated the
abstractness rule.” (Rader, J., dissenting)). In other
words, the Benson Court’s holding was that the
process claim there preempted a mathematical
formula (and thus was not drawn to patentable
subject matter), and not that the machine-or-
transformation test is the only means by which a
process claim can avoid such preemption.
machine and a transformation. See Bilski, 545 F.3d at 981
(Newman, J., dissenting). As a result, the issue of whether a
process involving no machine or transformation is patentable
was not squarely presented.
17
Finally,
Diehr shows that the Federal Circuit, by
focusing on machinery and transformation, confused
instantiation of the governing standards with the
standards themselves. Diehr held that
when a claim containing a mathematical
formula implements or applies that formula
in a structure or process which, when
considered as a whole, is performing a
function which the patent laws were
designed to protect (e.g., transforming or
reducing an article to a different state or
thing), then the claim satisfies the require-
ments of § 101.
450 U.S. at 192 (emphasis added). If transformation
had been a critical requirement of the Court’s
holding, it would not have been mentioned in a
parenthetical aside, and it would not have been
introduced by “e.g.” Indeed, the use of “e.g.” implies,
contrary to the exclusivity of the Federal Circuit’s
holding, that any number of means besides trans-
formation might be employed to ensure that the claim
is drawn to a patentable process rather than an
unpatentable fundamental principle.
The Federal Circuit’s decision should accordingly
be reversed.
18
II. AN AFFIRMANCE WOULD CALL INTO
QUESTION INNUMERABLE PATENTS
FOR DIAGNOSTIC METHODS AND WOULD
CHILL FUTURE INNOVATION
Venture capital is the lifeblood of biotechnology
companies and their life-saving discoveries. But
venture capitalists and established companies will
make few investments unless the discoveries receive
strong patent protection. Any uncertainty in the
availability of such protection will chill investment
and hence innovation. For several reasons, the
decision below, which is not limited to business
methods and applies to all processes in every field of
endeavor, will dramatically weaken patent protection
for diagnostics, and thus will jeopardize funding for
the entire industry.
Patents for diagnostics often claim a two-step
method that consists of a non-specific assay or other
measurement, followed by a correlation between the
assay result and a disease, medical condition, or
resistance to a particular treatment.15 The focus of
15 In dissent below, Judge Rader, addressing questions
raised in the dissent from the dismissal of the writ of certiorari
granted in Laboratory Corporation of America v. Metabolite
Laboratories, Inc., 548 U.S. 124, 125-39 (2006), cogently
explained why such diagnostic method claims recite patentable
subject matter under § 101:
That dissent is premised on a fundamental
misapprehension of the distinction between a natural
phenomenon and a patentable process. . . .
(Continued on following page)
19
each such method is the generation of information
useful for diagnosis and treatment. While the first
step in such methods is often – though not always –
an assay that employs a machine or apparatus (such
as a computer, thermocycler, gas chromatograph,
gene chip, and/or mass spectrophotometer) and
transforms components of tissue or blood samples
into detectible chemical complexes (such as antibody-
protein or nucleic acid complexes),16 it is and will
The fundamental error in that Lab. Corp. dissent is
its failure to recognize the difference between a patent
ineligible relationship – i.e., that between high homo-
cysteine levels and folate and cobalamin deficiencies –
and a patent eligible process for applying that
relationship to achieve a useful, tangible, and concrete
result – i.e., diagnosis of potentially fatal conditions in
patients. . . . Moreover, testing blood for a dangerous
condition is not a natural phenomenon, but a human
invention.
The distinction is simple but critical: A patient
may suffer from the unpatentable phenomenon of
nature, namely high homocysteine levels and low
folate. But the invention does not attempt to claim
that natural phenomenon. Instead the patent claims a
process for assaying a patient’s blood and then
analyzing the results with a new process that detects
the life-threatening condition. Moreover, the sick
patient does not practice the patented invention.
Instead the patent covers a process for testing blood
that produces a useful, concrete, and tangible result:
incontrovertible diagnostic evidence to save lives.
Bilski, 545 F.3d at 1013-14 (Rader, J., dissenting).
16 Not every diagnostic method patent involves an assay,
however. When a diagnostic method involves no assay, it
may be particularly vulnerable to rejection under the
(Continued on following page)
20
remain doubtful whether machine implementation
and transformation are sufficiently central to each
method to satisfy the machine-or-transformation test.
See Bilski, 545 F.3d at 961-62 (“The use of a specific
machine or transformation or an article must impose
meaningful limits on the claim’s scope . . . . Th[e]
transformation must be central to the purpose of the
claimed process.” (emphasis added)); id. at 1015
(Rader, J., dissenting) (“[The majority] opinion
propagates unanswerable questions: What form or
amount of transformation suffices? . . . What link to a
machine is sufficient to invoke the ‘or machine’
prong?” (emphasis added)).17 Such doubt creates a
significant disincentive for investment because of the
consequent uncertainty as to whether future inno-
vations in molecular diagnostics will be accorded pat-
ent protection. See Bilski, 545 F.3d at 1014 (Rader, J.,
dissenting) (“[T]his court inadvertently advises
investors that they should divert their unprotectable
investments away from discovery of ‘scientific
relationships’ within the body that diagnose breast
cancer or Lou Gehrig’s disease or Parkinson’s . . . .”).
machine-or-transformation test, as the discussion below
concerning the ’180 Office Action reveals.
17 Because of the risk inherent in myopic attention to only
one step in a process, Diehr warns that a court, in assessing the
patentability of a claimed process, must consider the claim “as a
whole.” Diehr, 450 U.S. at 188. Yet the majority opinion below
runs afoul of this admonition by requiring that, in a process
claim, the step involving a transformation – such as might occur
during the assay step of a two-part diagnostic method – be
“central” to the process. 545 F.3d at 962.
21
The danger to personalized medicine is clear.
Before the year was out, the Federal Circuit had used
the decision below to invalidate claims in a patent for
an immunization method. See Classen Immuno-
therapies, Inc. v. Biogen IDEC, No. 2006-1634, 2008
WL 5273107 (Fed. Cir. Dec. 19, 2008); see also King
Pharms., Inc. v. Eon Labs, Inc., 593 F. Supp. 2d 501,
512-13 (E.D.N.Y. 2009) (invalidating treatment
method claim under Bilski). On December 3, 2008, in
a presentation concerning personalized medicine, the
USPTO explicitly applied the holding below to a
theragnostic method for selecting a treatment for
breast cancer18 – belying Respondent’s assertion in its
opposition to certiorari that this matter implicates
only business methods and not “frontier tech-
nologies,” see Brief for the Respondent in Opposition,
Bilski v. Doll, No. 08-964, 2009 WL 1179332, at *14
(Sup. Ct. May 1, 2009). Early in 2009, the USPTO
issued guidelines to patent examiners for applying
the machine-or-transformation test to process claims
in view of the decision below.19 The guidelines stated
that “reciting a specific machine or a particular
18 See Kathleen Bragdon, Quality Assurance Specialist,
Technology Center 1600, USPTO, A Look at Personalized
Medicine, at slide 16, available at http://www.cabic.com/bcp/
120308/.
19 See Memorandum dated January 7, 2009, from John J.
Love, Deputy Commissioner for Patent Examination Policy to
the Technology Center Directors and Patent Examining Corps
(“Bilski Guidance Memo”), available at http://www.uspto.gov/
web/offices/pac/dapp/opla/documents/bilski_guidance_memo.pdf.
22
transformation of a specific article in an insignificant
step, such a[s] data gathering or outputting, is not
sufficient to pass the test.” Bilski Guidance Memo at
1. Left unclear, however, is whether an assay or other
measurement constitutes “data gathering.”
USPTO Examiners have begun rejecting diag-
nostic method claims under Bilski. On July 7, 2009,
an Examiner rejected U.S. Application Serial No.
10/888,18020 (the “ ’180 Office Action”), claim 1 of
which was rejected under Bilski. Claim 1 described a
method for detecting endometrial pathology by
detecting a plurality of polypeptides in a test sample
to obtain a test profile, comparing the test profile to a
reference protein profile, and determining that a
patient has an endometrial pathology where a
difference is measured with respect to at least one
biomarker. Acknowledging the holding below, the
Examiner asserted that a claimed process is pat-
entable only if it meets the machine-or-
transformation test. ’180 Office Action, p. 4 (citing
Bilski), available at http://portal.uspto.gov/external/
portal/pair (Application No. 10/888,180; file wrapper).
The Examiner then stated that “the claimed subject
matter recites steps for obtaining a patient’s sample,
detecting polypeptides in the test sample to yield a
profile, and providing a result to a user in a user
20 Assigned to Science & Technology Corporation (STC.UNM)
at University of New Mexico, on reel/frame no. 021321/0457,
recorded 7/31/2008, available at http://assignments.uspto.gov/
assignments/q?db=pat (Published Application No. 20050100967).
23
readable format without requiring any specific
machines for performing these steps.” Id. (emphasis
added). Finally, the Examiner stated that the
“claimed subject matter recites steps for obtaining a
patient sample and detecting polypeptides . . . [but
that] . . . these limitations do not require any assays
for performing these steps and therefore do not
explicitly result in a transformation of an article.” Id.
(emphasis added).21 Similar rejections are certain to
follow.
It is not just pending applications that are now in
jeopardy: Hundreds, even thousands, of already-
issued patents are now subject to invalidity defenses
in infringement litigation. Many such patents recite
diagnostic methods involving neither an assay (or
other transformative measurement) nor machine
implementation. Many others involve an assay in
which the transformation of the tissue sample’s
components may not be considered sufficiently
“central to the purpose of the claimed process,” Bilski,
545 F.3d at 962, because the transformation is
incidental to the purpose of generating diagnostic
information. Moreover, the jeopardy and uncertainty
created by Bilski will upset the settled expectations of
21 Although the Examiner indicated that addition of an
assay would overcome the transformation-based rejection, see
’180 Office Action, p. 4, the addition could well be insufficient in
view of the statement in the majority opinion below that “the
transformation must be central to the purpose of the claimed
process.” Bilski, 545 F.3d at 962.
24
those who, in obtaining patents for claims that may
now run afoul of the machine-or-transformation test,
followed the law as it existed at the time of the patent
application. See Festo v. Shoketsu Kinzoku Kogyo
Kabushiki Co., 535 U.S. 722, 724 (2002) (“ ‘[C]ourts
must be cautious before adopting changes that will
disrupt the settled expectations of the inventing
community.’ ” (citation omitted));22 see also Payne v.
22 The Festo Court explained:
The responsibility for changing [settled law] rests
with Congress. . . . Fundamental alterations in these
rules risk destroying the legitimate expectations of
inventors in their property. The petitioner in Warner-
Jenkinson requested another bright-line rule . . . at
the cost of disrupting the expectations of countless
existing patent holders. We rejected that approach:
“To change so substantially the rules of the game now
could very well subvert the various balances the PTO
sought to strike when issuing the numerous patents
which have not yet expired and which would be
affected by our decision.” [Warner-Jenkinson Co. v.
Hilton Davis Chemical Co., 520 U.S. 17, 32 n.6 (1997)];
see also id., at 41, 117 S.Ct. 1040 (GINSBURG, J.,
concurring) (“The new presumption, if applied
woodenly, might in some instances unfairly discount
the expectations of a patentee who had no notice at
the time of patent prosecution that such a presumption
would apply”). As Warner-Jenkinson recognized, patent
prosecution occurs in the light of our case law.
Inventors who amended their claims under the
previous regime had no reason to believe they were
conceding all equivalents. If they had known, they
might have appealed the rejection instead. There is no
justification for applying a new and more robust
estoppel to those who relied on prior doctrine.
Festo, 535 U.S. at 739.
25
Tennessee, 501 U.S. 808, 828 (1991) (adhering to
established law, and to consequently settled expecta-
tions, is particularly important “in cases involving
property and contract rights, where reliance interests
are involved”); Bilski, 545 F.3d at 977, 993 (Newman,
J., dissenting). Some of the more well-known
examples of patents now in danger include:
•
Prognosis for Colon Cancer: Claim 9
of U.S. Patent No. 7,163,801 assigned to
National Institutes of Health, U.S. Dept.
of Health and Human Services, is
directed to a method of determining a
prognosis for survival for colon cancer in
a patient having stage II colon carci-
noma by measuring levels of a bio-
marker in a colon cancer cell-containing
sample: “A method of determining a
prognosis for survival for a colon cancer
patient having stage II colon carcinoma,
comprising: (a) measuring levels of
TUCAN polypeptide and one or more
biomarker polypeptides selected from
the group consisting of cIAP2, Apaf1,
Bcl-2 and Smac in a colon cancer cell-
containing sample from said colon
cancer patient, and (b) comparing the
level of TUCAN polypeptide and the one
or more selected biomarker polypeptides
in said sample to a reference level of
TUCAN polypeptide and said one or
more selected biomarker polypeptides
from normal colon tissue, wherein a
lower level of TUCAN polypeptide and a
higher level of any of Apaf1, Bcl-2, or
26
Smac, or a lower level of TUCAN
polypeptide and a lower level of cIAP2 in
said sample relative to said reference
level correlate with increased survival of
said patient.”
•
Colon Neoplasia Detection: Claim 13
of U.S. Patent No. 7,485,420, assigned
on its face to Case Western Reserve
University, identifies a method com-
prising determining the likelihood that a
human subject has colon neoplasia by
detecting a vimentin expression level
relative to a control: “A method for
detecting the likelihood that a human
subject has colon neoplasia, comprising
detecting vimentin protein or nucleic
acid expression level in a sample from
the human subject, wherein reduced
expression level of vimentin protein or
nucleic acid relative to a control sample
from a healthy subject is indicative of
the likelihood that the human subject
has colon neoplasia.”
• Prostate Specific Antigen (“PSA”)
test for prostate cancer: Claim 10 of
U.S. Patent No. 5,840,501, assigned on
its face to Bayer Corp., identifies a
method consisting of any immunoassays
followed by a correlation: “A method for
monitoring the course of disease in a
male patient diagnosed with prostate
cancer, comprising the performance of
a series of immunoassays over time to
determine changes in the level of
27
complexed prostate specific antigen
(cPSA) in blood samples obtained from
such patient, whereby changes in the
cPSA blood level correlate with changes
in disease status.” PSA is widely used to
diagnose prostate cancer.
• Test for HIV/AIDS: Claim 1 of U.S.
Patent No. RE38352, assigned on its
face to Stanford University, identifies a
method consisting of any test for a
specific nucleic acid mutation, followed
by a correlation: “A method of evaluating
the effectiveness of antiretroviral
therapy of an HIV-infected patient
comprising: collecting a plasma sample
from an HIV-infected patient; and
determining whether the plasma sample
comprises nucleic acid encoding HIV
reverse transcriptase having a mutation
at codon 215, in which the presence of
the mutation correlates positively with
an accelerated immunologic decline of
said patient compared to patients who
do not have the mutation.” Mutations
in the HIV virus within an infected
individual are widely used to help people
find and take drugs that will make them
better, and to avoid drugs that will make
them sicker.
• HER-2/neu test for breast and
ovarian cancer: Claim 1 of U.S. Patent
No. 4,968,603, assigned on its face to the
University of California, identifies a
method consisting of any test for the
28
amplification level of the HER-2/neu
gene, followed by classifying an in-
creased amplification relative to a refer-
ence level: “A method for screening
patients to determine disease status,
said method comprising: measuring the
level of amplification or expression of the
HER-2/neu gene in a sample from a
patient suffering from breast or ovarian
adenocarcinoma; and classifying those
patients having an increased level of
amplification or expression of the HER-
2/neu gene relative to a reference level
characteristic of normal cells as being
more likely to suffer disease relapse or
having a decreased chance of survival.”
HER-2/neu-related tests are widely used
to determine which drug should be taken
by a breast cancer patient.
• Test for neoplastic (i.e., cancerous)
tissue: Claim 7 of U.S. Patent No.
5,955,263, assigned on its face to Johns
Hopkins University and Genzyme Corp.,
identifies a method consisting of com-
paring normal and abnormal proteins,
and detecting a mutation-based altera-
tion in the amino acid sequence wherein
the alteration indicates neoplasia: “A
method to aid in determining neoplasia
of a tissue of a human, comprising:
comparing (a) p53 proteins in a human
tissue suspected of being neoplastic to
(b) wild-type p53 proteins in a normal
tissue of said human; detecting an
alteration in the amino acid sequence
29
between the p53 proteins, wherein the
alteration is due to a mutation in a p53
gene in the human tissue suspected of
being neoplastic, wherein the mutation
is selected from the group consisting of:
a point, deletion, missense, and frame-
shift mutation, wherein an alteration
in the amino acid sequence indicates
neoplasia.” Science Magazine named p53
the “molecule of the year.” Mutations in
p53 help doctors determine whether a
tissue is cancerous.
The repercussions for the future of biotechnology,
particularly diagnostics, if the decision below is
affirmed would be staggering. The health care
industry relies on the economic incentives provided
by our patent system, including in large part by the
patentability of diagnostic method claims. If such
claims were subject to invalidation as unpatentable,
health care companies would lose incentive to conduct
research into basic diagnostics, to develop
personalized medicine tools and diagnostic systems,
to validate them, and to have them approved by the
FDA – all steps that are tremendously costly and
necessary for the public to derive any benefit from
new diagnostics. Likewise, venture capitalists,
financial firms, and established companies would no
longer have incentives to fund or invest in health care
companies that pursue the research, development,
and regulatory approval of drugs and diagnostic
systems. If there is no expectation of a limited right
to exclusivity, industry will respond: These areas will
30
be neglected in favor of other areas for which patent
protection is still available.23
Weighty policy issues underlie our carefully
structured and long-standing patent system. While
the decision below would change this framework and
impose a further, rigid limitation on patentability,
23
Harm from declaring diagnostic method claims
unpatentable is not limited to the loss of incentives for research
and development. Rather, the diagnostics segment of the
biotechnology industry – which industry in 2008 generated
about $70 billion in revenues, employed 190,000 people, and had
a market capitalization of more than $340 billion – could be
seriously jeopardized. See Glen T. Giovannetti & G. Jaggi, Ernst
& Young, Beyond Borders – Global Biotechnology Report 2009, p.
34G (2009). As discussed above, an affirmance here could cause
numerous two-step diagnostic patents to be rendered void. At a
minimum, companies holding those patents – and their
investors and financial backers – would face uncertainty as to
the value of their patents and the corresponding value of their
businesses. It is unquestionable that a biotechnology company’s
value drops precipitously upon expiration of its patents,
demonstrating the economic value afforded by patent protection.
For example, in anticipation of the expiration of its patent on
the cholesterol drug Zocor in June 2006, Merck announced in
December 2005 that it expected sales of Zocor to drop from $4.35
billion in 2005 to $2.45 billion in 2006. See Merck Plans More
Cost-Cutting, N.Y. TIMES, Dec. 16, 2005, at C5. In 2007, as a
result of generic competition, Merck’s sales of Zocor were only
$877 million. See Gina-Louise Monari, Pressure rises in cardio,
MedAd News, Feb. 2009, available at http://www.pharmalive.
com/magazines/medad/view.cfm?articleID=7173. Any ruling that
would render diagnostic method claims unpatentable would
hasten such reduction of value for numerous companies, with
devastating effects for the biotechnology industry.
31
any such revision should be left to the Legislative
branch. This Court so stated in Chakrabarty:
The choice we are urged to make is a matter
of high policy for resolution within the
legislative process after the kind of
investigation, examination, and study that
legislative bodies can provide and courts
cannot. That process involves the balancing
of competing values and interests, which in
our democratic system is the business of
elected representatives. Whatever their
validity, the contentions now pressed on us
should be addressed to the political branches
of the Government, the Congress and the
Executive, not to the courts.
447 U.S. at 317; see Diehr, 450 U.S. at 182.24 In sum,
any ruling in this case should not upset settled law
and expectations concerning the scope of patent-
ability.
----------------- ♦ -----------------
24 Congress can and does amend the patent law when it
finds that a change is in the public interest. For example, in
1996, Congress exempted certain medical activity from giving
rise to infringement liability. 35 U.S.C. § 287(c) (added by Pub.
L. No. 104-208, § 616, 110 Stat. 3009, 3009-67 (Sept. 30, 1996)).
32
CONCLUSION
The judgment of the Federal Circuit should be
reversed insofar as it held the machine-or-
transformation test to be the exclusive test for pat-
entable subject matter in process claims.
Respectfully submitted,
GIDEON A. SCHOR
Counsel of Record
VERN NORVIEL
RAY AKHAVAN
1301 Avenue of the Americas,
40th
Floor
New York, NY 10019
(212) 999-5800
Attorneys for Amicus Curiae
Caris Diagnostics, Inc.
Document Outline
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