• Being “new and useful” are not enough for software patent eligibility: the question is whether “new and useful” software taken as a whole and excluding extra-solution activity amounts to human ingenuity,

• The 101 preemption analysis for determining subject matter patentability centers on the “practical, real-world effects of the claim,”

• Seven of 10 judged the Beauregard and method claims invalid,

• Five of 10 judged the system claims invalid, and

• It is the concurring opinion that garnered the most votes of five of 10 judges compared to the four votes garnered by the dissent and the separate opinion of Judge Newman.

On May 10, 2013, the en banc federal circuit handed down its highly anticipated decision in the software patent case of CLS Bank.  The court struck down four software patents under 101 as patent in-eligible; affirming the lower court and effectively reversing an earlier panel decision of the federal circuit.

The CLS Bank patents provided a very good vehicle for the federal circuit to evolve the jurisprudence on 101 in the wake of Bilski.  The patents in both cases are directed to similar subject matter of hedging — to manage commodity risk in Bilski and financial risk in CLS Bank. The patents differ, however, in two respects. Unlike Bilski, where the method claims were devoid of structure, the method claims in CLS Bank recited structure inherently or expressly.  For example, the step of “adjusting” the shadow records in claim 33 of the ‘479 patents inherently recited structure.  The step of “electronically adjust[s]” the shadow records in the method claims of the ‘510 patent expressly did. CLS Bank, Concurring Op., at 25.  In addition, Bilski only included method claims. CLS Bank also included Beauregard and system claims.

It is in these differences that the jurisprudence of the en banc court in CLS Bank has made its mark. While there is no majority opinion, the en banc concurring decision written by Judge Lourie and garnering votes of five of the ten judges is the most influential of the opinions written. This concurring decision provides guidance on the sufficiency of recited structure to patent eligibility of a method claim. In addition, this concurring decision provides guidance on the spillover effect of Bilski to non-method claims. The importance of this concurring decision of five of ten judges in CLS Bank on the evolution of the 101 debate generally and on the subject matter patentability of software specifically cannot be overstated.

In a strongly worded dissent by Judge Moore, joined by Chief Judge Rader and Judges Linn and O’Malley, the naysayers predict that the CLS Bank decision is the beginning of the end of software patents. As Judge Moore pronounced “[a]nd let’s be clear: if all of these claims, including the system claims, are not patent-eligible, this case is the death of hundreds of thousands of patents, including all business method, financial system, and software patents as well as many computer implemented and telecommunications patents.  CLS Bank, Dissenting Op., at 2. In what must be hyperbole, Judge Moore even boldly proclaimed that “[i]f all of the claims of these four patents are ineligible, so too are the 320,799 patents which were granted from 1998-2011 in the technology area “Electrical Computers, Digital Processing Systems, Information Security, Error/Fault Handling.” Id. These pronouncements and proclamations are nonsense. The CLS Bank decision is not about striking down all software patents.  Rather it is about denying patentability where there is no human invention.

Ten judges participated in the decision and seven of the ten judged the method and Beauregard claims invalid. Only five of ten judged the system claims invalid. An evenly divided decision on the judgment, under court law, means affirmation of the lower court judgment. The Dissent points out that no one opinion garnered a majority of the court, as though that gives little weight to the concurring decision. However, the concurring decision written by Judge Lourie and joined by four other judges, hence garnering five votes, certainly carries more weight of things likely to come than the concurrence-in-part, dissent-in part decision, authored by Chief Judge Rader and joined by only three other of ten judges, hence garnering only four votes; the dissenting decision written by Judge Moore  and garnering those same four votes; and the separate concurring-in-part, dissenting-in-part decision written by Judge Newman.

The tenor of the dissent evidences high tension between the judges on the subject matter patentability of software patents. If the final remarks of Chief Judge Rader, reminiscing about the days when he and Judge Lourie, who authored the per curiam decision, once saw more eye to eye on this issue, is any indication, the 101 debate is far from being over.  Additional Reflections of Chief Judge Rader, at 3.

The CLS Bank decision of the five concurring judges, while not a majority nonetheless carries the most momentum, as the decision garnering the most votes; and should be heralded by the patent community. For more than two years now, the Supreme Court has stated in no uncertain terms in major decisions on 101, the appropriate analysis to use to determine whether a patent covers patent eligible matter. The message by the Supreme Court in each of Bilski, Prometheus, and most likely to be the message in Myriad, is that a claim taken as a whole and excluding extra-solution activity must be tailored narrowly enough to encompass only a particular application of a fundamental principle (i.e., a law of nature, natural phenomena, or an abstract idea) rather than to preempt the principle itself.  Ibid.; Bilski, v. Kappos, 130 S. Ct. 3218, 3231 (2010); Gottschalk v. Benson, 409 U.S. 63, 72 (1972); Parker v. Flook, 437 U.S. 584 (1978); Diehr, 450 U.S. 175, 185 (1981). For perhaps the first time, the Federal Circuit has embraced that message in the CLS Bank concurring decision in a way that the opinion could just as well have been authored by the Supreme Court itself.  More particularly, the five CLS Bank concurring judges were in agreement to use the analytical tools provided by the Supreme Court to first identify the abstract principle and its scope and then determine whether the recited steps that manipulate the abstract principle preempts the abstract principle. CLS Bank, Concurring Op, at 25, 26  In the CLS Bank concurring opinion, once the general computing structure was stripped from the claims as insignificant extra solution activity, all that remained was the abstract principle; which is not enough.

It May Be New and Useful, But Is It An Invention?

A key take-away from the Supreme Court precedent in Bilski, Prometheus, and likely Myriad, once decided, is that these patents fail not because they were not “new and useful.” Rather they fail because they did not satisfy the “inventive” prong of the “[w]hoever invents or discovers any new and useful” requirements of 101. The five CLS Bank concurring judges captured that concept in their concurring decision when explaining that:

“[a]n “inventive concept” in the § 101 context refers to a genuine human contribution to the claimed subject matter… The underlying notion is that a scientific principle … reveals a relationship that has always existed.” Flook, 437 U.S. at 593 n.15. From that perspective, a person cannot truly “invent” an abstract idea or scientific truth. He or she can discover it, but not invent it. Accordingly, an “inventive concept” under § 101—in contrast to whatever fundamental concept is also represented in the claim—must be “a product of human ingenuity.” See Chakrabarty, 447 U.S. at 309.” Ibid., at 21.

Practitioners should make note from their explanation that “inventiveness” under 101 is different from 102 and 103. As the concurring opinion explains, “[w]e do not read the Court’s occasional use of that language in the § 101 context as imposing a requirement that such limitations must necessarily exhibit “inventiveness” in the same sense as that term more commonly applies to two of the statutory requirements for patentability, i.e., novelty and nonobviousness. See 35 U.S.C. §§ 102, 103.”  Ibid., at 19  This reasoning squares well with what the Supreme Court appears to be saying  on this point.

The Dissent, however, continues in endeavors to narrow the “inventiveness” requirement. In the words of the Dissent:

“[t]he Supreme Court’s reference to “inventiveness” in Prometheus must be read as shorthand for its inquiry into whether implementing the abstract idea in the context of the claimed invention inherently requires the recited steps.” CLS Bank Concurring-in-part, Dissenting-in-part Op., 23

According to the Dissent:

“[i]f to implement the abstract concept, one must perform the additional step, then the step merely separately restates an element of the abstract idea, and thus does not further limit the abstract concept to a practical application.” Ibid., at 23, 24.

While it may be true that one reason an additional step is lacking human inventiveness is because it may restate an element of the abstraction that is not the only reason. Surely, the term “extra-solution” activity coined by the Court in Flook to describe a non-inventive step may include things broader than the abstract principle itself. In fact, it includes things like general purpose computers, as in Benson, which are real and not an abstraction.

The reasoning the Dissent uses to try to limit the “inventiveness” requirement to is transparent. The Dissent wants to put as much distance as it can between the general purpose computing structure recited in the system claims and the inventiveness requirement. The concurring decision of the five judges seems to get it right with Supreme Court jurisprudence when it explains that “analyzing patent eligibility, in contrast, considers whether steps combined with a natural law or abstract idea are so insignificant, conventional, or routine as to yield a claim that effectively covers the natural law or abstract idea itself. (emphasis added) CLS Bank, Conccuring Op., at 22. The general purpose computing structure recited in the system claims are just that.

The Dissent analogizes the recited structure in the CLS Bank system claims to a machine combination with circuitry, transistors, capacitors, and other tangible electronic components precisely arrayed to accomplish the function of translating Chinese to English. CLS Bank Concurring-in-part, Dissenting-in-part Op.at 28. As the Dissent explains, “[t]hese complex interrelated machine components would squarely fit within the terms of Section 101 and involve nothing theoretical, highly generalized, or otherwise abstract.”  Ibid., at 29. The analogy is inapro since not one of the computing structures in the system claims in CLS Bank is recited with the kind of structural detail existing in the analogized assembly. In fact, even the assembly of machine or electronic components in the analogy used by the Dissent would fail 101 if that assembly contained only the sparce claim limitations found in the computing structure recited in the claims of CLS Bank.

The Dissent relies heavily on the extensive architecture and interrelationship of components description in the specification in arguing that the recited computing structure is not a general computer; rather it is a specific application of a general computer. Ibid., at 31-34. The details pointed to by the Dissent in arguing the computing structure to be specific are recited in none of the claims before the court, expressly or by claim construction of the court. Indeed, this part of the Dissent’s opinion flies in the face of the court’s own precedent concerning the impermissible importation of limitations into claims.

The CLS Bank decision of the five concurring judges aligns well with the jurisprudence of the Supreme Court on subject matter patentability and should be commended. The concurring decision does have one shortcoming, however, which is the same one as in the Supreme Court precedent. The Supreme Court precedent makes clear what you need to do to determine whether a claim preempts an abstract idea. But the Court never really tells you where to draw the line that defines whether a claim has preempted an abstract idea or not. In other words, “when do recitations in a claim preempt the abstract idea and when do they not?” For that reason, drawing the preemption line becomes a matter of subjective guesswork based on the specifics of the case and decider and is ripe for inconsistent decisions. It is largely for this reason that the patent community has been reluctant to more quickly embrace the Supreme Court’s jurisprudence.

A Real-World “Physical or Virtual Links” Test

An amicus brief filed by The Juhasz Law Firm in this CLS Bank case, describes one  guideline, that “is not a bright line,” provides guidance on where to draw the preemption line, and that the CLS Bank concurring judges appears to be inching toward accepting.

Since 2010, we have advocated a “physical or virtual links” test that provides practitioners with good guidelines for more accurately drawing that preemption defining boundary line  – towit, that line within which an invention is eligible patent matter and without which an invention is not. The physical and virtual links test makes it possible to draw that preemption line with more predictability; something not possible using only the tools the Supreme Court has provided.

The physical and virtual links test, simply put, is this:  the clue to the patentability of software may lie in the “manipulation” by the data (e.g., the electrical data or signals generated by the software instructions) of physical or tangible objects either physically (i.e., by a “physical link”) as in Diehr ( i.e. , the electrical data or signals generated by the software instructions are manipulating in this case physical [not tangible] objects of a “mold” and a “press” through the steps of “loading of the mold” and “opening of the press”) or virtually (i.e., by a “virtual link”), that is to say, by electrical signals or data generated by the software instructions representing physical or tangible objects as in Morse (e.g., opening or closing of a physical telegraphic switch or manipulation of tangible sound, light, etc., such as on-off tones, lights, or clicks in telegraphic use).

The physical and virtual links test is all about software data manipulating something real, that is to say, manipulating physical or tangible objects. The manipulation can occur physically, as in Diehr, or virtually, that is to say, by manipulating data that represents physical or tangible objects, as in Morse. In the CLS Bank concurring decision of five judges, the court’s momentum is inching closer to the physical and virtual test when explaining that, “[t]he § 101 preemption analysis centers on the practical, real-world effects of the claim.” Concurring Op., at 20  The “practical, real-world effects” of the claim lies in the claim having manipulated something real; which after all is what the physical and virtual links test is all about.

The patents in CLS Bank failed because the software only manipulated abstract things. The predictions of the Dissent will not come to pass. Software patents that manipulate something real do and will continue to survive.

About The Juhasz Law Firm

The Juhasz Law Firm is a patent and intellectual property (IP) protection, counseling, licensing and litigation firm. Combining deep patent/IP experience, broad capabilities across a wide spectrum of industries and technologies, and extensive expertise in strategic counseling, The Juhasz Law Firm collaborates with clients to help them better see, understand and realize the potential strategic value from their patents and intellectual property.

Paul R. Juhasz has written extensively on matters of software patents, including the Bilski software patent decision and including an amicus brief filed in the CLS Bank case.

In a sea-change of thinking on induced infringement by the Federal Circuit in Akamai, decided last August, as reaffirmed most recently in Aristrocrat, decided last month, liability for induced infringement can now be based upon two or more unrelated entities engaging in acts that collectively practice the steps of the patented method even though no one induced entity practices all of the steps of the method.

Under previous BMC Resources precedent, which was overruled by the Akamai court, only if a single actor induced was also directly infringing the patent, either personally or vicariously, could there be liability for induced infringement.

The problem fixed by the Akamai and Aristrocrat decisions is one that is prevalent in cases involving charges of induced infringement of a method claim under 35 U.S.C. § 271(b). In many of those cases, two or more unrelated parties may be jointly practicing a patented method invention by performing all of the claimed steps between them. Under previous BMC Resources precedent, liability for induced infringement was not possible since no one party, directly or vicariously, performed all of the method steps. Under Akamai and Aristrocrat decisions, there may now be liability for induced infringement if the induced party induces the parties to engage in the acts that collectively practice all the steps of the patented method.

The Akamai and Aristrocrat decisions have made possible many scenarios of induced infringement liability which were not possible under earlier precedent.  In one scenario found in both Akamai and Aristrocrat, the collective activities before the court involved a defendant who performed some of the steps of a claimed method who induced other parties to commit the remaining steps. The patent in Akamai covered a method for efficient delivery of web content consisting of placing some of a content provider’s content elements on a set of replicated servers and modifying the content provider’s web page to instruct web browsers to retrieve that content from those servers. In Aristrocrat, patents directed to gaming machines included method steps requiring two separate actors: (1) the casino via the gaming machine and (2) the player.

In another scenario found in the McKesson case, part of the Akamai decision, the collective activities before the court involved a defendant who performed no step of the method but induced other parties to collectively perform all the steps of the claimed method. In McKesson, the patent covered a method of electronic communication between healthcare providers and their patients. The steps were divided between patients, who initiate communications, and healthcare providers, who perform the remainder of the steps.

Under either scenario in which the inducing entity practices one or more but not all or none of the steps of the method, inducement liability can now be based upon the induced party inducing the entities to engage in the acts that collectively practice the steps of the patented method—and those others perform those acts. This despite the fact that neither the induced entity nor induced entities practice all of the steps of the method. As explained by the Akamai and Aristocrat courts, “[this] has precisely the same impact on the patentee as a party who induces the same infringement by a single direct infringer; there is no reason, either in the text of the statute or in the policy underlying it, to treat the two inducers differently.”

A continuing requirement and limitation on induced infringement liability is that the accused inducer act with knowledge that the induced acts constitute patent infringement. Global-Tech Appliances. This requirement remains a high burden for the patent holder to meet. For example, to meet this burden in Akamai this means that the defendant Limelight would be liable for inducing infringement if the patentee could show that (1) Limelight knew of Akamai’s patent, in addition to establishing that (2) it performed all but one of the steps of the method claimed in the patent, (3) it induced the content providers to perform the final step of the claimed method, and (4) the content providers in fact performed that final step.

To meet this burden in Aristrocrat this means that the casino could be liable for inducing infringement if the patentee could show that (1) the casino knew of Aristrocrat’s patent, in addition to establishing that (2) it performed all but one of the steps of the method claimed in the patent, (3) it induced the customers to perform the final step of the claimed method, and (4) the customers in fact performed that final step.

To meet this burden in McKesson this means that Epic can be held liable for inducing infringement if the patent holder can show that (1) Epic knew of McKesson’s patent, in addition to proving that (2) Epic induced the performance of the steps of the method claimed in the patent, and (3) those steps were performed.

Akamai and Aristrocrat decisions may not have altered the landscape of direct infringement. Direct infringement remains a strict liability tort. There is no scienter element required for direct infringement to have occurred. If one entity practices all steps he infringes the patent. The single entity may be a single entity acting alone or by or with one or more other entities acting under the direction or control of the single entity to such an extent that the act of the other entities can be attributed to the single entity as a direct infringer. But under Akamai and Aristrocrat decisions,  the “single-entity rule” for establishing direct infringement for purposes of induced infringement under 35 U.S.C. § 271(b) is gone; although it is still the yardstick by which liability for direct infringement under35 U.S.C. § 271(a) is measured.

About The Juhasz Law Firm

The Juhasz Law Firm is a patent and intellectual property (IP) protection, counseling, licensing and litigation firm. Combining deep patent/IP experience, broad capabilities across a wide spectrum of industries and technologies, and extensive expertise in strategic counseling, The Juhasz Law Firm collaborates with clients to help them better see, understand and realize the potential strategic value from their patents and intellectual property.

Paul R. Juhasz has written extensively on matters of software patents, including the Bilski software patent decision and including an amicus brief filed in the CLS Bank case; matters of diagnostic method patents, including an amicus brief filed in the Mayo case decided by the U.S. Supreme Court and now in the Ass’n for Molecular Pathology case; and licensing matters including strategic monetization of intellectual property.

Effective March 16, 2013, U.S. patent rights will switch from first-to-invent to first-to-file, a change that results from the patent reform act of 2011, known as the America Invents Act (AIA), passed by Congress and signed into law by President Barack Obama on September 16, 2011.

Beginning this month, any use, sale, publication or other disclosure to the public occurring anywhere in the world by anyone will stand as an absolute bar to securing a patent with one exception: An inventor will continue to enjoy a one year grace period from the date he makes any disclosure of the invention in which to file for a patent. This is the only instance in which an inventor may be able to defeat an earlier filing of another on the same invention based upon the earlier date of his disclosure.

Of course, these changes under the America Invents Act first-to-file system apply only to securing a patent in the U.S. None of these changes alter the playing rules for securing a patent in a foreign country. Those rules in many other countries are already based on a first-to-file system that each country has enacted for its jurisdiction.

Patent attorneys are advised to prevent compromise or loss of patent rights protection in the U.S. regarding a prior filing anywhere else in the world by filing for patent protection before Saturday, March 16, 2013.

America Invents Act PDF

America Invents Act Implementation Timeline

About The Juhasz Law Firm

The Juhasz Law Firm is a patent and intellectual property (IP) protection, counseling, licensing and litigation firm. Combining deep patent/IP experience, broad capabilities across a wide spectrum of industries and technologies, and extensive expertise in strategic counseling, The Juhasz Law Firm collaborates with clients to help them better see, understand and realize the potential strategic value from their patents and intellectual property.

Paul R. Juhasz, patent attorney, has written extensively on matters of software patents, including the Bilski software patent decision; matters of diagnostic method patents, including two recent amicus briefs filed before the U.S. Supreme Court in the Myriad and Prometheus cases; and licensing matters including strategic monetization of intellectual property.

In a brief filed by the U.S. in CLS Bank on December 14, 2012, the United States urged the Fed. Cir. to decide patent eligibility of software on a case-by-case basis. “This Court should identify a non-exhaustive list of factors for district courts and examiners to consider in resolving that essential question [whether the claim, properly construed, incorporates enough meaningful limitations to ensure that it amounts to more than a claim for the abstract idea itself] on a case-by-case basis.”  Slip Op. 8

While true to the letter and spirit of Bilski and its progeny decisions, the U.S. approach to deciding patent eligibility of software hardly provides patent practitioners with any more guidance than was provided by the Fed. Cir. in Research Corp. Tech – towit, “I know it when I see it.” In Research Corp. Tech., the Fed. Cir. proposed a “functional and palpable applications” test in defining whether a claim preempts a fundamental idea.  As we noted in a blog January 2011, “palpable” is defined by Merriam-Webster dictionary to mean “capable of being touched or felt” and so the “functional and palpable applications” test provides little guidance on determining the preemption issue and is reminiscent of the phrase made famous by Justice Potter Stewart in the obscenity case of Jacobellis v. Ohio “I know it when I see it.”  For more, see Bilski 101 Double-Header – “I Know it When I See It.”

The list of factors identified by the U.S. as “will often bear” on the patent-eligibility of computer-implemented inventions are “at least the following factors”:

• Nominal/Tangential: whether the computer is recited in a manner that is only nominally or tangentially related to the performance of the invention

• Generic/Unconventional: whether the computer is generically recited in a manner that would encompass any machine capable of performing the claimed steps, or whether specific, unconventional, computer equipment, tools, or processing capabilities are required

• Improved Function: whether the invention involves an improvement in the ability of the computer to function as a computer, or whether the invention relates principally to an unrelated, non-technological field

• Particular Manipulation: whether the claim recites a computerized device that manipulates particular data in a particular, specific, and useful way or whether the computer is recited solely for its generic functions of automating tasks or communicating over a distance

• Transformation of Matter: whether (as in Diehr) the abstract idea is bound up in an invention that effects a transformation of matter, or whether (as in Benson and Flook) the abstract idea is merely described in a particular environment; and

• Explained Generally: whether the computer-related elements of the claim represent conventional steps, described at a high level of generality, that would have to be employed by any person who wished to apply the abstract

Id., at 13, 14. (bold-faced headings not part of opinion)   As the U.S. explained:

“These factors are meant to identify relevant considerations only, and are not intended to be exhaustive or talismanic. No particular factor or number of factors must weigh in favor of patent eligibility for a claim to satisfy § 101. Other factors might be identified over time, and different factors may be relevant in other technological contexts. Moreover, the factors will not carry equal probative weight in every case. Nevertheless, the government believes that this general approach to § 101 for computer-implemented inventions — a broad legal inquiry undertaken on a case-by-case basis with the aid of a non-exhaustive list of probative factors — represents the best way to bring a measure of structure and discipline to the case-specific, contextual inquiry that the Supreme Court’s recent decisions have demanded.

Id., at 14, 15. (Emphasis added)

While it attempts to follow Bilski and its progeny, the “list of factors” test proposed by the U.S. hardly provides the patent community with any more insight on the patent eligibility of software than was provided by the Fed. Cir. in Research Corp. Tech — towit, “I know it when I see it.”

Take, for example, the term Nominal/Tangential proposed by the U.S. When is a recited computer “nominally or tangentially” related to the performance of the invention? as called for by the first factor. (What does “nominally” or “tangentially” even mean?)

The same can be said about other factors  proposed by the U.S., for example, Generic/Unconventional. When is a computer “generically recited in a manner that would encompass any machine capable of performing the claimed steps?” as called for by the second factor. (What does “generically” or “would encompass any machine” even mean?)

The factor Improved Function. When does an invention recite an “improvement in the ability of the computer to function as a computer?  (What does “the ability of the computer to function as a computer” even mean.)

The factor Particular Manipulation. When does a computer “manipulate data in a particular, specific, and useful way?” (What does “particular, specific, and useful way” even mean?  Indeed, is not  this criteria part of the question to be answered – i.e., whether a computer-implemented invention is eligible for a patent?).

The factor Transformation of Matter. When is “the abstract idea merely described in a particular environment”?  (What does that even mean?)

The factor Explained Generally. When does a computer-related element represent “conventional steps, described at a high level of generality, that would have to be employed by any person who wished to apply the abstract”?  (What does “high level of generality” even mean?  How will the term “any person who wished to apply the abstract” even be construed?  What does “wish” mean and does that term invoke a scienter element?  Does the absolute term “any person” fail if one person “wished to apply the abstract?)

With all due respect to the U.S., the above factors are nonsensical and serve no one but the patent litigators. They are premised upon “abstract” criteria, obtuse in understanding, and will undoubtedly lead to subjective application and inconsistent decisions, just as has the Fed. Cir.’s “functional and palpable applications” test in Research Corp. Tech.

The challenge of defining the boundary line within which software is patentable, and outside of which it is not, could not become any murkier if the U.S. approach to deciding software patentability is adopted. And it would come as no surprise if the en banc Fed. Cir. hearing the CLS Bank appeal did just that. The approach urged by the U.S. provides a very safe haven for the Fed. Cir. to decide this important software patent case in a way that does not run afoul of the fundamental Supreme Court tenet that jurisprudence involves a balancing of competing factors.

It is difficult to refute that the U.S.’s proposal does not involve such a balance. But in seeking safe haven by adopting the “list of factors” test proposed by the U.S., instead of doing the patent community a service, the Fed. Cir. may simply be deferring the question when is software eligible for a patent to future courts to decide.  They will be left to decide what the various terms in the criteria proposed by the U.S. and articulated by other courts really mean and how to apply those terms in deciding the patent eligibility of software claims. Other than patent litigators who will undoubtedly reap many benefits from this kind of approach, the U.S. “list of factors” approach does the patent community an ill service. Hopefully, the Fed. Cir. does the right thing and rejects the U.S. “list of factors” approach as the test to determine whether a computer-implemented invention is a patent ineligible “abstract idea.” For if the Fed. Cir. were to adopt the U.S. “list of factors” approach, the jurisprudence of software patent eligibility would be taken back to the future.

One of several alternative approaches to deciding the issue of the patent eligibility of software is an approach devised by The Juhasz Law Firm in May 2011 and that the Firm urged the Fed. Cir. to adopt in its en banc decision in CLS Bank. See CLS Bank amicus brief. The approach is known as the “physical and virtual links” test. It is a simple test grounded in the Supreme Court’s Diehr and Morse precedent that remains true to the admonish of the S. Ct. against bright-line rules by recognizing that it is only one clue that may be used in deciding the subject matter patentability question; albeit a very good one at that. So far, the test as applied has lead to highly predictable results in § 101 decisions to date. For more on “physical and virtual links,” read about the “virtual link” patent claim defense.

It is hoped that whatever test the en banc Fed. Cir. may adopt in deciding CLS Bank, it will be one that will be clear, cogent, and compelling that is easy to explain, understandable to the client, and leads to substantially predictable results. And not like the one proposed by the U.S. which involves deciding the patent eligibility of software based upon “I know it when I see it.”

About Juhasz Law

The Juhasz Law Firm can help you to better understand the effect of these cases on your patents. For more information regarding how these cases may affect your patents, please contact The Juhasz Law Firm. Your patents may be your most important asset. To help you protect your patents, rely on Juhasz Law, the firm committed to Guiding Your Patent Beyond The Horizon (sm).

For more information on subject matter patentability, contact Paul R. Juhasz at +1 713-260-9651.

In its serpentine path from U.S. Supreme Court to Fed Circuit and now back again, in the matter of Ass’n for Molecular Pathology, excessive attention has been given to the question whether or not isolated DNA is ‘new’ and ‘useful’.  But actually, more is required under § 101 for isolated DNA to be patent eligible; it must also be an “invention” or “discovery.”

So it is not enough simply to impute to isolated DNA that it is a “human invention” deserving of a patent because of markedly different characteristics from any found in nature as the Fed Circuit did when it decided the subject matter patentability of the isolated DNA claims largely under Chakrabarty. As §101 and the Supreme Court Mayo and Funk Bros. decisions make clear, the patent eligibility of isolated DNA depends as much upon satisfying the “invention” or “discovery” requirement as it does upon satisfying the requirement that it be “new” and “useful.”

The issue before the U.S. Supreme Court in Ass’n for Molecular Pathology is “Are human genes patentable?” Under Mayo, the issue before the U.S. Supreme Court in Ass’n for Molecular Pathology really boils down to the question: “Is a chemically engineered package of DNA derived by engineering the edges of the DNA sequence an ‘insignificant extra-solution activity’ or is it a ‘human invention’ deserving of a patent?”

On January 28, The Juhasz Law Firm filed an amicus brief before the U.S. Supreme Court in Ass’n for Molecular Pathology v. U.S.P.T.O., concerning the subject matter patentability of isolated DNA, and urging the U.S. Supreme Court to clarify its preemption doctrine.

The Juhasz Law amicus brief outlines the underpinnings of the preemption doctrine found in Supreme Court decisions in Mayo and its predecessor decisions. A composition which is “new” and “useful” must also satisfy the § 101 requirement that it be an “invention” or “discovery.” Even a product decidedly “new” and “useful” may nonetheless fail § 101 if the composition preempts the fundamental principle itself. In that case, the product may fail the § 101 requirement of invention not because there is no invention, but because the invention is the result of the handiwork of nature and not the result of human ingenuity. The isolated DNA claims now before the U.S. Supreme Court trigger the preemption question not under the requirement that they be “new,” which they are. The preemption question in the case of isolated DNA is triggered under the § 101 requirement of “invention.”

In essence, isolated DNA is human engineering done “at the edges” of DNA for the purpose of providing a chemical package for containing the naturally occurring DNA useful for diagnostic testing. Since the remaining portion of DNA (inside the isolating package and useful for diagnostic targeting) is the work of nature, the question under § 101 thus turns on whether that new packaging of DNA can be called an invention deserving of a patent under § 101.

The Juhasz Law amicus brief argues that the DNA in isolated form has the same effect it had before isolation, and the correlation of the BRCA1 and BRCA2 human genes to a predisposition to breast and ovarian cancers is nature’s handiwork and, thus, not patentable. Absent the DNA SEQ, all that remains is the isolated packaging of the DNA SEQ.  In the case where the DNA SEQ chemically packaged by isolating is identical to naturally-occurring gene sequences, the chemical packaging of that DNA SEQ amounts to an insignificant extra-solution activity that is not patent eligible matter under Mayo since doing this was a matter of known practice. Where, however, the DNA SEQ packaged involves isolated cDNA molecules, more briefing is required to determine whether the packaging of the DNA SEQ into cDNA molecules is an insignificant extra-solution activity or “human invention” deserving of a patent.

For more insight on isolated DNA and Chakrabarty, read prior blogs September 2012 and August 2011.

About The Juhasz Law Firm

The Juhasz Law Firm is a patent and intellectual property (IP) protection, counseling, licensing and litigation firm. Combining deep patent/IP experience, broad capabilities across a wide spectrum of industries and technologies, and extensive expertise in strategic counseling, The Juhasz Law Firm collaborates with clients to help them better see, understand and realize the potential strategic value from their patents and intellectual property.

Paul R. Juhasz has written extensively on matters of software patents, including the Bilski software patent decision; matters of diagnostic method patents, including an amicus brief filed in the Mayo case decided by the U.S. Supreme Court and now in the Ass’n for Molecular Pathology case; and licensing matters including strategic monetization of intellectual property.

The Juhasz Law Firm filed an amicus brief before the U.S. Supreme Court on January 28 in Ass’n for Molecular Pathology v. U.S.P.T.O., concerning the subject matter patentability of isolated DNA. The brief urges a shift in focus to the “invention or discovery” requirements in § 101 in deciding the subject matter patentability of isolated DNA.

The Juhasz Law amicus brief points out that excessive attention in this case has been given to the question whether or not “isolated DNA is ‘new’ and ‘useful’,” which it has been found to be under  the U.S. Supreme Court Chakrabarty case. The Juhasz Law amicus brief argues that more is required under § 101 for isolated DNA to be patent eligible; it must also be an “invention” or “discovery.”

“The issue before the U.S. Supreme Court boils down to the question: Is a chemically engineered package of DNA derived by engineering the edges of the DNA sequence an ‘insignificant extra-solution activity’ or is it a ‘human invention’ deserving of a patent,” said Paul R. Juhasz.

The Juhasz Law amicus brief points out that the DNA in isolated form has the same effect it had before isolation, and the correlation of the BRCA1 and BRCA2 DNA SEQ to a predisposition to breast and ovarian cancers is nature’s handiwork and, thus, not patentable.

Preemption Doctrine of The U.S. Supreme Court

The Juhasz Law amicus brief outlines the underpinnings of the preemption doctrine found in prior Supreme Court decisions, and explains the justification why preemption in the Ass’n for Molecular Pathology case should be decided on the basis of “invention” or “discovery” rather than on the basis of being “new.” Under U.S. Supreme precedent, a composition which is “new” and “useful” must still satisfy the § 101 requirements of “invention” or “discovery.”

Even a product decidedly “new” and “useful” may nonetheless fail the § 101 test if it “preempts” a fundamental principle, such as laws of nature. In this case, the isolated DNA that are identical to naturally occurring gene sequences fail the § 101 test because absent the BRCA1 and BRCA2 DNA SEQ, all that remains is known cleaved packaging; an insignificant extra-solution activity.  So there is no invention or discover beyond what is found in nature.  For isolated cDNA molecules, however, more briefing is required to determine whether the packaging of the DNA SEQ into cDNA molecules is an insignificant extra-solution activity or “human invention” deserving of a patent.

For a copy of this amicus brief, see the Publications Page.

About The Juhasz Law Firm

The Juhasz Law Firm is a patent and intellectual property (IP) protection, counseling, licensing and litigation firm. Combining deep patent/IP experience, broad capabilities across a wide spectrum of industries and technologies, and extensive expertise in strategic counseling, The Juhasz Law Firm collaborates with clients to help them better see, understand and realize the potential strategic value from their patents and intellectual property.

Paul R. Juhasz has written extensively on matters of software patents, including the Bilski software patent decision; matters of diagnostic method patents, including an amicus brief filed in the Mayo case decided by the U.S. Supreme Court; and licensing matters including strategic monetization of intellectual property.

Courts cast dark cloud over subject matter patentability of software and isolated DNA as the Supreme Court grants certiorari for the second time in the case of Ass’n for Molecular Pathology v. Myriad Genetics and the Federal Circuit grants an en banc hearing to rethink the wisdom of its earlier decision in CLS Bank International v. Alice Corporation. The earlier decisions in both cases upheld the subject matter patentability of isolated DNA and software, respectively.

The tension may never have been greater between the Supreme Court and the Federal Circuit than now. Twice over a two year period, the Supreme Court has issued guidance on §101 subject matter patentability in the Bilski and Prometheus cases. Yet the Federal Circuit has yet to find a way to square the analysis it uses in its decisions with the guidance the Supreme Court has provided.

With our amicus filing in CLS Bank yesterday, we encourage the courts to arrive at a predictable boundary for determining the patent-eligibility or ineligibility of software, as well as diagnostic methods.

Subject Matter Patentability of Software in CLS Bank

On October 9, 2012, the Federal Circuit granted a petition for rehearing en banc filed by CLS Bank International and CLS Services Ltd. in connection with the subject matter patentability of software. The rehearing allows the full court to take a fresh look at the CLS Bank decision rendered by the three judge panel of Judges Linn, Prost, and O’Malley on July 9, 2012. That panel held that software claims directed to managing trading risk are patent eligible subject matter and reversed the district court granting of summary judgment to the contrary. Circuit Judge Linn wrote the opinion of the court with Circuit Judge Prost dissenting.

The en banc rehearing signals the tension that may exist between the Federal Circuit and the Supreme Court with respect to the subject matter patentability of software patents. In this regard, the Federal Circuit has shown a bias toward upholding software patents, to the point of impermissibly importing limitations into broad claims.

The earlier CLS Bank decision appears to have done just that when importing computer application specific limitations into the software claims in order to make the claims application specific. As we wrote in our blog Subject Matter Patentability of Software–Need for a Markman Hearing, precisely this kind of impermissible importing of limitations into claims is one reason the Federal Circuit was reversed by the Supreme Court in Prometheus. The en banc hearing in CLS Bank may be an acknowledgement by the Federal Circuit of this error and that absent finding an analytical framework that squares its decision in CLS Bank with the Supreme Court precedent, this decision of the Federal Circuit too will be reversed by the Supreme Court.

There are two questions to be decided by the Federal Circuit on rehearing:

• What test should the court adopt to determine whether a computer-implemented invention is a patent ineligible abstract idea; and when, if ever, does the presence of a computer in a claim lend patent eligibility to an otherwise patent-ineligible idea?

• In assessing patent eligibility under 35 U.S.C. § 101 of a computer-implemented invention, should it matter whether the invention is claimed as a method, system, or storage medium; and should such claims at times be considered equivalent for § 101 purposes?

The issue of the appropriate test to use in determining subject matter patentability is an important one for the software industry, our clients, and our professional colleagues; and one that we at Juhasz Law have written about extensively.  We are happy to report that on December 4, we filed an amicus brief with the court proposing the adoption of the “physical” and “virtual” links test for determining whether or not a software patent preempts an abstract idea. We find this test to be an effective indicator of preemption and hope that the court agrees with our recommendation.

To see how the software claims in the CLS Bank case fare under this test, read the amicus brief.

Subject Matter Patentability of Isolated DNA in Myriad

On Friday, November 30, 2012, the Supreme Court. granted the petition of Ass’n for Molecular Pathology for a writ of certiorari. This will be the second time that this case is before the S. Ct. The first time, the S. Ct. remanded the case to the Federal Circuit for reconsideration in light of Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. ___ (2012). This time, the certiorari has been limited to the following question “1.  Are human genes patentable?” The certiorari signals the tension that exists between the Federal Circuit and the Supreme Court with respect to the subject matter patentability of isolated DNA.

This matter is likely before the S. Ct. because earlier, on remand, the Federal Circuit, once again decided the subject matter patentability of the isolated DNA claims under Chakrabarty, effectively “cleaving” out the analytical backbone of the S.Ct.’s Prometheus case from its decision upholding the subject matter patentability of isolated DNA. This despite the S. Ct. decision in Prometheus being the reason for the S. Ct. remand. The District Court had invalidated the isolated DNA claims.

As we stated in our earlier blog,

“the Myriad 2 decision has provided insight into how “cleaving of the covalent bond” in the backbone of the natural DNA to form the isolated DNA supports subject matter patentability under Chakrabarty. The patent community now needs to understand how “cleaving of the covalent bond” supports subject matter patentability under a Prometheus-like analysis. For example, is “cleaving of the covalent bond” to isolate DNA an insignificant extra-solution activity? Or is “cleaving of the covalent bond” something that makes the isolated DNA less naturally occurring (e.g., less a “law of nature/manifestation of nature”) so as to avoid preemption? It seems now that these questions have been left for the S. Ct. to decide.”

Now we will get that answer.

About Juhasz Law

The Juhasz Law Firm can help you to better understand the effect of these cases on your patents. For more information regarding how these cases may affect your patents, please contact The Juhasz Law Firm. Your patents may be your most important asset. To help you protect your patents, rely on Juhasz Law, the firm committed to Guiding Your Patent Beyond The Horizon (sm).

For more information on subject matter patentability, contact Paul R. Juhasz at +1 713-260-9651.

The Juhasz Law Firm filed an amicus brief before the Federal Circuit Court on December 4 in CLS Bank International v. Alice Corporation.  CLS Bank concerns the subject matter patentability of software. The brief urges the Federal Circuit to adopt the “physical” and “virtual” links test proposed by Juhasz to determine whether a computer-implemented invention is a patent ineligible abstract idea.

“Physical and Virtual Links”

The brief outlines the underpinnings for the test found in Supreme Court decisions in Diamond v. Diehr and O’Reilly v. Morse, which along with Benson, Flook, and Bilski form the bedrock cases in U.S. patent jurisprudence on the question of subject matter patentability.

For a copy of this amicus brief or for more information about the “physical” and “virtual” links test, go to The Juhasz Law Firm at www.patenthorizon.com.

About The Juhasz Law Firm

The Juhasz Law Firm is a patent and intellectual property (IP) protection, counseling, licensing and litigation firm. Combining deep patent/IP experience, broad capabilities across a wide spectrum of industries and technologies, and extensive expertise in strategic counseling, The Juhasz Law Firm collaborates with clients to help them better see, understand and realize the potential strategic value from their patents and intellectual property.

Paul R. Juhasz has written extensively on matters of software patents, including the Bilski software patent decision; matters of diagnostic method patents, including an amicus brief filed in the Prometheus case decided by the U.S. Supreme Court last March; and licensing matters including strategic monetization of intellectual property.

Forum shopping is the process by which a plaintiff chooses which court to decide the plaintiff’s case from among several courts having jurisdiction and venue. As a strategic patent tool, forum shopping allows a plaintiff to pick a court for filing the lawsuit that may provide plaintiff with an advantage over the defendants (e.g., favorable judge; speed of deciding a case; procedural rules; cost; convenience, etc.)  For the same reasons, defendants too may engage in forum shopping as a strategic patent tool in a responsive filing of one or more new actions against the plaintiff to open up new lines of counter-attack.

The decision by the 9th Cir. U.S. Court of Appeals in Microsoft v. Motorola on September 28, 2012 is a good example illustrating how forum shopping, including foreign forum shopping, can be used as a strategy to gain an advantage. It also shows how forum shopping does not always provide the expected advantage. There, Microsoft’s home court advantage trumped Motorola  (a division of Google) forum shopping.

In Microsoft v. Motorola, Motorola sent Microsoft an offer-to-license letter, offering Microsoft a license under certain standards-essential patents. The offer was at a “2.25% royalty rate,” “subject to a grant back of Microsoft standard-essential patents,”  “based on the price of end products and not on component software,” and gave Microsoft 20 days to accept. On November 9, 2010, before the expiration of the 20 days time to respond, Microsoft did some forum shopping and chose its home court of the U.S. Dist. Court of Washington to file a breach-of-contract suit against Motorola, providing immediate advantages over Motorola. Microsoft alleged that Motorola’s offer-to-license letter breached Motorola’s contractual RAND obligations to the standards bodies to which Microsoft is a third-party beneficiary.

In response, the next day, Motorola did some forum shopping of its own and chose the U.S. District Court for the Western District of Wisconsin to file a patent suit against Microsoft – a court known for its speed in deciding patent cases. This forum provided a decided advantage to Motorola in the promise of a speedy decision on patents which could then be used to drive Microsoft to capitulate to the terms offered by Motorola under the standards-essential patents that were the subject of the breach-of-contract action before Washington’s home court could decide the issue. Motorola (and more particularly its parent Google) fears an unfavorable ruling by the Washington court, which could find the standards-essential license, including the “grant back of Microsoft standard-essential patents,” unreasonable.  This would leave Android products exposed to Microsoft patents. The complaint alleged infringement of U.S. patents ‘374, ‘375, and ‘376, three of the standards essential patents Motorola had offered to license and that were part of the breach-of-contract suit.

In reply, Microsoft successfully moved to transfer the Wisconsin case to its home forum court of Washington. Not only did Microsoft dodge the Wisconsin bullet by providing the Wisconsin court with an alternative court venue and a reason to transfer the Motorola filing, but the Washington court also consolidated the Wisconsin patent case with the breach-of-contract case before it. This was a nice bonus from Microsoft’s home court since the Wisconsin patent claims were non-compulsory to the breach-of-contract claims and so were not required to be consolidated.

Intent on getting a decision on its patents before the Washington District Court could decide the breach-of-contract case, Motorola did some more forum shopping and in July 2011, Motorola opened up a new front for attack by choosing the Mannheim court in Germany to file a suit against Microsoft; alleging infringement of the German ‘667 and ‘384 standards-essential patents and seeking, among other things, an injunction. These patents were included among the standards essential patents Motorola had offered to license and that were part of the breach-of-contract suit in Washington.

The German court system is one forum gaining particular favor with litigators. The German court system provides quality patent jurisprudence that delivers infringement decisions in typically a shorter period of time and at a fraction of the cost of U.S. District Court litigation. An infringement decision or an injunction to stop sales based on the German patent infringement decision can then be used to settle patent disputes in the U.S. and/or elsewhere. This is precisely the strategy Motorola decided to use against Microsoft and it seemed to be working.  On May 2, 2012, less than one year after its July 2011 filing, the German court rendered a decision favorable to Motorola holding that Microsoft’s Xbox gaming system and certain software infringed the patents and enjoining Microsoft from selling those products in Germany.

Anticipating the worst, prior to the decision by the German court, on March 28, 2012, Microsoft sought to get further dividends from its home court advantage. Microsoft moved the Washington District Court for a temporary restraining order to enjoin Motorola from enforcing any injunction that may issue in Germany pending the resolution of the breach-of-contract action by the home court. This is known as a foreign anti-suit injunction and was possible since an injunction in Germany is not self-enforcing (i.e., after an injunction is decided, the plaintiff is required to take further actions like posting of a bond to enforce the injunction). The Washington court granted the TRO. After the German court issued its next ruling, the Washington District Court converted the TRO to a preliminary injunction; advantageously giving Microsoft a temporary relief from an injunction in Germany.

The decision by the 9th Cir. U.S. Court of Appeals in Microsoft v. Motorola nicely illustrates how forum shopping can provide strategic advantage and how it may sometimes go awry. The strategic advantages noted above that Microsoft has and continues to enjoy from having forum shopped its breach-of-contract suit to its Washington home court has and continues to provide dividends.

On the other hand, Motorola’s attempt to forum shop to the German court before the U.S. District Court could adjudicate the breach-of-contract case fell short; just as did Motorola’s earlier attempt to forum shop to the District Court of Wisconsin. The strategy sought to use the favorable ruling from the German court to snatch victory from the jaws of a likely defeat by a Washington court that may likely decide the essential patents issue in favor of Microsoft; leaving Android exposed to Microsoft patents.

The District Court would hear none of it and the 9th Circuit agreed. The 9th Circuit found that the District Court applied the correct legal standard and did not abuse its discretion in barring Motorola from enforcement of the injunction in Germany. The parties and issues are the same in both actions, the 9th Cir. explained. “Microsoft’s contract-based claims, including its claim that the RAND commitment precludes injunctive relief, would, if decided in favor of Microsoft, determine the propriety of the enforcement by Motorola of the injunctive relief obtained in Germany.” Slip. 26.

Foreign forum shopping by Motorola was unsuccessful in Microsoft v. Motorola because of the close nexus existing between the German patents on which the injunction was based and the contractual lawsuit before the U.S. District court. Morotola’s earlier attempt to forum shop to the Wisconsin court likewise failed because of the close nexus existing between the litigated patents and the breach-of-contract suit. Absent such a close nexus, however, forum shopping (domestic and foreign) remains an important strategic tool for companies to use in advancing patent objectives. As the advantages enjoyed by Microsoft from having forum shopped its breach-of-contract action to its home court shows, forum shopping provides a valuable strategic tool to help your company get the upper hand over competitors.

The Juhasz Law Firm can help you to better understand the effect of international patent strategies on your patents. For more information regarding global patent strategy and advice on such strategies for your patents, please contact The Juhasz Law Firm.

Your patents may be your most important asset. To help you protect your patents contact Juhasz Law, the firm committed to Guiding Your Patent Beyond The Horizon(sm).

Myriad 2 provides insight into how “cleaving of the covalent bond” in DNA supports subject matter patentability under Chakrabarty. The patent community now needs to know from the courts: how will this support subject matter patentability under a Prometheus-like analysis.

On August 16, 2012, the Federal Circuit decided Ass’n for Molecular Pathology v. Myriad Genetics, et al. (“Myriad 2”), upholding isolated DNA to be subject matter patentable. The case was before the Federal Circuit on remand from the Supreme Court for reconsideration in light of Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. ___ (2012). The District Court had invalidated the isolated DNA claims and in Myriad 1 decided July 29, 2011, the Federal Circuit upheld the isolated DNA claims on the basis that isolated DNA was “cleaved” (i.e., had covalent bonds in its backbone chemically severed) and so was not a naturally occurring composition and so is patentable under the Supreme Court’s Chakrabarty precedent. On remand in Myriad 2, the Federal Circuit, once again decided the subject matter patentability of the isolated DNA claims under Chakrabarty, effectively “cleaving” out  the analytical backbone of the S.Ct.’s Prometheus case from its decision upholding the subject matter patentability of isolated DNA. This despite the S. Ct. decision in Prometheus being the reason for the S. Ct. remand.

“Mayo does not control the question of patent-eligibility of such [isolated DNA composition] claims,” Judge Lourie boldly proclaimed in the majority decision. Op. 38. “They are claims to compositions of matter, expressly authorized as suitable patent-eligible subject matter in § 101.” The majority went on to uphold the subject matter patentability of isolated DNA using an analytic framework that omitted Prometheus from the analysis.

“[T]he Prometheus discussion of laws of nature (process claims) clearly ought to apply equally to manifestations of nature (composition claims),” Judge Moore stated in her concurring opinion in refuting  “Myriad’s argument that Prometheus is constrained to methods.” Concurring, at 7. Nonetheless, the concurring decision went on to uphold the subject matter patentability of isolated DNA without ever applying a Prometheus-like analysis of the “laws of nature/manifestations of nature” in that decision.

Only in Judge Bryson’s dissent does there appear to be any discussion of the subject matter patentability of isolated DNA claims under a Prometheus-like analysis. Relying on Prometheus, Judge Bryson found the isolated DNA claims to be not subject matter patentable since they are nothing more than “well-understood, routine, conventional” elements. Dissent, at 15.  (“Just as a patent involving a law of nature must have an “inventive concept” that does “significantly more than simply describe…natural relations,” Mayo, 132 S. Ct. at 1294, 1297, a patent involving a product of nature should have an inventive concept that involves more than merely incidental changes to the naturally occurring product.”) Ibid.

In Prometheus, the S. Ct. held that the natural relationships between concentrations of certain metabolites in the blood and the likelihood that a thiopurine drug dosage will prove ineffective or cause harm are not themselves patentable. It is in the omission of any Prometheus-like analysis of the relationships that isolated DNA has with nature that may be one failing of the Fed. Court’s decision in Myriad 2. The majority appears to have dismissed these considerations by relying soley on Chakrabarty in deciding the subject matter patentability question. The concurring opinion seems to have recognized these considerations but never applied them. And the dissent seems to have applied these considerations without ever really explaining how compositions that do not occur in nature can exhibit naturally occurring relationships. Conversely, how the relationships of isolated DNA define naturally occurring relationships because isolated DNA effectively exists in nature but in a form in which it is covalently bonded in its backbone (i.e., in the natural DNA state as we know it to exist).

From the foregoing, it seems that what ought to have been decided by the Fed. Cir. on remand in Myriad 2 are two things. First, whether the relationships isolated DNA has with its surroundings (e.g., the relationship of the recited “polypeptide having the amino acid sequence set forth in SEQ ID NO:2” with nature and the relationship of the “isolated DNA coding for the recited BRCA1 polpytide” with nature) are naturally occurring relationships. Second, if these relationships include a law of nature/manifestation of nature, does the claim preempt that law of nature or a manifestation of nature (e.g., sequence) under a  Prometheus-like analysis?

The answer to these questions may ultimately turn on the role played by the “cleaving of the covalent bond” in the natural DNA to form the isolated DNA, as the Fed. Cir. has surmised. More specifically, does the cleaving make isolated DNA an elemental form of natural DNA, that is to say that isolated DNA exists in nature but covalently bonded in its backbone in the form of natural DNA as we know it to exist  (i.e., cleaving the backbone does no more than reduce the natural DNA into its isolated DNA element as the dissent suggests)?  Or, does the cleaving really make a new compound from natural DNA called isolated DNA that does not exist in nature (even though the relationships that the isolated DNA has to its surroundings may mimic the naturally occurring relationships of normal DNA) as the majority suggests but in a decision that omits any  Prometheus-like analysis?

The Myriad 2 decision has provided insight into how “cleaving of the covalent bond” in the backbone of the natural DNA to form the isolated DNA supports subject matter patentability under Chakrabarty. The patent community now needs to understand how “cleaving of the covalent bond” supports subject matter patentability under a Prometheus-like analysis.  For example, is “cleaving of the covalent bond” to isolate DNA an insignificant extra-solution activity? Or is “cleaving of the covalent bond” something that makes the isolated DNA less naturally occurring (e.g., less a “law of nature/manifestation of nature”) so as to avoid preemption? It seems now that these questions have been left for the S. Ct. to decide.

The Juhasz Law Firm can help you to better understand the effect of Myriad 2 on your diagnostic method patents. For more information regarding these cases and advice on how these decisions may affect your patents, please contact The Juhasz Law Firm. Your patents may be your most important asset. To help you protect your patents, contact Juhasz Law, the firm committed to Guiding Your Patent Beyond The Horizon℠.

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[1] Representative isolated DNA claim before the Fed. Cir.:   1. An isolated DNA coding for a BRCA1 polypeptide, said polypeptide having the amino acid sequence set forth in SEQ ID NO:2.