Life Sciences Litigation Update - January 2023

The issue of what is or is not patent-eligible subject matter under 35 U.S.C. § 101 has been hotly contested over the past decade.  The debate stems largely from two U.S. Supreme Court decisions on the topic, as well as a large body of caselaw from the U.S. Court of Appeals for the Federal Circuit, which has been criticized for lacking uniformity.  The Federal Circuit’s recent § 101 decision in American Axle & Manufacturing, Inc., v. Neapco Holdings LLC, 967 F.3d 1285 (Fed. Cir. 2020), has further intensified that debate both as a general matter and specifically within the life sciences industry

I. American Axle

American Axle involved a patent claiming a method of manufacturing an automobile drive shaft that involved the use of a liner that was “tuned” to reduce the drive shaft's vibration, making it quieter.  967 F.3d at 1289.  Prior to American Axle, such patent claims fell within the category of claims that have traditionally been considered patent-eligible under § 101.  A divided Federal Circuit panel held, however, that the claims were directed to patent ineligible subject matter.  Id. at 1288.  Specifically, the panel majority found that, even though neither the claims nor the specification explicitly referenced a natural law, the method required the use of a natural law—Hooke’s law, which describes the relationship between an object’s mass, its stiffness, and the frequency at which it vibrates—“and nothing more.”  Id. at 1297.  According to the majority, the claims recited only a desired result without “limiting the claim to particular methods of achieving the result. . . .”  Id. at 1295.  According to the panel, to be patent-eligible, a claim “must go beyond stating a functional result; it must identify ‘how’ that functional result is achieved by limiting the claim scope . . . to concrete action, in the case of a method claim.” Id. at 1302.

Although the majority in American Axle stressed that its decision was consistent with Supreme Court and Federal Circuit precedent on § 101, see 967 F.3d at 1296 (“[o]ur cases as well have consistently rejected such claims as unpatentable.”), others saw it as a broad expansion of the doctrine.  Indeed, Judge Kimberly Moore dissented, arguing that the majority conflated the § 101 requirement with that of enablement under § 112 and thus expanded § 101 beyond its intended gatekeeping role.  Id. at 1305 (Moore, J., dissenting).

The Federal Circuit denied rehearing en banc and American Axle filed a petition for certiorari.  Several Judges dissenting from the denial of en banc rehearing echoed Judge Moore’s concerns and called for the Supreme Court to grant certiorari and provide clarification to the lower courts.  See, e.g., Am. Axle & Mfg., Inc. v. Neapco Holdings LLC, 966 F.3d 1347, 1357 (Fed. Cir. 2020) (Newman, J., dissenting) (“The court’s rulings on patent eligibility have become so diverse and unpredictable as to have a serious effect on the innovation incentive in all fields of technology.”).

So too did the Solicitor General in its response to the Supreme Court’s request for its view on the matter.  See Brief for the United States as Amicus Curiae at 19, 21, Am. Axle & Mfg., Inc. v. Neapco Holdings LLC, 142 S. Ct. 2902, 2022 WL 1670811 (2022) (noting that “[t]his is only the most recent Section 101 case that has fractured the Federal Circuit,” and that “[t]his case is a suitable vehicle for providing greater clarity”).

Nonetheless, the Supreme Court denied American Axle’s petition in June of last year.

To many, the Supreme Court’s denial was unsurprising.  From this perspective American Axle was just one of a long list of § 101 cases that the Court has declined to hear since its decisions in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289 (2012), and Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014).  Given the Supreme Court’s most recent reminder of its apparent reluctance to take up § 101 cases, there has been a renewed interest in legislative reform.

II. Proposed Legislation

Senator Thom Tillis (R-NC) proposed a new bill this past August called the Patent Eligibility Restoration Act of 2022.  According to a Press Release issued by Senator Tillis’ office, “current Supreme Court[] patent eligibility jurisprudence is undermining American innovation and allowing foreign adversaries like China to overtake us in key technology innovations.”  See Press Release, Tillis Introduces Landmark Legislation to Restore American Innovation (Aug. 3, 2022).  The Press Release describes the bill as addressing those concerns by “by enumerating a specific but extensive list of excluded subject matter.”  Id.  Specifically, the bill keeps the current language of § 101—“[w]hoever invents or discovers any useful process, machine, manufacture, or composition of matter, or any useful improvement thereof, may obtain a patent therefore”—but adds a subsection (B) which provides statutory exceptions on subject matter for which “a person may not obtain a patent.”  Those exception are: “(A) A mathematical formula, apart from a useful invention or discovery”; “(B) [a] process that—(i) is non-technological economic, financial, business, social, cultural, or artistic process; (ii) is a mental process performed solely in the human mind; or (iii) occurs in nature wholly independent of, and prior to, any human activity”; “(C) [a]n unmodified gene, as that gene exists in the human body”; and “ (D) [a]n unmodified natural material, as that material exists in nature.” 

The bill goes on to state that “[f]or purposes of subparagraphs (C) and (D) . . . a human gene or natural material that is isolated, purified, enriched, or otherwise altered by human activity, or that is otherwise employed in a useful invention or discovery, shall not be considered to be unmodified.”  It also proposes a revision to the definition of the term “process,” laid out in 35 U.S.C. § 100, which would replace “includes a new use of a known process” with “includes a use, application, or method of manufacture of a known or naturally-occurring process.”

Prior to Senator Tillis’ introduction of the Patent Eligibility Restoration Act of 2022, several Senators, including Tillis, requested a report from the USPTO detailing “the current state of patent eligibility jurisprudence in the United States.”  See Letter to USPTO (Mar. 5, 2021), available at  https://www.tillis.senate.gov/services/files/04D9DCF2-B699-41AC-BE62-9DCA9460EDDA.  The Senators stated that they were “particularly interested in learning how the current jurisprudence has adversely impacted investment and innovation in critical technologies like . . . precision medicine, diagnostic methods, and pharmaceutical treatments,” among others.  Id. 

The USPTO submitted its response to that request this June: a report titled “Patent eligible subject matter: Public views on the current jurisprudence in the United States,” which based its findings on 141 public comments from a variety of stakeholders including legal associations, industry organizations, advocacy groups, nonprofit entities, businesses, law firms, practitioners, academics, and inventors.  At a high level, the Report found that “[t]hose critical of the current state of the law included many patent practitioners and innovative companies, especially companies involved in life sciences” who noted that “making patents less available and rights less predictable, inhibits investment in new technologies and companies.”  Patent eligible subject matter: Public views on the current jurisprudence in the United States at 3 (June 2022). 

In large part, the view of the commentators from the life sciences industry largely echoed Judge Newman’s statements in her dissent to the Federal Circuit’s decision not to rehear American Axle en banc. 

As detailed in the report, several life sciences industry participants noted that, because “the development of biologics and pharmaceuticals is both high risk and high cost,” “the uncertainty in the current jurisprudence is significantly diminishing present investment in these areas and disincentivizing future investment and innovation because of the increasingly uncertain prospects of obtaining and enforcing patent rights on these technologies.”  Id. at 26.  This, according to an organization representing the biotechnology industry, jeopardizes the life sciences industry’s ability to develop and deliver precision medicine, pharmaceutical treatments, and diagnostics to patients.”  Id. at 25.  That organization also raised concerns that the current jurisprudence is stifling competition by making it harder for startups and other small and medium-sized entities to attract investments.  Id. at 27.  Another commentator noted that the uncertainty engendered by the current state of law will “force companies seeking to advance this field to protect their intellectual property through trade secrets,” which will ultimately slow the progress of science. Id. at 32-33.

In late September, Senator Chris Coons (D-DE) announced that he would co-sponsor the bill.  Even with a co-sponsor, it is unclear whether the Patent Eligibility Restoration Act of 2022 will pass.  Senator Coons and Tillis have noted, however, that they are optimistic about the prospects for intellectual property legislation in the next congress.

III. Conclusion

To many, the Federal Circuit’s decision in American Axle raised more questions than it answered.  What claims are “directed to” a natural law and which are not if the claims need not explicitly recite a natural law to be “directed to” one?  What constitutes a “concrete action” as opposed to an unpatentable “functional result”?  Under American Axle, these questions could certainly be relevant to patent claims in the life sciences field, which can be directed to drug compounds, pharmaceutical formulations, methods of treatment, methods of making drug compounds, and methods of diagnosis, just to name a few.  Depending on the creativity of a patent challenger, all of these types of claims could—in theory at least—be framed as depending on the “results” of “natural laws.”  Thus, the full effect of American Axle, particularly to life sciences patents, remains to be seen.  In the near term, the only thing that seems certain is that courts, Congress, patent practitioners, and industry leaders will continue to grapple with the scope and applicability of § 101’s patent eligibility requirement.