To many, Soverain v. Newegg is just another obviousness dispute; so why would the Supreme Court get involved? It is really more than your typical obviousness dispute, though. Increasingly, patent claims are held valid in a variety of different forums — they are initially granted, they are litigated in district court and at the ITC, and litigated again and again at the USPTO. In some instances, after all that litigation, and even after multiple successful reexaminations in favor of the patentee, the Federal Circuit will find the claims invalid as being obvious.
How is this the case? That is a good question. It stems from the fact that obviousness, which is supposed to be a mixed question of fact and law, is reviewed de novo by the Federal Circuit. It seems the Federal Circuit, which as an appellate court is not well-equipped to deal with determining facts, reviews the underlying facts de novo as well.
On May 20, 2013, the United States Supreme Court granted cert. in Medtronic v. Boston Scientific, a case that will answer whether the licensee in a declaratory judgment challenge bears the burden of proving that the alleged non-infringing product does not infringe, or whether the responding patentee must prove infringement. To read the Federal Circuit decision in the case, click here.
The Supreme Court explained the question presented as follows:
In Medlmmune, Inc. v. Genentech, Inc., 549 U.S. 118, 137 (2007), this Court ruled that a patent licensee that believes that its products do not infringe the patent and accordingly are not subject to royalty payments is “not required … to break or terminate its … license agreement before seeking a declaratory judgment in federal court that the underlying patent is … not infringed.”
The question presented is whether, in such a declaratory judgment action brought by a licensee under MedImmune, the licensee has the burden to prove that its products do not infringe the patent, or whether (as is the case in all other patent litigation, including other declaratory judgment actions), the patentee must prove infringement.
Over the past several days, the United States Supreme Court has issued several important decisions that will impact the patent system.
First, on June 13, 2013, the Supreme Court issued a decision in Association of Molecular Pathology v. Myriad Genetics, which has sometimes been referred to as “ACLU v. Myriad” in recognition of the fact that it was the American Civil Liberties Union that was responsible for bringing the challenge in the district court and pursuing the matter through the judicial system.
In Myriad, Justice Thomas wrote for a nearly unanimous Court. Only Justice Scalia wrote a brief separate opinion in which he concurred in part and concurred in the judgment.
The majority decision in Myriad is not long, and the first 10 pages are background. Despite not giving much detailed attention to the significant legal issues presented, the Supreme Court did manage to do real and serious harm to much of the biotechnology industry.
Justice Thomas summarized the Court’s decision by saying:
“[W]e hold that a naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated, but that cDNA is patent eligible because it is not naturally occurring.”
The decision has widely been reported as the Court recognizing that cDNA is patent eligible, but the ruling is far more nuanced. In fact, Justice Thomas specifically recognized that some cDNA is not patent eligible. He wrote:
“cDNA is not a ‘product of nature’ and is patent eligible under §101, except insofar as very short series of DNA may have no intervening introns to remove when creating cDNA. In that situation, a short strand of cDNA may be indistinguishable from natural DNA.”
I have spoken with a number of people who are in the biotech industry and they all seem to think this decision means that cDNA is patent eligible and I shouldn’t make too much out of Thomas specifically saying that at least some cDNA is not patent eligible. Personally, I think this is misplaced hope; we all know how the district courts will respond, and it won’t be to an expansive reading of patent eligibility. While the USPTO seems poised to say that cDNA is patent eligible, the fact that some has been determined not patent eligible will be used by challengers and likely successfully so. Further, it seems clear that Thomas is saying that if something is man-made but identical to what appears in nature, it is not patent eligible. This fundamentally undercuts the most important aspects of Chakrabarty and would effectively kill research into such important areas as artificially grown organs, which by their very nature must be identical to what is produced in nature to be transplanted into the human body, for example.
On Monday, May 13, 2013, the United States Supreme Court, in a unanimous decision, ruled that a farmer who buys Monsanto’s patented seeds cannot then propagate new seeds for future use without infringing the underlying patent.
The opening paragraph in the Court’s decision, which was delivered by Justice Kagan, succinctly captures the essence of the ruling. Justice Kagan wrote:
Under the doctrine of patent exhaustion, the authorized sale of a patented article gives the purchaser, or any subsequent owner, a right to use or resell that article. Such a sale, however, does not allow the purchaser to make new copies of the patented invention. The question in this case is whether a farmer who buys patented seeds may reproduce them through planting and harvesting without the patent holder’s permission. We hold that he may not.
Monsanto invented a genetic modification that enables soybean plants to survive exposure to glyphosate, the active ingredient in many herbicides (including Monsanto’s own Roundup). Monsanto markets soybean seed containing this altered genetic material as “Roundup Ready” seed. Farmers planting that seed can use a glyphosate-based herbicide to kill weeds without damaging their crops. Two patents issued to Monsanto cover various aspects of its Roundup Ready technology, including a seed incorporating the genetic alteration.
Today we continue our weekly installment highlighting the best of the patent blogosphere from the past week. If there are any patent blogs you think should be highlighted by our Top 5, please comment on this post and we’ll check them out.
1) Patently-O: Gene Patent Debate Returns to the Federal Circuit – This post reports on SCOTUS’ recently issued GVR order in Association for Molecular Pathology v. USPTO and Myriad Genetics (Fed. Cir. 2012). According to the post, “The Federal Circuit has now released a new briefing schedule — asking the parties to file supplemental briefs by June 15, 2012 addressing the issue: What is the applicability of the Supreme Court’s decision in Mayo to Myriad’s isolated DNA claims and to method claim 20 of the ’282 patent?”
2) Green Patent Blog: Clean Energy Patent Growth Index Shows Record High for 2011 – This post shares the findings of the Heslin Rothenberg firm’s Clean Energy Patent Growth Index (CEPGI) 2011 Year in Review, highlighting that granted green patents were at an all time high of 2331 for last year, a rise of 450 patents, or 24%, over 2010. (more…)