Patent Law Practice Center

Judge Michel Sounds Off About Alice v. CLS Bank

Recently, I had the opportunity to sit down with Paul Michel, who we in the patent community know as the former Chief Judge of the United States Court of Appeals for the Federal Circuit. When Judge Michel stepped down as Chief Judge and retired several years ago, he told me that he decided to retire so he could say what needed to be said on behalf of the patent system, something he felt he couldn’t do while a member of the federal judiciary. Judge Michel has been true to his promise. He keeps an active schedule.

Judge Michel has been generous with his time over the past several years, and I have interviewed him on a number of topics. Most recently we discussed the Supreme Court’s patent decisions during the October 2013 term, spending most of our discussion on Alice v. CLS Bank.

Below are the highlights of my interview with Judge Michel. If you would like to read the entire interview, which lasted for approximately one hour and spans over 9,000 words, please see: Judge Michel says Alice Decision ‘will create total chaos’.

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Canine Genetic Testing Patent Dispute Settled

On December 13, 2013, Genetic Veterinary Sciences, Inc. (d/b/a Paw Print Genetics) filed a declaratory judgment action against VetGen, LLC, in the United States District Court for the Eastern District of Washington (Spokane). The lawsuit sought a declaration that Paw Print Genetics was not infringing various claims of patents owned by VetGen. The complaint specifically sought a declaration of non-infringement with respect to U.S. Patent Nos. 6,040,143, 6,074,832, 6,767,707, 6,780,583, and 6,410,237. Each of these patents are titled DNA encoding canine von Willebrand factor and methods of use. In the alternative, Paw Print Genetics also sought a declaration that the claims of the patents are invalid. Both Paw Print Genetics and VetGen offer inherited disease testing to identify carriers and affected dogs for a variety of different canine genetic conditions.

In both dogs and humans, von Willebrand’s disease is a bleeding disorder of variable severity that results from a quantitative or qualitative defect in von Willebrand factor. This clotting factor has two known functions, stabilization of Factor VIII (hemophilic factor A) in the blood, and aiding the adhesion of platelets to the subendothelium, which allows them to provide hemostasis more effectively. If the factor is missing or defective, the patient, whether human or dog, may bleed severely. The disease is the most common hereditary bleeding disorder in both species, and is genetically and clinically heterogenous.

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SCOTUS Ending Term with Patent Decisions

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.

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Unanimous SCOTUS Sides with Monsanto on Seeds

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:

Patentability of Business Method Subject Matter Divides Federal Circuit

A new level of significance is reached when the Federal Circuit U.S. Court of Appeals decides to address an issue even though it is not in fact at issue in the case before them. On March 2, 2012, the Federal Circuit issued its decision in MySpace, Inc. v. GraphOn Corp. (No. 2011-1149), in which they affirmed the lower court’s decision, finding the case was properly decided under §§ 102 and 103 of the Patent Act and not under § 101.

The significance is that even though the Federal Circuit was deciding on the issue of patent invalidity under §102’s anticipation standard and under § 103’s obviousness standard, the issue of whether or not the underlying subject matter was patentable was still brought up and discussed by the Federal Circuit judges.  (more…)