1. Mayo v. Prometheus Labs – The Backdrop June 12, 2012 © 2012, all rights reserved.

2. How did we get here? General patent subject matter history Bilski et al. v. Kappos Classen Immunotherapies, Inc. v. Biogen IDEC Molecular Pathology (AMP) v. Myriad Genetics, Inc.

3. What inventions are patentable? An invention can be patented if: ▫ The invention is eligible for patenting (“patentable subject matter”), and  35 USC § 101 ▫ The invention meets other statutory conditions ( e.g., “new” and “unobvious” as measured against the prior art)  35 USC §§ 102, 103, 112

4. What Inventions are not Patentable? Abstract ideas ▫ Mental processes Physical phenomena Laws of nature ▫ Abstract mathematical formulas or pure algorithms ▫ Inventions that clearly do not work  Perpetual motion machines

5. What is “Patentable Subject Matter”? 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. Patent Act of 1952 (35 USC § 101)

6. Along comes the Bilski Decision Decided June 28, 2010 Four important conclusions from the majority: ▫ (1) the Court’s precedents providing “three specific exceptions to §101’s broad patent-eligibility principles:  laws of nature,  physical phenomena, and  abstract ideas” ▫ remain the law even though those exceptions were not required by the statutory text (Section 101)

7. The Bilski Decision (cont.) (2) the M-O-T (machine-or-transformation) test is not the sole test for deciding whether an invention is a patent eligible process It is, however, a “useful and important clue, an investigative tool, for determining whether some claimed inventions are processes under §101.”

8. The Bilski Decision (cont.) (3) Section 101’s category of “process,” which Section 100(b) defines as including a “method,” does not “categorically exclude business methods,” because:  the ordinary meaning of “method” does not exclude business methods,  it was not clear “how far a prohibition of business method patents would reach,”  it was not clear whether such a prohibition “would exclude technologies for conducting a business more efficiently,” and  the Section 273 infringement defense clarified that “a business method is simply one kind of `method’ that is, at least in some circumstances, eligible for patenting under §101.”  “A conclusion that business methods are not patentable in any circumstances would render 273 meaningless”

9. The Bilski Decision (cont.) ▫ (4) Bilski’s “patent application … falls outside of §101,” because its claims cover an abstract idea (citing Benson, Flook, Diehr )  concept of hedging risk (claim 1),  concept reduced to a mathematical formula (claim 4), or  concept limited to a particular field or to “token post solution components

10. Fallout of Bilski Aside from the above, the opinion offers no clarity in determining whether a particular invention falls within the scope of Section 101.  “Today, the Court once again declines to impose limitations on the Patent Act that are inconsistent with the Act’s text. The patent application here can be rejected under our precedents on the unpatentability of abstract ideas. The Court, therefore, need not define further what constitutes a patentable “process,” beyond pointing to the definition of that term provided in §100(b) and looking to the guideposts in Benson, Flook, and Diehr.”  Practical Effect  Instructing the Fed. Cir. to try, try again…

11. USPTO reaction to Bilski On June 28, 2010 the USPTO issued first memo to its Examining Corps. ▫ Examiners should continue to examine patent applications for compliance with section 101 using the existing guidance concerning the machine-or-transformation test as a tool for determining whether the claimed invention is a process under section 101. If a claimed method meets the machine-or-transformation test, the method is likely patent- eligible under section 101 unless there is a clear indication that the method is directed to an abstract idea. If a claimed method does not meet the machine-or-transformation test, the examiner should reject the claim under section 101 unless there is a clear indication that the method is not directed to an abstract idea. If a claim is rejected under section 101 on the basis that it is drawn to an abstract idea, the applicant then has the opportunity to explain why the claimed method is not drawn to an abstract idea.  USPTO is issued further guidance on patentable subject matter eligibility under 35 U.S.C. § 101 on July 27, 2010.

12. Supreme Court follow up to Bilski Mayo v. Prometheus Labs ▫ On June 29, 2010, the Supreme Court granted cert., vacated the decision and remanded the case to the Federal Circuit  The Federal Circuit was instructed to reconsider the case “in light of Bilski v. Kappos, 561 U.S. ____ (2010).” Classen Immunotherapies, Inc. v. Biogen IDEC ▫ Fed. Cir. determination of unpatentability reversed by S. Ct. in light of Bilski  Granted cert., vacated Fed. Cir., and remanded ▫ Note: Fed. Cir. held that claims did not meet the M-O-T test

13. Classen – The Remand Background ▫ Three patents at issue (‘139, ‘739 and ‘283) ▫ Two of Classen’s patents (‘139 and ‘739) claim a method of screening and comparing information on immunization schedules and the occurrence of chronic disease to identify the lower risk schedule and then immunizing by administering a vaccine on that schedule ▫ The ‘283 patent does not include the immunization step ▫ At the district court level, all three patents were found to be ineligible patent subject matter

14. Classen – The Remand On appeal the Fed. Cir. Found that §101 was not met On remand, Fed. Cir. decided that the claims of the ‘139 and ‘739 patents met the requirements of §101. 659 F. 3d 1057 (Fed. Cir. Aug. 2011). The third Classen patent (‘283) was found invalid

15. Classen – The Remand The Fed Cir. looked to Bilski and found that the patentability of subject matter that is within the classes set forth in 101 is more reliably resolved in accordance with the conditions of §102, § 103 and § 112  a § 101 inquiry is a threshold test Presence of mental step is not itself fatal to § 101 eligibility Basically, the use of a physical step (immunization) in two of Classen’s patents met the § 101 requirement – “Specific, tangible application” ▫ The ‘283 patent did not have a physical step

16. Interesting note on Classen Judge Rader joined by Judge Newman wrote separately to express their frustration with now constant §101 challenges Fed. Cir. still avoiding a “bright line rule” for patent drafters to follow

17. Myriad - Try, try, again… This is a Gene Patent case ‘282 patent claims at issue directed to: ▫ Claim 1 - An isolated DNA coding for a BRCA1 polypeptide ▫ Claim 20 - A method of finding a cancer treatment that involves growing a host cell that has been genetically modified and then testing to see whether any compound particularly inhibits the growth of those cells.

18. Myriad - Try, try, again… On March 29, 2010, District Court declared patents invalid ▫ DNA's existence in an 'isolated' form alters neither this fundamental quality of DNA as it exists in the body nor the information it encodes. Therefore, the patents at issue directed to 'isolated DNA' containing sequences found in nature are unsustainable as a matter of law and are deemed unpatentable under 35 U.S.C. §101 Myriad appealed, challenging the court's jurisdiction and its decision. On July 29, 2011 the Federal Circuit overturned the District court in part, and upheld the decision in part.

19. Myriad - Try, try, again… The Fed. Cir. overturned the District Court's finding that the claims covering isolated DNA gene sequences are invalid and also overturned the invalidity of some of the diagnostic claims The Fed Cir. upheld the finding that the claims for the diagnostic methods that only compare or analyze sequences - that have no transformative step - are invalid.

20. Myriad - Try, try, again… On March 26, 2012 the S. Ct. issued a G-V-R decision which ordered the Fed. Cir. to reconsider its decision in light of Mayo. ▫ Fed. Cir. issued a briefing schedule for supplemental issue of applicability of Mayo and oral arguments are set for July 20, 2012 ▫ On May 30, 2012, Myriad filed a Motion suggesting mootness  Arguing that Fed. Cir. should have asked for briefing on jurisdictional issue too  Responsive brief has been filed

21. Others follow suit ▫ On May 21, 2012, S. Ct. rejected another Fed. Cir. decision addressing patentable subject matter.  WIldTangent v. Ultramercial ▫ Very generally, in Ultramercial the claims at issue were found patent eligible by the Fed. Cir. before Mayo due to a requirement that a computer perform the method  Patent directed to a particular method for distributing copyrighted products over the Internet ▫ Can they get it right for the S. Ct.?