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Federal Circuit Oral Argument on Eligibility of Genes for Patenting Also Explores Standing Questions

The Federal Circuit on April 4, 2011, heard oral argument in a case reviewing a summary judgment that gene patents are invalid because they cover naturally occurring subject matter.  Association for Molecular Pathology v. Myriad Genetics, Inc., Fed. Cir., No 2010-1406, oral argument 4/4/2011.
In addition to exploring the amount of human intervention needed to create patent eligibility, the court also considered whether a patentee's objections that are more than 10 years before this suit was filed can still create a sufficient case or controversy for declaratory judgment jurisdiction. On the Federal Circuit panel were Judges Alan Lourie, William Bryson, and Kimberly Moore. 
Appellant's Argument
Gregory A. Castanias of Jones Day, representing Myriad, made his point about the "stale dispute" offered as a case or controversy, but Judge Moore suggested the possiblity that the old cease and desist letters could have had the intended effect when issued and have had a continuing effect of constraining plaintiffs' behavior with a threat of litigation.  She pointed out that Myriad has done nothing remove such fears.  Even if a convenant-not-to-sue is not generally required to defeat DJ jurisdication, she asked if a patentee whose threats modified a plaintiff's behavior years ago should not be required to show that its threat is not continuing. 
Castanias noted that the passage of time undermines the DJ plaintiffs' ability to show the immediacy of any alleged harm.  He also argued that the plaintiffs' lack standing because the few claims they identified in their action are inadequate to provide the relief sought.  Under Prasco LLC v. Medicis Pharm. Corp., 537 F.3d 1329, 1338 (Fed. Cir. 2008), standing requires a showing that the claimed harm is redressable by a favorable decision, he argued.  Judge Moore expressed concern that the sweeping standing criteria stated by the district court could overwhelm the patent system with innumerable validity challenges by concumers based on nothing more that the high cost to access the technology.
On the merits, Castanias contended that the subject matter of the claims is patent eligible because isolated DNA does not exist in nature.  As to the scope of the claims, Judge Bryson asked if the claims would read on the sequencing of the entire human genome.  Speaking hypothetically, Castanias supposed that they would not because such sequencing would not require that genes be isolated from the body.  He conceded that a new mineral found on the ground or a new plant found in the wild is not eligible for a patent.  But what if the mineral is not on the ground but must be extracted from rock through extensive and complex efforts, Judge Moore asked. Castanias answered that Section 101 could be satisfied for such a composition of matter that was the object of human efforts, but it would probably fail other tests of patentability under Sections 102 and 103.  Why then doesn't the same answer apply to this technology, Judge Moore asked.  Because this case arises only in the context of Section 101, with no finding of the level of skill in the art in 1995 when these applications were filed, Castanias answered.
Judge Lourie suggested that genes outside of the body are different in kind from those inside the body, whereas the mineral when separated from the rock may retain its natural character.  Replying to Judge Bryson's question, Castanias suggested that the amount of effort required to isolate the claimed product could be a consideration to determine whether the necessary human intervention amounted to an inventive act.  Judge Moore asked if it was equally legitimate to consider not only the ingenuity of extraction but also the ingenuity of discovering the product's use.
Appellees' Argument
Christopher A. Hansen, of the ACLU and representing the plaintiffs, responded to Judge Moore's standing question concerning the willingness of the plaintiffs to practice the patented technology.  She observed that some declarations did not expressly say they "would" do so but for the patents, perhaps falling short of showing "imminent harm" as required by Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992).  Hanson maintained that most of the plaintiffs are definite that they would practice the technology but for the the patents and Myriad's conduct.  As for the passage of time since that conduct, Hanson said Myriad has continued to assert its patents broadly since they were issued and has refused to enter a covenant-not-to-sue.
On the merits, Hanson insisted that a gene inside the body is no more different from one outside the body than a kidney outside the body is different from one inside the body. Judge Lourie suggested that the chemical processes in the case of genes transforms the removed product into something different in kind.  Hanson replied that the use of chemicals or scalpals is irrelevant, to which Judge Bryson said that the application of chemicals may create something not in nature. However, Hansen insisted that Myriad's entire business model relies on the extracted genetic being identical to the genetic material in the body in order to correctly carry out its diagnostic test.
Government's Argument
Acting Solicitor General Neal Katyal appeared for the government, arguing as amicus curiae. He contended that the Supreme Court test requires a determination of whether the subject matter is man-made or naturally-occurring. The vast majority of granted patents in this area satisfy this test easily as cDNA claims, recombinant DNA claims, and process claims are all man-made. However, the government considers the PTO view that mere isolation can render a substance patent eligible to be inconsistent with the Supreme Court rulings in this area. Were the PTO view correct, Katyal observed, mere isolation of lithium, uranium, and coal from the ground would be sufficent to render those natural materials eligible for patenting.
Judge Moore pointed out the 35 years of granting patents under this approach and the development of an entire industry in reliance on it. Katyal said this is a pure question of law, and that Congressional acquiescence is not a proper basis for adhering to an incorrect view.
To hear the audio recording of the oral argument, click here.