Appeals and USPTO implementation take years which destroys certainty

IV. EVOLVING AND INCONSISTENT COURT DECISIONS CREATE UNTENABLE UNPREDICTABILTY AND UNCERTAINTY

The “Findings” section of the current draft of PERA notes “extensive confusion and a lack of consistency” in how courts are applying the judicial exceptions to § 101. I agree. This confusion and inconsistency makes it difficult to counsel clients on whether or how a given innovation can be patented in the U.S. It also makes it difficult to assess the value of patent portfolios for corporate valuations or transactions, since that depends on the validity of the constituent patents.

Perhaps because courts are applying judicial exceptions, judges seem more willing to extrapolate a prior decision to the case at hand, and recent years have seen expansion of the scope of the judicial exceptions to an extent that does not occur with the statutory requirements for patentability (e.g., §§ 102, 103, and 112). Practitioners aware of the latest district court decisions still face uncertainty surrounding whether and when the decision will be appealed, whether it will be upheld by the Federal Circuit, and if the Supreme Court will take it up for review. This uncertainty can extend for years, during which it is difficult to predict whether or how the reasoning of the original decision may be applied to other claims.

The USPTO provides guidance to patent examiners based on precedential court decisions,23 but there is an inevitable lag between a new court decision and the USPTO’s implementation of updated guidance. (The most recent court decisions cited in current USPTO guidance for examiners are from 2019).24 This means that patents may be examined and granted under a standard that is inconsistent with the latest judicial pronouncement on patent eligibility.

For example, in May 2016 the USPTO issued patent eligibility guidance under Mayo with specific examples for life sciences technologies. Example 29 pertained to the diagnosis and treatment of the fictional condition “Julitis.” The following claim was said to be eligible for patenting under Mayo, because the claimed steps “do not recite or describe any recognized [judicial] exception.” 25

1. A method of detecting JUL-1 in a patient, said method comprising:

a. obtaining a plasma sample from a human patient; and

b. detecting whether JUL-1 is present in the plasma sample by contacting the plasma sample with an anti-JUL-1 antibody and detecting binding between JUL-1 and the antibody.

This guidance effectively instructed USPTO examiners to not reject such claims under § 101, which means claims directed to methods of detecting newly identified disease markers continued to be granted after Mayo.

But that USTPO guidance was inconsistent with the Federal Circuit’s 2015 decision in Sequenom (discussed above),26 where the court held the following claim ineligible under the “natural phenomenon” judicial exception:

1. A method for detecting a paternally inherited nucleic acid of fetal origin performed on a maternal serum or plasma sample from a pregnant female, which method comprises amplifying a paternally inherited nucleic acid from the serum or plasma sample and detecting the presence of a paternally inherited nucleic acid of fetal origin in the sample.

Like the claim at issue in the USPTO example, the claim at issue in Sequenom recited a physical method that included detecting the presence of a substance in a sample. In both cases, both the discovery of the potential existence of the substance in the sample and the clinical significance of its presence were contributions of the invention that were not known in the prior art. Yet, the court held the Sequenom claim ineligible for a patent because the claim encompassed the use of conventional laboratory techniques to detect the “natural phenomenon.”

The fact that even the USPTO did not predict how Mayo would be applied to methods of detecting newly identified disease markers underscores the high level of uncertainty in the application of judicial exceptions to § 101. This uncertainty is exacerbated by jurisprudence that supports parsing claims into individual elements that are each evaluated on a stand-alone-basis and/or determining the “gist” of a claim and assessing eligibility on that basis. I think it is important that PERA expressly prohibits such an approach, by requiring in PERA § 101(c) that eligibility be determined “by considering the claimed invention as a whole” and “without regard to … whether a claim element is known, conventional, routine, or naturally occurring.”

The Federal Circuit’s 2021 decision in Yu v. Apple Inc.27 is emblematic of the ongoing problem of the unexpected manner in which courts continue to apply and expand the judicial exceptions. The claims at issue in Yu were directed to a digital camera that included a number of structural elements, including sensors, lenses, and circuitry:

1. An improved digital camera comprising:

a first and second image sensor closely positioned with respect to a common plane, said second image sensor sensitive to a full region of visible color spectrum;

two lenses, each being mounted in front of one of said two image sensors;

said first image sensor producing a first image and said second image sensor producing a second image;

an analog-to-digital converting circuitry coupled to said first and said second image sensor and digitizing said first and said second intensity images to produce correspondingly a first digital image and a second digital image;

an image memory, coupled to said analog-to-digital converting circuitry, for storing said first digital image and said second digital image; and

a digital image processor, coupled to said image memory and receiving said first digital image and said second digital image, producing a resultant digital image from said first digital image enhanced with said second digital image.

Nevertheless, the court held the claims invalid as being directed to “the abstract idea of taking two pictures … and using one picture to enhance the other in some way.”28 Although the court cited Alice for the proposition that claiming a “tangible system” is “not dispositive” under § 101,29 practitioners, commentators and scholars alike saw Yu as expanding the judicial exception.30

Yu was not the first time the Federal Circuit had been asked to consider patent-eligibility of a device. A year earlier in Cardionet, LLC v. Infobionic, Inc.31 the Federal Circuit upheld claims directed to “a device for detecting and reporting the presence of atrial fibrillation or atrial flutter in a patient,” which was claimed as follows:

1. A device, comprising:

a beat detector to identify a beat-to-beat timing of cardiac activity;

a ventricular beat detector to identify ventricular beats in the cardiac activity;

variability determination logic to determine a variability in the beat-to-beat timing of a collection of beats;

relevance determination logic to identify a relevance of the variability in the beatto-beat timing to at least one of atrial fibrillation and atrial flutter ; and

an event generator to generate an event when the variability in the beat-to-beat timing is identified as relevant to the at least one of atrial fibrillation and atrial flutter in light of the variability in the beat-to-beat timing caused by ventricular beats identified by the ventricular beat detector.

The district court had found the claims to be ineligible as directed to “the abstract idea that atrial fibrillation and atrial flutter can be distinguished by focusing on the variability of the irregular heartbeat.”32 But the Federal Circuit determined that, “[w]hen read as a whole, and in light of the written description, we conclude that claim 1 … is directed to an improved cardiac monitoring device and not to an abstract idea.”33

Considering Yu and Cardionet together highlights the difficultly of predicting how a given claim will be analyzed under § 101. Every useful invention has a purpose that could be described as an abstract idea by analogy to Yu, but most inventions can be claimed such that the subject

matter as a whole could be found eligible by analogy to Cardionet. How can patent owners and their competitors predict which approach will be taken? When the judicial exceptions are applied in an unpredictable manner, that means the validity of a patent—and the value of associated patent rights—also may be unpredictable. Such uncertainty undermines the ability of patents to encourage further investment in patented technologies.

I think PERA would go a long way towards addressing and resolving these problems with the current state of U.S. patent eligibility. By eliminating the judicial exceptions and requiring a statutory-based analysis limited to specific exceptions, PERA would provide a more predictable framework for evaluating patents under § 101. By requiring eligibility to be determined “by considering the claimed invention as a whole” and “without regard to … whether a claim element is known, conventional, routine, or naturally occurring,” I would expect PERA to reduce uncertainty regarding the types of inventions that can be patented. This in turn could stimulate more confident U.S. investment in life sciences technologies related to naturally-occurring products, diagnostic methods, and other innovations caught in the § 101 snares of Mayo, Myriad, and Alice.