Game-Changer? Federal Circuit Court Reverses “Eligibility” Invalidation in Rapid Litigation Management Ltd. v Cellzdirect Inc.


by Dr. David MENCHER

In the few years since the landmark rulings of Mayo v Prometheus (2012) and AMP v Myriad Genetics (2013), the Life Sciences, Biotech and Pharma sectors, as well as the Patent Office and IP practitioners around the world have been carefully watching for definitive guidance regarding patent eligibility of inventions involving naturally occurring products, laws of nature and natural phenomena.  Translation:  compositions comprising naturally occurring products (proteins, nucleic acids, carbohydrates, lipids, etc, micro- as well as macro- molecules, biologics, etc.), methods and processes using naturally occurring products or processes and laws or principles of nature (i.e. “the way things work”, as in correlations between markers and disease).

Following the Myriad decision, the US Patent and Trademark Office (USPTO) has issued instructions for Examiners (“Guidance on Patent Subject Matter Eligibility” ) in three iterations (December 2014, July 2015 and most recently, May 2016), in which one can discern, on the one hand, an early, comprehensive application of the “natural products” and “law of nature” exclusion from eligibility, as well as the later evolution of  a more nuanced criteria and interpretation of the rulings, tempered by the accumulation, over time, of a body of related court decisions and opinions.  Nonetheless, the application of Mayo and Myriad, and other related precedential decisions to reject and invalidate claims as “ineligible” has raised enormous obstacles for scientists, patent applicants and their IP counsels seeking to obtain protection for inventions, particularly in Life Sciences and Biotech.

Currently, the Supreme Court has succeeded in side-stepping industry’s plea for oversight of the Patent Office’s broad application of the Mayo and Myriad decisions, which have virtually eliminated significant protection for inventions involving diagnostic methods and severely complicated prosecution of applications involving nucleic acids, genes, proteins, peptides and other naturally-occurring products (see refusal of cert in Sequenom ).   However, a recent ruling in the Courts of the Federal Circuit (CAFC) in a case involving Patent Subject Matter Eligibility, on appeal from the District Court, now provides some long-needed hope for a reasonable limitation of the definition of “natural phenomena”, which can in turn be applied in strategizing responses to Examiner’s rejections as well as competitor’s challenge of many types of claims in Life Science patent applications.

The context of the Federal Circuit Court’s decision in Rapid Litigation Management Ltd. v Cellzdirect Inc. was a familiar scenario:  Rapid Litigation, representing patentholder Celsis (and InVitro Ltd), a leader in in-vitro cell culture technology, had sued Cellzdirect for infringement of their US patent 7,604,929 (‘929), covering methods for preparing frozen hepatocytes that can be thawed and re-frozen (at least twice) while remaining viable, basically an artificial-selection approach of freezing-and-thawing a group of hepatocytes and then selecting the ones still viable, as well as a few additional details such as using density gradient fractionation (centrifuge) to separate the viable from nonviable; not plating the cells between the first and second freeze; and using a pooled preparation of hepatocytes from multiple sources.  In their defense, Cellzdirect argued, as is common in such infringement cases, that the claims in ‘929 were invalid under USC 35 § 101 as being directed to a “law of nature”- the ability of the liver cells to survive repeated cycles of freezing and thawing.  The District Court agreed with the defendants (Cellzdirect) that the claimed method was not patent eligible material, finding no infringement and invalidating Celsis’ patent.  Celsis (Rapid Litigation Management) appealed the decision to the higher instance, the Federal Circuit Court (CAFC).

The Federal Circuit Court reversed the decision, reinstating Celsis’ patent and finding that the lower court had interpreted the principles of the Mayo and Myriad decisions too broadly.  Chief  Justice Prost noted that Celsis’ patented method was not a “mere discovery of a law of nature “:

“as the first party with knowledge of” the cells’ ability [to endure cycles of freezing and thawing, DM], they [Celsis, In Vitro]  were “in an excellent position to claim applications of that knowledge.” Myriad, 133 S. Ct. at 2120 (quoting Ass’n for Molecular Pathology v. U.S. Patent & Trademark Office, 689 F.3d 1303, 1349 (Fed. Cir. 2012) (Bryson, J., concurring in part and dissenting in part)). That is precisely what they did. They employed their natural discovery to create a new and improved way of preserving hepatocyte cells for later use.”

Adding a strong rebuke to the prevailing overzealous application of the Mayo and Myriad decisions, Justice Prost sounded a warning regarding the current practice in the USPTO and courts dealing with Patent Eligibility  (“101”) cases:

Through the recited steps, the patented invention achieves a better way of preserving hepatocytes. The ’929 patent claims are like thousands of others that recite processes to achieve a desired outcome, e.g., methods of producing things, or methods of treating disease. That one way of describing the process is to describe the natural ability of the subject matter to undergo the process does not make the claim “directed to” that natural ability. If that were so, we would find patent-ineligible methods of, say, producing a new compound (as directed to the individual components’ ability to combine to form the new compound), treating cancer with chemotherapy (as directed to cancer cells’ inability to survive chemotherapy), or treating headaches with aspirin (as directed to the human body’s natural response to aspirin).

Coupled with the recently revised directives regarding the responsibility of Patent Examiners to provide thorough explanations of the scientific and legal bases for rejections under “101”(Patent Eligibility), and specifically to evaluate the claimed inventions as a whole, not judging the eligibility of individual component features or steps (“Formulating a Subject Matter Eligibility Rejection”), the Federal Circuit Court’s reversal of invalidation in Rapid v Cellzdirect  will not only hopefully reduce the number of spurious “101” rejections, but also provides Applicants and IP professionals with better grounds for arguing for Patent Eligibility of a broader range of subject matter, particularly in the Life Science and Biotech sectors.


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