[author: Joshua Sarnoff]

Patent Docs has always ascribed to the notion that respectful debate is good for most issues, and with the adage that if you are dumb, it's best to surround yourself with smart people and if you are smart surround yourself with smart people who disagree with you.  In that spirit we give our readers the thoughts of Professor Joshua Sarnoff on our recent post discussing Senator Thom Tillis' bill for reforming 35 U.S.C. § 101 (see "Senator Tillis' Patent Eligibility Reform Proposal: A Biopharma Perspective").

A brief response to Kevin Noonan's "Senator Tillis' Patent Eligibility Reform Proposal: A Biopharma Perspective"

Professor Sarnoff:  Kevin and I disagree with two assertions he makes his blog post, and in the underlying premise of his argument I believe the evidence argues against a fundamental assumption.

The first of these is that Myriad decision was limited to claims to products as they occur in nature.  Kevin states that:  "There are several subsections in proposed revised Section 101 that specifically and frankly address not only the concerns of the biopharma patent community but also its critics and discontents.  The frankest example is Subsection (b)(1)(C), which codifies the Court's decision in Myriad that human genes in nature are not patent eligible per se.  Subsection (b)(1)(D) further codifies the extension of this principle that has arisen in practice, that any naturally occurring product is ineligible as it occurs in nature.  The genesis of this distinction, and one that the proposal attempts to constrain, is that 'mere' isolation of a natural product may not be (although in practice often has been found not to be) patent eligible."

I agree with the last emphasized sentence but disagree with the preceding emphasized sentence.  In my view, Myriad held that isolated genetic sequences (without some further, and insufficiently specified requisite changes) are not eligible, despite the fact that isolated genetic sequences do not occur in nature.  Justice Thomas stated that "In this case, by contrast, Myriad did not create anything.  To be sure, it found an important and useful gene, but separating that gene from its surrounding genetic material is not an act of invention . . . .  Nor are Myriad's claims saved by the fact that isolating DNA from the human genome severs chemical bonds and thereby creates a non-naturally occurring molecule."  Ass'n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 591, 593 (2013).

In my view there is a question of whether the Myriad precedent is limited to human genes, and until SCOTUS takes a case on claims to things derived from natural products again we won't know.  But Myriad was clear that for human genes "mere" isolation from natural conditions, even with chemical changes resulting therefrom, is not enough for eligibility.  Proposed Tillis Bill subsections 101(b)(1)(C) & (D) would exclude from eligibility only "[a]n unmodified human gene, as that gene exists in the body" and "[a]n unmodified natural material, as that material exists in nature."  Proposed subsection 101(b)(2)(B) makes ever clearer that mere isolation now would provide eligibility (if not necessarily patentability):  ''(B) HUMAN GENES AND NATURAL MATERIALS.—For the purposes of subparagraphs (C) and (D) of paragraph (1), a human gene or natural material that is isolated, purified, enriched, or otherwise altered by human activity, or that is otherwise employed in a useful invention or discovery, shall not be considered to be unmodified."

Hence, the Myriad precedent goes well beyond what Kevin suggests (as least as to genes), and it is precisely that precedent that the Tillis Bill would overturn.  And it is precisely why "the American Civil Liberties Union . . . a vocal critic of Senator Tillis' attempts to remedy patent eligibility issues . . . [has argued that] 'mere' isolation is not enough to confer patent eligibility."

Kevin Noonan's response:  My understanding of the Myriad precedent differs somewhat from Professor Sarnoff's.  Justice Thomas was clear that the decision was based on the fact that mere isolation was not enough, because doing so changed the gene in no patent-relevant way.  Complementary DNA (cDNA) was different, and the Court was careful not to address instances where genes were altered (changed nucleotides, etc.).  Professor Sarnoff reads the bill differently than I do, to the extent that taken together the provisions indicate to me that on the one hand genes are sui generis in this regard, and on the other any natural product existing as it does in nature is not patent eligible.  Section (b)(2)(B) as I read it requires something more than what was proscribed by the Myriad decision and makes explicit what should be the case presently.  For example, should an inventor isolate a genomic DNA sequence and insert it into a recombinant expression construct and thereby permit production of the encoded protein, the basis for Justice Thomas' distinction -- that "mere" isolation is not enough -- no longer holds, because such a construct does not occur in nature and evokes a change consistent with the rationale in Diamond v Chakrabarty (which the Court did not overturn in its Myriad decision):

Judged in this light, respondent's micro-organism plainly qualifies as patentable subject matter.  His claim is not to a hitherto unknown natural phenomenon, but to a nonnaturally occurring manufacture or composition of matter -- a product of human ingenuity "having a distinctive name, character [and] use."  Hartranft v. Wiegmann, 121 U. S. 609, 121 U. S. 615 (1887).  The point is underscored dramatically by comparison of the invention here with that in Funk.  There, the patentee had discovered that there existed in nature certain species of root nodule bacteria which did not exert a mutually inhibitive effect on each other.  He used that discovery to produce a mixed culture capable of inoculating the seeds of leguminous plants.  . . .  Here, by contrast, the patentee has produced a new bacterium with markedly different characteristics from any found in nature, and one having the potential for significant utility. His discovery is not nature's handiwork, but his own; accordingly it is patentable subject matter under § 101.

I will concede that the language could be interpreted as Professor Sarnoff does, but that would (in my view) require ignoring the context.

Professor Sarnoff's reply:  I agree with Kevin that the Myriad decision treated cDNA differently, by adopting a simple "novelty" standard rather than the "markedly different" standard it applied to isolated DNA.

Professor Sarnoff:  Second, in my view nothing in these subsections actually "address[es] . . . the . . . concerns of the . . . critics" of the biopharma patent community, although it would codify a much more restrictive concept of the limits of patent eligibility.  In fact, those "critics" have been directly opposed to overturning both the Myriad and Mayo decisions.  And for good reason (as discussed next).  So in my opinion the Tillis Bill does not "giv[e] something to everyone."  I don't consider this to be a "compromise," but only something less than a total repudiation of any and all eligibility limits while still eliminating any meaningful limits.  No doubt, Kevin and many in the "biopharma patent community" think that is a good idea.  But as I see it many in the "biopharma community," including "critics" of the subset of that community that are the "biopharma patent community," think that expanding eligibility in this was and is a very bad idea.

Kevin Noonan's response:  The reason I used the taxol example is that it strikes at the heart of why eligibility law needs clarification.  DNA is, to be frank, a very 20th Century concern, particularly human genes.  But there are countless numbers of natural products that can be made into drugs and other important compounds as a consequence of their being "mere" isolated.  In my view, the rather loose language in Myriad has led to the concept that anything that can be "merely" isolated should be ineligible.  The proposed statute addresses this problem without rendering human genes patent eligible as I understand the language taken as a whole to mean.

Professor Sarnoff's reply:  Again, I agree that this is the intent of the bill (except that the language would also render eligible merely isolated human genes, and I believe that was also the intent).  As to whether that is a good idea, we will just have to beg to differ.

Professor Sarnoff:  As Kevin notes, "[w]ith regard to diagnostic method claims reconsideration under proposed Section 101 is less directly addressed; indeed, changes in the definition of 'process' carries much of the water supporting such claims.  But the provisions of Subsection (c)(1)(A) and (B)(ii) are important because they would proscribe the habit, used by district courts and affirmed by the Federal Circuit . . . of parsing claims into their component parts and then cherrypicking claim elements to arrive at a Mayo/Alice-sanctioned ineligibility conclusion . . . .

But as with semiconductors and artificial intelligence, there may be a window for convincing other Members that the current eligibility regime is inimical to innovation in the biopharmaceutical arts and that foreign competitors will be all too willing to step into the breach to charge American consumers whatever the traffic will bear for diagnostic methods and therapeutic drugs produced abroad."

Thus, Kevin posits that Mayo (and implicitly Myriad) have adversely affected innovation in diagnostic methods.  Perhaps Kevin is right in regard to venture and other capital investments in developing such methods (but see the evidence below that such investment has not been diminished in regard to diagnostics).  But my understanding of the data is inconsistent with Kevin's position that restrictions on eligibility have been bad for innovation, at least in the diagnostics space.  To make the point, I quote from the submission of the Association for Molecular Pathology (a trade association for diagnostics developers, which is also part of the "biopharma . . . community") on the 2021 PTO Jurisprudence Study request for comments, see https://www.regulations.gov/comment/PTO-P-2021-0032-0066, explaining why innovation and access have expanded, not contracted, for diagnostic tests post-Myriad and Mayo.  (Additional analysis of the innovation effects can be found in the testimony of molecular geneticist Dr. Sean George of Invitae Corporation on the prior draft legislation from Senator Tillis, see https://www.judiciary.senate.gov/download/george-testimony.)  This is the only significant natural experiment that has been conducted in recent memory on U.S. eligibility, so simply stating that investment has declined is not a meaningful response to the argument that innovation has nevertheless increased.  Hopefully, Kevin can respond with actual data to show that the AMP is wrong; if not, hopefully he will revise his views and accept that Myriad and Mayo should be preserved (at least for diagnostics).

Kevin Noonan's response:  To be fair this section of Professor Sarnoff's submission is too detailed and too important for a quick response in this post.  AMP's contentions can be found on the record linked above.  It does not surprise me that AMP would think diagnostics innovation has improved but there would appear to be two costs.  The first is access:  while I am sure that in the rarefied precincts in Boston, New York, Chicago, etc., the existence of teaching hospitals has had the effect AMP asserts.  But I'm not so sure the same is true in Appalachia, the Four Corners area of the Southwest, or other, particularly rural parts of the country.  Second, as noted in my post "The ACLU, Working for the Man," the prime beneficiaries of the Mayo/Myriad decision has been the big diagnostics companies, who can take advantage of academic research for free.  This was the situation forty-plus years ago that was the impetus for the Bayh-Dole Act, which has provided a return on investment (of time, effort, and intellect) expended by university researchers.

Professor Sarnoff's reply:  Here we are getting to truly meaningful discussions, with evidence.  I'll look forward to Kevin's analysis of the AMP's (and possibly to Dr. George's) conclusions, and to any other data that he can supply (particularly if it is industry-wide) on innovation effects of Myriad and Mayo.  Thanks as always for engaging, Kevin.  It is truly my pleasure to do so.

Patent Docs thanks Professor Sarnoff for his thoughts and comments on Senator Tillis' bill.  The AMP's position, and comments regarding it, will be the subject of a later post.