A conversation between the Supreme Court & the Federal Circuit

The following contribution to our gene patenting symposium comes from Robin Feldman, Professor of Law at UC Hastings College of the Law, specializing in Intellectual Property. She has published two books, Rethinking Patent Law (Harvard 2012) and The Role of Science in Law (Oxford 2009).  This essay is adapted from A Conversation On Judicial Decision-Making, and Whose Body.

One of the fascinating aspects of the Supreme Court’s modern jurisprudence on patentable subject matter is the conversation that emerges between the Court and the Federal Circuit. The conversation has the feel of an exchange between a teacher and a student, or perhaps between an adult and an adolescent, because after all, the Federal Circuit has been around only a few short decades. As with any conversation of this kind, much of the talking is done by the one who has wisdom conferred by superior status, but there are occasional rejoinders from below.

With Myriad, we are now reaching the third of what I suspect will someday be called a quartet of patentable subject matter decisions – the fourth being some as-yet-undetermined software case. After Apple/Samsung, I could imagine a fifth decision relating to design patents, although the Court could choose to address problems with design patents through other doctrines. In the Apple/Samsung case, Apple received a billion-dollar jury verdict, arguing that Samsung’s tablets and smartphones had infringed a variety of Apple’s intellectual property rights. The claims included design patents on features such as a black background and rounded edges.

What is the reason for this extended conversation?  The Federal Circuit, in its carefree, adolescent life, has developed a habit of resting on rules of convenience.  The cases make distinctions to try to reach a particular result, but the rules (and the distinctions within those rules) lack general applicability and defensible logic.  The approach feels comfortable because of the end result, but it is intellectually and operationally unsatisfying.  Worse yet, the cases all too often produce what I would call death by tinkering – change a little piece here and a little piece there until the entire area threatens to collapse of its own weight.

A classic example of artificial distinctions can be seen in Myriad.  In a concurring opinion, Judge Moore noted that although isolated gene sequences have literal chemical differences from gene sequences in the human body, it is not clear that those distinctions make any meaningful difference. In other words, Judge Moore is questioning her colleague’s decision to rest a legal determination on this distinction, and indeed, it is worth questioning. Identifying a literal difference is an insufficient basis for any legal decision. One must ask why the difference matters in the full doctrinal framework of the question, not just for gene sequences or even life science patents, but for patents as a whole.

Doctrinal approaches that lack logical coherence and general applicability are a problem in many areas of Federal Circuit jurisprudence, but they are particularly evident in patentable subject matter.  And it is here, in the broad thematic spaces of patentable subject matter, that the Supreme Court has engaged in its most detailed conversation yet.

One of the most striking parts of the exchange occurs when the Court says the following, in the 2010 Bilski v. Kappos case: 

[N]othing in today’s opinion should be read as endorsing interpretations of § 101 [patentable subject matter] that the Court of Appeals for the Federal Circuit has used in the past.

In other words, the Supreme Court is saying to the Federal Circuit, we disagree with everything you have ever had to say about the topic in your thirty-year history. The Federal Circuit, however, continues to push back.

For example, on remand in Myriad, the Federal Circuit fails to acknowledge the necessity of coherence throughout the doctrine. All three of the decisions by the panel insist that the Supreme Court’s Mayo opinion on method patents is merely instructive, but not controlling. Mayo, however, is one of the many steps the Court is taking as it marches through patentable subject matter attempting to impose coherence in the doctrine. The Federal Circuit seems to miss this point.

Of course, wisdom can be easier to expound than to live by.  When the Supreme Court tries to demonstrate the outlines of a test for patentable subject matter, the Court stumbles by trying to preserve its decisions in both Parker v. Flook and Diamond v. Diehr. In perfect candor, the doctrine would benefit from an acknowledgment that, although the expressions of the claims and discussions of the pre-emption risks diverged in Flook and Diehr, the facts of the two cases were quite similar.  Sections of Flook are simply incompatible with the decision in Diehr, and one could argue that the Court would be better served by retreating from its first, and perhaps imperfect, foray into computer-related inventions in Flook. Myriad offers an opportunity to remedy this problem, which continues to hover over patentable subject matter and prevent coherence in the area.

In fact, gene patents are the perfect subject matter for creating coherence between product and process patents. After all, genes, themselves, are a strange combination of product and process. Human genes are a sequence of nucleotides that operate as a set of instructions for carrying out some function in the body. Normally, a set of instructions is considered a process. Nevertheless, genetic material in a petri dish is as tangible as any product, and we treat gene claims as product claims.

It takes a certain amount of mental gymnastics to contemplate a thing whose nature combines both product and process.  If one could create an instruction manual that operated on its own, would it be a process or a product? Software, to some extent, is another example of this type of hybrid. It is a set of instructions that is designed to operate itself, that is, to produce a set of results. Understanding the way these areas are intertwined is a further reminder of the importance of developing an approach to patentable subject matter that has logical coherence throughout, something that the Federal Circuit’s tests have failed to accomplish.

In Myriad, the issue is whether gene claims fall outside of patentable subject matter because they are simply too close to nature itself. The question is not whether there are any literal differences from nature but whether there are any differences that matter. In my view, this question breaks down into two inquiries. First, in deciding whether there are any differences from nature that matter, I believe one should follow the logic suggested by Judge Learned Hand in Parke-Davis v. H.K. Mulford Co., which can be described as the following: is the invention not only new but new in a way that opens avenues for humans to do something previously beyond reach?

One could argue endlessly over whether Judge Hand’s discussion constitutes dicta. One could also argue that the purification cases are too old to be helpful. Nevertheless, one so often finds the wisdom of Learned Hand to be compelling, and Parke-Davis is no exception.

Applying this logic, one would look at the two types of products Myriad claimed: (1) isolated sequences of the relevant gene along with isolated subsections; and (2) cDNA. To understand cDNA, think of that wonderful double helix one sees in biology illustrations. Imagine opening the double helix like a zipper, and on half of the zipper, separating out the relevant part and then splicing out the unnecessary regions. cDNA is the mirror image of that.  cDNA does not normally exist in the body, and is naturally created only through the operation of certain retroviruses.

Transforming DNA into cDNA provides a more efficient tool for studying, diagnosing, and treating the disease associated with a gene. These qualities should satisfy the notion of being different from nature in a way that opens new avenues for humans.

Isolated strings or partial strings of DNA are a closer call. Although they offer some advantages, those advantages are less clear, and reasonable minds can differ. The fact that two agencies of the same administration (PTO and Justice) have taken opposing positions on the question is itself an indication that reasonable minds can differ.

In my view, the second inquiry in determining whether any differences matter concerns pre-emption. The strongest message to emerge from the Court’s recent opinions is the importance of considering whether the patent would block an entire abstract idea or natural category. If nothing else, it is clear that pre-emption will be on the Court’s mind.  I would frame the question in the following terms: Despite the literal differences from nature, does this type of invention, nevertheless, risk pre-empting its natural counterpart?

Personally, I would hate to reduce the incentive for this extremely important area of research, but I could easily see the Court concluding that gene patents create too great a risk of pre-empting their natural counterparts – both DNA strings and cDNA. Scientists make cDNA because it is tailored to work with bacteria, the organisms commonly used to manipulate genes and proteins in the lab. If the Court is concerned about the pre-emption risk of patenting the strings found in nature, one could argue that patenting the product in the altered form most commonly used in the lab has the effect of blocking access to the gene itself. This could create the type of pre-emptive effect about which the Court expressed concern in Mayo.

In the modern world of patent monetization and patent wars, the notion of pre-emption takes on particular importance.  Entire industries have exploded onto the scene in which entities buy up patents to assert them against any product that might conceivably have a relation to the patent – no matter how tangential. This practice has opened a Pandora’s box of strategic behavior, in which companies spend an increasing amount of their time and resources defending, asserting, and strategizing about patents.

In an intense bargaining environment, courts must set rules that limit the possible roaming space for a patent holder.  With certain types of patents, so few things are likely to survive close scrutiny, and the bargaining power that can be wielded with them is so great, that it may be better to forbid patenting them altogether.

In my view, the proper test for determining patentable subject matter should focus both on Section 101 and on the tests for patentability as a whole.  I would express the basic inquiry in the following manner:  Considering the limitations of the patent system as a whole, are we likely to have pre-emption problems with the subject matter of this patent? Understanding pre-emption in the context of modern monetization trends will be important in the application of this test.