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Biotech Industry Supports Cert in Sequenom to Avert “Crisis of Patent Law and Medical Innovation”

The biotechnology and life sciences community has voiced broad support for Sequenom’s recent request that the Supreme Court review the Federal Circuit’s decision holding Sequenom’s diagnostic fetal DNA patent ineligible under 35 U.S.C. § 101 and the Supreme Court’s decision in Mayo Collaborative Servs. v. Prometheus Labs. Inc., 132 S. Ct. 1289 (2012).  Sequenom’s patent – which this blog has covered herehere, and here – is based on the breakthrough discovery that paternally-inherited cell-free fetal DNA (“cffDNA”) can be found in maternal plasma.  The claimed invention uses amplification and detection of cffDNA from routinely-collected maternal plasma to diagnose fetal conditions such as chromosomal abnormalities – tests that could not before be done noninvasively.  The Federal Circuit ruled that the patent fails Mayo’s two-part test for patent eligibility because it is allegedly directed at ineligible natural phenomena (the presence of cffDNA in maternal plasma or serum) and because the additional elements of the claim (amplification and detection) are conventional and not inventive.

Although the Federal Circuit denied rehearing en banc, a number of judges, including those that concurred in the result, expressed concern about the Sequonom decision.  Judges Lourie and Dyk wrote concurrences to the denial of rehearing opining that Mayo required the result but suggesting that Mayo had doomed an otherwise novel and useful patent.  Judge Newman dissented, stating that Mayo did not require invalidating Sequonom’s patent.  Sequonom made similar arguments in its petition for certiorari, contending that Mayo was distinguishable and that the Federal Circuit’s broad interpretation of Mayo threatened many breakthrough medical innovations.

Last week, twenty-two amici filed briefs in support of Sequenom’s petition.  They represent a diverse contingent of stakeholders: biotech and life science companies, innovators in other technological fields, academics, international and domestic professional organizations, and IP licensors.  Although the amici raise many arguments, the central theme is that the Federal Circuit’s decision threatens broad swaths of novel technology and portends a “crisis of patent law and medical innovation,” as Judge Lourie put it in his concurrence to the denial of rehearing en banc.

On the law, the amici echo Sequenom’s argument that the Federal Circuit’s analysis is overbroad and threatens to invalidate undisputedly novel innovations in the biotechnology industry.  An industry brief submitted by the Biotechnology Innovation Organization, Pharmaceutical Research and Manufacturers of America and the Association of University Technology Managers contends that the Federal Circuit erred by analyzing Section 101 eligibility on an element-by-element basis rather than based on the claim as a whole.  Similarly, a group of Nineteen Law Professors argues that virtually all scientific inventions contain an element of natural laws or phenomena and that invalidating all patents applying known technology to new discoveries would be contrary to long-established law.  By way of example, they contend that iconic patents such as Samuel Morse’s telegraph (natural phenomenon: the motive power of magnetism; conventional steps: imprinting signals on paper) and Alexander Graham Bell’s telephone (natural phenomenon: electrical undulations produce sound; conventional steps: the already-known telegraphic transmission of sounds) would fail the eligibility test as applied by the Federal Circuit.  Others, including the New York Intellectual Property Law Association, [1] also urge the Court to take on the case in order to clarify that preemption concerns – the notion that a broad patent on a natural law will preempt other uses of the law and stifle innovation – are central to the patent eligibility analysis.  NYIPLA argues that the Supreme Court’s Section 101 cases have centered on concerns about preemption and that the Federal Circuit’s “wooden application of Mayo” without addressing preemption missed the point of the Court’s jurisprudence.

Other briefs address the likely consequences if Sequonom is not overturned.  The brief of Amarantus Bioscience Holdings Inc., Exo Incubator, Inc., and Michael Heltzen – a small diagnostic biotech company, a biotech incubator, and a seed investor, respectively – argues from a business perspective that widespread invalidation of patents like Sequenom’s will dry up funding for new tech companies and keep new products from the market.  For these entities, “[t]he equation is simple: fewer protective patents means less funding of innovation, which leads to fewer new companies producing fewer new healthcare technologies and services, which ultimately results in diminished U.S. economic strength, increased healthcare spending, and prolonged patient suffering.”  Similarly, Metabolon Inc., a biochemical biomarker innovator, cautions that uncertainty means that members of the biomedical community cannot: “(1) confidently invest in research; (2) confidently invest in clinical validation and commercialization of existing patents; or (3) confidently predict that it is better to disclose discoveries through the patent system than it is to keep discoveries a trade secret.”

These concerns were echoed by larger companies.  Novartis forecasts “three possibilities for the future of [its] business” if the Supreme Court does not change the current course of Section 101 jurisprudence: first, it and similar companies may “be forced to take at least parts of our business elsewhere to jurisdictions with friendlier patent laws”; second, it may “be forced to rely on trade secret protection in areas, where patents are, and continue to become, less predictable,” frustrating the patent system’s disclosure aim; or third, and “most depressing, we and our peers may be forced to abandon our R&D efforts” – for Novartis, $8.9 billion in 2015 – “in certain areas, not because we want to, but because the costs and risks would just become too high without an incentive that enables us to recoup our investment.”  Novartis offers that under the current course of the law, the third scenario may be the likeliest.  Microsoft notes that these concerns are not confined to the life sciences; computer software patents are particularly at risk, Microsoft argues, because “advances in computing often are achieved by combining new conceptual insights – insights that might be patent ineligible abstract ideas standing alone – together with known devices or techniques.”

A group of international amici stressed that the direction of Section 101 jurisprudence is becoming increasingly out of step with international law.  The Institute of Professional Representatives Before the European Patent Office argues that the Federal Circuit’s interpretation of Mayo might contravene Article 27 of the Agreement on Trade-Related Aspects of Intellectual Property Rights, the international agreement administered by the WTO.  And a group of international biotech industry organizations from the UK, Europe, Australia, Canada, Switzerland, Holland and Japan notes that while, like the US, natural phenomena are not patentable in international jurisdictions, patent eligibility determinations are differing drastically in the US as compared to the rest of the world.  They compare Sequenom’s US patent claims to their European, Australian, Canadian and Japanese counterparts, noting that in the latter jurisdictions subject matter eligibility was never questioned.

The other amici are Boston Patent Law Association; Chartered Institute of Patent Attorneys; Coalition for 21st Century Medicine; Dr. Ananda Mohan Chakrabarty; Eli Lilly and Company, Eisai Inc., Upsher-Smith Laboratories, Inc., Pfizer Inc., and Etiometry, Inc.; Federal Circuit Bar Association; Intellectual Property Owners Association (IPO); JYANT Technologies; Murgitroyd & Company; Population Diagnostics, Inc., Avant Diagnostics, Inc., Personalis, Inc., Linda Bruzzone, and Erin Marie Mading; Professor Timo Minssen and Robert M. Schwartz with 10 European and Australian Law Professors; Professors Jeffrey A. Lefstin and Peter S. Menell; and Wisconsin Alumni Research Foundation, Indiana University Research and Technology Corporation, and San Diego Intellectual Property Law Association.

[1] Irena Royzman, Co-Chair of the NYIPLA Amicus Briefs Committee and a contributor to this blog, was an author of NYIPLA’s brief.