patentable subject matter

Alice Corporation Pty. Ltd. v. CLS Bank International

Issues

Are claims to computer-implemented inventions—including claims to systems and machines, processes, and items of manufacture—patent-eligible subject matter?

Alice Corporation was granted patents on several processes and systems relating to the use of computer software to facilitate securities trading and reduce risks of parties not fulfilling contractual obligations. CLS Bank developed software for its own use in similar transactions. CLS brought an action for declaratory judgment, asserting that Alice’s patents were subject-matter ineligible because they did no more than recite abstract ideas regarding fundamental economic concepts. Alice counterclaimed, asserting that CLS infringed Alice’s patents. The district court found the Alice patents invalid, but the Federal Circuit reversed, holding that Alice’s patents fell within the “abstract ideas” exception to the generally broad policy of patent eligibility. Alice argues that the abstract ideas exception is meant to be read narrowly and apply to fundamental truths such as facts of nature. CLS counters that Alice’s patents merely cover fundamental economic concepts and that these should fall within the exception. At issue is a basic question about the scope of patent-eligible subject matter, and the breadth of the abstract ideas exception. The Court’s decision could fundamentally alter the scope of what is patentable.  The decision may encourage innovation in the software and other industries by rewarding those who expend resources to bring about a useful product to the public.

Questions as Framed for the Court by the Parties

Whether claims to computer-implemented inventions—including claims to systems and machines, processes, and items of manufacture—are directed to patent-eligible subject matter within the meaning of 35 U.S.C. § 101 as interpreted by this Court? 

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Facts

In securities trading, when two parties agree to a trade there is often a time lapse between when the parties enter into the agreement and when the actual trade is performed. See CLS Bank Int’l v. Alice Corp., 717 F.3d 1269, 1274 (Fed Cir. 2013).

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Association for Molecular Pathology v. Myriad Genetics, Inc.

Myriad Genetics first identified and isolated the BRCA1 and BRCA2 genes responsible for diagnosing an elevated risk of breast and ovarian cancer. Myriad claims patents on the isolated BRCA genes along with cDNA, which is a synthetic product that mirrors the coding sections of the BRCA genes, and "primers" used in diagnostics. The Patent Act defines the scope of patentable subject-matter in 35 U.S.C. § 101; however, the Supreme Court has consistently held that laws of nature, abstract ideas, and natural phenomenon cannot be patented. Myriad claims that the isolated and modified genes that they hold patents for never occur in nature, and subsequently are patentable subject-matter. Conversely, the Association for Molecular Pathologists contends that Myriad only isolated, and did not modify, a gene already existing in nature and that this isolated gene performs a similar function as the gene in natural form. The district court held that naturally-occurring genes were not patentable subject-matter, but the Federal Circuit court reversed. How the Supreme Court decides this case will greatly impact the scope of patentable subject-matter. A narrowing or a broadening of current subject-matter eligibility will have significant effects on the incentives for inventors as well as what information is available for and usable by the general public.

Questions as Framed for the Court by the Parties

Many patients seek genetic testing to see if they have mutations in their genes that are associated with a significantly increased risk of breast or ovarian cancer. Respondent Myriad Genetics obtained patents on two human genes that correlate to this risk, known as BRCA1 and BRCA2. These patents claim every naturally-occurring version of those genes, including mutations, on the theory that Myriad invented something patent-eligible simply by removing ("isolating") the genes from the body. Petitioners are primarily medical professionals who regularly use routine, conventional genetic testing methods to examine genes, but are prohibited from examining the human genes that Myriad claims to own. This case therefore presents the following questions:

  1. Are human genes patentable?
  2. Did the court of appeals err in upholding a method claim by Myriad that is irreconcilable with this Court's ruling in Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012)?
  3. Did the court of appeals err in adopting a new and inflexible rule, contrary to normal standing rules and this Court's decision in MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007), that petitioners who have been indisputably deterred by Myriad's "active enforcement" of its patent rights nonetheless lack standing to challenge those patents absent evidence that they have been personally threatened with an infringement action?

LIMITED TO QUESTION 1 PRESENTED BY THE PETITION.

Issue

Whether Myriad’s claimed invention, the sequence of certain human genes in both isolated and purified forms, falls within the scope of inventions for which a patent may be granted.

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Acknowledgments

The authors would like to thank Professor Oskar Liivak for his insight into this case.

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Overview

A patent grants the patent holder the exclusive right to exclude others from making, using, importing, and selling the patented innovation for a limited period of time.  The U.S. Patent Act, 35 U.S.C. §§ 1 et seq., was enacted by Congress under its Constitutional grant of authority to secure for limited times to inventors the exclusive right to their discoveries.

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