The Importance of Proper Claim Construction to the Patentable Subject Matter Determination in the United States
By Patricia A Martone, Law Office of Patricia A Martone PC
"No matter what the technology, the best practice for patent owners faced with a section 101 challenge is to emphasise the use of classic claim construction procedures in resolving section 101 issues and opposing efforts by defendants to “summarise” or “simplify” the claims."
The Supreme Court decisions in Alice Corporation v CLS Bank International, 134 S.Ct. 2347 (2014) (Alice) and Mayo v Prometheus Laboratories, Inc, 132 S.Ct. 1289 (2012) (Mayo) have had a major impact on the analysis of the patentable subject matter requirement of 35 USC. §101. Scores of patents in both the technology and biotechnology spaces have been invalidated in the courts in decisions applying these Supreme Court precedents. There have been numerous inconsistent and unexplained rejections of pending applications in the US Patent and Trademark Office. As a result, patents covering significant investments by companies in both the technology and life sciences industries are routinely invalidated or denied.
Those companies, the legal profession and judges have all complained that the standard for patentable subject matter needs to be clarified either by the Supreme Court or Congress in a way that will produce reasonably predictable outcomes and do not exclude meritorious inventions. This article explains why clarification of these cases by the Supreme Court or action by Congress is unlikely in the near future. I will suggest an alternative path for patent owners seeking to uphold the validity of their patents. This path makes claim construction a central part of the section 101 analysis. Patent owners should urge the Court to construe the claims as a whole using well-established claim-construction procedures. While the Federal Circuit has not been consistent in its claim-construction approach, recent decisions suggest that when the Court does examine a claim as a whole and not just as a sum of parts, a decision upholding patent validity is more likely.
Patent owners need to take matters into their own hands because there is little hope of action by the Supreme Court or Congress in the near term. The Supreme Court made clear that it was done with section 101 issues when the Court declined to hear the Sequenom appeal (Sequenom, Inc v Ariosa Diagnostics, Inc, 136 S.Ct. 2511 (2016) (cert. denied)). The petitioner in Sequenom sought a ruling that a method claim covering the application of a new combination of previously known techniques to a newly discovered natural phenomenon to achieve a previously impossible result is patentable. This was likely viewed by the Court as a request to issue a “bright line” rule which the Supreme Court disfavours.
Some others have argued that Congress should eliminate section 101 because it is redundant of the patentability requirements of sections 102 and 103. The stated justification for elimination is that if something exists in nature it cannot be novel and non-obvious. However, section 101 has been in existence for a long time, and the argument that section 101 is redundant of other patentability requirements was expressly rejected in Mayo. Moreover, section 101 also contains the important requirement that the invention be useful. This means that inventions actually have to work in practice and not merely in theory. It is difficult to imagine Congress agreeing to eliminate this section.
Two major IP bar associations have recently argued for amendment of section 101. See, for example, “Proposed Amendments to Patent Eligible Subject Matter under 35 USC. sec 101” published by the Intellectual Property Owners Association (7 February 2017), and “Letter from the American Bar Association Section of Intellectual Property Law to the Honorable Michelle K Lee, Director of the United States Patent and Trademark Office” (28 March 2017). But it is important to bear in mind that the statute on its face is not problematic. Section 101 provides only that an invention be a “new and useful process, machine, manufacture, or composition of matter, or any new or useful improvement thereof”. The conflict is over the so-called “judicially-created” exceptions to patentability, which are “laws of nature, natural phenomena and abstract ideas” (Diamond v Diehr, 450 US 175, 185 (1981)). Therefore, the purpose of an amendment would be to codify these exceptions by expressly stating what is not patentable. The statutory patent law in some other countries contain such express patentable subject matter limitations. But our Congress currently has many issues to deal with, and it is unrealistic to expect Congress to pass new patent laws in the foreseeable future. In addition, there is so much recent case law on patentable subject matter that a statute sitting on top of all this precedent is bound to cause confusion.
We are therefore left with applying the Alice and Mayo precedents. On its face, the test set forth in these cases seems straightforward.
First, we determine whether the claims at issue are directed to one of those patent ineligible concepts [“laws of nature, natural phenomena, and abstract ideas”] [Step One]. If so, we then ask, what else is there in the claims before us? To answer that question, we consider the elements of each claim both individually and as an “ordered combination” to determine whether the additional elements “transform the nature of the claim” into a patent-ineligible application. We have described step two of this analysis as a search for an “inventive concept” – ie, an element or combination of elements that is “sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself” [Step Two]. (Alice at 2355)
As always, the devil is in the detail. Looking at the cases concerning both technology patents and life sciences patents, it is clear that claim construction has a major impact on the outcome of the section 101 analysis. On the technology side, claim construction has a large impact on the Step One analysis – whether the claim at issue covers an abstract idea. Computer and software- related patents are most vulnerable at this step. Defendants have achieved success on motions to dismiss early in a case by arguing that the claims at issue call for routine calculations or data manipulation done on a computer which were previously done without a computer. These cases are striking because in many cases courts have been willing to decide the subject matter of claims without a proper claim construction analysis. This approach supports defendants’ efforts to oversimplify the claims by selective interpretation which ignores those portions of the claim most likely to support the conclusion that the claim is not directed to an abstract idea. The result are flawed decisions untethered to the language of the claims at issue.
The first Federal Circuit case to hold that computer-related claims are patentable in a Step One analysis is DDR Holdings LLC v Hotels.com, LP, 773 F.3d 1245 (Fed. Cir. 2014). The Court held that the claims directed to retaining website visitors “do not merely recite the performance of some business practice known from the pre-Internet world along with the requirement to perform it on the Internet” (id at 1257). Instead the claims were patent-eligible because “the claimed solution is necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks.”
In Enfish, LLC v Microsoft Corp. 822 F.3d 1327 (Fed. Cir. 2016) (Enfish), the Federal Circuit was even more explicit on the need to look at the claims as a whole in the Step One analysis. Enfish held that the correct inquiry was not whether the claims “involve” a patent-ineligible concept but, whether, using the precise language of Alice, the claims are “directed to” a patent ineligible concept. The Court relied upon Mayo for its holding that all inventions at some level involve laws of nature, natural phenomena or abstract ideas, and if this were the test, no claim would be patent-eligible. The Court declined to hold that all improvements in computer-related technology and all software patents are inherently abstract and can never pass the Step One test for patentable subject matter. The Court went on to perform an analysis of the claims directed to a particular logical model for a computer database, read in light of the specification, and concluded that the claims were not directed to an abstract idea and were therefore patent-eligible.
Similar analyses can be found in the subsequent Federal Circuit decisions sustaining the patentability of claims directed to computers and software in Bascom Global Internet Services, Inc v AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016) (Bascom) (IP server for filtering content on the internet) and McRO, Inc v Bandai Namco Games America Inc, 837 F.3d 1299 (Fed Cir. 2016) (McRO) (automation of a known 3D animation method). In McRO, the Court was able to definitively rule that the claims were not directed to an abstract idea in its Step One analysis. In Bascom, the Court was more comfortable holding that the subject matter of the claim was patentable after a Step Two analysis. But the fundamental emphasis of these cases on carefully construing claims in light of the specification instead of using summaries of the claims untethered from their actual language is what is important.
Turning to the life sciences arena, the types of claims are different from those discussed above, but the importance of proper claim construction remains the same. Claim construction was at the heart of the decision in Sequenom, supra, where the Federal Circuit ruled that the claims at issue were invalid under section 101. Ariosa Diagnostics Inc v Sequenom, Inc, 788 F.3d 1371 (Fed. Cir. 2015). The claims were directed to a method for detecting a small amount of a particular substance in maternal plasma or serum to determine foetal characteristics such as gender. The discovery that foetal DNA is present in maternal plasma and serum was new, but the techniques applied to detect it were known. The application of known techniques to a newly discovered albeit natural phenomenon resulted in a previously impossible result. Noteworthy is the Federal Circuit’s ruling that in performing the Step Two analysis, it felt bound by Mayo to exclude from its analysis those portions of the claim covering “post-solution activity that is purely conventional or obvious”, citing Mayo at 1299.
On its face, this approach appears contrary to Mayo’s requirement that in Step Two of the section 101 analysis claim elements are to be considered both individually and as an “ordered combination”. The concurring opinion of Judge Linn recognises that the claims should be analysed as a whole, but that Mayo also required the exclusion of claim elements directed to conventional or obvious post-solution activity. A central theme of Sequenom’s petition for a writ of certiorari was the automatic exclusion of conventional post solution activity from the Federal Circuit’s claim interpretation in its Step Two analysis. Some amici also focused on the claim construction issue.
The question remains whether the Federal Circuit will stick to what many view as its overly rigid reading of Mayo. The Federal Circuit’s denial of Sequenom’s petition for en banc consideration makes clear that it does not want to make a head-on effort to qualify the scope of Mayo. But history shows us that the Federal Circuit can change course if presented with a new case with different claims and different facts. And even if the Federal Circuit’s decision was unfavourable to the patentee, the case could also provide the opportunity for a winning petition for a writ of certiorari.
Therefore, no matter what the technology, the best practice for patent owners faced with a section 101 challenge is to emphasise the use of classic claim construction procedures in resolving section 101 issues and opposing efforts by defendants to “summarise” or “simplify” the claims. Patent owners should also resist premature motions to end the case when there are construction issues requiring a full Markman procedure.