By: Michael J. Weil
In the spring of 2018 a significant decision by the Federal Circuit, Vanda v. West-Ward , cut a distinct path though the controversial Mayo and Alice rules for evaluating subject matter eligibility of patents.
Relevant Case Background
The case is multifaceted; this article will focus on the Vanda court’s interpretation of Patent Subject Matter eligibility under 35 U.S.C. § 101. The suit revolved around Vanda’s schizophrenia drug Fanapt® (iloperidone). Vanda owned a patent which utilized a method of treating schizophrenia patients with iloperidone. Specifically, Vanda’s method employed a dosage range based on a patient’s genotype. West-Ward pharmaceuticals manufactured a generic version of Fanapt® and utilized a similar method—West-Ward’s “proposed generic drug label recommended that physicians perform genotyping tests on iloperidone patients.” West-Ward claimed that because Vanda used a person’s genotype (a natural phenomenon) in its method, Vanda’s patent was invalid. West-Ward used precedents known in patent law as the Mayo test and the Alice test, discussed below, to make its argument. Based on its invalidity contention West-Ward filed an Abbreviated New Drug Application (ANDA); if granted the ANDA would allow West-Ward to market its generic product before expiration of Vanda’s original patent. Vanda responded by suing for infringement, claiming that their patent was valid because it transformed the natural process into an inventive concept.
Mayo and Alice Tests
The Mayo Test consists of two steps. The first step states that when evaluating the validity of patent, courts must find whether the contested patent claims are “directed to a patent-ineligible concept.” If the concept is patent eligible, the test is satisfied. However, if the concept is not patent eligible the courts must next evaluate whether the elements of each claim, both individually and in combination, transform the law of nature into a patentable application. “To transform an un-patentable law of nature into a patent-eligible application of such law, one must do more than simply state the law of nature, while adding the words ‘apply it’…it must limit its reach to a particular, inventive application of the law.”
From the precedent set in Mayo, courts have inferred that if a patent employs natural phenomena—such as a method which utilizes a natural process—the patent must limit its reach to a particular concept. Under the Mayo Test an inventor should demonstrate that he or she has staked a claim to a particular aspect of nature, and developed that aspect in a unique way–thereby converting it into a human-made invention. Like the Vanda case, the concept specifically discussed in Mayo related to the concentration of certain metabolites in the bloodstream. In Mayo, the court ruled that the process of deciding whether to increase or decrease the dosage of a drug based on the measurement of metabolites failed both prongs of the court’s test, and thus, was not eligible for patent protection.
Ultimately, the Mayo court urged caution in granting patents that employed natural phenomena out of concern that “patent law not inhibit future discovery by improperly tying up the use of laws of nature and the like.”
Similarly, the Alice Test uses a two-step framework that is influenced by the Mayo Test. The Alice test states that to determine patentability, the court must: determine whether the claims at issue are directed to a patent-ineligible concept, and if the concept is ineligible search for the ‘inventive concept’ —i.e., “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.” In Alice the patent in question related to a computer-implemented, electronic escrow service which helped facilitate financial transactions. The court in Alice ruled that the financial facilitator was an abstract idea, and therefore fell out of the realm of patent protection. Regarding the second step, “The mere recitation of a generic computer cannot “transform” a patent ineligible abstract idea into a patent eligible invention.”
The decisions have been controversial. Critics have pointed out that the decisions significantly hamper the ability to obtain new patents in fields such as software and medicine. Gene Quinn, a well-known patent practitioner, has voiced major concern over the rulings—particularly Alice. Quinn critiques three aspects of Alice: 1) There is no objective standard for judging patent-eligibility; the test is completely subjective; 2) Other than by resort to analogy to specific patented inventions in prior cases, there is no definition of what “abstract idea” or “something more” means in the Alice test; and 3) Alice fails to provide any guidance for “reaching the patent eligibility zone.” Additionally, in the wake of the rulings, many previously granted patents have been challenged and invalidated. The judicial trend has largely been to cast a wide net and strike down most patents that invoke natural phenomena.
Applying the Tests
In Vanda, the court laid out the tests for patent eligibility articulated in Mayo and Alice. Next, in a relatively surprising move (given the precedent set in the Mayo case) the court ruled that Vanda’s process was a new way to treat a disease–not merely a solicitation of an existing natural process. The court ruled that the process was patentable, fulfilling step one of both the Mayo and Alice tests: “Unlike the claim at issue in Mayo, the claims here require a treating doctor to administer iloperidone…depending on the results of the genotyping assay. The specification further highlights the significance of specific dosages and how certain ranges (of dosage) correlate with risk…thus, the claims are ‘a new way of using an existing drug’ that is safer for patients because it reduces risk.” Furthermore, in the Mayo case a doctor could violate the patent, even if he did not actually alter his treatment decision in light of the genetic tests. To paraphrase, the court in Mayo ruled that the patent in question was invalid because the patent impermissibly covered the metabolic process itself without a sufficient man-made application. In contrast, the Vanda court held that Vanda’s patent was tied specifically to the dosage or treatment regiment based on the results of the genetic testing, and was specifically tailored to cover the relationship between the genotype of the patient and the dosage. This limited the application of the natural phenomenon in a patentable way: “These are treatment steps. In contrast, the claim in Mayo stated that the metabolite level in blood simply “indicates” a need to (alter) dosage, without prescribing a specific dosage regiment…” Hence, the court ruled that treatment steps are patentable, even if they utilize a natural phenomenon; therefore, step one of both the Mayo Test and the Alice Test is satisfied and there is no need to move onto step two– seeing if there is an inventive concept involved.
The court’s ruling in Vanda may potentially pave the way for a re-interpretation of the rules set forth in Mayo and Alice. In theory, Vanda may even turn the tide back toward a more “expansive” and “broadly inclusive” interpretation of patent eligibility as set forth in Diamond v. Chakrabarty. The ruling also could also be a first salvo in the push to loosen the strictures on patents relating to abstract ideas or natural phenomena. Finally, given that the court did not elaborate on the second step of the Alice and Mayo tests, it remains to be seen if the second step is altered. Overall it will be fascinating to track the courts use of Vanda—will it become a new precedent regarding patent subject matter eligibility or merely an outlier?
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