May 9, 2014

All We Like Sheep Have Gone Astray

The CAFC extends Myriad beyond DNA claims

Much ink has recently been spilled arguing that the PTO’s new guidelines go further than they should, and that Myriad’s reasoning should not be applied to proteins, cells, lipids, etc. For better or worse, however, on 8 May 2014 the Federal Circuit made clear in In re Roslin that Myriad’s reach extends beyond DNA.

Roslin’s facts and posture are fairly straightforward. Roslin Institute scientists famously cloned “Dolly” the sheep in 1996. They applied for a patent, and this application gave rise to series of continuation and divisional applications. Some of these have matured into patents that cover the cloning methods (see, e.g., US 6,147,276 & 7,514,258). One of these applications in the family, US 09/225,233, claimed “[a] live-born clone of a pre-existing, nonembryonic, donor mammal, wherein the mammal is selected from cattle, sheep, pigs, and goats.” The PTO rejected this claim under §§ 101–103. The PTAB affirmed rejections on all three grounds, and Roslin appealed to the Federal Circuit.

The Federal Circuit affirmed the PTAB entirely on subject matter-eligibility, without ever addressing the novelty/obviousness rejections. To evaluate §101 eligibility of Roslin’s claims, the Federal Circuit sketched a spectrum running from Funk Bros. to Chakrabarty. At one end, Funk Bros.’ claims embrace organisms that are not transgenic at all. At the other end, Chakrabarty’s claims embrace only transgenic organisms. The Federal Circuit looked to Myriad to decide where the dividing line lies along that spectrum. The Roslin court concluded that because “Roslin did not create or alter any of the genetic information of its claimed clones,” Roslin’s claims embrace animals that “do[] not possess markedly different characteristics from any farm animals found in nature,” (internal quotations omitted, slip op. at 7). This put Roslin’s claims on the “ineligible” side of the line.

Roslin argued three points that it claimed distinguished its claimed clones from natural farm animals. The Court rejected each in turn.

1)     Cloned sheep are not identical to their wild ancestors because “environmental factors” will give rise to phenotypic differences. According to the Federal Circuit, as a matter of law phenotypic differences caused by environmental factors cannot make a claimed organism “markedly different” for eligibility purposes. “[A]ny phenotypic differences [that] came about… independently of any effort of the patentee… do not confer eligibility on their claimed subject matter” (internal quotations omitted, slip op. at pgs. 9 & 10, citing Funk Bros., 333 U.S. at 131 and Chakrabarty, 447 U.S. at 310).

2)     Cloned sheep can have different mitochondrial DNA from their nucleus-donor parent. This argument was rejected on two grounds. First, the Court noted that Roslin’s claims do not exclude animals with the same mitochondrial DNA as their nucleus-donor parents. Second—and more substantively—the court indicated that even if the claims were drafted to require mitochondria from one progenitor and a nucleus from another, this still might not be enough for subject-matter eligibility. “[T]he Specification does not disclose any systematic differences in the clones that arise from the capture of the recipient oocyte… There is nothing… that suggests that the clones are distinct in any relevant way from the donor animals of which they are copies” (internal quotations omitted, slip op. at pg. 11).

3)     Clones are time-delayed versions of their donor-progenitors. The Court rejected this argument on the grounds that “the difficulty with the time-delayed characteristic is that it is true of any copy of an original.” Those trained in formal logic might recognize this argument as the informal fallacy of petitio principii (also called “begging the question”). The conclusion only follows if one accepts as an unstated premise that copies are per se ineligible. Is a copy necessarily §101 ineligible? A copy is necessarily anticipated, but it is less clear whether copies are categorically excluded subject matter. Should all §102 rejections in biotech applications necessarily be paired with a §101 rejection because the claimed matter is “just a copy” of the prior art? In any event, the Federal Circuit did not consider that this point brought Roslin’s claims across the line onto the Chakrabarty side of the spectrum.

Editorial Note

Once upon a time, the Federal Circuit used to believe that “courts should avoid reaching for interpretations of broad provisions, such as §101, when more specific statutes, such as §§ 102, 103, and 112, can decide the case.” MySpace v. GraphOn Corp., 672 F.3d 1250, 1261 (Fed. Cir. 2012). Unfortunately, Mayo Collaborative v. Prometheus Labs., 132 S. Ct. 1289, 1303 (2012) declared that “[t]his approach… would make the ‘law of nature’ exception to § 101 patentability a dead letter.” Roslin highlights the need for the wisdom of the MySpace approach. The Roslin court could have reached exactly the same judgment—affirming the PTAB—on novelty and/or obviousness grounds, without involving itself in the absurdity of declaring that a clone of a pre-existing donor mammal is a “product of nature.”

Practice Tips

Imagine that you own Mine that Bird. You plan to clone the gelding and start a business that rents out the clones of the gelding as studs, with locations in all fifty states. You need a patent that covers these clones. How, in view of Roslin, should you draft your application and your claims?

The safe answer to this question is that the donor nucleus should be altered in some way prior to injection, so that the resulting clones have some “markedly different” characteristic. Ideally the characteristic will be something irrelevant to racing, such as coat color.

On the other hand, the knowledge that the clones are different in any way from the original may depress the price that one can command for the studs. In a complex organic system like a race horse, who can say whether the coat color protein does not feed into some other metabolic pathway that makes a difference to racing ability? How then, can one draft the claim to cover the identical animal?

It is very hard to answer this question. The Roslin court is careful to note in dictum that “having the same nuclear DNA as the donor mammal may not necessarily result in patent ineligibility in every case” (slip op. at 11). The focus on “markedly different characteristics” indicates that if one can identify phenotypic traits that distinguish a claimed organism from its wild-type forebears, one might get across the §101 threshold. The Roslin court, however, gives little guidance as to what is different enough to satisfy the post-Myriad eligibility standards. The hypothetical patent eligible organism with identical nuclear DNA may be as fictional as the unicorn.