Presumption of Validity - Does it Matter Anymore?

35 U.S.C. 282 says it: “A patent shall be presumed valid…The burden of establishing invalidity of a patent or any claim thereof shall rest on the party asserting such invalidity.” This presumption of validity was codified in the 1952 Patent Act. The Federal Circuit has in varying cases described the purpose of establishing the presumption. See, Brooktree Corp. v. Advanced Micro Devices, Inc., 977 F.2d 1555, 1574 (Fed. Cir. 1992) (“[The] presumption is based in part on the expertise of patent examiners presumed to have done their job.”) and Applied Materials, Inc. v. Advanced Semiconductor Materials Am., Inc., 98 F.3d 1563, 1569 (Fed. Cir. 1996) (“The presumption of validity is based on the presumption of administrative correctness of actions of the agency charged with examination of patentability.”)

The Federal Circuit has long established that the burden to overcome the presumption of validity is clear and convincing evidence. “Clear and convincing” generally means highly probable or reasonably certain. Prior to formation of the Federal Circuit in 1982, the burden of proof necessary to rebut varied among the various Circuit Courts – some courts used a “preponderance of the evidence,” some used “substantial evidence,” and some used “clear and convincing evidence.” The Supreme Court has never directly addressed the issue of the proof required to rebut the presumption.

Why do I bring this up? At page 104 of the Association for Molecular Pathology opinion, Judge Sweet had this to say: “While Congress has created a presumption of validity for issued patents, approximately 40% of patents challenged in the courts have been found invalid, indicating that this presumption is far from absolute.”

While it may be fair to say that many patents are (rightly or wrongly) invalidated in litigation, is it fair to simply blow off the statutory presumption of validity?  More importantly, the majority of the cases relied upon by Judge Sweet issued prior to the codification of Section 282, and prior to the formation of the Federal Circuit, which established once and for all that the burden to rebut was “clear and convincing.” Are Judges held to a higher burden of proof now to invalidate than pre 1952 and/or pre 1982? And should that be taken into consideration when relying upon older cases to invalidate a patent?

Association for Molecular Pathology v. USPTO - The Case Law

For the moment, speaking solely to the “isolated DNA” claims and argument, let’s take a look at Judge Sweet’s analysis.

Let’s look at the case law he mainly relied upon:

American Wood-Paper Co. v. The Fibre Disintegrating Co., 90 U.S. (23 Wall.) 566 (1874)

Cochrane v. Badische Anilin & Soda Fabrik, 111 U.S. 293 (1884)

Ex Parte Latimer, 1889 Dec. Comm’r Pat. 123 (1889)

Gen. Elec. Co. v. De Forest Radio Co., 28 F.2d 641 (3rd Cir. 1928)

American Fruit Growers, Inc. v. Brodgex Co., 283 U.S. 1 (1931) (rejects Myriad’s argument that this case was decided on novelty grounds)

In Re Mardin, 47 F.2d 957 (C.C.P.A. 1931)

In Re Merz, 97 F.2d 599 (C.C.P.A. 1935)

Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948) (rejects Myriad’s argument that this case was decided on an obviousness determination)

Diamond v. Chakrabarty, 447 U.S. 303 (1980)

JEM Ag Supply, Inc. v. Pioneer Hi-Bred Int’l, Inc., 534 U.S. 124 (2001)

Two things jump out at me when looking at these cases. First, there is not a single Federal Circuit Court of Appeals case in the list. Granted, there are two C.C.P.A. cases from the 1930s, but given that the Federal Circuit is pretty much the holy grail when it comes to patent law, I find it hard to believe that there was nothing worth citing (dicta or otherwise) in any Federal Circuit case on this issue addressing gene patents.  Has the Federal Circuit really never commented on this issue?  I'll do some research on that.  As I said in my post below, biotech patents aren't an area I generally deal with, so I don't know the answer to this question off the top of my head.

The second thing that jumps out at me is that the majority of these cases are extremely old. What’s amusing about that is that Judge Sweet specifically cites to and points to part of Judge Rich’s discussion of the 101 analysis from In Re Bergy, 596 F.2d 952 (C.C.P.A. 1979), in particular Judge Rich's statement that “statements in the older [pre 1952] cases must be handled with care lest the terms used in their reasoning clash with the reformed technology of the present statute; lack of meticulous care may lead to distorted legal conclusions.” Yet, Judge Sweet’s analysis relies upon eight cases decided prior to the Patent Act of 1952.  Do these cases even apply anymore, given the changes in patent law over the past 100 years?  Is it clear that these cases all dealt with 101 and not novelty or obviousness?  Another issue I'll take a look at.   

Let’s move on to the cases he distinguished, and why:

In Re Kubin, 561 F.3d 1351 (Fed. Cir. 2009) (distinguished because it dealt with obviousness of the biological product claims)

In Re O’Farrell, 853 F.2d 894 (Fed. Cir. 1988) (distinguished because it dealt with obviousness of the biological product claims)

Merck & Co., Inc. v. Olin Mathieson Chem. Corp., 253 F.2d 156 (4th Cir.) (the purified product was “more than a mere advance in the degree of purity of a known product”)

In re Bergstrom, 427 F.2d 1394 (C.C.P.A. 1970) (distinguished because it presented issues of novelty)

In re Kratz, 592 F.2d 1169 (C.C.P.A. 1979) (distinguished because it presented issues of novelty)

Parke –Davis & Co. v. H.K. Mulford Co., 189 F.2d 95 (S.D.N.Y. 1911) (distinguished because it dealt with novelty)

All of these cases except for one were distinguished on the basis that they did not address 101 issues, but instead were dealing with 102 and 103 issues.  One thing I do remember from law school and dealing with 101 (since it really rarely comes up as an issue in litigation) is that sometimes it is difficult to tell on what basis a patent is invalidated in the older cases, as Judge Rich pointed out.  Interesting, though, that Judge Sweet had no problem making this determination in the case law that didn't support his position.  I’ll withhold any opinion on this issue until I have a chance to look at these cases.

Judge Sweet v. the USPTO

I’ve been working my way through the massive 156 page opinion in Association for Molecular Pathology v. USPTO, where – in case you’ve been living under a rock – Judge Sweet of the Southern District of New York ruled that gene patents are invalid under Section 101.

The writing was on the wall in this opinion by page 63, whereupon Judge Sweet spent 11 pages discussion the policy implications of gene patents – a discussion heavily weighted in favor of why gene patents are bad.

I’ll admit up front that I don’t generally deal with biotech patents, so I’m not familiar with some of the cases cited by Judge Sweet other than, of course, Chakrabarty.  What bothers me is that this decision does not in any way convince me that he is right and the Patent Office is wrong for issuing gene patents; his decision seems based more on policy and less on the law.  Judge Sweet appears to state his own interpretation of the cases, while ignoring the interpretation that the USPTO has discussed in its examination guidelines.  I dug up the January 5, 2001 utility patent examination guidelines, which discuss gene patents.  Judge Sweet dismisses these guidelines in one fell swoop (pp. 103-104), and does not even attempt to explain the disparity between his position and that of the USPTO. Does he have to? No, I guess not. But certainly some mention of the diparity or support for his interpretation would have been  nice.  While the word of the Patent Office is not law, and technically Judge Sweet doesn’t need to give it any deference, the logic and conclusion of this opinion do not seem to indicate that he even realized the enormity and impact of what he was saying.     

For example, at pages 114-116, Judge Sweet dismisses the Parke-Davis case (slamming Judge Hand in footnote 46), stating essentially that it wasn’t relevant because it dealt with novelty. Here’s what the Patent Office said about the case in the 2001 examination guidelines:

Patenting compositions or compounds isolated from nature follows well-established principles, and is not a new practice. For example, Louis Pasteur received U.S. Patent 141,072 in 1873, claiming `[y]east, free from organic germs of disease, as an article of manufacture.' Another example is an early patent for adrenaline. In a decision finding the patent valid, the court explained that compounds isolated from nature are patentable: `even if it were merely an extracted product without change, there is no rule that such products are not patentable. Takamine was the first to make it [adrenaline] available for any use by removing it from the other gland-tissue in which it was found, and, while it is of course possible logically to call this a purification of the principle, it became for every practical purpose a new thing commercially and therapeutically. That was a good ground for a patent.'  Parke-Davis & Co. v. H. K. Mulford Co., 189 F. 95, 103 (S.D.N.Y. 1911) (J. Learned Hand).

The Patent Office goes on to discuss the Bergstrom case (also rejected by Judge Sweet because it dealt with novelty) in a similar manner:

In a more recent case dealing with the prostaglandins PGE2 and PGE3, extracted from human or animal prostate glands, a patent examiner had rejected the claims, reasoning that `inasmuch as the `claimed compounds are naturally occurring' * * * they therefore `are not 1new' within the connotation of the patent statute.'' In re Bergstrom, 427 F.2d 1394, 1397, 166 USPQ 256, 259 (CCPA 1970). The Court reversed the Patent Office and explained the error: `what appellants claimMpure PGE2 and PGE3Mis not `naturally occurring.' Those compounds, as far as the record establishes, do not exist in nature in pure form, and appellants have neither merely discovered, nor claimed sufficiently broadly to encompass, what has previously existed in fact in nature's storehouse, albeit unknown, or what has previously been known to exist.' Id. at 1401, 166 USPQ at 261-62. Like other chemical compounds, DNA molecules are eligible for patents when isolated from their natural state and purified or when synthesized in a laboratory from chemical starting materials.

Judge Sweet also gives short shrift to any responsibility by Congress to legislate such a massive change in the current process at page 105. The Patent Office had this to say in the 2001 examination guidelines:

Congress adopted the current statute defining patentable subject matter (35 U.S.C. 101) in 1952. The legislative history indicates that Congress intended `anything under the sun that is made by man' to be eligible for patenting. S. Rep. No. 1979, 82d Cong., 2d Sess., 5 (1952); H.R. Rep. No. 1923, 82d Cong., 2d Sess., 6 (1952). The Supreme Court interprets the statute to cover a `nonnaturally occurring manufacture or composition of matter-a product of human ingenuity.' Diamond v. Chakrabarty, 447 U.S. 303, 309, 206 USPQ 193, 197 (1980). Thus, the intent of Congress with regard to patent eligibility for chemical compounds has already been determined: DNA compounds having naturally occurring sequences are eligible for patenting when isolated from their natural state and purified, and when the application meets the statutory criteria for patentability.

Note that at page 110, fn. 43 Judge Sweet refers to the “anything under the sun that is made by man” quote as “misleading.”

Something else is odd.  Here is one of the claims at issue: “an isolated DNA coding for a BRCA1 polypeptide, said polypeptide having the amino acid sequence set forth in SEQ ID NO:2.”

Here is an example claim from the MPEP, Section 803.4: “an isolated and purified DNA fragment comprising DNA having at least 95% identity to a DNA sequence selected from SEQ ID Nos. 1-1,000.”

Pretty similar format, no?

More comments to come…

Jurassic Park

This article states:

The US Patent Office issued Patent # 6,872,552, "A Method of Reconstituting nucleic Acid Molecules" today to Burt D. Ensley, Ph.D, Chairman of MatrixDesign, and CEO of DermaPlus, Inc. The patent covers methods for recovering and reconstituting genes from "degraded" DNA samples, and could allow scientists to reassemble everything from prehistoric, extinct animals to unsolved crime scenes.

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By reconstituting nucleic acid molecules that have been degraded but still contain useful information scientists at MatrixDesign are able to create a template from which to multiply the genetic material. That process is repeated until the genetic material is substantially representative -- at microscopic levels -- of the species from which the degraded sample was obtained.