News

3/29/2006

US Supremes May Restrict Eligibility of Biotech and Business Method Inventions for Patent Protection

The United States Supreme Court (Court) heard arguments in Laboratory Corp. of America v. Metabolite Labs., U.S. No. 04-607 (Metabolite) on March 21, 2006. The Court has demonstrated an increased interest in patent cases and has granted certiorari in more cases during the past 18 months than it has in the past decade.

The legal issue in Metabolite is the scope of nonstatutory subject matter affecting patentability under 35 U.S.C. § 101, which has always been interpreted as prohibiting patents on natural phenomena and abstract ideas. This issue has not been considered by the Court for over 25 years when the Court broadly interpreted § 101 as permitting patents on living organisms. In Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980), the Court gave an expansive breadth of § 101 by recognizing that the legislative history of § 101 supported that patentable subject matter extended to "include anything under the sun that is made by man." Later Federal Circuit cases, including in particular, State Street Bank & Trust v. Signature Financial Group, 149 F.3d 1328 (Fed. Cir. 1998) had similarly interpreted § 101 expansively, widening the scope of permissible subject matter, to business methods implemented through computer software.

In Metabolite, the Court will consider whether § 101 should now be interpreted more restrictively. The patent holder in Metabolite had discovered that body levels of a certain chemical, homocysteine, could be correlated with vitamin B-12 deficiency. The United States Patent and Trademark Office had granted the inventor a method claim involving detecting vitamin B-12 deficiency by assaying a body fluid for homocysteine and using that information to make a diagnosis.

During oral argument, Justices Scalia, Breyer and Stevens all posited questions indicating that they believed that nothing in the Metabolite claim was developed by man and that the patent was merely claiming a law of nature, not an invention within the permissible scope of § 101. The justices cited a number of Supreme Court cases, including Funk Bros. Seed Co. v. Kalo Innoculant Co. 333 U.S. 127 (1948), Diamond v. Diehr, 450 U.S. 175 (1981) and O'Reilly v. Morse, (15 How.) 62 (1853) for the proposition that manifestations of a law of nature is unpatentable.

The § 101 patent eligibility issue however, was not raised by the patent challenger at either the district court or at the Federal Circuit. The accused infringer had, instead, argued invalidity of the patent based on other statutory grounds and the lower courts had not considered the § 101 issue. The patent holder therefore argued persuasively to the Court that it should decline to rule on the § 101 issue, a position echoed by the Solicitor. Justice Kennedy appeared to concur with that position, expressing concern that it was imprudent to rule on something that was not before the lower courts.

It is therefore possible that certiorari may be dismissed in Metabolite as having been improvidently granted. Alternatively, the Court may untie this Gordian knot by remanding the case for specific consideration of the § 101 issue with strong guidance on what constitutes patentable subject matter. If the Court does reach the issue of statutory subject matter within the scope of § 101, it seems certain that the Court will restrict patent eligibility. Such a holding would have implications way beyond the medical field. Clearly, business method patents will be especially vulnerable to a new Court interpretation.