A Q&A With Goodwin's Alexandra Valenti, JD, About Patent Discussions in the Senate

As 2018 turned into 2019, 2 senators began discussing patent reforms with stakeholders to understand how case law has changed the intent of the Patent Act and to see if reforms are needed, and if so, how far they should go. As a result of those discussions, Senators Chris Coons, D-Delaware, and Thom Tillis, R-North Carolina, released a draft patent reform bill in May; last month, they held 3 days of hearings with 45 witnesses. At the end of the hearing, Coons and Tillis said they would release another draft, possibly this month.

The Center for Biosimilars^® turned to Alexandra D. Valenti, JD, with Goodwin’s Intellectual Property Litigation group, to help understand the underlying issues and think about what could come next.

Allison Inserro (AI): What was the intent of the patent reform bill as first proposed in May by Senators Coons and Tillis?

Alexandra D. Valenti, JD (AV): The bill would make 3 changes to the patent law. First, it would add a new defined term under Section 100, “useful,” meaning “any invention or discovery that provides specific and practical utility in any field of technology through human intervention.” Second, the bill would add an additional subsection to Section 101 regarding patent eligible subject matter: “Eligibility under this section shall be determined only while considering the claimed invention as a whole, without discounting or disregarding any claim limitation.” Third, the bill would change the title of Section 112(f) to “Functional Claim Elements,” as opposed to the current title “Element in a Claim for a Combination.” Some changes to the language of Section 112(f) are also proposed, although they do not appear to change the substantive requirements of the statute.

In major part, the bill is intended to change the law in response to the recent Supreme Court decisions in Mayo Collaborative Services v Prometheus Laboratories and Alice Corporation v CLS Bank International, which established a 2-part test for evaluating patent eligibility under Section 101. In particular, the bill would explicitly define “useful,” already in Section 101, though not currently defined in Section 100, in a way that would provide courts with a new standard for determining whether a patent is directed toward eligible subject matter.

The proposed changes to Section 112 are minor by comparison. From public statements by Senator Tillis, it appears the intent of that proposed amendment was to prevent “vague business methods and generic computer claims” from withstanding validity challenges. As Senator Tillis has noted, however, more changes are needed to give effect to that intent.

AI: How would the bill have altered previous Supreme Court rulings on patent eligibility (ie, Mayo Collaborative Services v Prometheus Laboratories, Association for Molecular Pathology (AMP) v Myriad Genetics, Alice Corp. v CLS Bank International, etc?)

AV: Under Mayo-Alice, courts are directed to evaluate patent eligibility by considering: 1) whether the claims at issue are directed toward patent ineligible subject matter, such as laws of nature, natural phenomena, or abstract ideas; and 2) if so, whether the additional elements of the claim “transform” the claim into patent-eligible subject matter. Under step 2, courts can consider whether the additional elements were conventional in the art.

As noted in the “additional legislative proposals” accompanying the draft bill text, the law would abrogate any case establishing exceptions to patent eligible subject matter under Section 101, such as “abstract ideas,” “laws of nature,” or “natural phenomena.” This would abrogate the first part of the Mayo-Alice test. Additionally, the new subsection to Section 101 would abrogate the second step of the Mayo-Alice test, which requires courts to look to individual limitations of a claim to determine patent eligibility. Likewise, the additional legislative proposals state that Section 101 eligibility should be determined without regard to whether individual limitations of a claim were “well known, conventional, or routine,” further negating the second step of the Mayo-Alice test.

It is difficult to say whether the claim at issue in Mayo, for instance, would be sustained over a validity challenge under the “usefulness” standard now proposed in the draft bill. There, the claims were directed toward a method of “optimizing therapeutic efficacy for treatment of an immune-mediated gastrointestinal disorder” by measuring the level of 6-thioguanine in a subject, which in turn indicates whether there is a need to increase or decrease the amount of a thiopurine drug administered to the subject. The Tillis-Coons bill would require only a showing that the claimed invention “provides specific and practical utility in any field of technology through human intervention.” However, as the Mayo court noted, “[w]hile it takes a human action (the administration of a thiopurine drug) to trigger a manifestation of [the relation between toxicity and levels of 6-thioguanine] in a particular person, the relation itself exists in principle apart from any human action.”

Senators Tillis and Coons acknowledged in a post-hearing statement that the intent of the bill is to change the legal standard, not necessarily the outcome of any given case that has found claims ineligible under the Mayo-Alice standard: “Our framework attempts to provide a positive definition of eligibility to focus courts on subject matter that is eligible while eliminating the confusing and unreliable judicially created tests that dissect patent claims looking for ‘abstract ideas’ and ‘inventive concepts.’ Our proposed abrogation of the court cases establishing those tests does not mean that the results of each case should have turned out differently.”

AI: The Senate Judiciary Subcommittee on Intellectual Property had 3 days of hearings about the draft in June, hearing from 45 stakeholders. Some said the Court rulings have been hindering innovation, and others, primarily patient groups and the ACLU, raised fears that private companies would own human genes. The senators said they will release another draft to clarify terms like utility, fields of technology, functional claims, and research exemptions. What will stakeholders be looking for in the next draft?

AV: Stakeholders will likely be looking for more clarity and specificity to be added to the new standard. The “usefulness” standard as currently drafted is rather broad and requires only “human intervention” to render a patent claim valid under Section 101. Narrower language is likely needed to address the concerns raised at the hearing concerning patentability of human genes.

AI: What space does the biosimilar industry occupy in the midst of these discussions?

AV: No court in a BPCIA [Biologics Price Competition and Innovation Act] litigation has ruled on a dispute concerning a Section 101 challenge. However, such disputes are likely to arise in the future, as biologic manufacturers continue to pursue patents with claims covering isolated products of nature, like DNA, or proteins, or diagnostic methods, such as the use of a companion diagnostic with a biological product.

Diagnostic claims, in particular, have been a repeated target of Section 101 challenges in recent years. These claims are frequently invalidated under current standards because they are often directed to the application of a natural correlation, such as between a marker in the body (like a metabolite, gene, or antibody) and a particular disease or the outcome from using a particular treatment.

Such patents will likely be asserted in BPCIA litigations in the future, and biosimilar manufacturers will need to consider strategies for defending against these patents, including challenges under Section 101.

AI: Is there anything else Congress is overlooking here?

AV: There have been several recent legislative proposals on patent issues beyond reform of Section 101. For instance, the House recently passed The Purple Book Continuity Act of 2019, which would require the FDA to publish in the Purple Book lists of patents associated with approved biological products once a patent dance has begun.

Another recent bill was introduced in the House, Terminating the Extension of Rights Misappropriated (TERM) Act of 2019 (HR 3199), which would, according to a press release accompanying the bill filing, “significantly limit the process known as ‘evergreening,’ whereby pharmaceutical companies make minor changes to a drug and file for a new patent on those trivial changes in order to extend their exclusivity.” Both of these measures can be viewed as advantageous to biosimilar applicants by facilitating patent challenges.

On the other hand, another measure has been introduced that would tend to favor patent holders by making it harder to challenge patent validity. The Hatch-Waxman Integrity Act of 2018, pending before both the Senate and House of Representatives, would require biosimilar applicants to certify in their aBLA [abbreviated Biologics License Application] that, for any patent that could be included in the list of potentially infringed patents to be supplied by the reference product sponsor, the aBLA applicant has not and will not file an IPR or PGR challenging the potentially-listed patents.

Any of these issues may be taken up by Congress as it considers reforms to other aspects of the patent laws, such as Section 101.