a judicial axe for sharp drafting: the “natural phenomenon” dilemma, ben mee

7/29/2019 A Judicial Axe for Sharp Drafting: The Natural Phenomenon Dilemma, Ben Mee

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Title: AJudicialAxeforSharpDrafting:TheNaturalPhenomenon

DilemmaAuthor: BenMee

EAPDate(approvedforprint):19/11/2012

DOI:10.5778/JLIS.2012.22.Mee.1

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A Judicial Axe for Sharp Drafting: The Natural

Phenomenon Dilemma

BEN MEE*

1 Introduction

Much of the focus of the gene patent debate has been on the patentability ofgenetic products: isolated DNA sequences per se. Other papers in this issueconsider legislative and case law developments in the area of product claims.1Less attention has been paid to method claims, which are potentially moreinsidious than product claims.2 Legislators in states party to the Agreementon Trade-Related Aspects of Intellectual Property Rights (TRIPS) have limitedscope to exclude in vitro methods of diagnosis from patentability. Further, theordre public exception under Article 27(2) of TRIPS is also unlikely toground a broad legislative exclusion of methods of genetic testing. Whilethese exceptions are limited, the courts of member states have power to applya further patentability filter to certain method claims through the thresholdrequirement that an invention be disclosed.

On 20 March 2012, the United States Supreme Court (the Court) delivered aunanimous opinion in Mayo Collaborative Services v Prometheus Laboratories Inc(Prometheus),3 finding two patents which were concerned with the use ofthiopurine drugs to treat autoimmune diseases to be invalid. It did so on basisthat the claimed processes had not transformed unpatentable natural lawsinto patent-eligible applications of those laws.4 The processes embodied inthe patents related to correlations between levels of certain metabolites in theblood and the likelihood that a particular dosage of a thiopurine drug willprove either ineffective or cause harm. A reader of the patent specifications

* BSc-LLB (Hons) (Tasmania). Lawyer, Allens. The views expressed by the author

are not necessarily the views of Allens.1 Dianne Nicol and John Liddicoat, Legislating to Exclude Gene Patents: Difficult

and Unhelpful, or Useful and Feasible? (2012) 22(1)Journal of Law, Information andScience.

2 Some commentators have suggested that, when compared to claims to DNAsequences per se, claims relating to methods of diagnosing genetic conditions aremore often difficult or impossible to invent around: I Huys, N Berthels, G Matthijs

and G Van Overwalle, Legal Uncertainty in the Area of Genetic DiagnosticTesting (2009) 27 Nature Biotechnology 903, cited in D Nicol, Implications of DNAPatenting: Reviewing the Evidence (2011) 21(1) Journal of Law, Information andScience 7.

3 (US, No 10-1150, 20 March 2012) slip op.4 Ibid 3.


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may intuitively get a sense that the patents would struggle to withstand achallenge on the basis of lack of inventive step/obviousness. However, the

Courts method of excising that which constitutes a natural phenomenonand attempting to identify an inventive concept in the balance of the claimsas a threshold question of patentability substitutes a malleable judicialexercise in characterisation for the evidentiary inquiry required by aninventive step/non-obviousness analysis. In the field of gene patents, thedecision has obvious implications for the assessment of method claims relyingon natural phenomena. In the authors opinion, the decision on remand inUS AMP v Myriad (Myriad 2),5 so far as it related to method claims,demonstrates the inherent uncertainty of the Prometheus approach. However,there are suggestions in theMyriad 2 opinions that the natural phenomenonreasoning applied in Prometheus may also extend to product claims, withuncertain and unpredictable results.

This paper critically analyses the Prometheus decision, against the backdrop of

earlier decisions of the Court. It may be that the approach in Prometheus wasinformed by US-specific considerations (particularly the ability to avoid a jurytrial on obviousness issues). However, such an approach, tentatively exploredby the High Court of Australia in NV Philips Gloeilampenfabrieken v MirabellaInternational Pty Ltd6 and earlier cautioned against in National ResearchDevelopment Corporation v Commissioner of Patents,7ought not to be embracedby courts or patent offices in jurisdictions outside the US. If courts in otherjurisdictions were to adopt the Prometheus approach and rationale, in thecontext of method or product claims, emerging and/or controversialtechnologies and subject matter may be subject to a less transparent analysisthan that which has informed the development of the law in respect of moreconventional subject matter. Gene patents are an obvious candidate. In theauthors opinion, any threshold inquiry into inventive ingenuity should notgo beyond the face of the specification. Moreover, courts should onlyundertake substantive judicial investigation into whether a claimed inventioninvolves a sufficiently transformative contribution having regard to whatwas known in the art, if at all, in circumstances where the patent otherwisemeets the express requirements of the relevant domestic legislation, includinginventive step.8

5 689 F 3d 1303, (2012).6

(1995) 183 CLR 655.7 (1959) 102 CLR 252.8 This will depend in part on the pleadings in a given case. However, it would be an

unusual (and risky) approach for a party who alleges threshold uninventivenessby virtue of matters beyond the specification itself to fail to plead lack of inventivestep.


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2 Background

The patents in suit, US Patent No 6,355,623 and US Patent No 6,680,302,claimed a method of optimising dosages of thiopurine drugs in the treatmentof autoimmune diseases. In particular, the patents relied on findings that,following administration of a particular dosage, concentrations of certainmetabolites in a patients blood above or below a specified range 9 indicatethat the dosage of the drug is likely too high (and potentially toxic) or too low(and potentially therapeutically ineffective) respectively. Each specificationrecited that:

Although drugs such as 6-MP and AZA have been used fortreating IBD, non-responsiveness and drug toxicity unfortunatelycomplicate treatment in some patients. Complications associatedwith 6-MP drug treatment include allergic reactions, neoplasia,opportunistic infections, hepatitis, bone marrow suppression, andpancreatitis. Therefore, many physicians are reluctant to treatpatients with AZA because of its potential side effects, especiallyinfection and neoplasia.10

Further, and as the Court noted,

[b]ecause the way in which people metabolize thiopurinecompounds varies, the same dose of a thiopurine drug affectsdifferent people differently, and it has been difficult for doctors todetermine whether for a particular patient a given dose is too high,risking harmful side effects, or too low, and so likely ineffective.11

The claims, of which the Federal Circuit and the Court considered claim 1 ofthe 623 Patent to be typical, sought to embody a therapeutic use of theabove correlations through the process of:

(a) administering a drug providing 6-thioguanine to a subjecthaving said immune-mediated gastrointestinal disorder; and

(b) determining the level of 6-thioguanine in said subject havingsaid immune-mediated gastrointestinal disorder, wherein alevel of 6-thioguanine less than about 230 pmol per 8x10 8 redblood cells indicates a need to increase the amount of said drugsubsequently administered to said subject and wherein a levelof 6-thioguanine greater than about 400 pmol per 8x108 red

9 Specifically, 6-thioguanine levels between 230-400 pmol per 8x108 red blood cells

and 6-methyl-mercaptopurine levels below 7000 pmol per 8x108 red blood cellscorrelate to an optimal dosage.

10 Seidman et al, Method of Treating IBD/Crohns Disease and Related ConditionsWherein Drug Metabolite Levels in Host Blood Cells Determine SubsequentDosage US Patent No 6 355 623 B2 (issued 12 March 2002).

11 Prometheus, (US, No 10-1150, 20 March 2012) slip op 4.


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blood cells indicates a need to decrease the amount of said drugsubsequently administered to said subject.12

Prometheus, the exclusive licensee of both patents, sold diagnostic testsembodying the above processes. Mayo bought and used those tests for sometime, but in 2004 announced that it intended to begin using and selling itsown test. Prometheus brought an action for infringement in the District Courtfor the Southern District of California.13

Among a series of interlocutory applications, Mayo filed a motion forsummary judgment of patent invalidity under 35 USC 101, on the basis thatthe patents in suit claimed unpatentable subject matter. Section 101 providesthat:

Whoever invents or discovers any new and useful process,machine, manufacture, or composition of matter, or any new and

useful improvement thereof, may obtain a patent therefor, subjectto the conditions and requirements of this title.

Judge Houston granted summary judgment to Mayo, finding that althoughthe test infringed the patents, the processes in substance claimed natural lawsor natural phenomena, namely, the correlations between thiopurinemetabolite levels and the toxicity and efficacy or thiopurine drugs, and weretherefore unpatentable. Importantly, Prometheus unsuccessfully argued thatthe underlying factual issues14 precluded summary judgment under 101.Judge Houston found that these issues do not represent factual disputes, andinstead concern interpretation of the claims and the proper application ofsection 101 to the facts of this case and that the questions were clearlyquestions of law, and are thus appropriate for summary judgment.15

The Federal Circuit reversed the District Courts decision, finding that theprocesses were patentable under the machine or transformation test.16 TheFederal Circuit agreed with Prometheuss argument that the asserted claimswere drawn to statutory subject matter, expressly noting that:

12 Ibid 5-6.13 Prometheus Lab Inc v Mayo Collaborative Services (SD Cal, WL 878910, 28 March

2008).14 These were (1) whether the claims at issue claim a natural phenomenon; (2)

whether the claims at issue transform an article into a different state or thing; (3)whether the claims at issue produce a useful, concrete, and tangible result; and (4)

whether the claims at issue wholly preempt all uses of the inventors correlation:Ibid, 14.

15 Ibid citing AT & T Corp 172 F 3d 1355 as authority that whether a patent claim isinvalid under section 101 is a question of law appropriate for summary judgment.

16 Prometheus Laboratories Inc v Mayo Collaborative Services, 581 F 3d 1336 (Fed Cir,2009).


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the only issue before us is whether the claims meet therequirements of 101. This appeal does not raise any questions

about lack of novelty, obviousness, or overbreadth, since those areseparate statutory requirements for patentability under 102, 103,and 112, respectively (citations omitted).17

Following its decision in Bilski v Kappos18 (Bilski), the Court grantedcertiorari and vacated the Federal Circuits judgment in Prometheus, remittingthe matter for reconsideration. The Federal Circuit reaffirmed its earlierconclusion, finding that the machine or transformation test, considered inlight of the Courts decision in Bilski, nonetheless led to the clear andcompelling conclusion that the claims do not merely encompass laws ofnature or pre-empt natural correlations.19 It reaffirmed its findings thatPrometheuss asserted claims recite transformative administering anddetermining steps and that Prometheuss claims are drawn not to a law ofnature, but to a particular application of naturally occurring correlations, and

accordingly do not preempt all uses of the recited correlations betweenmetabolite levels and drug efficacy or toxicity.20 The matter returned to theCourt on certiorari. Justice Breyer delivered the unanimous opinion of theCourt.

3 Prometheus: Analytical Approach

The Courts finding of invalidity proceeded in four steps:

(a) Prometheuss patents set forth laws of nature namely,relationships between concentrations of certain metabolites in theblood and the likelihood that a dosage of a thiopurine drug willprove ineffective or cause harm.

(b) A law of nature is not patentable.(c) If a law of nature is not patentable, then neither is a process reciting

a law of nature, unless that process has additional features that providepractical assurance that the process is more than a drafting effort designedto monopolise the law of nature itself.

17 Ibid 1345.18 (US, No 08-964, 28 June 2010) slip op. Bilski relevantly found that the machine or

transformation test is not a definitive test of patent eligibility.19 Prometheus Laboratories Inc v Mayo Collaborative Services 628 F 3d 1347, 1355 (Fed Cir,

2010).20 Ibid 1355.


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(d) The administering step, the determining step and thewherein step in the patents are not themselves natural laws but

neither are they sufficient to transform the nature of the claim.21

The Courts conclusion that the requisite transformation was lackingproceeded on the basis that,

the claims inform a relevant audience about certain laws of nature;any additional steps consist of well-understood, routine,conventional activity already engaged in by the scientificcommunity; and those steps, when viewed as a whole, add nothingsignificant beyond the sum of their parts taken separately.22

The Court considered that the controlling precedents, most particularly Parkerv Flook (Flook)23and Diamond v Diehr (Diehr)24 reinforced its conclusion. Aswill be seen, the reasoning in Prometheus is largely in line with the reasoning

adopted in Flook (properly understood), but goes beyond the holding in Diehritself. Prometheus also traverses territory well outside the limitedinterpretation of Flook which was put forward by the majority in Diehr inorder to justify the different results in the two cases.

3.1 Flook

In Flook, the Court framed the question as whether the identification of alimited category of useful, though conventional, post-solution applications ofa novel and useful mathematical formula is patentable.25 The respondentspatent application described a three-step method for updating alarm limitsin transient operating situations during catalytic conversion processes,26comprising:

measuring the present value of a variable (eg temperature);

use of an algorithm to calculated an updated alarm-limit value; and updating the actual alarm limit to the updated value so calculated.

21 Prometheus, (US, No 10-1150, 20 March 2012) slip op, 8-9.22 Ibid 11.23 437 US 584 (1978).24 450 US 175 (1980).25 437 US 584, 585 (1978).26 Ibid. As the Court explained, where particular process variables (such as

temperatures) exceed a predetermined alarm limit, an alarm may signal thepresence of an abnormal condition. Although fixed alarm limits may beappropriate for steady operation, periodic updating of alarm limits may beappropriate in transient situations such as start-up: at 585.


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As the Court acknowledged, the line between a patentable process and anunpatentable principle is not always clear.27 The respondent expressly

argued against an approach which improperly imports into the 101 analysisconsiderations of inventiveness or which engaged in claim dissection soas to be inconsistent with the proposition that a patent claim must beconsidered as a whole.28 The Court responded with two propositions whichclearly pervaded the analysis in Prometheus.

First, the Court stated that [t]he rule that the discovery of a law of naturecannot be patented rests, not on the notion that natural phenomena are notprocesses, but rather on the more fundamental understanding that they arenot the kind of discoveries that the statute was enacted to protect.29 Theunderlying notion cited is that a scientific principle, such as that expressedin the respondents algorithm, reveals a relationship that has always existed.On that basis, the Court considered that [t]he obligation to determine whattype of discovery is sought to be patented must precede the determination of

whether that discovery is, in fact, new or obvious. 30

Secondly, the Court found that the process was unpatentable under 101 notbecause it contains a mathematical algorithm as one component, but becauseonce that algorithm is assumed to be within the prior art, the application,considered as a whole, contains no patentable invention. On this basis, thediscovery of a phenomenon of nature or mathematical formula cannotsupport a patent unless there is some other inventive concept in itsapplication.31 The Court did not consider its approach to be inconsistent withthe view that a patent claim must be considered as a whole. An importantfactor perhaps influencing the result in Flook is that the patent application didnot explain matters such as how to select or identify the relevant variables inthe formula including margin of safety and the relevant time interval thatshould elapse between updates. As noted below, this absence was expressly

adverted to in the majority opinion in Diehr as a means of differentiating thatcase.

Justice Stewart, joined by Burger CJ and Rehnquist J, issued a dissentingopinion. His Honour considered the case to be a far different one fromGottschalk v Benson (Benson),32 cited by the majority as the controllingprecedent. In Benson, a method for converting numerical information frombinary-coded decimal numbers into pure binary numbers was heldunpatentable. The Court took the view that the process claim was so abstractand sweeping as to cover both known and unknown uses of the [binary

27 Ibid 589.

28 Ibid 592, 594.29 Ibid 593.30 Ibid.31 Ibid 594.32 409 US 63 (1972).


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coded decimal] to pure-binary conversion.33 The Courts opinion in Bensonalso cited O'Reilly v Morse (Morse),34 in which Morses claim to the use of

electro-magnetism, however developed, for marking or printing intelligiblecharacters, signs, or letters, at any distance was held to be patent-ineligible.Judge Monroes opinion inMorse observed that,

[i]f this claim can be maintained, it matters not by what process ormachinery the result is accomplished. For aught that we nowknow some future inventor may discover a mode of writing orprinting at a distance by means of the electric or galvanic current,without using any part of the process or combination set forth inthe plaintiffs specification.35

In Flook, Stewart J took the view that the holding of the Court of Customs andPatent Appeals that Benson was inapplicable was wholly in conformity withbasic principles of patent law.36 His Honour considered that thousands of

processes and combinations have been patented that contained one or moresteps or elements that themselves would have been unpatentable subjectmatter.37 He concluded that the majority opinion struck a damaging blow atbasic principles of patent law by importing into its inquiry under [101] thecriteria of novelty and inventiveness.38 As will be seen below, the High Courtproceeded along similar lines of reasoning in the National ResearchDevelopment Corporation v Commissioner of Patents39 (NRDC case).

3.2 Diehr

In Diehr,40 the claimed invention was a process for moulding raw, uncuredsynthetic rubber into cured precision products41 using a mould for shapingand curing the uncured material under heat and pressure. The point at whicha product will be properly cured can be calculated using the Arrhenius

equation, which concerns the relationship between time, temperature andconstants dependent on measurements of a particular batch of compound andthe geometry of the mould.42 The respondents characterised the contributionto the art as the process of constantly measuring the actual temperature insidethe mould. Those measurements could be automatically fed into a computerwhich repeatedly recalculates the cure time by use of the Arrhenius equation,

33 Ibid 68.34 56 US 62 (1853).35 56 US 62, 113 (1853).36 437 US 584, 599 (1978).37 Ibid.

38 Ibid 600.39 (1959) 102 CLR 252.40 450 US 175 (1980).41 Ibid 175.42 Ibid 177-178.


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and signals the device to open when the actual time elapsed equals therecalculated cure time.43

The patent examiner had rejected the claims under 101, on the basis that thesteps carried out by a computer constituted non-statutory subject matterpursuant to Benson and that the remaining steps of installing the rubber in thepress and closing the press were conventional and necessary to the processand cannot be the basis of patentability.44 The Court reaffirmed that laws ofnature, natural phenomena and abstract ideas are excluded from patentprotection under 101, citing, inter alia, Flook.45 Although the composition ofthe Bench was identical in Flook and Diehr, the three dissentients in Flook werejoined by White and Powell JJ in Diehr (Rehnquist J delivering the opinion ofthe Court).46

The Court distinguished the patent protection sought in Diehr from that inFlook, accepting that it is now commonplace that the application of a law of

nature or mathematical formula to a known structure or process may well bedeserving of patent protection.47 The Court cited the observation of Stone J inMackay Radio & Telegraph Co v Radio Corp of America that: While a scientifictruth, or the mathematical expression of it, is not a patentable invention, anovel and useful structure created with the aid of knowledge of scientifictruth may be.48

The majority opinion considered that statement to take it a long way towardthe correct answer in this case49 and that although the Arrhenius equation isnot patentable in isolation, a process for curing rubber which incorporates init a more efficient solution of the equation, that process is at the very least notbarred at the threshold by 101.50 The Court considered it inappropriate todissect the claims into old and new elements and then to ignore the presenceof the old elements in the analysis, and that the novelty of any element or

steps in a process, or even of the process itself, is of no relevance in determining

43 Ibid 178-179.44 Ibid 180-181.45 As outlined above, the Court noted in Diehr that the application in Flook was

effectively limited to the mathematical formula itself, as it did not explain how toselect the relevant variables and actually use the formula to compute the updatedalarm limit: Ibid at 186-187.

46 In Flook, Stevens Js majority opinion was joined by Brennan, White, Marshall,Blackmun and Powell JJ. Stewart Js dissentwas joined by Burger CJ and Rehnquist

J. In Diehr, Stevens Js dissent was joined by Brennan, Marshall and Blackmun JJ.

47 Diehr, 450 US 175, 187 (1980), citing, inter alia, Funk Bros Seed Co v Kalo Inoculant Co 333 US 127 (1948).

48 306 US 86, 94 (1939) (Radio Corp of America) cited in Diehr, 450 US 175, 188 (1980).49 Diehr, 450 US 175, 188 (1980).50 Ibid.


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whether the subject matter of a claim falls within 101.51 It noted that 101serves as a general statement of the type of subject matter that is eligible for

patent protection,52 and that specific conditions for patentability follow.53 TheCourt accepted that where a claim recites a mathematical formula, scientificprinciple or phenomenon, an inquiry must be made into whether the claim isseeking patent protection for that formula in the abstract. It cited Flook asauthority that a formula as such is not patentable and cannot becircumvented by attempting to limit the use of the formula to a particulartechnological environment.54 The Court clearly recognised the potentialtension with its reasoning in Flook, asserting in a substantive footnote that:

its reasoning in Flook is in no way inconsistent with its reasoning inDiehr;

a mathematical formula does not simply become patentable subjectmatter simply by having the applicant acquiesce to limiting the reachof the patent for the formula to a particular technological use; and

similarly, a mathematical formula does not become patentable subjectmatter merely by including in the claim for the formula token post-solution activity such as the type claimed in Flook. The Courtreiterated that it had been careful to note in Flook that the patentapplication did not purport to explain how the variables used in theformula were to be selected, nor did the application contain anydisclosure relating to chemical processes at work or the means ofsetting off an alarm or adjusting the alarm limit.55

Justice Stevenss dissent in Diehr expressly embraced the dissectionapproach in Flook whereby the algorithm (or, by analogy, the naturalphenomenon or scientific principle) should be treated for 101 purposes asthough it were a familiar part of the prior art56 and the balance of the claimthen examined to determine whether it discloses some other inventiveconcept.57 His Honour took the view that the majoritys approach trivializesthe holding in Flook, the principle that underlies Benson, and the settled line ofauthority reviewed in those opinions.58

51 Ibid 189.52 Ibid.53 Ibid.54

Ibid 191.55 Ibid 192.56 Ibid 204.57 Ibid.58 Ibid 205.


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3.3 Prometheus: reconciling Flook and Diehr?

The attempted synthesis ofFlook and Diehr to support the Courts outcome inPrometheus is, with respect, not entirely convincing. The Court effectivelyembraced Stevens Js interpretation ofFlook,and made central to the analysisan inquiry into whether there is some inventive concept superimposed onthe natural phenomenon in question. The Court suggested that the caseswarn against interpreting patent statutes in ways that make patent eligibilitydepend simply on the draftsmans art without reference to the principlesunderlying the prohibition against patents for natural laws. In particular, theCourt considered that the cases insist that a process that focuses upon theuse of a natural law also contain other elements or a combination of elements,sometimes referred to as an inventive concept, sufficient to ensure that the patentin practice amounts to significantly more than a patent upon the natural lawitself.59 In respect of the patents under consideration in Prometheus, the Courtconcluded that the steps in the claimed processes, apart from the natural laws

themselves, involve well-understood, routine, conventional activitypreviously engaged in by researchers in the field.60 The Court did so byseparating the three steps of the process.

In respect of the administering step, the Court noted that doctors usedthiopurine drugs to treat patients suffering from autoimmune disorders longbefore anyone asserted th[e] claims.61 In respect of the wherein step, theCourt considered that the relevant clauses tell the relevant audience aboutthe laws while trusting them to use those laws appropriately where they arerelevant to their decision making.62 The determining step was said to telldoctors to engage in well-understood, routine, conventional activitypreviously engaged in by scientists who work in the field.63 The Courtreaffirmed that [p]urely conventional or obvious [pre]-solution activity isnormally not sufficient to transform an unpatentable law of nature into a

patent-eligible application of such a law.64

Finally, the Court considered thattaking the three steps as an ordered combination adds nothing to the laws ofnature that is not already present when the steps are considered separately.65

The Courts analysis of Diehr sheds the most light on its incorporation ofobviousness considerations into the 101 analysis. Accepting that the processin Diehr was held patentable, the Court put forward the fact that the majorityin Diehr nowhere suggested that all these steps, or at least the combination of

59 Prometheus, (US, No 10-1150, 20 March 2012) slip op, 3.60 Ibid 4.61

Ibid 9.62 Ibid.63 Ibid 10.64 Ibid.65 Ibid 10.


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those steps, were in context obvious, already in use, or purely conventional.66So as to distinguish the outcome in Diehr from that in Flook, the Court relied

on the point put forward by the majority in Diehr, namely, that the patent inFlook did not explain how the variables used were to be selected, nor did itcontain any disclosure relating to chemical processes at work or the means ofsetting off an alarm or adjusting the alarm limit.67 Further, it placed relianceon the fact that, once dissected, the super-added elements of the inventionentailed no inventive concept.68 It took the view that the case for patentabilitywas weaker than the claim in Diehr, and no stronger than the claim inFlook.69

4 Broader Implications for Other Jurisdictions

The larger question that arises is what, if anything, should courts in other

jurisdictions take from Prometheus when grappling with untested areas patentlaw in the context of new and emerging technologies. The author accepts thatthe patent applications in both Flook and Prometheus, at face value, raise anintuitive sense of scepticism as to inventive merit. It may even be accepted forthe purpose of argument that each entailed little (if any) more than anobvious application of a natural phenomenon, correlation or relationship. ThePrometheus approach would, in a clear case, potentially have the advantagesof efficiency and simplicity in the resolution of disputes. However, the thesisof this paper is that the Flook/Prometheus approach is flawed or, at least,unhelpful in dealing with emerging technologies which rely on naturalphenomena, and should not be adopted by courts in other jurisdictions, suchas Australia. First, for a court to identify and excise natural phenomena orcorrelations from a claimed invention, then undertake an examination of thebalance through an obviousness or inventive ingenuity lens, distorts the

statutory framework and substitutes a malleable, intuitive process for anevidentiary and technical approach traditionally undertaken in a non-obviousness/inventive step analysis. Secondly, even if one accepts that theremay be a case where some threshold unpatentability by virtue of subjectmatter is the only basis on which a patent might be invalidated, doing so as athreshold question rather than a last resort undermines certainty andtransparency in the process. That is, the question of whether a bad patent isinvalidated as suffering from some threshold uninventiveness, or for lackingan inventive step through the eyes of a person skilled in the art, is not simplyone of technicality.

66 Ibid 12.67 Ibid 12-13.68 Ibid 13.69 Ibid.


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The two core propositions which supported the reasoning in Flook70 situncomfortably with the approach adopted (and the outcome) in the High

Court of Australias watershed NRDC decision. In that case, McInerney QCargued for the Commissioner that the claim is only for a discovery of a bio-chemical reaction; there is no control of it and the result is identical with thediscovery.71 The invention claimed was a method for eradicating weeds fromcrop areas by applying a particular class of herbicides which had a selectiveeffect on the weeds. The High Court did not ultimately appear to agree withMcInerney QCs argument that the result was identical with the discovery,and in any event considered irrelevant the proposition that once thediscovery was made that the chemicals produce a lethal reaction whenapplied to the weeds and produce no such reaction when applied to the cropsthere was no more ingenuity required in order to show how the processmight be performed.72 The High Court considered that [t]he point thatmatters is that a weed-killing process is claimed which is distinguished frompreviously known processes by a feature the suggestion of which for such a

process involved a step plainly inventive.73 Thus the High Court rejected anapproach whereby the applicationof a natural phenomenon (in this case, thedifferential effect of the chemical on weeds and crops) must itself involvesome ingenuity or inventive concept. The patent in NRDC arguably revealeda relationship which has always existed74 (but was previously unknown),and claimed the application of that relationship to its most logical context.The holistic approach adopted by the High Court arguably accords withStone Js comments in Radio Corp of America directed to the patentability ofnovel and useful structure[s] created with the aid of knowledge of scientifictruth,75 as distinct from novel and useful superstructures developed upona basis of scientific truth.

The author contends that the Courts approach in Prometheus, reflected inFlook,76 represents an undesirable approach to validity analysis. As arguedabove, it creates uncertainty by supplanting the evidence-based screening roleof novelty and non-obviousness/inventive step inquiries with an ambiguousjudicial filter. This could effectively be employed in respect of any patent, asall inventions in some way rely on, incorporate, or make use of natural laws,correlations and phenomena. Such a malleable approach to a technicallycomplex inquiry such as this ought, if at all, only to be employed after aconventional inventive step analysis has been undertaken with the benefit ofexpert evidence. As Frankfurter J warned in his concurring opinion in FunkBros Seed Co v Kalo Inoculant Co (Funk Bros):

70 Arguably correctly identified by Stevens J in dissent in Diehr.71 NRDC, (1959) 102 CLR 252, 259.

72 Ibid 265.73 Ibid.74 Flook, 437 US 584, 593 n 15 (1978).75 306 US 86, 94 (1939).76 At least to the extent that Stevens Js analysis of that decision in Diehr is correct.


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It only confuses the issue to introduce such terms as the work ofnature and the laws of nature. For these are vague and malleable

terms infected with too much ambiguity and equivocation.Everything that happens may be deemed the work of nature, andany patentable composite exemplifies in its properties the laws ofnature. Argument drawn from such terms for ascertainingpatentability could fairly be employed to challenge almost anypatent.77

This passage was cited by Dixon CJ and Kitto and Windeyer JJ in NRDC,78where their Honours noted that the distinction between discovery andinvention is not precise enough to be other than misleading in this area ofdiscussion. 79 Discovering a law of nature is not, in a literal sense, inventive,even in circumstances where it involves extensive research (andfailed/abandoned attempts by others) over significant periods of time and isof great significance. Nonetheless, a holistic analysis of what is claimed may

nonetheless reveal that the invention meets the requirements of the Act.

In CCOM Pty Ltd v Jiejing Pty Ltd80 (CCOM), the Full Federal Court wascritical of passages in the trial judges decision which suggest he wasinfluenced in the determination of the issue as to manner of manufacture byasking whether what was claimed involved anything new andunconventional in computer use.81 The Full Court reaffirmed the approach,derived from NRDC, which accepts that in so far as manufacture suggests avendible product, this is to be understood as covering every end producedor artificially created state of affairs which is of utility in practical affairs andwhose significance thus is economic.82 In expressing these views, the FullCourt was mindful of the historical significance of the treatment of discoveryof laws or principles of nature as unpatentable:

A distinction also has been drawn between the discovery of lawsor principles of nature and the application thereof to produce aparticular practical and useful result. A reason why the former has

77 333 US 127, 134-135 (1948).78 (1959) 102 CLR 252, 263-264. As noted in Ayres, Owen Dixon (2007 ed), 141, Sir

Owen formed a strong friendship with Frankfurter J during his time as AustraliasMinister to the United States, described by Blackshield as the most enduring ofDixons Washington friendships: Strict Logic and High Technique, AustralianBook Review, June/July 2003, 8; That relationship casts some light on the apparentinfluence of Frankfurter Js concurring opinion in Funk Bros on the development ofthe NRDCjudgment.

79 (1959) 102 CLR 252, 264. Although the context of the NRDC decision is slightlydifferent in that the subject matter consisted of an unknown use of a previouslyknown substance, the discussion is directed to the same issue.

80 (1994) 51 FCR 260.81 Ibid 291.82 Ibid.


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not been treated as a proper subject of patent according to theprinciples developed pursuant to the Statute of Monopolies was

considered as long ago as 1852 in Carpmael, The Law of Patentsfor Inventions (5th ed), pp 42-43:

Let it not however be supposed that the minds of theindividuals making such discoveries of principles areunderrated, on the contrary, the highest respect is due toboth, but it will be evident that their discoveries are not ofthat kind which should secure to them the right of toll on allfuture practical applications of such principles; such acourse would lead to endless difficulties, and tend toprevent those rapid strides to improvements by which theexistence of the present law has been marked.83

The Full Court in CCOM noted that counsel for the respondents, who had

initially made broad submissions on the manner of new manufactureground on the basis of the Full Federal Courts decision in Mirabella,84 resiledfrom relying on that decision in so far as issues more apt to obviousness mayhave intruded into the consideration of the concept of manner ofmanufacture85 and accepted that many of the old cases which may havebeen treated in the texts under the heading of manner of new manufacturerwould now be treated as decisions upon degree of inventiveness, that is tosay obviousness.86 The Full Court also rejected a narrower proposition thatthere could be no manner of manufacture in identifying basiccharacteristics or desiderata and to claim all ways of achieving them.87 Itheld in respect of the CCOM claims that unless such a claim lacks novelty, isobvious, or lacks utility, or there is a failure to comply with one or other of thelimbs of s 40 because, for example, the invention is not fully described or theclaim is not clear and succinct, there does not remain an independent ground

of objection as to patentability, within the sense of s 18(1)(a) of the Act. 88

Although the discussion in CCOM predated the High Courts decision inMirabella (and may have been framed slightly differently in light of thatdecision), the residual requirement of inventiveness accepted by the HighCourt in that case, as explained in Advanced Building Systems Pty Ltd v RamsetFasteners Pty Ltd89 and subsequent cases, is confined to the narrowcircumstances where there is an effective admission of non-inventiveness

83 (1994) 51 FCR 260, 292.84 NV Philips Gloeilampenfabrieken v Mirabella International Ply Ltd (1993) 44 FCR 239.

The decision was, at the time, pending hearing in the High Court following a grantof special leave.

85 Ibid 294.86 Ibid.87 Ibid.88 Ibid.89 (1998) 194 CLR 171.


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on the face of the specification.90 It does not, in the authors submission,permit a court to venture, on its own initiative and unaided by evidence,

beyond the bounds of the specification into the world of the skilled addresseein order to make a threshold assessment of the caliber of inventiveingenuity through that addressees eyes without the benefit of evidence. Asframed in Bristol-Myers Squibb Co v F H Faulding & Co Ltd:

if the body of prior knowledge disclosed by the specification isinsufficient to deprive what is claimed of the quality ofinventiveness, then the only additional knowledge or informationwhich will be taken into account is knowledge or information of akind described in s 7(2) of the 1990 Act It is the only approachwhich does not, in practical terms, render s 18(1)(b)(ii) otiose.91

Whatever the scope of that threshold requirement, it is not an inquiryconcerned with what is known to those in the art, and whether contributions

above the natural phenomenon would be considered inventive in theireyes. It also would not, in the authors submission, extend to a case such asPrometheus because a lack of inventiveness is not admitted on the face of thespecifications, even in circumstances where the super-added contributionto the correlations recited, and the claimed processes as a whole, mightappear relatively straightforward. That is not to say that some relativelysimple expert evidence addressing the same criticisms made by the Court ofthe three step process of the patents could not easily invalidate the patentson some other ground such as obviousness (assuming they would even makeit through the Australian examination process). However, the practice ofjudicial usurpation of the role of the skilled addressee through the guise of atest of threshold inventive ingenuity sets a dangerous precedent for futureanalysis in less straightforward cases.

The framework of analysis is significant because it affects how the courtreaches its determination as to patentability. In effect, every invention in someway embodies natural laws and processes. As much was recognised in NRDCand Funk Bros. The difference is that an obviousness inquiry takes, as itsstarting point, what was known in the field pre-solution and relies onevidence of experts in that field to assist the Court in determining whether theinvention is non-obvious. It thereby provides a degree of transparency andobjective evidentiary support for the conclusions reached.

As Lord Hoffmann noted in Biogen Inc v Medeva Plc,92 the Patents Act 1977(UK) contains no definition of invention, and the four conditions in section90 See further Commissioner of Patents v Microcell Ltd (1959) 102 CLR 232; Lockwood

Security Products Pty Ltd v Doric Products Pty Ltd (No 2) (2007) 235 CLR 173, 211[106]; Merck & Co Inc v Arrow Pharmaceuticals Ltd (2006) 154 FCR 31, 51-53; Dura-Post (Aust) Pty Ltd v Delnorth Pty Ltd (2009) 177 FCR 239, [31].

91 (2000) 97 FCR 524, 536 [30] (Black CJ and Lehane J). An excellent summary of theauthorities is set out in SNF (Australia) Pty Ltd v Ciba Speciality Chemicals WaterTreatments Ltd [2011] FCA 452, [212]-[224].

92 [1997] RPC 1, [44].


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1(1) of that Act (effectively novelty, inventive step, industrial applicability93and the specified exceptions, including discoveries, scientific theories and

mathematical methods as such) in his Lordships opinion do a great dealmore than restrict the class of inventions which may be patented. Theyprobably also contain every element of the concept of an invention inordinary speech.94 Lord Hoffmann considered that an approach which takesthreshold inventiveness as a preliminary question would be a mistake andcause unnecessary difficulty in most cases.95 Of particular relevance to thepresent discussion is the suggestion that, One can of course imagine cases inwhich the alleged subject-matter is so obviously not an invention that it istempting to take an axe to the problem by dismissing the claim withoutinquiring too closely into which of the conditions has not been satisfied.96

However, his Lordship opined that most cases will be more difficult, andcautioned that [j]udges would therefore be well advised to put on one sidetheir intuitive sense of what constitutes an invention until they have

considered the questions of novelty, inventiveness and so forth. 97 Indeed, inthe related area of the patentability of abstract ideas, Breyer J himself joinedin Stevens Js opinion in Bilski, which criticised the primary opinion in thatcase on the basis that:

[t]he Court, in sum, never provides a satisfying account of whatconstitutes an unpatentable abstract idea the Court essentiallyasserts its conclusion that petitioners application claims anabstract idea. This mode of analysis (or lack thereof) may have ledto the correct outcome in this case, but it also means that theCourts musings on this issue stand for very little. 98

In summary, the Prometheus approach potentially offers a short cut forcourts to deal with patents that can, with the benefit of hindsight, be said to

be straightforward applications of natural phenomena. But as one movesalong the spectrum from cases such as Prometheus and Flook to those likeDiehr, decisions will have be made as to where lines should be drawn on whatclaims will constitute claims to significantly more than the natural law

93 The author recognises the need for some care in dealing with 1977 Act

authorities, adverted to by the Full Federal Court in CCOM Pty Ltd v Jiejing Pty Ltd(1994) 51 FCR 260, noting that [t]hat which would have been considered a mannerof manufacture under the previous law will not necessarily have capacity forindustrial application: at 268; Further, Lord Hoffmanns discussion on this pointwas not an aspect of the Biogen decision considered to be of questionable relevanceto Australian law by Gleeson CJ, Gaudron, Gummow and Hayne JJ in AktiebolagetHassle v Alphapharm Pty Ltd (2002) 212 CLR 411, 429-430 [38]-[40].

94 Biogen Inc v Medeva Plc [1997] RPC 1, [44].95 Ibid [43].96 Ibid [46].97 Ibid.98 (US, No 08-964, 28 June 2010) slip op, 9 (Stevens J).


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itself. In the authors opinion, those lines can be more reliably drawn with theaid of expert evidence by way of an obviousness inquiry, than by a malleable

approach based on what constitutes a natural phenomenon. That argumentbecomes somewhat more compelling in light of the added technicalcomplexity in areas such as gene patents. In such matters, judges (andlitigants) should arguably have the benefit of the skilled addressees evidenceon questions related to obviousness, so that overly broad categories ofclaims are not rendered unpatentable because of one bad patent dealingwith similar subject matter.

5 Implications for Gene Patents: Myriad 2

On 16 August 2012, the Federal Circuit issued its decision on remand inMyriad 2,99 reaching exactly the same substantive result as its previous

decision (issued 29 July 2011): that Myriads diagnostic method patents areinvalid, but its gene patents are valid. Although a comprehensive analysis ofthe Myriad litigation is beyond the scope of this paper, the differentinterpretations placed on Prometheus in the three opinions in Myriad 2 isilluminating.

In respect of the method claims, the Court unanimously ruled that Myriadsclaims to comparing or analysing the BRCA sequences to a humansample were patent-ineligible, on the basis that they were limited only to theabstract mental process of comparison. The Court rejected Myriads argumentthat one should read in to the existing claims the additional allegedlytransformative steps of extracting DNA from a human sample andsequencing the BRCA DNA molecule. However, Judge Louries reasonssuggest that method claims which expressly included such steps may not

necessarily be patent-ineligible.100 In respect of the method claim for screeningpotential cancer therapeutics via changes in cell growth rate, the Court againfound this to be patent-eligible, reasoning that the claim applies certain stepsto transformed cells that, as has been pointed out above, are a product of man,not of nature.101

Myriad 2 also provides some insight into the ramifications of the Prometheusdecision for product patents. Judge Lourie considered that Prometheus doesnot control the question of patent-eligibility of [claims to isolated DNAmolecules],102 albeit it provides valuable insights and illuminate[s] broad,foundational principles.103 Judge Lourie considered that although theremand of the case for reconsideration in light ofPrometheus might suggest

99 689 F 3d 1303, (2012).100 Ibid 1335 (Lourie J).101 Ibid 1336.102 Ibid 1325.103 Ibid 1326.


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that the composition claims are mere reflections of a law of nature, hisHonour held that they are not. His Honour went on to expressly state that in

this context, the Court considered patent-eligibility, and notpatentability.104

Judge Moore agreed that Prometheus did not control the outcome of the case, itwas instructive regarding the scope of the law of nature exception.105 HerHonour rejected the view that Chakrabarty, Funk Bros or Prometheus leadsinexorably to the conclusion that isolated DNA molecules are not patentablesubject matter106 and declined the invitation to broaden the law of natureexception.107 Judge Moore joined in Judge Louries opinion regarding thepatentability of cDNA sequences, but had more difficulty in respect of thepatentability of isolated DNA sequences identical to naturally occurringsequences, in light ofPrometheus:

If I were deciding this case on a blank canvas, I might concludethat an isolated DNA sequence that includes most or all of a gene

is not patentable subject matter. The scope of the law ofnature/manifestation of nature exception was certainly enlarged inPrometheus. But we do not decide this case on a blank canvas.Congress has, for centuries, authorized an expansive scope ofpatentable subject matter. Likewise, the United States Patent Officehas allowed patents on isolated DNA sequences for decades, and,more generally, has allowed patents on purified natural productsfor centuries. There are now thousands of patents with claims toisolated DNA, and some un-known (but certainly large) number ofpatents to purified natural products or fragments thereof. As Iexplain below, I believe we must be particularly wary ofexpanding the judicial exception to patentable subject matterwhere both settled expectations and extensive property rights areinvolved.108

Judge Bryson, dissenting as to the validity of the gene patents, accepted that,as a method case, Prometheus was not decisive as to the product claims underconsideration inMyriad. However, his Honour laid out an approach by whichanalogous reasoning might be applied to a product claim:

Just as a patent involving a law of nature must have an inventiveconcept that does significantly more than simply describe natural relations,Mayo, 132 S. Ct. at 1294, 1297, a patent involvinga product of nature should have an inventive concept that involvesmore than merely incidental changes to the naturally occurringproduct. In cases such as this one, in which the applicant claims a

104 Ibid 1333.105 Ibid 1340 (Moore J).106 Ibid 1347.107 Ibid.108 Ibid 1343.


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composition of matter that is nearly identical to a product ofnature, it is appropriate to ask whether the applicant has done

enough to distinguish his alleged invention from the similarproduct of nature. Has the applicant made an inventivecontribution to the product of nature? Does the claimedcomposition involve more than well-understood, routine,conventional elements? Here, the answer to those questions isno.109

A petition to the Supreme Court for a writ of certiorari was filed by theAmerican Civil Liberties Union on 24 September 2012 it remains to be seenwhether the Supreme Court will follow the road map laid out by JudgeBryson.

Conclusion and Implications

The 9-0 decision in Prometheus is arguably an example of bad patents makingbad law. There are certainly arguments available that, at face value, thespecifications intuitively appear unlikely to withstand a properly mountedvalidity inquiry or challenge on an orthodox inventiveness analysis. Theremay, in theory, be procedural and efficiency advantages in allowing athreshold inquiry in such a case. Those advantages may be morecompelling in the United States, where the Seventh Amendment right to trialby jury in certain civil cases makes more attractive (to an alleged infringerand, arguably, the judiciary) an approach which allows an alleged infringer toobtain summary judgment against a patentee and thereby bypass a trial onobviousness involving a jury.110 Indeed, in the District Court Mayo filed amotion to strike Prometheuss jury demand two days prior to filing its motionfor summary judgment.111

However, a malleable intuitive approach to identifying threshold validity onthe basis of claim dissection and an assessment of the inventive ingenuitybehind non-natural aspects of the claim is contrary to the approachembraced in NRDC, and poses particular difficulty in emerging technologicalenvironments. On that basis, the author submits that such an approachprovides little assistance in the Australian context, and should not be adoptedoutside the US. A full discussion is beyond the scope of this paper, but onecan imagine the relevant process in Prometheus being claimed in respect ofmore sophisticated environments than the mere administration of a dosage,

109 Ibid 1355 (Bryson J).110

On the issue of the (increasing) role of juries in patent trials, see eg, Tindell,Toward a More Reliable Fact-Finder in Patent Litigation (2009) 13 MarquetteIntellectual Property Law Review 309; Weisenberger, Juries and PatentObviousness (2010) Vanderbilt Journal of Entertainment and Technology Law 641.

111 Prometheus did not oppose the motion, and Judge Houston subsequently grantedthe motion and struck the jury demand: Prometheus Lab Inc v Mayo CollaborativeServices (SD Cal, WL 878910, 28 March 2008) n 2.


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measurement of metabolite levels and interpretation of those levels. Forexample, the process might be adapted in respect of an automated continual-

release system, or incorporated into nanotechnology as a self-regulatingsystem. If the court is permitted to go beyond the specification, at what pointdoes any supposed lack of inventive quality cease? Other sectors whichmight be particularly affected include personalised medicines and businessmethods/systems. The prophylactic effect of a vaccine or the therapeuticeffect of a drug, once identified, can be said to be a natural phenomenon.The super-added contribution of directing its use to the prevention ortreatment of a condition to which it is suited would seem unlikely toconstitute a sufficiently impressive aura of inventive ingenuity. By contrast,a meritorious patent over any of the processes described above could,considered as a whole, arguably be described as being distinguished frompreviously known processes by a feature the suggestion of which for such aprocess involved a step plainly inventive.112 The Prometheus patents may failthis same test, but they would do so by virtue of the totality of what is

claimed, not through an artificial excision of that which is natural from thatwhich supposedly represents the balance of the contribution. In any event,there is no reason to bypass the ordinary obviousness inquiry, informed byevidence from those skilled in the art, simply because particular patentsmight instil an intuitive sense of scepticism in the decision-maker. ThePrometheus approach is exactly the kind of judicial axe of which LordHoffmann warned, and in the authors opinion, is too blunt and imprecise atool for the majority of cases. The Supreme Court may have already crossedthe Rubicon, but it remains to be seen whether other jurisdictions follow suit.

112 NRDC (1959) 102 CLR 252, 265.

a judicial axe for sharp drafting: the “natural phenomenon” dilemma, ben mee

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