Chemical & Life Sciences Patent: Year In Review 2016

The Supreme Court decided three patent cases in 2016, but the Court’s denial of certiorari in Ariosa v. Sequenom will have the most lasting impact on the prospects for patenting in the life sciences. The Federal Circuit’s Ariosa decision—left undisturbed by the Court—precludes patenting most diagnostic methods that rely on generally known techniques, as being drawn to ineligible subject matter under 35 U.S.C. § 101. Combined with the Federal Circuit’s decision in Genetic Techs. v. Merial that allows adjudicating § 101 eligibility questions on a motion to dismiss, the Ariosa decision rapidly changes the landscape for patenting diagnostics and potentially other life sciences inventions.
 
But there was at least one silver lining for life science patent owners this year. In Rapid Litigation Management Ltd. v. CellzDirect, Inc., the Federal Circuit upheld claims to a method of producing hepatocytes, finding that the claims are “directed to” patent eligible subject matter, and although the method steps were individually known, the process of repeating the steps was not routine and conventional.
 
In two decisions affecting chemical and life science patenting, the Supreme Court weighed in on the standard for willfulness in Halo, and the procedures for inter partes review (IPR) in Cuozzo. Halo overruled the Federal Circuit’s Seagate standard of “objective recklessness,” making it easier for patent owner to prove willful infringement and obtain treble damage awards. This decision increases the importance of timely non-infringement opinions of counsel for potential infringers.
 
In Cuozzo, the Court blessed the Patent Office’s approach to claim construction in an inter partes (IPR), and agreed that institution decisions based on slightly different grounds than presented in the petition are not appealable. The Court cast some doubt upon the Federal Circuit’s blanket practice of finding anything related to the institution decision non-appealable. As a result, the Federal Circuit granted en banc rehearing in WiFi One, Inc. v. Broadcom Corp., where it will reassess its standards for what issues may be appealed to the Federal Circuit in an IPR.
 
The Federal Circuit largely affirmed the Patent Trial and Appeal Board’s decisions whether they related to IPRs or ex parte examinations. For example, the court held that the Board has discretion regarding whether to permit new arguments late in an IPR proceeding, and to rely on references showing the “state of the art” even if not cited in the institution decision.
 
The Federal Circuit also weighed in on several issues of substantive patent law of interest to chemical and life sciences, including anticipation, obviousness, indefiniteness, written description, and claim construction. Most notably for pharmaceutical patent owners, the en banc court reversed an earlier panel holding that a contract manufacturer’s “sale” of manufacturing services to the patentee presented an on-sale bar.

Click here to find a detailed analysis on Chemical & Life Sciences cases that were pivotal in 2016.