Federal Circuit Reverses Course On Classen, Finds That Many Method Claims Satisfy 35 USC § 101, Safe Harbor Of 35 USC § 271(E)(1) Does Not Shelter Many Defendants

On August 31, 2011, the Federal Circuit issued its second decision in Classen Immunotherapies, Inc. v. Biogen Idec (App. 2006-1643, -1649), on remand from the Supreme Court after Bilski v. Kappos (U.S. 2010). The Federal Circuit first decided Classen's appeal in 2008, when a panel comprised of Circuit Judges Newman and Moore and District Judge Farnan (sitting by designation) held in a one-paragraph, non-precedential decision authored by Judge Moore that Classen's claims do not satisfy 35 USC § 101. The second time around, the Federal Circuit (by a panel that included Chief Judge Rader in place of Judge Farnan) took a closer look at Classen's claims, and determined that two of the three Classen patents at issue indeed are directed to subject matter that is patent-eligible under 35 USC § 101. In this decision, the Federal Circuit has provided useful guidance for method claims that involve some type of information gathering. It appears that if the claims recite a step of "putting this knowledge to practical use," such as an active treatment step based on the information, they are likely to be patent-eligible under 35 USC § 101. On the other hand, if the claimed methods culminate in obtaining information, and nothing more, they may be vulnerable to challenge under 35 USC § 101.

Judge Newman wrote the opinion for the court, which was joined by Chief Judge Rader. Chief Judge Rader wrote a separate opinion to express "additional views," which was joined by Judge Newman. Judge Moore wrote a dissenting opinion.

Procedural Background

Classen asserted three patents against Merck and other defendants who participated in studies evaluating the risks associated with different vaccination schedules. The district court granted motions for summary judgment that the claims were invalid under 35 USC § 101 and not infringed because the alleged infringing activities were sheltered by the "safe harbor" of 35 USC § 271(e). The Federal Circuit originally upheld the district court on the § 101 issue. Classen sought and was granted certiorari by the Supreme Court, but the Court vacated and remanded to the Federal Circuit shortly after it issued its decision in Bilski v. Kappos. (See Foley's PharmaPatents Blog for a discussion of the Supreme Court's post-Bilski treatment of Classen at http://tinyurl.com/3zocr3s.)

The Claims at Issue

The three Classen patents at issue (U.S. Patent 6,638,739; U.S. Patent 6,420,139; and U.S. Patent 5,723,283) are based on Dr. Classen's discovery that the particular schedule of infant immunization for infectious diseases can affect the later occurrence of chronic immune-mediated disorders such as diabetes, asthma, hay fever, cancer, multiple sclerosis, and schizophrenia. The patents collectively include 230 claims, but Classen designated two representative claims for the district court's analysis.

Claim 1 of the '739 patent was designated as representative of the claims of both the '739 patent and the '139 patent, and recites:

Claim 1 of the '283 patent recites:

The Patent-Eligibility Issue

In her opinion for the court, Judge Newman reviews language of 35 USC § 101 and Supreme Court decisions leading up to Bilski. Referring to the statutory role of §101 as a "'coarse eligibility filter,' not the final arbiter of patentability," the court indicates that §101 is generally regarded as a low hurdle, and other statutory requirements, such as § 102, § 103, and § 112, place more meaningful limits on patentability.

The Federal Circuit notes that while the district court had invalidated the claims for including mental steps, "the presence of a mental step is not of itself fatal to § 101 eligibility." Indeed, "the claims must be considered as a whole when determining eligibility." Citing its 2010 decision in Research Corporation Technologies, Inc. v. Microsoft Corp., 627 F.3d 859 (Fed. Cir. 2010), the Federal Circuit explains that, when applying § 101, it is important to consider where the claimed methods fall on "the continuum from abstractness to specificity."

Turning to the claims at issue, the Federal Circuit finds that the '139 and '739 patents are directed to "a method of lowering the risk of chronic immune-mediated disorder," and so "are directed to a specific, tangible application." The court therefore holds that the claims of these patents pass through the "coarse eligibility filter of § 101." On the other hand, the court is careful to leave the door open for invalidation on other grounds, such as prior art.

The Federal Circuit reaches a different conclusion on the claims of the '283 patent, finding that they are not patent-eligible under 35 USC § 101. The court characterizes the '283 patent claims as relating to "methods of 'determining whether an immunization schedule affects the incidence or severity of a chronic immune-mediated disorder,' by reviewing information on whether an immunization schedule affects the incidence or severity of a chronic immune-mediated disorder." The Federal Circuit distinguishes these claims from those of the '139 and '739 patents on the ground that the other claims "include the subsequent step of immunization on an optimum schedule." i.e., a specific application and practical use of the obtained knowledge.The court notes that "methods that simply collect and compare data, without applying the data in a step of the overall method, may fail the § 101 filter." Important to the court's determination that the '283 patent does not satisfy § 101 is the fact that it does not put the knowledge gained from the "comparing" step into "practical use."

The Federal Circuit also addresses Classen's arguments that all claims satisfy the machine-or-transformation test, because they are akin to methods of treatment that the Federal Circuit held "are always transformative" in its decisions in Prometheus Laboratories, Inc. v. Mayo Collaborative Services, (Fed. Cir. June 20, 2011). (See Foley's PharmaPatents Blog for a discussion of the Federal Circuit's Prometheus decision at http://tinyurl.com/3lsl2bc, and Foley's PharmaPatents Blog and Personalized Medicine Bulletin for discussions of the Supreme Court's decision to grant certiorari in Prometheus at http://tinyurl.com/3lbt52c and http://tinyurl.com/6lg4x5a.)

However the Federal Circuit distances itself from this broad language, citing the "materially different facts in Prometheus," where the claims were directed to "a method of controlling individualized dosages of a specific drug by measuring its metabolic products in the blood of individual patients." The Federal Circuit again draws a line between "the Classen claims that include such transformative steps" and those "that require no more than referring to known information."

The Safe Harbor Issue

Classen had alleged that Biogen Idec and GlaxoSmithKline directly infringed the patents by participating in studies "to evaluate suggested associations between childhood vaccinations, particularly against hepatitis B and Haemophilus influenza . . . and risk of developing type 1 diabetes; and to determine whether timing of vaccination influences risk." The district court granted summary judgment of non-infringement on the ground that these activities were sheltered by the safe harbor provision of 35 USC § 271(e)(1). The provision excludes from infringement activities that are "solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products."

Classen argued that § 271(e)(1) "is limited to activities conducted to obtain pre-marketing approval of generic counterparts of patented inventions," and so does not apply to the accused activities, which occurred after market approval of the vaccines. GlaxoSmithKline and Biogen Idec argued that their studies were in conformity with FDA regulations, and so fell under the safe harbor.

The Federal Circuit considers the legislative history and judicial treatment of § 271(e)(1), and finds that both support the proposition that "§ 271(e)(1) is directed to premarketing approval of generic counterparts before patent expiration." The court therefore concludes that the district court had erred when it determined that § 271(e)(1) sheltered post-marketing approval activities of Biogen Idec and GlaxoSmithKline "in providing vaccines, in advising on immunization schedules, and in reporting any adverse vaccine effects to the FDA."

In summary, the Federal Circuit's decision therefore reversed the district court's judgment of patent-ineligibility of the claims of the '139 and '739 patents, affirmed the district court's judgment of patent-ineligibility of the claims of the '283 patent, affirmed the district court's judgment of non-infringement by Merck, and vacated the district court's judgment of non-infringement by Biogen Idec and GlaxoSmithKline under § 271(e)(1). The Federal Circuit also remanded the case to the district court "for appropriate further proceedings."

Chief Judge Rader's Additional Views

Chief Judge Rader joined Judge Newman's opinion for the court, but also wrote separately to provide "additional views" highlighting public policy considerations and the real-world impact of the "rising number of challenges" under 35 USC § 101 in recent years. For example, he notes that "eligibility restrictions usually engender a healthy dose of claim-drafting ingenuity" leading to "evasions" of subject matter exclusions. Such evasions "add to the cost and complexity of the patent system and may cause technology research to shift to countries where protection is not so difficult or expensive." He describes how claim drafting evasion has occurred in the past, as seen with Beauregard claims directed to software ("computer programs embodied in a tangible medium") and Swiss-style claims used in Europe to protect methods of treatment ("the use of a compound X in the manufacture of a medicament for the treatment of disease Y"). As noted by Chief Judge Rader, "when careful claim drafting or new claim formats avoid eligibility restrictions, the doctrine becomes very hollow ... [and] achieves no substantive improvement in the patent landscape."

Beyond claim drafting gamesmanship, Chief Judge Rader notes that "eligibility restrictions increase the expense and difficulty in obtaining a patent" so that "the real-world impact is to frustrate innovation and drive research funding to more hospitable locations," such as those outside the United States. Chief Judge Rader cites reports and publications indicating that after Europe imposed harsher patent-eligibility restrictions on biotechnology than the United States, "Europe lost innovation investment to the United States" and we "became the world leader in biotechnology innovation." Chief Judge Rader warns that "the tide can turn against us, too." Thus, he cautions judges (and presumably Justices at the Supreme Court) to "tread carefully" when imposing new limits on patent-eligibility, especially in light of existing substantive patentability considerations under 35 USC. §§ 102, 103 and 112.

Judge Moore's Dissent

Judge Moore dissented from the court's opinion on all issues. She would have affirmed the district court's judgment that none of the Classen claims satisfy 35 USC § 101, and agreed with the district court's interpretation of the scope of the safe harbor statute.

Regarding patent-eligibility, Judge Moore notes that none of the Classen claims is "directed to any specific treatment steps or drugs [or schedules to be used] or even any specific chronic immune disorder." She sees no distinction between any claims at issue that warrants treating them differently. Citing Bilski, she states that "Classen cannot escape the fundamental abstractness of his claims by limiting them to a single field of use — immunization." She believes that the majority does not "consider how these staggeringly broad claims will preempt the entire immunization field from considering any two schedules prior to immunizing any patient with any drug — clearly a sweepingly broad principle." On the whole, she finds that the "single physical immunization step" cannot make "this principle patentable subject matter."

Regarding the safe harbor, Judge Moore believes that the panel opinion "is contrary to the plain language of the statute," which does not limit its reach to "pre-approval uses." Judge Moore is not convinced that the context of earlier cases addressing the safe harbor support restricting its scope, where those same cases acknowledge the breadth of the statutory language.

Federal Circuit Provides Useful Guidance

This decision resolves at least some questions that have been hanging over the patent-eligibility of personalized medicine method claims since the Federal Circuit issued its first Classen decision in 2008. (See Foley's Personalized Medicine Bulletin for a discussion of the court's previous treatment of diagnostic method claims at http://tinyurl.com/3u5bl3a.)

It has been difficult to reconcile the court's brief 2008 decision finding the Classen claims invalid under § 101 with the rationale that the court developed and applied when it upheld the claims in Prometheus. Here, the Federal Circuit has provided some useful guidance for method claims that involves some type of information gathering. It appears that if the claims recite a step of "putting this knowledge to practical use," such as an active treatment step based on obtained information, they are likely to be patent-eligible under 35 USC § 101. On the other hand, if the claimed methods culminate in obtaining information, and nothing more, they may be vulnerable to challenge under 35 USC § 101. Patent holders who are concerned about the continued validity of granted claims in view of this decision can consider filing a reissue application, particularly in view of the recent Federal Circuit decision in In Re Tanaka, which held that a reissue application can be filed for the sole purpose of adding a dependent claim. (See Foley's PharmaPatents Blog for a discussion of the Tanaka decision, and the USPTO's recent adaptation thereto at http://tinyurl.com/3fy9cml and http://tinyurl.com/3zmouyh.)

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