Ex parte Parenteau – PTAB Skips Step One of the Mayo/Alice Test?

Skipping Step

In ex parte Ho, the subject of my last post, the PTAB reversed the Examiner’s rejection of claims to a population of bone marrow cells obtained by two-stage culturing that expressed or failed to express certain markers. The PTAB wrote that, for the purposes of the appeal, it would be assumed that the cells were a natural product, but went on to find that they were markedly different from any naturally occurring counterpart cells. The problem with this abbreviated analysis is the PTAB’s assumption that the claimed cell population is a natural product, and effectively forcing the appellant to traverse Step 2 of the Mayo/Alice test. In ex parte Ho, the appellant was able to present evidence to this effect,¬†including an expert’s declaration. But should they have had to?

Ex parte Parenteau, Appeal No. 2017-002191 (PTAB, August 22, 2018), is a slightly earlier decision in which the Board reversed both a s. 103 rejection and a s. 101 “natural product” rejection of claims directed to cultured tumor cells containing a population of 51-100% rapidly dividing C-RC cells that consists of 80-100% actively expanding and dividing VSEC, SDEC and SCEC cells and abnormal transit amplifying cells. The cultivating step is carried out in a serum-free, defined cell culture medium containing agents selected from the group consisting of 9 classes of agents, including TNF-alpha.

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Ex parte Ho – Burden Shifting in s.101 Rejections

In Judge Plager’s concurrence-in-part in Interval Licensing v. AOL, Inc., he describes the “small puzzle” present in the Mayo/Alice analysis of a claim identified as directed to an abstract idea: “[I]f a court, after reviewing challenged claims in light of their terminology and written description, determines the claims to be ‘abstract’ in Step 1 [the PTO’s Step 2A], how can the same court be expected to determine on a second reading that the same claims have become ‘un-abstract’ via Step 2 [Step 2B of the PTO test]?”

The PTAB gave a demonstration of how the analysis can be carried out in Ex parte Ho et al. (Serial No. 11/797,322; Appeal No. 2016-007472, August 27, 2018) when they reversed the rejection of claims directed to an isolated population of bone marrow cells that had been cultured in two stages to yield the population of cells that co-express CD49c/CD90 while not expressing CD43/CD45, as well as expressing telomerase so that the cells retain their population doubling time. [This a a broad summary of the elements of the main claim -133- that recites these and other elements in more detail.]

While recognizing that the culture conditions have changed the phenotype of the claimed [sic: parent?] cells, the Examiner argued that the claimed features of the cells were simply discovered by the Appellants and that the features “are independent from any effort of appellant.” The Examiner argued that the specification did not disclose that the claimed cells have any “characteristics…that are markedly different from naturally-occurring counterparts.” This sounds a bit like the argument in Ariosa that the invention was merely the discovery by appellants that a natural product, cffDNA, could be isolated from a natural source.

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Bhagat v. Iancu – Did the Myriad Decision Overrule Funk Bros.?

Omega-3 unsaturated fatty acid A September 6th post by Dennis Crouch at PatentlyO (“A Mixture of Known Compounds is Unpatentable without a Transformation“) led me to a closer reading of the cert. petition filed in Bhagat v. Iancu, (Case No. 18-277) an appeal from In re Bhagat that was decided by the Fed. Cir. on March 16, 2018. This decision was extensively discussed in my post of March 19, 2018. That post argued that the composition claims at issue, that are directed to a dosage comprising a certain ratio of fatty acids, are not an attempt to claim a natural product, and Bhagat makes those arguments again in her brief. Therefore, I will try to steer directly toward the interesting argument presented in detail in the brief that can be summarized by the question of whether or not the rationale for the Supreme Court’s decision in Funk Bros. Seed Co.v. Kalo, 333US 127 (1948) was effectively overruled by the much more recent Myriad decision.

This is not an easy question to answer, since the composition claims in Funk Bros. were invalidated as an attempt to patent a natural phenomenon – the discovery that culture of certain species of root-nodule forming bacteria were not cross-inhibitory – while the claims to the BRCA genes in Myriad were invalidated as an impermissible attempt to patent a natural product. Furthermore, the Funk Bros. decision was based on “lack of invention” since the Supreme Court applied an earlier version of s. 101 that included the novelty requirement. (The concurrence basically argued that the specification did not meet the written description requirement while the dissent argued that the specification was enabling.)

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Congress and Trump are out of step on Intellectual Property

United States and China Trade WarThis is a guest post from Russell Slifer that first appeared on The Hill (8/30/2018).

The Trump administration started its trade war this year with China under the auspices of countering Beijing’s theft of U.S. intellectual property. There is no doubt that China, with its Made in China 2025 plan, has been actively acquiring U.S. intellectual property for years. The U.S. intelligence community acknowledges that China is a leader in economic espionage. The Chinese government has required U.S. businesses to transfer technology to Chinese companies as a precondition of entering the Chinese market. Further, China and Chinese companies are investing heavily in U.S. companies to gain access to their underlying intellectual property.

The White House and Department of Commerce actions to reduce foreign IP theft is important but equally important is having a strong domestic policy. China does more than import IP from the U.S., it has consistently revised its laws to strengthen patent protection and is stepping up enforcement of intellectual property rights protection. So while China has strengthened its domestic patent system over the last 20 years, the U.S., thanks to Congress and the Supreme Court, has gone the other way.

American inventors and innovative companies have been under assault for more than a decade by Supreme Court decisions. At the same time, Congress pushed the U.S. patent system to new lows with legislation intended to eliminate abusive patent litigation. After 228 years since the first Patent Act, the U.S. should lead the world by a wide margin, but sadly the U.S. Chamber of Commerce now ranks the U.S. as 12th in the world, tied with Italy. The U.S. is still ranked ahead of China in overall intellectual property protection, but not for patent protection of key technologies necessary for our future economy. How did this happen?

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