Illumina v. Ariosa: Carving Out A New “Bucket” Of Section 101 Patent Eligible Claims

[Co-author: Rebecca Estrada, Ph.D.]

Case Summary
On March 17, 2020, the Federal Circuit found that patents claiming methods of preparing an extracellular fraction of cell-free DNA that is enriched in fetal DNA were patent eligible and not invalid under 35 U.S.C. §101 even though it was a “natural phenomenon” that this fetal DNA could be separated and amplified based on its size.

Best Practices
Based on the majority’s reasoning, life sciences claims that would ordinarily be drafted as methods to diagnose or detect disease should be converted to methods of preparing samples or even methods of treatment, if possible, in order to survive invalidity for claiming a natural phenomenon under Section 101.

Future Developments
Expect continued debate by the Federal Circuit. Ariosa (patent challenger) has already filed a petition for rehearing en banc for full panel review, which will likely be granted in view of the highly contested 2-1 split of this decision.

Influencing Factors
The decision may have also been driven by policy and fairness considerations since Illumina’s “discovery,” widely recognized as groundbreaking in the diagnosis field, was previously held invalid by the Federal Circuit on Section 101 grounds in Ariosa Diagnostics, Inc. v. Sequenom.

Concluding Thoughts
The Federal Circuit’s approach to Section 101 patentability will likely continue to be somewhat unpredictable without further guidance from the Supreme Court or Congress. Unfortunately, the Supreme Court has apparently decided not to further address this topic any time soon and an attempt to change patent eligibility through Congressional legislation has stalled.

In Illumina, Inc. v. Ariosa Diagnostics, Inc., No. 2019-1419 (Fed. Cir. March 17, 2020), the Federal Circuit reversed the decision of the U.S. District Court for the Northern District of California that claims 1–2, 4–5, and 9–10 of U.S. Patent 9,580,751 (the “’751 patent”) and claims 1–2 and 10–14 of U.S. Patent 9,738,931 (the “’931 patent”) were invalid under 35 U.S.C. § 101 as directed to an ineligible natural phenomenon (Illumina, Inc. v. Ariosa Diagnostics, Inc., 356 F. Supp. 3d 925 (N.D. Cal. 2018)).

The Patents-in-Suit

The claims in the ’751 and ’931 patents are directed to methods of preparing a fraction of cell-free DNA that is enriched in fetal DNA. It was previously discovered that both circulatory extracellular maternal DNA and circulatory extracellular fetal DNA were present in the maternal plasma. In addition, it was found that the circulatory extracellular fetal DNA has a comparatively small size of approximately 500 base pairs or less, whereas maternal circulatory extracellular DNA is greater than about 500 base pairs. It was this size difference that was the basis of the invention whereby the invention can be used to separate and enrich for fetal DNA sequences from the circulatory extracellular maternal DNA and subsequently analyzed for aberrant genetic loci in the fetal DNA.

Each of the patents, ‘751 and ‘931 have only one independent claim. Claim 1 of the ‘751 patent recites “[a] method for preparing a deoxyribonucleic acid (DNA) fraction from a pregnant human female useful for analyzing a genetic locus involved in a fetal chromosomal aberration.” The claim includes steps for extracting DNA from the blood plasma or serum of a pregnant woman and removing DNA fragments greater than 500 base pairs in size. The claim also includes an analysis step of the remaining fraction of DNA, understood to be the fetal DNA fragments. Similarly, claim 1 of the ‘931 patent recites a method for “extracting DNA comprising maternal and fetal DNA fragments from a substantially cell-free sample of blood plasma or blood serum of a pregnant human female.” Further steps of the claim selectively remove DNA fragments greater than approximately 300 base pairs followed by analysis of the DNA.

The patents also possess further dependent claims which place additional limitations on the size discrimination and selection processes recited in claim 1 from which they depend. For example, dependent claim 7 of the ‘751 patent recites centrifugation as the process for size discrimination with claim 8 further limiting it to density gradient centrifugation. Similarly for the ‘931 patent, dependent claims 4-10 add that the size discrimination step of claim 1 can comprise chromatography, electrophoresis, centrifugation and/or nanotechnological means.

The Lower Court Decision

On May 15, 2018, Illumina, Inc. and Sequenom, Inc. filed suit against Ariosa Diagnostics, Inc., Roche Sequencing Solutions, Inc., and Roche Molecular Systems, Inc. (collectively, “Roche”) alleging infringement of the ’751 and ’931 patents. On August 31, 2018, defendants moved for summary judgment that the asserted claims are invalid and unenforceable under 35 U.S.C. § 101. The district court invalidated the claims of the ’751 and ’931 patents as being directed to ineligible subject matter and entered judgment in favor of Ariosa and Roche. See Illumina, 356 F. Supp. 3d at 925. Indeed, the district court relied in part on a prior Federal Circuit decision involving the same parties and the same general discovery, Ariosa Diagnostics, Inc. v. Sequenom, Inc.,788 F.3d 1371, 1380 (Fed. Cir. 2015), where claims to methods of conducting a prenatal diagnosis using this cell-free fetal DNA were held invalid for lack of subject matter eligibility. Illumina and Sequenom subsequently appealed the district court decision.

The Majority’s Reasoning – It’s All About the “Buckets”

For Judge Lourie, writing for the majority, this case did not seem to be very difficult to decide. After explaining the current state of the law of Section 101 patentability under the Supreme Court’s decisions of Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 70 (2012) and Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208, 217 (2014)[1], the majority appeared to take a rather rigid and formalistic approach in settling Section 101 issues. Patent eligibility is to be determined by whether the claims fall into a particular “bucket.” Illumina, No. 2019-1419 at 8. If your claims belong in the bucket of “diagnostic claims,” then your claims are patent ineligible.[2] But if your claims fall within the “method of treatment” bucket, then your patent is valid under Section 101.[3] Since the claims in Illumina did not fall within either bucket, the majority appeared to create a new bucket of patent eligibility - method of preparing biological samples.

With respect to the first step of determining patent eligibility under Mayo/Alice (whether the claims are directed to a natural phenomenon), the majority found that the natural phenomenon discovered by the inventors was that “cell-free fetal DNA tends to be shorter than cell-free maternal DNA in a mother’s bloodstream,” thus allowing the critical cell-free fetal DNA (“cff-DNA”) to be analyzed for, say, certain birth defects instead of having to perform the risky procedure of extracting DNA from the fetus. The Court ruled that the claims in this case were not “directed” to the natural phenomenon, i.e., the cff-DNA or its difference in size, because they were directed to “methods for preparing a fraction of cell-free DNA that is enriched in fetal DNA.” Id. at 10. Because the claims were not directed to a natural phenomenon, the Court did not have to reach step two in the Mayo/Alice inquiry (whether the limitations transform the nature of the claim to patent eligibility) and the claims were deemed valid under Section 101. The Court reasoned that because the claimed method of preparation “achieves more than simply observing that fetal DNA is shorter than maternal DNA or detecting the presence of that phenomenon,” but actually uses process steps to change the composition of cff-DNA that is different from the original sample of the mother’s plasma, the claims are patent eligible. Id.

In doing so, the majority appeared to create another “bucket” of patent eligible claims - methods of preparing biological samples – by relying heavily on the Court’s prior decision in Rapid Litig. Mgmt. Ltd. v. CellzDirect, Inc., 827 F.3d 1042, 1046 (Fed. Cir. 2016). The claims in CellzDirect were also directed to “[a] method of producing a desired preparation” of preserving hepatocytes (liver cells) comprising freezing them, thawing them, removing the non-viable ones, the refreezing the viable cells. Id. Thus, while the natural phenomenon in that case was that “some fraction of hepatocytes are capable of surviving freeze-thaw cycles,” the inventors built upon that discovery by claiming useful methods of preparing and preserving these cells. Id. at 45. The majority reasoned that, like in CellzDirect, the inventors here used their discovery of a natural phenomenon to invent “a method of preparing a fraction of DNA that includes physical process steps to selectively remove some maternal DNA in blood to produce a mixture enriched in fetal DNA.” Illumina, No. 2019-1419 at 13.

The Dissent – The More Sophisticated Approach?

Judge Reyna’s dissent rejected any notion of a “buckets” approach of determining patentability Section 101. Instead, the dissent stressed that in answering the step one inquiry under Mayo/Alice of whether the claims are directed to a law of nature, the majority disregarded well-established precedent that requires the Court to examine whether the claimed advance of the invention “improve[d] upon a technological process or [was] merely an ineligible concept” based upon reviewing the claims and the written description. Id., Dissent at 6 (citing Athena Diagnostics, Inc. v. Mayo Collaborative Servs., LLC, 915 F.3d 743 (Fed. Cir. 2019) and Genetic Techs. Ltd. v. Merial L.L.C., 818 F.3d 1369 (Fed. Cir. 2016)). If the patent specification describes the natural phenomenon as the only “surprising” or “unexpected” aspect of the invention, then the claims are likely directed to that natural phenomenon under step one of Mayo/Alice, and the claims then have to be examined under the second inquiry (whether the limitations of the claims “transforms” the claims into patent eligible subject matter).

Judge Reyna determined that the specifications of the patents-in-suit clearly highlighted the natural phenomenon “that cff-DNA tends to be shorter than cell-free maternal DNA.” Illumina, No. 2019-1419, Dissent at 8. Judge Reyna also noted that the claimed advance of the claims, i.e., methods of preparing the mixture by separating and amplifying the cff-DNA, were all described in the specification as routine well-known techniques performed by “commercially available tools or kits.” Id. at 9. As a result, the dissent concluded that because the only surprising aspect of the invention is the natural phenomenon, the claimed advance is the natural phenomenon and the claims are directed to a law of nature.

Turning to step two of the Mayo/Alice inquiry which looks to see whether there are other elements in the claims which “transform” the otherwise ineligible claims into allowable subject matter, Judge Reyna looked at prior precedent and examined whether the additional elements of the method claims are “new and useful within the field generally, [and] not in the context of their particular application to the newly discovered phenomenon.” Id. at 13. (citing Roche Molecular Sys., Inc. v. Cepheid, 905 F.3d 1363, 1372 (Fed. Cir. 2018) and Athena, 915 F.3d at 754). Judge Reyna recognized that although the claimed size discrimination and selective removal method steps had never been applied to cff-DNA until claimed by the patents-in-suit, these process steps do not transform the claims into patent eligible subject matter because they “do not disclose any new and useful improvement to DNA separation techniques” “do not disclose an unconventional assay to the newly discovered natural phenomenon,” and instead merely “adapt commercially available DNA separation techniques to the natural phenomenon.” Id. at 13-14. As a result, because the claims failed the step two inquiry under Mayo/Alice, Judge Reyna concluded that the lower court’s decision of invalidity should be affirmed. Id. at 15.

Assessment – More Uncertainty Ahead

Judge Reyna’s dissent seemed to provide a more sophisticated approach in determining Section 101 patentability instead of just relying on the majority’s “buckets” approach. After all, under the step one inquiry under Mayo/Alice, the Court is supposed to decide whether the claims are “directed” to a natural phenomenon, and not claimed, as the majority appeared to do. That said, the dissent’s overreliance on determining the step one inquiry by examining the specification (and invariably the state of the art) seems to conflate steps one and two of the Mayo/Alice test. If step one requires the determination of whether the “claimed advance” is the natural phenomenon or just routine non-novel applications of the natural phenomenon, i.e., commercially available kits, then what else is left for the step two analysis of determining whether the limitations transform the otherwise ineligible subject matter into an allowable invention? It certainly appeared that once Judge Reyna determined in step one that the claimed advance was the natural phenomenon because the specification described only well-known techniques of extracting and size discriminating DNA, there was no way that the claimed invention could pass the step two inquiry, begging the question of whether a step two analysis was even necessary. Moreover, by interpreting the step one inquiry into one that examines the “claimed advance” over the art, the dissent appears to improperly inject a Section 102/103 novelty and/or obviousness component into the Section 101 analysis. In fact, the majority seemed to allude to this distinction between novelty and eligible subject matter when it stated that “[t]hough we make no comment on whether the claims at issue will pass muster under challenges based on any other portion of the patent statute, under § 101 the claimed methods are patent-eligible subject matter.” Illumina, No. 2019-1419 at 15. As the majority seemed to recognize, the claims of the patents-in-suit could very well be invalid on obviousness grounds, but that does not mean that they are ineligible under Section 101.

At the same time, the majority may have been influenced by policy or fairness considerations in preserving the validity of these claims. As noted, the Federal Circuit had previously invalidated on Section 101 grounds very similar patents by Illumina/ Sequenom directed to the separation of cff-DNA from maternal DNA in Ariosa, 788 F.3d at 1380. Those claims were largely drafted as diagnostic claims rather than the method of preparing claims of Illumina. As the Illumina decision noted, this discovery was groundbreaking to the life sciences community, stating:

In Ariosa, we recognized that the inventors had made a discovery with implications that would allow what had previously been discarded as medical waste to be used as a tool for determining fetal characteristics. 788 F.3d at 1373. We acknowledged the profound impact that the discovery had on the field of prenatal medicine, including that it “created an alternative for prenatal diagnosis of fetal DNA that avoids the risks of widely-used techniques that took samples from the fetus or placenta.” Id.

Illumina, No. 2019-1419 at 14. Perhaps the majority was somewhat swayed that given a second a chance to learn from their prior claiming mistake, the inventors should be allowed to have a patent eligible invention to such a “profound” diagnostic method by claiming it as a method of preparing biological samples.

Given the vigorous dissent, it was not surprising that patent challenger Ariosa/Roche filed on April 16, 2020 a petition for rehearing en banc to hear the case before the full panel. (Docket Entry No. 57) The next day, on April 17^th, the Court invited a response from the Appellants/patentee Illumina and Sequenom to be filed by May 1, 2020 (Docket Entry No. 58), and Appellants complied by filing their response, dated May 1, 2020. (Docket Entry No. 61). In view of the uncertainty surrounding the Section 101 debate, it appears that Ariosa/Roche’s petition will be granted for full panel review.

The Federal Circuit will likely have to grapple with the central issue of the first step of the Mayo/Alice test: how to determine whether claims are “directed” to a natural phenomenon? Does one take the formalistic “buckets” approach of the majority or a more flexible analysis that takes into consideration advances over the prior art, as the dissent appears to have done? One would think that the Supreme Court could resolve this issue since it originally formulated this test in Mayo and Alice. However, if recent practice by the Supreme Court is any indication, it appears that the high court is in no rush to revisit Section 101 patentability. The Supreme Court recently denied certiorari earlier this year in Athena Diagnostics, Inc. v. Mayo Collaborative Servs., LLC, 915 F.3d 743 (Fed. Cir. 2019) (which was cited extensively by the majority and the dissent in Illumina), even though the U.S. Solicitor General filed an amicus brief in another Section 101 case arguing that certiorari should be granted in Athena.[4] The Solicitor General’s brief also highlighted just how splintered the Federal Circuit’s approach has been in resolving Section 101 disputes in the life sciences area, especially since it took no less than 8 separate opinions in denying rehearing en banc in Athena, many of which implored the Supreme Court to provide more clarity to the Section 101 debate.[5] The Solicitor General stated:

The [Supreme] Court instead should provide additional guidance in a case where the current confusion has a material effect on the outcome of the Section 101 analysis. For example, Mayo has had particularly significant practical effects with respect to medical-diagnostic methods. See Athena Diagnostics, Inc. v. Mayo Collaborative Servs., LLC, 927 F.3d 1333, 1352-1353 (Fed. Cir. 2019) (Moore, J., dissenting from the denial of rehearing en banc) (“Since Mayo, we have held every single diagnostic claim in every case before us ineligible.”), petition for cert. pending, No. 19-430 (filed Oct. 1, 2019). In contrast to this case, where rehearing was denied without recorded dissent, the Federal Circuit’s recent order denying rehearing en banc in Athena was accompanied by multiple separate opinions articulating different understandings of Mayo and seeking clarification from this Court. See id. at 1337 (Hughes, J., concurring in the denial of rehearing en banc) (“welcom[ing] further explication of eligibility standards in the area of diagnostics patents”); id. at 1335 (Lourie, J., concurring in the denial of rehearing en banc); id. at 1339 (Dyk, J., concurring in the denial of rehearing en banc); id. at 1344-1348 (Chen, J., concurring in the denial of rehearing en banc); id. at 1352 (Moore, J., dissenting from the denial of rehearing en banc); id. at 1363-1368 (Newman, J., dissenting from the denial of rehearing en banc); id. at 1370-1371 (Stoll, J., dissenting from the denial of rehearing en banc); id. at 1371 (O’Malley, J., dissenting from the denial of rehearing en banc).

Those various opinions provide substantial grounds for inferring that, if the Federal Circuit were not bound by the current Section 101 framework, that court might have reached different outcomes in Athena itself and in other diagnostic-method cases. Whether in Athena or in another such case, further guidance from this Court is amply warranted. Id. at 22-23.

The subject matter eligibility debate has also been the subject of proposed Congressional legislation to reform Section 101. But it appears that this too has stalled because of lack of bipartisan agreement. As was reported earlier this year, Senator Thom Tillis, Chair of the Senate’s Subcommittee on Intellectual Property, stated that Congress could not complete drafting its bill addressing patent eligibility unless there was a “consensus driven approach” where “everyone will have to compromise.”[6]

The majority’s “buckets” approach of resolving Section 101 issues in life sciences cases in Illumina appeared to provide some clarity to patent practitioners by creating rigid boundaries of patent eligible claims (method of treatment claims and method of preparation claims) that separated them from ineligible claims (method of diagnosing or detecting claims). However, given the vigorous dissent and the Federal Circuit’s clear signals to the Supreme Court for more guidance, one should expect continued uncertainty until at least the Supreme Court or Congress further weighs into this matter.

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