Another district court (actually, a magistrate judge) has succumbed to the siren song, or drank the Kool-Aid, or (fill in your favorite Apocalyptic metaphor here) of applying the Supreme Court's Mayo v. Prometheus decision in ways not required by the decision, that produce an entirely subjective standard for patent eligibility, and that are arguably contrary to how the Court itself explained its earlier decision in the CLS Bank v. Alice case, in Genetic Technologies Ltd. v. Laboratory Corp. of America Holdings.

The case concerned U.S. Patent No. 7,615,342, wherein Genetic Technologies asserted claim 1:

1.  A method to predict potential sprinting, strength, or power performance in a human comprising:
    a)  analyzing a sample obtained from the human for the presence of one or more genetic variations in α-actinin-3 (ACTN3) gene;
    b)  detecting the presence of two 577R alleles at the loci encoding amino acid number 577 of the α-actinin-3 (ACTN3) protein; and
    c)  predicting the potential sprinting, strength, or power performance of the human, wherein the presence of two copies of the 577R allele is positively associated with potential sprinting, strength, or power performance.

Defendants include LabCorp Holdings, LabCorp America, and 23andMe, and the Magistrate Judge Christopher J. Burke rendered his decision on a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), alleging failure to state a claim because the '342 patent claims were invalid as claiming patent ineligible subject matter.  Within days of the Magistrate Judge's Report and Recommendation, the parties filed a joint stipulation of dismissal with prejudice.

The Magistrate Judge's Report and Recommendation contains an interesting procedural background, wherein Chief Judge Leonard P. Stark referred the case to the Magistrate for pretrial matters "including the resolution of case-dispositive motions."  Instead of filing an Answer to the complaint, the defendants submitted their motion, which was followed by ten "supplemental letters . . . appris[ing] the Court of recent opinions -- including a number of important decisions by the Supreme Court -- that might impact review of the Section 101-related issues" before the Court.  This authority included Uniloc USA Inc. v. Rackspace Hosting Inc. (E.D. Tex. Mar. 27, 2013) (directed, according to defendants, to "a method for processing certain types of numbers in a computer"); Ultramercial Inc. v. Hulu LLC (Fed. Cir. June 21, 2013) (related, according to plaintiff, to "methods for distributing copyrighted materials over the Internet where the end user would receive the copyrighted product for free after viewing an advertisement"); Association for Molecular Pathology v. Myriad Genetics (2013) (which defendants asserted "bears more closely on [the] motion than does Ultramercial" and is related to the question of patent eligibility of natural phenomena, which the Court set forth the "contours of the doctrine" in Mayo); Ubicom, LLC v. Zappos IP Inc. (D. Del. Nov. 13, 2013) (which defendants assert "demonstrates that even after Ultramercial [], it is permissible to grant motions to dismiss on patentable subject matter in appropriate cases"); Cyberfone Systems, LLC v. CNN Interactive Group (Fed. Cir. Feb. 26, 2014) (wherein defendants assert that there is no requirement for claim construction before deciding subject matter eligibility); Alice Corp. v. CLS Bank Int'l (2014) (a case defendants assert "is central to the resolution of [the] motion") and plaintiff's response; defendant's notice of the Supreme Court's decision to vacate the Federal Circuit's Ultramercial decision and plaintiff's response and defendants' reply, a total of ten citations of authority from March 25, 2013 through July 7, 2014.

Arriving at the merits, the Magistrate Judge sets out what he characterized as "the general framework for Section 101 analyses," and then applied it to the facts and allegations in Genetic Technologies' complaint.  This analysis encompasses the familiar litany that Congress intended the scope of patent eligibility to be broad, but that this breadth was circumscribed by the Supreme Court's "exceptions" related to natural laws, abstract ideas, and natural phenomenon.  The Magistrate Judge also notes that the Supreme Court has recognized that too broad an application of these judicial exceptions would "eviscerate" patent law because "all inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena or abstract ideas," citing Mayo.

The Magistrate Judge then cited the Federal Circuit, Accenture Global Servs., GmbH v. Guidewire Software, Inc. (Fed. Cir. 2013), and District of Delaware precedent, Comcast IP Holdings L LLC v. Sprint Commc'ns Co. L.P. (D. Del. July 16, 2014), for the appropriate test.  The two-prong test used by the Magistrate Judge is first, to identify whether the invention recited by the claims "fits within one of the four statutory classes."  Second, the court must determine whether, despite satisfying the first prong the claims recite subject matter falling within the scope of one of the judicial exceptions.  The Magistrate Judge then cites portions of the Supreme Court's decision in CLS Bank v. Alice directed towards "the search for an inventive concept."

The Report and Recommendation begins by holding that the motion was not premature.  In doing so, the Magistrate faults plaintiffs for not "articulat[ing] why there are any disputed areas of fact relevant to the resolution of the Motion" (emphasis in report).  The Magistrate also cites the Federal Circuit's CyberFone and Bancorp decisions, and Judge Mayer's concurring opinion in I/P Engine Inc. v. AOL Inc. (Fed. Cir. Aug. 15, 2014) for the proposition that claim construction is not always necessary for a § 101 patent eligibility determination.  In a footnote, the Magistrate also noted that the Supreme Court has held that the "clear and convincing evidence" standard "does not apply to pure questions of law," citing Microsoft Corp. v. i4i Ltd Partnership (2011).  In those cases where a plaintiff asserts a need for claim construction, the Magistrate states that the matter can be resolved simply by adopting plaintiff's claim construction, citing UbiComm and Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat'/ Assoc. (D.N.J. July 31, 2013).  In addition, the Magistrate notes that the only claim term at issue was "predicting," and the Judge adopted Genetic Technologies' construction for this term.

The Magistrate then sets forth the basis for his decision that claim 1 does not satisfy the patent eligibility standard of § 101, relying on Myriad, Mayo and Perkin Elmer, Inc. v. Intema Ltd. (Fed. Cir. 2012), and setting forth his understanding of these decisions.  While entirely conventional, the Magistrate's analysis focused on the preemptive effects of the claims in Mayo and Perkin Elmer and the risk of "tying up future innovation premised on laws of nature," characterizing the Mayo claims as being of "sweeping nature" and the Perkin Elmer claims as encompassing any known measuring method.  From this assessment it was a short step to including in the definition of "known methods" those that are "routine, conventional and well-understood."

The Magistrate then concluded that claim 1 of the '342 patent "contains" a law of nature, based on the "broad manner" that the Mayo Court defined a law of nature ("[A] patent that ... describes [a relationship that is the consequence of entirely natural processes] sets forth a natural law").  The "correlation" between athletic performance and inheritance of particular alleles of genes encoding α-actinin-3 is "the handiwork of nature," according to the Magistrate, something that "man did not do anything to bring about this relationship."  The Magistrate then concluded that the claim did not "amount[] to a patent-eligible application of" that natural law.  In answering in the negative, the Magistrate applied the now-common practice of assessing the nature of each of the steps of the claim individually, which it identified as an "analyzing" step, a "detecting" step, and a "predicting" step.  Because the "analyzing step does not recite a novel analyzing method this step does not provide the needed "something more," with the Court citing (out of context) Justice Thomas's statement that "[had] Myriad created an innovative method of manipulating genes while searching for the BRCA1 and BRCA2 genes, it could possibly have sought a method patent" (inapposite here because the question before the Magistrate was not the question before the Supreme Court in Myriad).  The Magistrate also cites the District Court's decision in Ariosa v. Sequenom that arrived at a similar (erroneous) conclusion.  As in the Ariosa case, the Magistrate cites patentee's own specification for the breadth of analytical methods that can be employed in this step.

The Magistrate applies this same reasoning to the detecting step, using patentee's statements in the specification to support its conclusion.  And the "predicting" step suffers from the same fate as the "wherein" causes in the claims at issue in Mayo, as being merely an "instruction [to] apply the [natural] law" or, alternatively, "insignificant post-solution activity" (rendering the actual invention, the ability to predict a phenotype from a detectable phenotype, into insignificance).  In this regard the Report also cites the distinctions set forth by the Federal Circuit in the two claim types suffering different invalidating fates in Classen Immunotherapies, Inc. v. Biogen IDEC, wherein claims to "reviewing effects of known immunization schedules" was not patent eligible, but that claims that "required the 'further act of immunization'" "moved the claim from 'abstract scientific principle to specific application.'"

Having disassembled the claim and analyzed its component recited limitations individually, it is not surprising that the Magistrate could not discern subject matter eligibility in the claims considered "as a whole," because inter alia the claim did not "recite an application that amounts to significantly more than a patent upon the natural law itself,'" citing Mayo and Ariosa.  Finally, as in Mayo the Magistrate concludes that the general nature of the claim language raises the possibility that the claims could "inhibit the development of new processes that make use in some way of the claimed method for analyzing and detecting the particular genetic variation" and stifle future innovation.

The case presents two troublesome trends.  First, patentees are now at risk of not even getting their day in court, and not getting the statutory presumption of validity, because courts are empowered by decisions such as these to render decisions without claim construction, or production of clear and convincing evidence of patent ineligibility.  The second trend is for courts to require novel methods for obtaining, analyzing, or detecting evidence of anything that can be cast as a natural law, over-interpreting Justice Breyer's proscription against what is routine, conventional or well-understood.   Extended to its logical conclusion assessing the patent eligibility of any diagnostic method claim as the Magistrate Judge does in this case, or the District Court judge did in Ariosa (or, arguably, how the Federal Circuit panel did in the Perkin Elmer case) will preclude patent eligibility for all such claims.  It is possible that the Supreme Court intended this result.  But considering the damaging effects this would have on future innovation, and the disruption of settled expectations that the Court itself has warned should be avoided, it seems only prudent for the lower courts (and the PTO) to give the Court the prerogative of saying so itself.