**This article is a reprint of Robert G. Sterne’s weekly newsletter, dated February 13, 2019. Rob Sterne produces a private newsletter, distributed to an invited list of recipients. This article is reprinted by permission. For information about obtaining an invitation to Rob Sterne’s weekly newsletter, please email Bonnie Wertz with a request to be added to the list.**

A method of diagnosing neurological disorders invented by researchers at Oxford University and the Max-Planck Society was found patent ineligible by the Federal Circuit in the case Athena Diagnostics, Inc. v. Mayo Collaborative Services (2017-2508) on February 6. This is a troubling decision for innovators in medical diagnostics because it demonstrates in stark relief the impact of the Supreme Court’s 2012 diagnostic eligibility decision in Mayo Collaborative Services v. Prometheus Laboratories, Inc. and its 2014 two-step patent eligibility decision in Alice Corp. v. CLS Bank International.

The patent owners asserted U.S. Patent No. 7,267,820 in the US District Court in Massachusetts, one of the leading medical innovation centers in the U.S. At the beginning of the case, the defendant filed a motion to have the case dismissed for failure to state a claim. The invention focused on diagnosing myasthenia gravis (“MG”), a neurological disorder where patients experience muscle weakness and symptoms including drooping eyelids, double vision, and slurred speech. The court determined that the claims focused on the interaction of 125Ilabeled MuSK with MuSK autoantibodies in bodily fluid, an interaction which occurs naturally. Applying the Mayo and Alice tests, the court concluded that the claims were directed to a law of nature and that the recited diagnostic steps involved only standard techniques in the art. As such, the claims were found to be patent ineligible – despite the importance of the discovery and its medical significance – and the court dismissed the case.

A panel of Judges Newman, Lourie, and Stoll heard arguments at the Federal Circuit. Each was an expert patent attorney before being elevated to the bench, so the patent owners could not have had a more sympathetic panel. It is worth listening to the October 4, 2018 Federal Circuit oral argument to get a full appreciation of the judges’ concerns about the patent eligibility issue before them.

Judge Lourie: So how does one protect the discovery of the relationship between the MuSK antibody complex and the disease other than with a Nobel Prize?

Counsel for Mayo: The relationship your Honor is not protectable. That’s the answer. If they want to have a claim to their special method of iodination they are free to try to get one, and if there is something special about iodinating or something special that requires human intervention in doing this test they can go get a claim to that and try to articulate it. But what the law prevents, as it currently stands, is a claim that is directed to a natural law that uses conventional steps to elucidate or observe, if you will, that natural law. That is what this claim absolutely does.

(Link to Download Oral Recording: Excerpt from 19:04 to 19:58)

Clearly U.S. patent law does not reward enforceable patents only to those inventions receiving a Nobel Prize. Judge Newman follows Judge Lourie’s question with ones involving the public policy of encouraging investment in diagnostic methods through patent protection.

The panel split 2:1 with Judges Lourie and Stoll finding the claims patent ineligible and Judge Newman writing a strong dissent in favor of patent eligibility. This decision extends the Federal Circuit diagnostic invention holdings of ineligibility of Ariosa Diagnostics, Inc. v. Sequenom, Inc. and Cleveland Clinic Found. V. True Health Diagnostics LLC.

There was significant amicus interest in this case. Some of the Federal Circuit judges seem frustrated with this harsh treatment of diagnostic innovation, but the court appears hamstrung and powerless to do anything differently because of the recent Supreme Court decisions. The biotech industry is particularly harmed and biotech interests may seek legislation from the U.S. Congress to change the law. But there are powerful economic interests that want to preserve this new legal regime who undoubtedly will lobby extensively against such legislation.

The U.S. appears to be more restrictive than other industrial market concerning patent eligibility for medical diagnostics. Based on anecdotal evidence, this has already resulted in lack of investment in the U.S. for some very promising technology. Moreover, investment is clearly moving to those jurisdictions where there is better patent eligibility protection. This does not bode well for the U.S. medical innovation community, which includes some of the most prominent academic institutions and teaching hospitals in the world. With declining U.S. investment in basic research, this undoubtedly will result in less U.S. innovation.

From a patent protection point of view, patent drafters must be vigilant in tracking this developing law to optimize the chances of success on the patent eligibility issue. The ’820 patent was drafted prior to the Mayo decision and statements made in the patent specification later undermined patent eligibility. The claims were broad and care should be taken to avoid broader scope than is necessary for infringement protection. The use of declarations during patent prosecution should be considered. And the court complaint should include support for patent eligibility. All of this is good lawyering under the present circumstances, but in the long run something needs to be done to encourage U.S. investment in this critical technology for the future of mankind.

My partners Pauline M. Pelletier and Jeremiah B. Frueauf have published an excellent client alert on this case that warrants your attention. As always, all errors in this newsletter are mine alone.

Best regards, Rob Sterne

This e-newsletter is for educational purposes only and does not constitute legal advice. The views expressed are those of the author(s) and do not necessarily reflect those of Sterne Kessler Goldstein & Fox PLLC or any other organization or individual.

This article appeared in the February 2019 issue of PTAB Strategies and Insights. To view our past issues, as well as other firm newsletters, please click here.