Federal Circuit Decides You Can Patent Those Gains – Dietary Supplements Are Subject Matter Eligible

On March 15, 2019, the Court of Appeals for the Federal Circuit (CAFC) heard an appeal in the matter of Natural Alternatives International, Inc. v. Creative Compounds, LLC regarding the subject matter eligibility of dietary supplements.  At issue in the case were six patents related to the CarnoSyn® beta-alanine athletic performance supplement.

In reversing the lower court’s ruling, the CAFC found that each of the six patents contained patent eligible subject matter under 35 U.S.C. § 101.   In fact, the court found that the patents directed at the beta-alanine product, method of manufacturing the beta-alanine product, and method of using the beta-alanine product for treatment (i.e., improving athletic performance), were are all subject matter eligible, and therefore patentable.

With regards to the patents on the beta-alanine product, the Court noted that, “A claim to a manufacture or composition of matter made from a natural product is not directed to the natural product where it has different characteristics and ‘the potential for significant utility.’”  In the present case, the court found that the combination of a specific form of beta-alanine and glycine, and that the specific dosages of beta-alanine may increase athletic performance in a way that naturally occurring beta-alanine may not.

With respect to the patents on the method of administering beta-alanine, the Court likened the claims to those at issue in Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals International Ltd, noting that, “Claims that are directed to particular methods of treatment are patent eligible[i].”  Here, the claims in the method patents are directed to administering beta-alanine to a human subject in order to overcome homeostasis and increase creatine production, resulting in physiological benefits to the subject.  The Court, in no unclear terms noted, “These are treatment claims, and as such they are patent eligible.[ii]

Finally, with regards to the manufacturing claims, the Court also found that subject matter eligibility under 35 U.S.C. § 101 was met by the fact that the claims were “[D]irected to the manufacture of a human dietary supplement with certain characteristics,[iii]” and that, “The supplement is not a product of nature and the use of the supplement to achieve a given result is not directed to a law of nature.[iv]

It is clear from the Court’s analysis that it is important to take certain precautions when drafting the specification and claims of patents directed to these dietary supplements and related products.  Here, the Court appeared to rely heavily on interpretations pulled from the specification of the patents at issue in order determine the claims were subject matter eligible.  For instance, the court looked to the specification of the patents to find the significance of dosing ranges, how they were calculated based on bodyweight, and how those dosing ranges were required to effectively increase athletic performance.   Applicants would be wise not to submit skimpy disclosures with a bare minimum of detail, as it could mean the difference between validity and invalidity of a patent.

Ultimately, the Court’s findings in the matter provide welcome guidance on the ever-challenging issue of subject matter eligibility under U.S.C. § 101.  The ruling gives clarity on the ability of sports nutrition companies to secure the lucrative rights in their proprietary performance enhancing dietary supplements; the dietary supplement market being valued at $152 billion (USD) as of 2018, and expected to grow to $220 billion (USD) by 2022[v].

 

 

[i] Natural Alternatives International, Inc. v. Creative Compounds, LLC

[ii] Id.

[iii] Id.

[iv] Id.

[v] https://www.statista.com/statistics/828514/total-dietary-supplements-market-size-globally/

Federal Circuit Ruling Cast Shadow Over USPTO Subject Matter Eligibility Guidance

In January of 2019, the United States Patent and Trademark Office (USPTO) issued revised guidance relevant to 35 U.S.C. § 101 (Subject Matter Eligibility) rejections. Entitled, 2019 Revised Patent Subject Matter Eligibility Guidance, the document added a new pathway for patent eligibility, whereby a claim that includes a judicial exception is still subject matter eligible under 35. U.S.C. § 101, if the judicial exception, such as an abstract idea, is “integrated into a practical application” of the judicial exception.

A large portion of the legal community felt that the guidance would cut the number of rejections under 35 U.S.C. § 101.  The guidance provided much needed clarity on how to present claims in an application to avoid such rejections, which had become commonplace in several art units at the USPTO.

This updated guidance has been largely welcomed by the legal community.  In fact, in its comments to the USPTO on the matter, the American Bar Association stated, “[T]he guidelines are a significant improvement in the examination of patent eligibility by providing a greater degree of certainty and increased predictability in subject matter eligibility determinations at the USPTO.[i]”  However, with quite a bit of foreshadowing, the American Bar Association’s letter noted, “We understand that these Guidelines, however, do not constitute substantive rulemaking and thus do not ‘have the force and effect of law.’”

Fast forward to April 1, 2019, the Federal Circuit found two patents owned by Cleveland Clinic invalid for being directed to ineligible subject matter.  The patents in question were related to testing for cardiovascular disease, and in the opinion of the court, “invalid under 35 U.S.C. § 101 as directed to an ineligible natural law.[ii]

Cleveland Clinic had argued that the courts “failed to give the appropriate deference to subject matter eligibility guidelines published by the PTO.”  Relying on Skidmore v. Swift & Co., 323 U.S. 134 (1944), Cleveland Clinic argued that, “Skidmore ‘requires courts to give some deference to informal agency interpretations of ambiguous statutory dictates, with the degree of deference depending on the circumstances.’[iii]”.

However, the Federal Circuit noted, “While we greatly respect the PTO’s expertise on all matters relating to patentability, including patent eligibility, we are not bound by its guidance. And, especially regarding the issue of patent eligibility and the efforts of the courts to determine the distinction between claims directed to natural laws and those directed to patent-eligible applications of those laws, we are mindful of the need for consistent application of our case law.”

So while the USPTO appears to be loosening the reigns on subject matter eligibility, the Federal Circuit does not appear to be following suit.  And while the Cleveland Clinic v. True Health case did not specifically address the 2019 Revised Patent Subject Matter Eligibility Guidance, the courts opinion clearly noted that the USPTO’s guidance was not the ultimate arbiter on subject matter eligibility.

Ultimately, from a prosecution perspective, it may be wise to not solely rely on the broader interpretations of subject matter eligibility provided under the latest USPTO guidance, and include at least some claims that would survive more rigorous scrutiny under the tests outlined and applied by the Federal Circuit and the Supreme Court of the United States.

 

[i] https://www.uspto.gov/sites/default/files/documents/eligibility2019comments_a_abaipl_2019mar07.pdf

[ii] http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/18-1218.Opinion.4-1-2019.pdf

[iii] See, Stephenson v. Office of Pers. Mgmt., 705 F.3d 1323, 1330) (Fed Cir. 2013)

New Guidance from the USPTO – a Boon for Patent Applicants

On January 4, 2019, the USPTO announced the issuance of revised guidance relevant to 35 U.S.C. § 101 (Subject Matter Eligibility) rejections. Entitled, 2019 Revised Patent Subject Matter Eligibility Guidance, the document adds a new pathway for patent eligibility, whereby a claim that includes a judicial exception is still subject matter eligible under 35. U.S.C. § 101, if the judicial exception is “integrated into a practical application” of the judicial exception. The guidance was incorporated into the Federal Register on January 7, 2019, and applies to all USPTO personnel, which includes the examiners that review applications for 35 U.S.C. § 101 concerns, and the administrative judges that oversee appeals and disputes on these issues.

Of considerable note, the new procedure, referred to in the guidance and Federal Register as “revised Step 2A,” changes how Step 2A of the Alice/Mayo test is applied.

The old Step 2A asked whether a claim is directed to a judicial exception.   There are three enumerated judicial exceptions: 1) laws of nature; 2) natural phenomena; and 3) abstract ideas. If a claim had no judicial exception, it was patent eligible subject matter.  If a claim did have a judicial exception, the analysis would then move to Step 2B for further review.

The revised Step 2A still looks to see if there is a judicial exception in a claim, and if there is no judicial exception, the claim is considered directed to patent eligible subject matter.  However, the revised Step 2A differs in that if a judicial exception is identified, the claim is still directed to patent eligible subject matter if the judicial exception is “integrated into a practical application” of the judicial exception. For example, if a patent application with claims directed to a software method which incorporated an abstract idea, so long as that abstract idea is integrated into a practical application of that abstract idea, the claim is directed to patent eligible subject matter and may still be entitled to patenting.

 

The Guidance in Action at the Patent Trial and Appeal Board

Now that a little over a month has passed since the new guidance has gone into effect, we are starting to see some opinions from the Patent Trial and Appeal Board (PTAB).  While the PTAB has still issued a greater number of affirmed 101 rejections than reversals since the new guidance, the opinions have been positive with respect to those reversals.

One very telling reversal came on application 14/282,015, for claims directed to a software-based system for vehicles that allows users to provide consent for installing optional software updates that add a feature to a vehicle module or adjust a configuration of an existing feature, and, in lack of receipt of such consent, displaying an icon in a gauge cluster in the vehicle.  The examiner had initially rejected the claims under 101 as directed to: i) the abstract idea of updating software; and ii) organizing human activity (i.e., receiving consent to take an action).

The PTAB reversed, noting that there was a “specific practical application” of the abstract ideas in the claims.   The PTAB found that the claims were “directed to a practical application of updating software specifically for a vehicle module, in which user consent is required and in which lack of receipt of user consent is communicated to a user via an icon within the gauge cluster of a vehicle.  The opinion also noted that the claims were “directed to providing in a head unit display of the vehicle an indication of an optional status of the software update and a request for consent to install the optional update and upon receipt of user consent sends an update command over the vehicle bus and installs the update to a memory of the vehicle module.”

Notably, here we have an opinion from the PTAB identifying a quite low bar for application of the “practical application” standard.  In this case, the “practical application” seems to be not much more than having a prompt for approval that you would see on any software update (e.g., “accept the new Terms of Service”) and then displaying an icon on a display when there is an update still pending approval.

The second opinion we find interesting is one involving US Patent Application No. 12/374,372, and the following claim in particular:

A method of surfing the Internet comprising: a. selecting information on a web page; b. clicking on the information as it resides on the web page; and c. in response to the clicking, conducting a web search on the information.

The PTAB’s opinion in this case is less telling on the what constitutes “practical application” standard, as the opinion does not make such an analysis, and merely focuses on the examiner’s failing to adequately assert a valid analysis of the claim as an abstract idea unto itself.  Rather, the opinion simply notes that:

[T]he Examiner’s factual findings regarding the underlying abstract idea to overgeneralize the claimed invention under the patent eligibility guidelines at the time of the rejection in the Final Action and Examiner’s Answer and this same overgeneralized abstract idea similarly does not meet the Examiner’s requisite burden for analysis under the 2019 Revised Patent Subject Matter Eligibility Guidance.

 Given the simplicity and breadth of the claim, it is likely good news for applicants with inventions in the software space that the PTAB is not outright viewing broad claims as inherently abstract under the new guidance.  The opinion does note other likely issues with the application, but it is in the context of the PTAB’s views on 101 with which we are concerned.

Conclusion

It has only been a month since the USPTO issued the latest in subject matter eligibility guidance, and our initial impressions of how the PTAB is using the new guidance is positive and optimistic.  Even though a greater percentage of opinions citing the 2019 Revised Patent Subject Matter Eligibility Guidance affirmed the 101 findings of the examiner, the limited numbers are not truly representative of what we expect to see over the long run.  Further, a closer look at those affirmed 101 findings leads us to believe that the cases were destined to be maintained, regardless of the updated guidance.

Most notably for us is that the current interpretation of what constitutes when claimed subject matter is “integrated into a practical application” of the judicial exception seems to be initially very favorable for applicants, particularly for those with inventions in the software space.