On Questionable Legal Basis, US Court Expands Range Of Patentable Inventions

For more than a decade, the United States has been making it harder to obtain patents. A series of court rulings have steadily restricted the types of inventions that are patent-eligible. The tide, however, may be now turning. The Federal Circuit’s recent decision in Vanda Pharmaceuticals v. West-Ward Pharmaceuticals has opened the way to many future patents on biotech and personalized medicine. The ruling is a big step forward for the biotech and medical industries, and perhaps for patients seeking better medical care. But there’s a catch. Vanda could be overturned because it conflicts with the US Supreme Court’s 2012 decision in Mayo Collaborative Services v. Prometheus Laboratories.

The similarities between Vanda [pdf] and Mayo [pdf] are striking. Both cases concern the patentability of a medical treatment. In both cases, the claimed method adjusts the amount of medication to be administered based on how quickly the patient’s body metabolizes the drug (i.e., breaks down the drug into different chemicals, known as metabolites). The inventions are “almost identical,” said Prof. Christopher Holman of University of Missouri-Kansas City Law School.

That’s troublesome because the invention in Vanda was held to be patent-eligible, while the invention in Mayo was not.

A Notional Difference

In Mayo, the claimed method was this: administer a diagnostic test (to determine how quickly a patient metabolizes the drug) and if the metabolization rate was unusually high or low, this “indicates a need” to adjust the drug dosage. This basically claimed a law of nature, the Supreme Court ruled unanimously. Prometheus sought a patent monopoly over the naturally occurring correlation between the amount of drug metabolites and the likelihood that the metabolized drug dosage was too low (thus ineffective) or too high (creating harmful side effects). Because laws of nature are unpatentable, the high court ruled this method of treatment was not eligible for a patent.

This ruling suggests that the method at issue in Vanda – using a patient’s metabolization rate to adjust drug dosage – is not patent eligible. But there’s a tiny difference between the method in Mayo and the one in Vanda. “In Vanda, the claimed method explicitly adjusts the dosage, instead of merely indicating the desirability of adjusting the dosage,” said Holman.

That may not seem like much of a difference. The method is still essentially claiming a naturally occurring correlation, like the one found patent-ineligible in Mayo. Based on this reasoning, one Federal Circuit judge found the invention in Vanda to be unpatentable.

The other two judges on the Federal Circuit panel saw things differently. They found that the invention in Mayo was a diagnostic method, while the invention in Vanda was a method of treatment. “In Mayo, someone did a diagnostic test and became aware of the desirability of adjusting the drug dosage. In Vanda, the method explicitly adjusted the dosage,” said Holman.

Bad Law, Good Policy?

Experts have some doubts about the Vanda court’s attempt to distinguish Mayo. “If you read Mayo literally, there should be a good argument that the claims in Vanda are patent-ineligible,” said Holman.

It is unclear, however, whether Mayo should be read literally. “Mayo is a very amorphous, very fuzzy decision,” said Holman. “It gives a lot of latitude for courts to interpret it narrowly or broadly. So I think both the majority opinion in Vanda and the dissent can be supported by Mayo.”

Although Vanda’s legal analysis is debatable, the ruling is fine public policy, according to most experts. “It is a good attempt by the Federal Circuit to balance the Supreme Court’s guidance with the needs of the life-science industry,” said Ewa Davison, a partner in the Fenwick & West law firm.

That industry needs patents on its inventions in order to make innovation financially worthwhile, many experts claim. “Patents are essential for the pharmaceutical and biotech industries, because research and development costs are so great,” said Prof. Timothy R. Holbrook of Emory University School of Law.

But in the wake of Mayo, companies in the life-science sector have struggled to patent many of their inventions. “The medical diagnostic industry has been hit very hard by Mayo,” said Holbrook.

Vanda thus offers relief to innovative pharmaceutical and biotech firms, by providing a way around Mayo. “This [case] will show people how to write their [patent application] claims,” said Prof. Arti Rai of Duke Law School. Davison concurs, stating that when drafting a patent application for a medical treatment, “you need to focus the claims on treating a specific medical condition. That is the biggest take-away from Vanda.”

“For patentees and the patent system, the decision is good,” concluded Holbrook.

For patients, the decision is something of a mixed bag. In the short term, they will be paying more for certain medical treatments. But eventually, patients may benefit from better medical care. “In the long term, Vanda will encourage the development of more medical treatments, which wouldn’t happen otherwise,” said Holbrook.

The Last Word

Vanda could yet be overturned. It appears as if West-Ward will be asking the full Federal Circuit to review the decision, according to Davison. Such a request has a good chance of being granted. “Given the narrow distinction between Mayo and Vanda, and Chief Judge Prost’s strong dissent [in Vanda], this is one the full court may opt to rehear,” said Davison.

If the full Federal Circuit hears the case, the court is unlikely to provide a clear, definitive ruling. “There will be a divided decision if Vanda is heard en banc,” said Rai. “We may have another situation like CLS Bank v. Alice [pdf], resulting in a fractured court [with multiple opinions].”

Such a fractured ruling “would increase the likelihood” that the Supreme Court would review the opinion, said Holbrook. The last word on Vanda, therefore, could be years away.

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