Smartgene, Inc. v. Advanced Biological Laboratories, Sa

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
SMARTGENE, INC.,
Plaintiff,
v.
Civil Action No. 08-00642 (BAH)
ADVANCED BIOLOGICAL Judge Beryl A. Howell
LABORATORIES, SA, et al.,
Defendants.
MEMORANDUM OPINION
Plaintiff SmartGene, Inc., a North Carolina corporation, brought this lawsuit against
Defendant Advanced Biological Laboratories, SA, a company with its principal place of business
in Luxembourg, seeking declaratory judgment as to the invalidity, unenforceability, and
SmartGene’s non-infringement of U.S. Patent No. 6,081,786 (the “786 patent”) and U.S. Patent
No. 6,188,988 B1 (the “988 patent”) (collectively, the “patents-in-dispute”). After prolonged
litigation, including a stay of proceedings of two and a half years, SmartGene filed a Motion for
Partial Summary Judgment, contending that the “patents-in-dispute” are facially invalid under 35
U.S.C. § 101 of the Patent Act because the subject matter is ineligible for patent protection. 1
Defendants, Advanced Biological Laboratories, SA (“ABL SA”) and ABL Patent Licensing
1
SmartGene stated at the March 9, 2012 Motions Hearing that the Motion was framed as a Motion for “Partial”
Summary Judgment because the Motion deals only with the validity of the patents-in-dispute and does not address
all disputed claims. See Motions Hearing Transcript (“Tr”) (Rough), Mar. 9, 2012, at 9:30, 42:23-43:1; 43:6-12
(The parties have not requested formal transcripts from the court reporter. Accordingly, the Court’s citations to
transcripts are from the court reporter’s rough draft of the proceedings.). No matter the styling of the pending
Motion as a “partial” Motion for Summary Judgment, grant of this Motion is dispositive in this matter since the
validity of the patents-in-dispute is the sine qua non for all the claims and counterclaims.
1
Technologies, SARL (“ABL PLT”) (collectively “ABL”) 2, oppose the Motion for Partial
Summary Judgment, arguing that the patents-in-dispute constitute eligible subject matter under
35 U.S.C. § 101. For the reasons explained below, SmartGene’s Motion for Partial Summary
Judgment is granted and this case is dismissed.
I. FACTUAL AND PROCEDURAL BACKGROUND
A. The Patents
The patents at stake in this dispute are Patent Nos. 6,081,786 (the “786 patent”) and
6,188,988 B1 (the “988 patent”), of which the defendants are the undisputed owners. Compl. ¶¶
7-8. 3 The ‘786 patent application was filed with the United States Patent and Trademark Office
(“PTO”) on April 1, 1999, and the patent issued on June 27, 2000. See LCvR 7(h) Statement of
Material Facts in Support of Pl.’s Mot. for Partial Summ. J. at ¶ 4. The application for the ‘988
patent, considered a “continuation” of the application for the ‘786 patent, was filed on March 10,
2000, and the patent issued on February 13, 2001. Id. at ¶ 6.
Both patents are entitled “Systems, Methods and Computer Program Products for
Guiding the Selection of Therapeutic Treatment Regimens,” and relate “to a system, method, and
computer program for guiding the selection of therapeutic treatment regimens for complex
disorders . . . by ranking available treatment regimens and providing advisory information.”
Defs.’ Mem. in Opp. to Mot. for Partial Summ. J. (“Defs.’ Mem.”), ECF No. 50, at 1-2. Both
patents-in-dispute are based on the same patent specifications and disclosures, and relate to
methods (i.e., process) and systems for an interactive, computerized program for guiding the
2
On November 23, 2011, the Court directed that ABL PLT be joined as a defendant in this case pursuant to Federal
Rule of Civil Procedure 25(c). See Order, ECF No. 43. The Court directed that the party be joined in order to
facilitate conduct of the case, because ABL PLT appears to have received rights originally belonging to ABL SA,
not because there are distinct, substantive claims against ABL PLT. See Minute Order (Jan. 3, 2012).
3
The operative complaint, and the one cited throughout this Opinion, is the First Amended Complaint filed on May
20, 2008. See ECF No. 4.
2
selection of therapeutic treatment regimens for a patient based on input provided by a physician.
See Pl.’s Mem. in Support of Mot. for Partial Summ. J. (“Pl.’s Mem.”), ECF No. 47, at 3; Defs.’
Mem. at 1-2. The defendants sum up their invention as follows: “Element (a) specifies that the
physician provide patient information to the computing device which includes prior therapeutic
treatment regimen information. This information is then processed against a first knowledge
base that contains different treatment regimens and a second knowledge base of expert rules.
The computing device then generates available treatments along with advisory information for
those treatments. By providing the patient information to the system and allowing interaction
with the physician, the Patents describe how therapeutic treatment regimens can be listed with
corresponding advisory information.” Defs.’ Mem. at 11.
The Court’s analysis focuses on the patentability of Claim 1 of the ‘786 patent. The
language for Claim 1 in both the ‘786 and ‘988 patent is nearly identical. SmartGene asserts that
the differences between Claim 1 in the ‘786 patent and ‘988 patent are insignificant, and that
these first claims are representative of all of the claims of the patents-in-dispute. Pl.’s Mem. at 8
n.3. The defendants failed to contest this characterization in their brief. 4 The Court concludes
that the differences between the various method and system claims within the patents-in-dispute
are immaterial with respect to whether the patents constitute eligible subject matter under 35
U.S.C. § 101. Accordingly, the pending Motion turns on whether Claim 1 of the ‘786 patent
4
Although not raised in their brief, the defendants erroneously asserted at the Motions Hearing that the “method”
and “system” claims at issue require a different standard of review for subject matter patentability. Tr. 29:6-30:17.
Here, Claim 1 in both the ‘786 and ‘988 patents is a method claim, while Claim 23 in both the ‘786 patent and ‘988
patent is a system claim. See Pl.’s Mem. at 11 nn. 5-6. Specifically, the defendants argued that “for a system claim,
there is a little bit different analysis because claiming an actual system . . . makes it even less abstract because it’s
not just a method . . . [I]t is even more intimately connected to the computer, as it is the system.” Tr. 30:4-15. The
defendants fail to cite any authority that supports their assertion, and ignore authority to the contrary. See, e.g., In re
Meyer, 688 F.2d 789, 795 n.3 (C.C.P.A. 1982) (“for purposes of section 101, [claims reciting “means for”
performing the steps set forth in the method claims] are not treated differently from method claims”).
3
constitutes eligible subject matter under 35 U.S.C. § 101 of the Patent Act. Claim 1 of the ‘786
patent is directed to:
1. A method for guiding the selection of a therapeutic treatment
regimen for a patient with a known disease or medical
condition, said method comprising:
(a) providing patient information to a computing device
comprising:
a first knowledge base comprising a plurality of different
therapeutic treatment regimens for said disease or medical
condition;
a second knowledge base comprising a plurality of expert
rules for evaluating and selecting a therapeutic treatment
regimen for said disease or medical condition;
a third knowledge base comprising advisory information
useful for the treatment of a patient with different
constituents of said different therapeutic treatment
regimens; and
(b) generating in said computing device a ranked listing of
available therapeutic treatment regimens for said patient;
and
(c) generating in said computing device advisory information
for one or more therapeutic treatment regimens in said
ranked listing based on said patient information and said
expert rules.
‘786 patent, Col. 17-18, ECF No. 4-1.
B. Procedural History
The litigation between these parties originated in September 2007, when ABL SA filed a
lawsuit in the United States District Court for the Eastern District of Texas, Marshall Division,
against SmartGene, alleging that SmartGene “manufactures, uses and sells products that infringe
the ‘786 and ‘988 Patents.” Compl. ¶ 9. ABL SA alleged specifically that “Smartgene’s
IDNS™ HIV program incorporates at least one technology which infringes at least claim 1 of
each [of] the ‘786 and ‘988 Patents.” Id. The district court in Texas dismissed the case on April
10, 2008 for lack of personal jurisdiction. Id. at 10.
4
SmartGene commenced this action in the District Court for the District of Columbia
against ABL SA on April 11, 2008, seeking declaratory judgment of non-infringement, patent
invalidity, and patent unenforceability under the Patent Act, 35 U.S.C. § 1 et seq., and the
Declaratory Judgment Act, 28 U.S.C. §§ 2201-2202. 5 SmartGene asserts in its Complaint that
the ‘786 patent and the ‘988 patent are invalid “for failing to comply with 35 U.S.C. §§ 101-103and/or 112.” Compl. ¶¶ 20, 26. 6
ABL SA filed its Answer and Counterclaims on October 6, 2008, alleging that
SmartGene’s products “[incorporate] at least one technology which infringes at least claim 1 of
each of the ‘786 and the ‘988 patents.” Answer, ECF No. 12, at ¶ 42. 7
On February 3, 2009, SmartGene’s unopposed motion to stay this proceeding, see ECF
No. 18, was granted due to concurrent patent validity reexaminations brought before the PTO.
See Order, ECF No. 19. Cumulatively, the defendants advise that the PTO held six
reexaminations—three for each of the patents-in-dispute—with two reexaminations combined
for each patent. Tr. 45:11-13. None of the reexamination proceedings, however, addressed the
subject matter eligibility question under 35 U.S.C. § 101. Tr. 45:16. The PTO completed its
reexamination proceedings and issued a final non-appealable denial of further review
5
This Court has jurisdiction to adjudicate this dispute pursuant to 28 U.S.C. § 1331 and 28 U.S.C. § 1338.
6
SmartGene further claims that “[d]uring Defendant’s prosecution of patent applications PCT US9907171 and EP
999166262.1, which claim priority to the application to which the ‘786 and ‘988 Patents claim priority, the PCT and
European Patent Office (“EPO”) search and examination authorities cited prior art references in reports dated
October 22, 1999, September 14, 2004, March 9, 2005, October 27, 2005, and March 17, 2006.” Compl. ¶ 11.
SmartGene claims that the EPO “determined that the EP 999166262.1 application was “not patentable in view of
this prior art . . .” Compl. ¶ 12. The prior art utilized to deny the EPO patent was apparently unavailable during the
PTO proceedings because the PTO Board of Appeals “said it would not consider those references” in its
reexamination proceeding. Tr. 6:4-8. Accordingly, SmartGene claims that this prior art is “material to the
patentability of the ‘786 and ‘988 Patent claims, and, upon information and belief, renders the ‘786 and ‘998 Patents
invalid by 35 U.S.C. § 102 and/or § 103.” Compl. ¶ 13. This claim is not at issue in the pending motion.
7
SmartGene asserts that the counterclaim for infringement is invalid because it was asserted by ABL PLT, rather
than ABL SA. Pl.’s Mem. at 1 n.1. The Court need not address this issue because the patents are invalid and the
counterclaims are moot.
5
proceedings on June 14, 2011. Joint Motion to Lift Stay, ECF. No. 32, at 1. The PTO concluded
that all of the claims of both patents-in-dispute were patentable over the prior art presented
during the reexamination. Id.
On September 7, 2011, the parties filed a joint motion to lift the stay and submitted a
proposed scheduling order. Id. This case was then reassigned to the undersigned Judge on
September 15, 2011.
This Court lifted the stay on October 21, 2011, and subsequently entered a scheduling
order to govern the proceedings in this matter. See Minute Order (Oct. 21, 2011); Scheduling
Order, ECF No. 39. SmartGene filed the instant Motion for Partial Summary Judgment on
December 12, 2011, alleging that the ‘786 patent and the ‘988 patent constituted ineligible patent
subject matter under 35 U.S.C. § 101 and pursuant to Bilksi v. Kappos, 130 S. Ct. 3218 (2010).
See ECF No. 47. Both parties agree that the resolution of this motion does not depend on the
disposition of any facts. Pl.’s Mem. at 2; Tr. 28:10-15. 8
This Court held a hearing on the Motion for Partial Summary Judgment and a Markman
Hearing to resolve disputes over claim construction on March 9, 2012 (“Motion Hearing”). For
the reasons explained below, SmartGene’s Motion for Partial Summary Judgment is granted. 9
II. LEGAL STANDARD
A. Summary Judgment
Pursuant to Rule 56 of the Federal Rules of Civil Procedure, summary judgment shall be
granted “if the movant shows that there is no genuine dispute as to any material fact and the
8
While the defendants state in their opposition brief that “there are several issues of material fact that should
preclude the granting of summary judgment,” see Defs.’ Mem. at 1, they did not file a separate statement of disputed
material facts, as required by Local Civil Rule 7(h), and clarified at the Motions Hearing that there are no
outstanding material facts that prevent adjudication of this Motion for Partial Summary Judgment. See Tr. 28:10-15.
9
Since the Court grants summary judgment for SmartGene, the Court need not proceed with claim construction.
6
movant is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a); Anderson v. Liberty
Lobby, 477 U.S. 242, 247 (1986); Estate of Parsons v. Palestinian Authority, 651 F.3d 118, 123
(D.C. Cir. 2011); Tao v. Freeh, 27 F.3d 635, 638 (D.C. Cir. 1994). Summary judgment is
properly granted against a party who, “after adequate time for discovery and upon motion, . . .
fails to make a showing sufficient to establish the existence of an element essential to that party’s
case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett,
477 U.S. 317, 322 (1986). The burden is on the moving party to demonstrate that there is an
“absence of a genuine issue of material fact” in dispute. Celotex Corp., 477 U.S. at 323.
In ruling on a motion for summary judgment, the court must draw all justifiable
inferences in favor of the nonmoving party, and shall accept the nonmoving party’s evidence as
true. Anderson, 477 U.S. at 255; Estate of Parsons, 651 F.3d at 123; Tao, 27 F.3d at 638. The
court is only required to consider the materials explicitly cited by the parties, but may on its own
accord consider “other materials in the record.” FED. R. CIV. P. 56(C)(3). For a factual dispute to
be “genuine,” Estate of Parsons, 651 F.3d at 123, the nonmoving party must establish more than
“[t]he mere existence of a scintilla of evidence” in support of its position, Anderson, 477 U.S. at
252, and cannot simply rely on allegations or conclusory statements. Greene v. Dalton, 164 F.3d
671, 675 (D.C. Cir. 1999). Rather, the nonmoving party must present specific facts that would
enable a reasonable jury to find in its favor. Id. If the evidence “is merely colorable, . . . or is
not significantly probative, . . . summary judgment may be granted.” Anderson, 477 U.S. at 249-
50 (citations omitted).
B. Subject Matter Patentability under the Patent Act
SmartGene’s Motion for Partial Summary Judgment challenges the subject matter
eligibility of the patents-in-dispute under 35 U.S.C. § 101. See Pl.’s Mot. for Part. Summ. J.
7
(“Pl.’s Mot.”), ECF No. 47. Congress has defined which inventions are patentable in Section
101 of the Patent Act, which states in its entirety:
Whoever invents or discovers any new and useful process, machine, manufacture,
or composition of matter, or any new and useful improvement thereof, may obtain
a patent therefor, subject to the conditions and requirements of this title.
35 U.S.C. § 101.
The Patent Act defines the term “process” as “process, art or method, and includes a new
use of a known process, machine, manufacture, composition of matter, or material.” 35 U.S.C. §
100.
The Supreme Court has further elaborated on what constitutes a patentable process claim,
noting that
a process may be patentable, irrespective of the particular form of the
instrumentalities used . . . A process is a mode of treatment of certain materials to
produce a given result. It is an act, or a series of acts, performed upon the subject-
matter to be transformed and reduced to a different state or thing. If new and
useful, it is just as patentable as is a piece of machinery.
Diamond v. Diehr, 450 U.S. 175, 182-83 (1981) (quoting Cochrane v. Deener, 94 U.S.
780, 787-88 (1877)).
While the Patent Act covers a broad range of subject matter, there are three important
subject matter exceptions from patentability: “laws of nature, physical phenomena, and abstract
ideas.” Bilski v. Kappos, 130 S. Ct. 3218, 3225 (2010) (“Bilski II”) (quoting Diamond v.
Chakrabarty, 447 U.S. 303, 309 (1980)); Gottschalk v. Benson, 409 U.S. 63, 67 (1972). The
Supreme Court has found that these categories of exceptions “are not patentable, as they are the
basic tools of scientific and technological work.” Benson, 409 U.S. at 67. “Thus, the Court has
written that a new mineral discovered in the earth or a new plant found in the wild is not
patentable subject matter. Likewise, Einstein could not patent his celebrated law that E=mc²; nor
could Newton have patented the law of gravity. Such discoveries are manifestations of . . .
8
nature, free to all men and reserved exclusively to none.” Mayo Collaborative Servs. v.
Prometheus Labs.,132 S. Ct. 1289, 1293 (2012) (“Prometheus”) (citations and quotation marks
omitted). “While these exceptions are not required by the statutory text,” the Supreme Court has
noted, “they are consistent with the notion that a patentable process must be ‘new and useful.’
And, in any case, these exceptions have defined the reach of the statute as a matter of statutory
stare decisis going back 150 years.” Bilski II, 130 S. Ct. at 3225 (citation omitted). Still, the
Supreme Court has recognized that “too broad an interpretation of this exclusionary principle
could eviscerate patent law. For all inventions at some level embody, use, reflect, rest upon, or
apply laws of nature, natural phenomena, or abstract ideas.” Prometheus, 132 S. Ct. at 1293.
The issue before this Court is whether the patents-in-dispute are abstract such that they do not
constitute patentable subject matter. Pl.’s Mem. at 1.
C. Level of Deference to the PTO
Patents issued by the PTO, and their underlying claims, are presumed valid. See 35
U.S.C. § 282. “[T]his presumption can only be overcome by clear and convincing evidence to
the contrary.” Unique Indus. v. 965207 Alta. Ltd., No. 08-1095, 2012 U.S. Dist. LEXIS 19621,
at *2 (D.D.C. Feb. 16, 2012); Eli Lilly & Co. v. Barr Labs, 251 F.3d 955, 962 (Fed. Cir. 2001);
Apple Computer v. Articulate Sys., 234 F.3d 14, 20 (Fed. Cir. 2000).
The determination of whether a claimed invention is invalid for lack of subject matter
patentability under 35 U.S.C. § 101 is a “threshold inquiry” and a matter of law. See In re Bilski,
545 F.3d 943, 950-51 (Fed. Cir. 2008) (“Bilski I”). “[A]ny claim of an application failing the
requirements of § 101 must be rejected even if it meets all of the other legal requirements of
patentability.” Id. at 950. The Court may conduct a section 101 analysis before the Court
conducts a formal construction of claims. See Ultramercial, LLC v. Hulu, LLC, 657 F.3d 1323,
9
1325 (Fed. Cir. 2011) (“claim construction may not always be necessary for a § 101 analysis”).
“Only after an invention has satisfied § 101, will it be analyzed under the remaining hurdles of
the Patent Act, which include the requirement that an invention be novel, see § 102; nonobvious,
see § 103; and fully and particularly described, see § 112.” CLS Bank Int’l., 768 F. Supp. 2d at
221, 233 (citing Bilski II, 130 S. Ct. at 3225).
The fact that the PTO conducted reexaminations of the patents-in-dispute does not trigger
higher deference on the issue of subject matter patentability because the PTO cannot review
subject matter eligibility during a reexamination proceeding. 37 C.F.R. § 1.552. This lawsuit,
therefore, is not dealing with matters previously covered during the reexamination proceedings.
Id. Titled “Scope of reexamination in ex parte reexamination proceedings,” § 1.552 states, in
relevant part, that upon ex parte reexamination, the PTO may only examine the contested patent
“on the basis of patents or printed publications and, with respect to subject matter added or
deleted in the reexamination proceeding, on the basis of the requirements of 35 U.S.C. § 112.” It
further states that “[i]ssues other than those indicated . . . will not be resolved in a reexamination
proceeding. If such issues are raised by the patent owner or third party requester during a
reexamination proceeding, the existence of such issues will be noted by the examiner in the next
Office action, in which case the patent owner may consider the advisability of filing a reissue
application to have such issues considered and resolved.” 37 C.F.R. § 1.552. “Thus, other
challenges to the patentability of original claims — such as qualification as patentable subject
matter under § 101 or satisfaction of the written description and enablement requirements of §
112—may not be raised in reexamination proceedings.” In re NTP, 654 F.3d 1268, 1275-76
(Fed. Cir. 2011); see also 35 U.S.C. § 302 (reexaminations may be conducted on “the basis of
any prior art”). Since this issue cannot be raised in a reexamination proceeding, no additional
10
deference is accorded to the PTO as to subject matter patentability. 10 See, e.g., In re NTP, 654
F.3d at 1275-76.
III. DISCUSSION
In its Motion for Partial Summary Judgment, SmartGene contends that the patents-in-
dispute constitute ineligible patent subject matter because they are (1) “directed to abstract ideas
and mental processes,” and because (2) the patents-in-dispute fail the “machine or
transformation” (“MOT”) test articulated in Bilski, and are thus invalid. Pl.’s Mem. at 1. In
support of this contention, SmartGene asserts that the patents-in-dispute are “directed to nothing
more than a mental process in which a person, e.g., a physician, engages when determining a
treatment for a patient suffering from a disease or a medical condition.” Pl.’s Mem. at 6. 11
The defendants respond that (1) the claims at issue are not directed to an abstract idea,
and (2) although the MOT test is “not the sole test for patentability,” the patents-at-issue satisfy
that test. Def.’s Mem. at 7-8. According to the defendants, the patents-in-dispute “describe an
interactive system, method, and computer program to assist the physician in keeping track of
potential treatment regimens and optionally ranking those regimens based on the patient’s
personal information.” Defs.’ Mem. at 1-2. “Rather than supplanting the role of the physician,
as SmartGene suggests, the invention seeks to improve patient treatment by giving the physician
reference to a program which can exceed his or her own capabilities.” Id. at 2.
10
Procedurally, the parties could have raised with the Court the issue of subject matter patentability before
requesting a stay of this patent action pending PTO reexamination proceedings. If that issue had been taken up
earlier in this case, the PTO may have been spared six reexaminations of the patents-in-dispute.
11
As noted, Claim 1 of the ‘786 patent discloses a “method for guiding the selection of a therapeutic treatment
regimen for a patient with a known disease or medical condition” by: (a) having the user input information into a
“computing device” comprised of three databases, including (i) a medical conditions database, (ii) a database
containing expert rules for selecting a treatment regimen, and (iii) an advisory information database; (b) having the
computing device generate a ranked listing of therapeutic treatment regimens for the patient; and (c) generating
advisory information based on patient information and expert rules. See ‘786 Patent, Col. 17-18, ECF No. 4-1.
11
Guided by Supreme Court and Federal Circuit precedent in this area, the Court proceeds
with its analysis by (A) examining 35 U.S.C. § 101 as a “threshold” inquiry into patent validity;
(B) reviewing Supreme Court caselaw “guideposts” on the subject of patent subject matter
eligibility; and then examining whether the patents-in-dispute (C) satisfy the MOT test, and (D)
constitute eligible subject matter irrespective of the MOT test. Finally, although the Court does
not formally construct the claims on which there is disagreement between the parties, the Court
(E) examines the claim construction proposals to inform its section 101 analysis. The Court
concludes that the relevant precedent and tests demonstrate that the patents-in-dispute constitute
ineligible subject matter and are thus invalid.
A. 35 U.S.C. § 101 as a Threshold Inquiry Into Patent Validity
As the Supreme Court noted in Bilski v. Kappos, the 35 U.S.C. § 101 inquiry is a
“threshold test.” Bilski II, 130 S. Ct. 3218, 3225 (2010). “It is well-established that [t]he first
door which must be opened on the difficult path to patentability is § 101.” CLS Bank Int’l. v.
Alice Corp. Pty. Ltd., 768 F. Supp. 2d 221, 233 (D.D.C. 2011) (citation and quotation marks
omitted). A recent Federal Circuit decision, however, cast doubt on this approach, sharply
questioning the wisdom of utilizing the § 101 subject matter inquiry as a threshold question. See
MySpace, Inc. v. Graphon Corp., No. 2011-1149, 2012 U.S. App. LEXIS 4375 (Fed. Cir. Mar. 2,
2012). In a majority decision, the Federal Circuit cautioned that lower courts should avoid the
“swamp of verbiage that is § 101 by exercising their inherent power to control the processes of
litigation, . . . and insist that litigants initially address patent invalidity issues in terms of the
conditions of patentability defenses as the statute provides, specifically §§ 102, 103, and 112.”
Id. at *24 (internal citation omitted). The decision asserts that this approach would alleviate the
necessity of entering “the murky morass that is § 101 jurisprudence.” Id; see also Classen
12
Immunotherapies, Inc. v. Biogen Idec, 659 F.3d 1057, 1073-75 (Fed. Cir. 2011) (urging judicial
restraint in the face of a plethora of section 101 litigation).
Following the Motions Hearing in this case, however, the Supreme Court, in Mayo
Collaborative Servs. v. Prometheus Labs., 132 S. Ct. 1289 (2012), clarified that a 35 U.S.C. §
101 subject matter patentability inquiry is the threshold analysis for determining patent validity.
The Supreme Court explicitly rejected that the “screening function” of 35 U.S.C. § 101 may be
performed by determining the novelty, see 35 U.S.C. § 102, non-obviousness, see 35 U.S.C. §
103, or the adequacy of the written specification, see 35 U.S.C. § 112, of a patentable claim. Id.
at 1303-04. The Court cautioned that “[shifting] the patent-eligibility inquiry entirely to these
later sections risks creating significantly greater legal uncertainty, while assuming that those
sections can do work that they are not equipped to do.” Id. at 1304. Conducting a patent
eligibility inquiry under any of the alternative sections “would make the ‘law of nature’
exception to §101 patentability a dead letter. The approach is therefore not consistent with prior
law.” Id. at 1303; see also Bilski II, 130 S. Ct. at 3235; CLS Bank Int’l., 768 F. Supp. 2d at 233;
see also H. R. Rep. No. 1923, 82d Cong., 2d Sess., 6 (1952) (“A person may have ‘invented’ a
machine or a manufacture, which may include anything under the sun that is made by man, but it
is not necessarily patentable under section 101 unless the conditions of the title are fulfilled”)
(quoted in Prometheus, 132 S. Ct. at 1303-04). Accordingly, this Court treats the § 101 subject
matter patentability inquiry as the threshold inquiry for patent validity. In this case, the section
101 analysis begins and ends the Court’s inquiry as it reveals that the patents-in-dispute are not
patentable.
13
B. “Guideposts” for Adjudicating Subject Matter Patentability
The Supreme Court has highlighted a trilogy of its decisions – namely Gottschalk v.
Benson, Parker v. Flook, and Diamond v. Diehr – as useful “guideposts” when considering
exceptions to patent subject matter eligibility under 35 U.S.C. § 101. Bilski II, 130 S. Ct. at
3231. The Court notes that “[i]n searching for a limiting principle, [the Supreme Court’s]
precedents on the unpatentability of abstract ideas provide useful tools.” Id. at 3229. The most
recent Supreme Court decision on this topic, Prometheus, reaffirms the importance of these
tools, focusing its section 101 analysis, inter alia, on this trilogy of cases as well as Bilski II. See
Prometheus, 132 S. Ct. at 1298-1301. This Court follows suit. The Court reviews these
guideposts below, and finds that, under this instructive precedent, the patents-in-dispute are not
patent-eligible processes.
1. Gottschalk v. Benson
The Supreme Court’s decision in Benson is the first of these patent subject matter
eligibility cases. Gottschalk v. Benson, 409 U.S. 63 (1972). There, the Supreme Court held that
“a method for converting binary-coded decimal (BCD) numerals into pure binary numerals” that
was “not limited to any particular art or technology, to any particular apparatus or machinery, or
to any particular end use” was not a process covered by the Patent Act. Id. at 64, 71-73. The
claimed method sought patent protection over an “algorithm” that represented “a generalized
formulation for programs to solve mathematical problems of converting one form of numerical
representation to another.” Id. at 65. The Supreme Court observed that “[t]he mathematical
formula involved here has no substantial practical application except in connection with a digital
computer, which means that if the judgment below is affirmed, the patent would wholly pre-empt
the mathematical formula and in practical effect would be a patent on the algorithm itself.” Id. at
14
71-72. The Court expressed concern that “the ‘process’ claim is so abstract and sweeping as to
cover both known and unknown uses,” which could “vary from the operation of a train to
verification of drivers’ licenses to researching the law books for precedents” and “be performed
through any existing machinery or future-devised machinery or without any apparatus.” Id. at
68. Accordingly, the Supreme Court denied the claim and found that computer algorithms that
encompass methods for mathematical conversion are “procedure[s] for solving a given type of
mathematical problem” and are ineligible patent subject matter that erroneously seeks to patent
the “basic tools of scientific and technological work.” Id. at 67.
2. Parker v. Flook
“In Flook, the Court considered the next logical step after Benson.” Bilski II, 130 S. Ct.
at 3230. There, the patent-holder asserted patent rights protection over a “method for updating
alarm limits,” which indicated the point at which the catalytic conversion conditions in the
petrochemical and oil-refining industries can produce inefficiencies or danger. Parker v. Flook,
437 U.S. 584, 585. As the Court noted, “[t]he only novel feature of the method is a
mathematical formula.” Id. “In [Benson], we held that the discovery of a novel and useful
mathematical formula may not be patented. The question in this case is whether the
identification of a limited category of useful, though conventional, post-solution applications of
such a formula makes respondent’s method eligible for patent protection.” Id. The Court found
that the “only difference between the conventional methods of changing alarm limits and that
described in respondent’s application rests in the second step – the mathematical algorithm or
formula” and that “a claim for an improved method of calculation, even when tied to a specific
end use, is unpatentable subject matter under § 101.” Id. at 595 & n.18.
15
Moreover, the Court found that incorporation of “post-solution” activity did not render
the formula patentable, because a “competent draftsman could attach some form of post-solution
activity to almost any mathematical formula.” Id. at 590. The Court rejected the idea that post-
solution activity, “no matter how conventional or obvious in itself, can transform an unpatentable
principle into a patentable process,” finding that would “[exalt] form over substance.” Id. The
Pythagorean theorem, for example, would not have been patentable even if a final step had been
added “indicating that the formula, when solved, could be usefully applied to existing surveying
techniques.” Id. The patent thus constituted ineligible subject matter because the claim sought
patent protection over an improved method for computing alarm limits, which were otherwise
computable by hand. Id. As the Court explained in Diehr and Bilski II, “Flook stands for the
proposition that the prohibition against patenting abstract ideas ‘cannot be circumvented by
attempting to limit the use of the formula to a particular technological environment’ or adding
‘insignificant postsolution activity.’” Bilski II, 130 S. Ct. at 3230 (quoting Diehr, 450 U.S. at
191-92).
3. Diamond v. Diehr
In Diehr, the Supreme Court “established a limitation on the principles articulated in
Benson and Flook.” Bilski II, 130 S. Ct. at 3230. The Court upheld as patentable subject matter
a process for molding, or “curing,” raw synthetic rubber into a product that would retain its
shape. This process involved using the well-known components of time, temperature and a
mathematical formula, but combined them with a previously uncontrollable variable (i.e., the
temperature inside of a rubber press) and use of a programmed computer. Diamond v. Diehr,
450 U.S. 175, 187 (1981). When implemented in a series of steps, the claimed process took the
“guess work” out of the proper curing time. Although the invention incorporated a well-known
16
mathematical formula, the Supreme Court concluded that the patent constituted eligible subject
matter because it sought process protection over the formula’s use solely in conjunction with the
other steps of the process. Id. “These other steps apparently added to the formula something
that in terms of patent law’s objectives had significance – they transformed the process into an
inventive application of the formula.” Prometheus, 132 S. Ct. at 1299.
Unlike in Benson, where the “sole practical application of the algorithm was in
connection with the programming of a general purpose digital computer,” Diehr, 450 U.S. at
185-86, the claimed invention in Diehr used a mathematical equation tied to “all of the other
steps in their claimed process,” which itself was limited to curing synthetic matter. Id. at 187.
The Supreme Court acknowledged that although, “[o]bviously, one does not need a ‘computer’
to cure natural or synthetic rubber,” when the computer significantly reduces the probability of
damaging the rubber, the process is not rendered unpatentable solely because of the use of a
mathematical formula or computer. Id.The Supreme Court articulated the following guidance: “A mathematical formula as such
is not accorded the protection of our patent laws [citing Benson], and this principle cannot be
circumvented by attempting to limit the use of the formula to a particular technological
environment [citing Parker]. Similarly, insignificant post-solution activity will not transform an
unpatentable principle into a patentable process. Ibid.” Diehr, 450 U.S. at 191-92. The Court
went on to say, however, that, “when a claim containing a mathematical formula implements or
applies that formula in a structure or process which, when considered as a whole, is performing a
function which the patent laws were designed to protect (e.g., transforming or reducing an article
to a different state or thing), then the claim satisfies the requirements of § 101.” Id. at 192.
17
4. Bilski II
In Bilski II, the Supreme Court held that the trilogy of cases discussed above – Benson,
Flook, and Diehr – made “clear that petitoner’s application [for a business method for hedging
risk in the energy commodities market] is not a patentable process.” 130 S. Ct. at 3231(quotation marks omitted). The Court stated that the patent application sought protection over a
“fundamental economic practice long prevalent in our system of commerce and taught in any
introductory finance class.” Id. at 3231 (citation omitted). The Court found that “[t]he concept
of hedging, described in claim 1 and reduced to a mathematical formula in claim 4, is an
unpatentable abstract idea, just like the algorithms at issue in Benson and Flook. Allowing
petitioners to patent risk hedging would preempt use of this approach in all fields, and would
effectively grant a monopoly over an abstract idea.” Id. The Court drew this conclusion
“narrowly on the basis of this Court’s decisions in Benson, Flook, and Diehr, which show that
petitioners’ claims are not patentable processes because they are attempts to patent abstract
ideas.” Id. at 3229-30.
5. Prometheus
The most recent guidance from the Supreme Court on section 101 analysis concerns
patent claims covering a process aimed to aid doctors administering thiopurine drugs to treat
patients with autoimmune disease. “The claims purport to apply natural laws describing the
relationships between the concentration in the blood of certain thiopurine metabolites and the
likelihood that the drug dosage will be ineffective or induce harmful side-effects.” Mayo
Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1294 (2012). In Prometheus,
the Court concluded, based on the Court’s precedent detailed above, that the process claims were
directed to natural law and were thus unpatentable.
18
Specifically, the Prometheus Court distilled the guideposts from its earlier section 101
cases into the following “warnings.” The Supreme Court warned “against interpreting patent
statutes in ways that make patent eligibility ‘depend simply on the draftsman’s art’ without
reference to the ‘principles underlying the prohibition against patents for [natural laws],’” id.(quoting Flook, 437 U.S. at 593), and warned against “upholding patents that claim processes
that too broadly preempt the use of a natural law.” Id. (citing O’Reilly v. Morse, 56 U.S. 62,
112-120). A “process that focuses upon the use of a natural law” must “contain other elements
or a combination of elements, sometimes referred to as an ‘inventive concept,’ sufficient to
ensure that the patent in practice amounts to significantly more than a patent upon the natural law
itself.” Id. (quoting Flook, 437 U.S. at 594). The Court found that the patent at issue failed this
test, explaining that “the steps in the claimed processes (apart from the natural laws themselves)
involve well-understood, routine, conventional activity previously engaged in by researchers in
the field.” Id. The Court further observed that “upholding the patents would risk
disproportionately tying up the use of the underlying natural laws, inhibiting their use in the
making of further discoveries,” and thereby allowing monopolies of unforeseeable scope. Id.
6. Patents-in-Dispute Are Unpatentable Abstract Ideas Under Supreme Court
Precedent
This Court finds that, as in Benson, Flook, Bilski II, and Prometheus, the “patent
application here can be rejected under [the Supreme Court’s] precedents . . .” Bilski II, 130 S.
Ct. at 3231. Mental processes and abstract intellectual concepts are simply not patentable for the
sound reason that “monopolization of those tools through the grant of a patent might tend to
impede innovation more than it would tend to promote it.” Prometheus, 132 S. Ct. at 1293. The
patents-in-dispute do no more than describe just such an abstract mental process engaged in
19
routinely, either entirely within a physician’s mind, or potentially aided by other resources in the
treatment of patients.
Specifically, the claim here, like the claim in Prometheus, “presents a case for
patentability that is weaker than the (patent-eligible) claim in Diehr and no stronger than the
(unpatentable) claim in Flook.” Id. at 1299. In Diehr, as noted, the parties sought patent
protection over the use of a mathematical equation “in conjunction with all of the other steps in
their claimed process. These include[d] installing rubber in a press, closing the mold, constantly
determining the temperature of the mold, constantly recalculating the appropriate cure time
through the use of the formula and a digital computer, and automatically opening the press at the
proper time.” Diehr, 450 U.S. at 187. The Court found that the invention was patentable under
section 101 because it was not “an attempt to patent a mathematical formula, but rather [was] an
industrial process for the molding of rubber products.” Id. at 192. Unlike the patent-eligible
claim in Diehr, the claim at issue here, as described below, involves no “transformation of an
article” nor a “step-by-step method for accomplishing such [transformation].” 12 Id. at 184. The
claim here is more like the claim in Flook (and Prometheus) because it is merely a recitation of
abstract steps, rather than an innovation that adds something “specific to the laws of nature [or
abstract ideas] other than what is well-understood, routine, conventional activity, previously
engaged in by those in the field.” Prometheus, 132 S. Ct. at 1299.
The claims at issue here are also analogous to the claim in In re Meyer, 688 F.2d 789(C.C.P.A. 1982), a case before the United States Court of Customs and Patent Appeals. There,
the patent applicant sought patent protection over a process for gathering neurological testing
data, imputing it into a computer, and using a formula to infer whether certain neurological
12
The Court discusses this concept of transformation more fully below in the discussion of the “machine or
transformation” test.
20
elements are functioning. In re Meyer, 688 F.2d at 793. The United States Court of Customs
and Patent Appeals rejected the patent owner’s assertion that the invention was “concerned with
replacing, in part, the thinking processes of a neurologist with a computer,” and instead
concluded that, “the process recited is an attempt to patent a mathematical algorithm rather than
a process for producing a product as in [Diehr].” Id. at 794. Here, the defendants have stated
that “the purpose of [their] invention was to provide the practitioner with help, to give the
practitioner more than he could have just in his mind.” See Tr. 35:16-18. This Court rejects this
argument where the patents-in-dispute are even more abstract than in Meyer, which at least
involved a mathematical algorithm. 13
Before proceeding to the machine-or-transformation test that the Supreme Court has
highlighted as an “important tool” in section 101 analysis, the Court first examines the ‘786
patent step-by-step in the context of the Court’s precedent, as the Court did in Prometheus. Set
against this binding precedent, the Court concludes that nothing in Claim 1 of the ‘786 patent
transforms the everyday abstract ideas on which it is based into patentable processes.
a. An Examination of Each Step in Claim 1 of the ‘786 Patent
“[W]hen a court examines whether a claim is directed to an abstract idea, the court must
view each claim as a whole.” CLS Bank Int'l v. Alice Corp. Pty, Ltd., 768 F. Supp. 2d 221, 232
(D.D.C. 2011). The Court views Claim 1 as a whole but still finds it useful to examine the claim
in steps for the purposes of its analysis of the claim as a whole. The first step of Claim 1 of the
‘786 patent describes “[a] method for guiding the selection of a therapeutic treatment regimen for
a patient with a known disease or medical condition, said method comprising.” As SmartGene
highlights, the language of the claim is directed to “nothing more than a mental process . . .”
13
The defendants were given the opportunity to distinguish In Re Meyer at the Motions Hearing and were unable to
do so, with counsel for the defendants simply reiterating counsel’s view of the purpose and function of the invention
at issue here, rather than specifically addressing how this case is distinguishable from Meyer. Tr. 34:22-35:25.
21
Pl.’s Mem. at 6. In fact, this process is one that is performed in doctors’ offices everyday. A
doctor speaks with a patient, who describes his or her ailments. The doctor recalls or looks up
possible treatment regimens, and then advises the patient about the treatment regimen options,
and the doctor’s recommendation for the patient. Indeed, the patent specification itself admits
that the invention “can simulate the judgment and behavior of a human or organization that has
expert knowledge and experience in a particular field.” ‘786 patent, Col. 7, lines 47-49.
The second step of Claim 1 of the ‘786 patent addresses “(a) providing patient
information to a computing device comprising [three knowledge databases].” The Court sees
nothing in this step that is any different than the process a doctor goes through in real time when
a doctor evaluates a patient by taking a medical history and obtaining information pertinent to
the patient’s condition and documenting the same in a medical chart. Similarly, the patents’
reference to three databases also mimics the evaluative process involved in the treatment of
patients. Specifically, after collecting patient information, a doctor would consider “therapeutic
treatment regimens for said disease or medical condition” (as in the first knowledge base),
consult “expert rules for evaluating and selecting a therapeutic treatment regimen for said disease
or medical condition” (as in the second knowledge base), and review “advisory information
useful for the treatment of a patient with different constituents of said different therapeutic
treatment regimens” (as in the third database). The claim itself does not add anything to the
process that doctors regularly engage in mentally when evaluating and treating patients.
The next step of Claim 1 of the ‘786 patent is “(b) generating in said computing device a
ranked listing of available therapeutic treatment regimens for said patient.” The Court views this
step as describing what goes on in the mind of a doctor in evaluating and ranking possible
treatment options for a patient based upon the benefits and counter-indicators of each option.
22
The final step of Claim 1 of the ‘786 patent is “(c) generating in said computing device
advisory information for one or more therapeutic treatment regimens in said ranked listing based
on said patient information and said expert rules.” The Court understands this step as
corresponding to a doctor generating a treatment plan for a patient.
b. An Examination of Claim 1 of the ‘786 Patent As A Whole
In essence, these four steps describe abstract ideas that are commonly performed by
medical professionals in evaluating, considering and constructing treatment options for a patient
presenting a specific medical condition. As with the claim examined in Prometheus, these “steps
consist of well understood, routine, conventional activity already engaged in by the scientific
community; and those steps, when viewed as a whole, add nothing significant beyond the sum of
their parts taken separately. For these reasons [this Court believes] that the steps are not
sufficient to transform unpatentable [abstract ideas] into patentable applications . . . .”
Prometheus, 132 S. Ct. at 1298. In short, the claims track the abstract mental processes of a
doctor treating a patient. Accordingly, analyzing Claim 1 of the ‘786 patent under the Supreme
Court’s precedent, this Court finds that the claims of the patents-in-dispute are abstract ideas and
unpatentable.
C. Claims are Invalid under the Machine-or-Transformation Test
The Court also finds that the patents-in-dispute are invalid under the “machine-or-
transformation” or “MOT” test utilized in some of the Supreme Court and Federal Circuit
precedent. Different tests have been employed over time to analyze claims under section 101.
See, e.g., State St. Bank & Trust Co. v. Signature Fin. Group, 149 F.3d 1368, 1373 (Fed. Cir.
1998) (finding that a transformation “constitutes a practical application of a mathematical
algorithm, formula, or calculation, because it produces ‘a useful, concrete and tangible result’”).
23
The most recent test developed in Bilski I is the MOT test. The Federal Circuit, sitting en banc
in Bilski I, articulated the standards for determining whether a claimed method constituted a
patentable “process” under section 101. There, the Federal Circuit clarified that the “machine-
or-transformation” test was the “governing test” for determining patent eligibility under section
101. In re Bilski, 545 F.3d 943, 955-56 (Fed. Cir. 2008).
In Bilski II, the Supreme Court notably rejected the Federal Circuit’s decision that the
“machine or transformation” test was the “sole test for governing § 101 analysis.” 130 S. Ct. at
3227. The Court found that while “[i]t is true that patents for inventions that did not satisfy the
machine-or-transformation test were rarely granted in earlier eras . . . times change.” Id. The
Court reflected generally that “[w]ith ever more people trying to innovate and thus seeking
patent protections for their inventions, the patent law faces a great challenge in striking the
balance between protecting inventors and not granting monopolies over procedures that others
would discover by independent, creative application of general principles.” Id. at 3228. The
Court, however, did not foreclose the use of the machine-or-transformation test. Id. at 3227.
Indeed, while the Supreme Court emphasized that the MOT test is “not the sole test for deciding
whether an invention is a patent-eligible ‘process,’” the Court noted that the Supreme Court’s
“precedents establish that the [MOT] test is a useful and important clue, an investigative tool, for
determining whether some claimed inventions are processes under § 101.” Id. Most recently, in
Prometheus, the Supreme Court rejected not the MOT test but the Federal Circuit’s application
of that test. There, the Federal Circuit concluded that the transformation prong of the MOT test
was satisfied because the claimed process involved “transforming the human body by
administering a thiopurine drug and transforming the blood by analyzing it to determine the
metabolite levels.” Prometheus, 132 S. Ct. at 1302. The Court described as “irrelevant” the
24
transformation on which the Federal Circuit upheld the patent at issue since no part of the so-
called “transformation” required the claimed process. Id. Accordingly, this Court employs the
MOT test as a useful investigative tool.
Under the MOT test, a process claim is patentable if “(1) it is tied to a particular machine
or apparatus, or (2) it transforms a particular article into a different state or thing.” Bilski I, 545
F.3d at 954; see also Flook, 437 U.S. at 589 n. 9 (“An argument can be made [that the Supreme
Court] has only recognized a process as within the statutory definition when it either was tied to
a particular apparatus or operated to change materials to a different state or thing.”) (internal
quotation marks and citations omitted). The “use of a specific machine or transformation of an
article must impose meaningful limits on the claim’s scope to impart patent-eligibility” and,
furthermore, “the involvement of the machine or transformation in the claimed process must not
merely be insignificant extra-solution activity.” CLS Bank Int’l, 768 F. Supp. 2d at 234(citations and quotation marks omitted). SmartGene claims that the patents-in-dispute “[a]ll fail”
the MOT test because (1) “they are not tied to a particular machine or apparatus that imparts
meaningful limitations on the claims” and (2) “they do not transform a particular article into a
different state or thing.” Pl.’s Mem. at 11. The defendants argue, in response, that “[e]ven
though the [MOT] test is no longer preferred for inventions of the Information Age,” see
Ultramercial, 657 F.3d at 1327, “the invention of the Asserted Claims satisfies both prongs of
the test.” Defs.’ Mem. at 10. The Court first addresses the machine prong and then the
transformation prong, and finds that the patents-in-dispute do not satisfy either one of them. The
Court also finds that the computing device referenced by the claims does not impose any
meaningful limit on the scope of the claims.
25
1. Claims of the Patents-in-Dispute Are Not Tied to a Particular Machine
To satisfy this prong, a claimed process must be “tied to a particular machine or
apparatus.” Bilski I, 545 F.3d at 954. SmartGene argues that “[t]he claims of the patents-in-suit
are essentially methods for providing and generating information, and do not identify a particular
machine for performing the recited claim steps. While the claims reference a ‘computing
device,’ this generic token reference does not identify any particular machine or provide any
indication of what particular type of machine is to be used . . .” Pl.’s Mem. at 12. The
defendants argue in response that the claims meet the machine prong of the MOT test “because
the claims are tied to a particular machine that has [three databases]” and “[i]t can hardly be
argued that the computing device is incidental to the invention, rather the computing device
allows the invention to pull information from three databases.” Defs.’ Mem. at 12-13. The
Court finds that the patents-in-dispute do not satisfy the machine prong for two reasons.
First, the claims of the patents-in-dispute do not refer to any “particular” machine. While
the claims reference a “computing device,” these references are insufficient to satisfy the
machine test. The defendants argue that “the figures and specification specify how the computer
is to be specially programmed to implement the method covered by the Asserted Claims,” but the
Court is not persuaded. Defs.’ Mem. at 13. 14 The patents-in-dispute include no special
programming code, nor provide any specific algorithms that the computers would use to perform
the database matching or synthesis of expert rules, advisory information, treatment regimens, and
14
Counsel for the defendants made an argument at the Motions Hearing that “figure one, a flow-chart” may be
“considered [an algorithm].” Tr. 36:23-37:3. The chart simply shows boxes labeled with descriptions of the data
and the verbs “generate,” “provide,” “examine,” “enter,” and “modify.” The Court is not at all convinced that the
flow chart in figure one is an “algorithm,” and counsel has provided no authority for this figurative leap. Counsel
further argues that “under the system description there is a lengthy discussion of the system architecture, the
essential server, the local server and exactly what steps are carried out to perform the method [in columns 7, 8, 9,
10]. So although [there] wasn’t any code that was included in the patent, there doesn’t have to be code for there to
be an algorithm disclosed in the specification.” Tr. 39:8-14. SmartGene argues in response that columns 7 through
10 do not contain an algorithm. Tr. 43:19-22. The Court agrees.
26
patient information. Moreover, unlike in Ex Parte Brown, Appeal 2009-012201, 2011 Pat. App.
LEXIS 15902 (BPAI Feb. 8, 2011), on which the defendants rely, see Defs.’ Mem. at 9-10, there
is no specific “server” specified in the claims.
To the extent that the claims reference a machine at all, they reference a “general purpose
computer,” which does not satisfy the machine prong. See, e.g., CLS Bank Int’l., 768 F. Supp.
2d at 237 (“With evolving guidance on this issue, district courts have determined that a method
claim that is directed to a general purpose computer is not tied to a particular machine under the
MOT test.”) (citations omitted); Graff/Ross Holdings LLP v. Fed. Home Loan Mortg. Corp., No.
07-796, 2010 U.S. Dist. LEXIS 141399, at *20 (D.D.C. 2010) (finding that a “computer
processor” referenced in method claim is not a “particular machine” under the MOT test);
Accenture Global Services, GMBH v. Guidewire Software, Inc., 691 F. Supp. 2d 577, 597
(D.Del. 2010) (“data processing system”, “claim folder”, “display device”, and “screen”
referenced in claim did not constitute a “particular machine” for the purposes of the MOT test);
see also ECF No. 55, Ex. A, July 8, 2009 Office Action for Patent Application No. 10/857, 105
(“105 Application”) (application where the PTO found that the term “computing device” did not
refer to a particular machine and rejected claims on that basis). 15
The defendants argue that the Court should look to VS Techs, LLC v. Twitter, Inc., No.
2:11-cv-43, 2011 U.S. Dist. LEXIS 114998 (E.D. Va. Oct. 4, 2011), as “[a] good example of the
15
SmartGene notes that the difference between the ‘105 Application and the patents-in-dispute “is that the PTO
applied the MOT test to the claims of the ‘105 Application and not to the patents-in-suit as the MOT was not the law
at the time the patents-in-suit issued.” Pl.’s Reply at 7. PTO states as a reason for the rejection of claims in the ‘105
Application: “Claims 1-15 remain rejected under 35 U.S.C. § 101 because the claimed invention is directed to non-
statutory matter. This is a new grounds of rejection necessitated by the recent decision in [In re Bilski, 545 F.3d 943(Fed. Cir. 2008)]. . . In the instant case, the method claims are not so tied to another statutory class of invention
because the method steps that are critical to the invention are ‘not tied to any particular apparatus or machine’
and therefore do not meet the machine-or-transformation test . . . The instantly recited ‘computing device’ is not a
specific computing device and the claims are therefore non-statutory. The rejection could be overcome by reciting a
‘suitably programmed computing device’ or ‘appropriately programmed computing device’ provided such is
supported in the specification as originally filed.” ECF No. 55, Ex. A at 2-3 (emphasis in original). PTO may have
come to the same conclusion if it had examined the patents-in-dispute under the same criteria.
27
proper application of the machine prong . . .” Defs.’ Mem. at 12. There, the court found that a
claim satisfied the machine prong because “the patent constitutes a practical application of an
idea.” VS Techs, LLC, 2011 U.S. Dist. LEXIS 114998, at *14-15. The Court finds, to the
contrary, that the caselaw is clear that allowing a process to become patentable simply because it
is computer aided and constitutes a practical application would render the subject-matter
eligibility criteria contained in section 101 meaningless. See Dealertrack, Inc. v. Huber, Nos.,
2012 WL 164439, at *16 (concluding that claims drawn to a “computer-aided” method of
processing information through a clearinghouse were ineligible abstract ideas under section 101);
CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1375 (Fed. Cir. 2011) (emphasizing
“that the basic character of a process claim drawn to an abstract idea is not changed by claiming
only its performance by computers, or by claiming the process embodied in program instructions
on a computer readable medium”).
Furthermore, the fact that the ‘786 claim relies in part on four other patents for its
inference database does not save the defendants’ claim under section 101. The defendants
argued at the Motions Hearing that “the means plus function language is relevant [to the machine
prong analysis], because it provides even further support that the claims are intimately tied to the
computer for as you know, for means plus function language, we have to disclose the structure.”
Tr. 39:16-20. In turning to the defendants’ proposed claim construction of the term “means for
generating,” which they cited at the Motions Hearing to satisfy the machine prong of the MOT
test, the Court notes that the defendants propose the following construction: “Inference engine
and its equivalents.” Defs.’ Cl. Constr. Br., ECF No. 54, at 6. The defendants describe the
“corresponding structure” as follows:
The inference engine 26 may be implemented as hardware, software, or
combinations thereof. Inference engines are known and any of a variety thereof
28
may be used to carry out the present invention. Examples include, but are not
limited to, those described in U.S. Pat. No. 5,263,127 to Barabash et al. (Method
for fast rule execution of expert systems); U.S. Pat. No. 5,720,009 to Kirk et al.
(Method of rule execution in an expert system using equivalence classes to group
database objects); U.S. Pat. No. 5,642,471 to Paillet (Production rule filter
mechanism and inference engine for expert systems); U.S. Pat. No. 5,664,062 to
Kim (High performance max-min circuit for a fuzzy inference engine).
Defs. Cl. Constr. Br. at 6 (quoting, inter alia, ‘786 patent, Col. 8, lines 25-37). The Court finds
that general references to other patents as “examples” of components of a structure without any
detail as to implementation or combination is simply insufficient to identify a structure in the
claims. This is fatal for the defendants’ claims. Accordingly, the Court finds that nothing in the
defendants’ proposed claim construction helps them satisfy the “machine” prong of the MOT
test.
Second, the computing device referenced in the claims is incidental to the claimed
invention and is not used for more than “insignificant postsolution activity,” and thus does not
satisfy the machine prong. Diehr, 450 U.S. at 191. As in Flook, the computing device is merely
a means of improving an existing process, which does not make the claims of the patents-in-
dispute patentable. Flook, 437 U.S. at 595 n. 18. Indeed, when a computer is functioning simply
to speed up a process, this does not make the process patentable. CLS Bank Int’l, 768 F. Supp.
2d at 238-39 (“In order for the addition of a machine to impose a meaningful limit on the scope
of a claim, it must play a significant part in permitting the claimed method to be performed,
rather than function solely as an obvious mechanism for permitting a solution to be achieved
more quickly”); see also Cybersource, 654 F.3d at 1375-76 (case would be different if “as a
practical matter, the use of a computer [was] required”). In the patents-in-dispute, the computing
device referenced in the claims appears to be doing nothing more than speeding up the research
and mental processes that a doctor normally goes through when evaluating the best treatment
29
options or regimen for a given patient. Thus, Claim 1 of the ‘786 patent does not satisfy the
machine prong of the MOT test.
2. Claims of the Patents-in-Dispute Do Not Satisfy the Transformation Test
To satisfy the “transformation” prong of the MOT test, a claimed process must
“[transform] a particular article into a different state or thing.” Bilski I, 545 F.3d at 954.
SmartGene argues that the claims of the patents-in-dispute “merely take one form of information
(i.e., patient information, therapeutic treatment regimens and advisory information) and represent
it in a different form (i.e., lists of therapeutic treatment regimens and advisory information)” and
that “[s]uch manipulations of information . . . are insufficient to meet the ‘transformation’ prong
of the MOT.” Pl.’s Mem. at 16. The defendants counter that “raw patient information is
transformed into a treatment regimen which in turn transforms the patient’s body.” Defs.’ Mem.
at 11. According to the defendants, this “system creates the ability for a physician to interact
with a program and view and develop a treatment regimen for a patient.” Id. This Court finds
the defendants’ arguments unavailing and concludes that the patents do not satisfy the
transformation prong of the MOT test.
The Supreme Court and Federal Circuit have offered some guidance in deciphering
whether a process satisfies the transformation prong. First, the “transformation must be central
to the purpose of the claimed process” see Bilski I, 545 F.3d at 962, and the “mere manipulation
or reorganization of data . . . does not satisfy the transformation prong.” CyberSource, 654 F.3d
at 1375. Second, “[p]urported transformations or manipulations simply of public or private legal
obligations or relationships, business risks, or other such abstractions cannot meet the test
because they are not physical objects or substances, and they are not representative of physical
objects or substances.” Bilski I, 545 F.3d at 963. Finally, as noted, the Supreme Court in
30
Prometheus recently rejected the Federal Circuit’s application of “transformation,” where the
Federal Circuit concluded that claimed processes were patent eligible where they involved
“transforming the human body.” Prometheus, 132 S. Ct. at 1302-1303. The Supreme Court in
Prometheus, however, did not retreat from a transformation analysis as part of a subject matter
patentability test under section 101.
The Federal Circuit’s guidance in CyberSource is particularly instructive. In
Cybersource, the Federal Circuit held that a method for detecting credit card fraud in internet
commerce constituted ineligible patent subject matter. Id. There, the parties sought patent
protection over a process that compares databases comprised of credit card transaction history
information to determine whether current purchases are indicative of credit card users’
purchasing habits. 654 F.3d at 1367. The Federal Circuit concluded that such an invention does
not constitute patent eligible subject matter because it “can be performed by human thought
alone . . .” Id. at 1373. The Federal Circuit also explicitly stated that the mere use of the internet
does not create patentable subject matter, because the internet is utilized as a “source of data,”
and “mere [data-gathering] step[s] cannot make an otherwise nonstatutory claim statutory.” Id.
at 1370 (quoting In re Grams, 888 F.2d 835, 840 (Fed. Cir. 1989)). The Federal Circuit found
that the patents-in-dispute did not satisfy the transformation prong because “[t]he mere
manipulation or reorganization of data . . . does not satisfy the transformation prong.” See
CyberSource, 654 F.3d at 1375. This conclusion indicates that even if computers simplify data
gathering and computation functions, a claimed invention is nevertheless unpatentable if it may
be entirely performed through mental processes.
Examining the Supreme Court and Federal Circuit precedent, as well as decisions in this
Circuit, the Court concludes that, the ‘786 patent does not involve transformation. As in Bilski,
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Cyberspace, and CLS Bank Int’l, the alleged transformation performed in the defendants’ patents
is more akin to a manual reorganization of treatment options. This does not satisfy the
transformation prong of the MOT test. See, e.g., CLS Bank Int'l, 768 F. Supp. 2d at 234-35(rejecting argument that “would convert almost any use of a computer, or other electronic device
with memory, to a transformation under the MOT test simply because data would necessarily
have to be manipulated . . . .”) (citations omitted).
The defendants’ arguments to the contrary are not persuasive. Specifically, the
defendants note that the Federal Circuit, in Bilski I, stated that “the transformation of . . . raw
data into a particular visual depiction of a physical object on a display was sufficient to render
that more narrowly-claimed process patent-eligible” and that “the electronic transformation of
the data itself into a visual depiction . . . was sufficient.” See Defs.’ Mem. at 11 (quoting Bilski,
545 F.3d at 963 (referring to In re Abele, 684 F.2d 902 (C.C.P.A. 1982)). Defendants’ reliance
on Abele is misplaced. In Abele, the patent applicant sought to patent a process for improving
the accuracy and reliability of CAT scan imaging techniques, while simultaneously reducing the
X-ray exposure of the patient. Abele, 684 F.2d 902, 903 (C.C.P.A. 1982). This process of
improving imaging is very different than the data manipulation at issue here. Unlike in Abele,
the patents here do not manifest any sort of physical transformation, and therefore do not satisfy
the transformation prong of the MOT. 16
16
The defendants further rely on an Eastern District of Virginia decision, VS Techs., LLC v. Twitter, Inc., No. 2:11-
cv-43, 2011 U.S. Dist. LEXIS 114998, at *19 (E.D. Va. Oct. 4, 2011), where the court noted that a claim directed to
the creation of an online community “involves a transformation in the sense that it creates the ability for people to
interact in real time.” The defendants argue that “[i]n the same way the technology in [VS Tech] involved a
transformation by creating the ability to interact in real time, the Asserted Claims involve a transformation by
creating the ability for the user to interact with the program to develop a treatment regimen.” Defs.’ Mem. at 11-12.
The Court does not find this argument convincing as there is nothing in the Supreme Court or Federal Circuit
precedent that suggests data matching and ranking, as described in the patents-in-dispute, constitute a
“transformation” of that data in a manner that would satisfy the machine or transformation test. Similarly, the
argument by the defendants that their invention “transforms the patient’s body,” see id. at 11, appears to be exactly
the type of transformation expressly rejected by the Supreme Court in Prometheus.
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D. Patent Claims Do Not Constitute Eligible Subject Matter
A claimed method may still constitute eligible subject matter despite failing to satisfy the
MOT test. See Bilski II, 130 S. Ct. at 3226. The defendants assert that the MOT test is
“disfavored,” and that the Court should instead be guided by the Federal Circuit’s reasoning in
Ultramercial, LLC v. Hula, LLC, 657 F.3d 1323, 1329 (Fed. Cir. 2011). Defs.’ Mem. at 8. An
examination of this Federal Circuit precedent, however, only reaffirms that the defendants’
patents-in-dispute are abstract and do not constitute patent eligible subject matter.
In Ultramercial, the Federal Circuit held that a patent claiming a method for “distributing
copyrighted products (e.g. songs, movies, books) over the Internet where the consumer receives
a copyrighted product for free in exchange for viewing an advertisement, and the advertiser pays
for the copyrighted content,” constituted patentable subject matter. 657 F.3d at 1324. The
Federal Circuit upheld the patent-eligibility of the mechanism, concluding that this patent “does
not claim a mathematical algorithm, a series of purely mental steps, or any similarly abstract
concept.” Id. at 1329. Rather, it “claims a particular method for collecting revenue from the
distribution of media products over the Internet.” Id. This invention constituted patentable
subject matter because the claim itself required complex computer programming and “controlled
interaction with a consumer via an Internet website.” Id. at 1330. Unlike the claims in
Cybersource, the Federal Circuit concluded that the claims here were “something far removed
from purely mental steps.” Id. at 1329-1330 (emphasis in original).
While the claims in Ultramercial could not be performed as “purely mental steps,” and
involved a number of steps, with complex computer programming, the defendants’ claimed
inventions can be performed – and, in fact, are routinely performed – in the minds of physicians
who are evaluating patients and selecting therapeutic treatment options for them. The patents-
33
in-dispute are thus more like the claimed invention in CyberSource – a process for detecting
credit card fraud in Internet transactions – which the court concluded could be performed
exclusively in the human mind. See CyberSource, 654 F.3d at 1373. As in CyberSource, the
claims at issue involve the “organization of data” and do “not require the method to be
performed by a particular machine . . .” Id. at 1370. The claims thus suffer from the same
defects as the claims in CyberSource and are not patentable.
The Federal Circuit’s recent decision in DealerTrack only reinforces that the patents-in-
dispute are not patentable. There, the Federal Circuit found that a process for automating credit
applications by receiving credit applicant data from a source and then forwarding the data to
potential creditors and forwarding the reply data to the first source, constituted ineligible patent
subject matter because it sought to “‘[explain] the basic concept’ of processing information
through a clearing-house, just as claim 1 in Bilski II ‘[explained] the basic concept of hedging.’”
DealerTrack, Inc. v. Huber, Nos. 2009-1566, 2009-1588, 2012 U.S. App. LEXIS 1161, at *47
(Fed. Cir. Jan. 20, 2012) (quoting Bilski II, 130 S. Ct. at 3231). The Federal Circuit held that the
claim was abstract because the method did not “impose meaningful limits on the claim’s scope.”
Id. at *48 (quoting Bilski I, 545 F.3d at 961-62). In so holding, the Federal Circuit rejected the
assertion that a computer was critical to the process because “the computer here ‘can be
programmed to perform very different tasks in very different ways[.]’” Id. at *48 (quoting
Aristocrat Techs. Australia PTY Ltd. v. Int’l Game Tech., 521 F.2d 1328, 1333 (Fed. Cir. 2008)).
Thus, “it does not play a significant part in permitting the claimed method to be performed.” Id.(citations and quotation marks omitted). The Federal Circuit found the patent invalid because the
claims were “silent as to how a computer aids the method, the extent to which a computer aids
the method, or the significance of a computer to the performance of the method.” Id. at *48. In
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addition, the claims did “not require a specific application” nor were they “tied to a particular
machine.” Id. at 49.
In light of this precedent, the Court finds that the defendants’ claims mirror the mental
processes that a physician performs, and therefore embody the “‘basic tools of scientific and
technological work’ that are free to all men and reserved exclusively to none.” CyberSource,
654 F.3d at 1373 (quoting Benson, 409 U.S. at 67). Furthermore, the computing device
references in the defendants’ patents may be “programmed to perform very different tasks in
very different ways,” and therefore cannot serve as a significant limitation or constraint on the
claimed invention. DealerTrack, 2012 U.S. App. LEXIS 1161, at *48 (quoting Aristocrat, 521
F. 3d at 1333). Like the courts in Cybersource and DealerTrack, the Court finds the defendants’
invention unpatentable. 17
E. Claim Construction
Finally, while it is not necessary for this Court to formally construct the claims, the Court
notes that the defendants’ proposed construction of the disputed claims only reinforces that the
17
SmartGene argues that another reason the patents-in-dispute are unpatentable is that the patents are directed to
software per se. Pl.’s Mem. at 13; Pl.’s Reply at 2. Specifically, SmartGene points to the language of the ‘786
patent specification, which states that the invention may be constituted in “. . . an entirely software embodiment. . .”
Pl.’s Mem. at 13 (quoting Ex. A., ‘786 patent, Col. 4, lines 17-20). SmartGene argues that “[s]uch lack of structure
renders the claims unpatentable as directed to software per se. Id.; see also Ex. Parte Lection, Appeal No. 2009-
012445, 2011 Pat. App. LEXIS 21213, *4 (BPAI Aug. 10, 2011) (“As such, claim 1 encompasses software per se
and is therefore directed to nonstatutory subject matter.”); Ex Parte Barbee, Appeal No. 2009-009777, 2011 Pat.
App. LEXIS 20090, at *3 (BPAI June 21, 2011) (“An embodiment that is software per se falls outside of the scope
of § 101”); Ex parte Liebl, Appeal No. 2009-010624, 2010 Pat. App. LEXIS 14403 (BPAI Mar. 16, 2010) (finding
that “the subject matter of the claims on appeal may be properly considered to directly and indirectly recite abstract
logic, data structures or software per se which our earlier noted case law considers not to be within in any statutory
category within 35 U.S.C. § 101”); Ex Parte Venkata, Appeal 2009-007302 n.1, 2010 Pat. App. LEXIS 18234, at *8
(BPAI Oct. 6, 2010) (noting that the specification “indicates that the service discovery functions performed by the
recited agents may be implemented in software, firmware, hardware or a combination thereof” and thus finding “that
the claimed agents comprised in the service discovery system can exist solely in software” and that “[r]eciting
descriptive material per se (e.g., data structures and computer programs) . . . is non-statutory.”). The defendants do
not directly address SmartGene’s software per se argument in their brief. When given an opportunity to respond to
SmartGene’s software per se argument at the Motions Hearing, the defendants argued, inter alia, that “the software
per se objection is mainly one that has been used in the context of prosecution, and is not a doctrine that has been
relied on in the court’s recent jurisprudence in the 101 issue.” Tr. 31:19-22. Since this software per se objection is
not necessary to resolve in this Motion, the Court declines to address it.
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defendants’ claims are unpatentable. The claimed steps of the invention, and not the
specification, must “impose meaningful limits on the claim’s scope,” see Bilski I, 545 F.3d at
961-62, in order to cabin the claimed invention’s potential reach. The claim language in Claim 1
of the ‘786 patent fails to enforce any meaningful limits on the scope and breadth of the claimed
invention. The defendants propose, for example, that the term “patient information” in Claim 1
of the ‘786 patent needs no definition. While SmartGene proposes constructing the claim
“patient information” to include “gender, age, weight, CD4+ cell information, hemoglobin
information, neuropathy information, neutrophil information, pancreatitis, hepatic function, renal
function, drug allergy and intolerance information, information for drug treatments for other
conditions, historical information on prior therapeutic treatment regimens for a disease or
medical condition, and prior patient information,” the defendants insist that the plain language of
the claim should apply. Defs.’ Cl. Constr. Br. at 2. Likewise, SmartGene proposes that the term
“knowledge base” be narrowly constructed to, at a minimum, limit the three databases to human
medical information. 18 Id. at 3. The defendants decline any narrow construction and instead
propose constructing the term “knowledge base” in Claim 1 of the ‘786 patent simply as
“database.” Id. Thus, the contours of these patents with no definition as to which information is
pertinent, combined with the broadest possible construction of the terms, could encompass far
more than the common understanding of therapeutic treatment regimens and could, for example,
include financial information about the patient and the most economic treatment options
available. This is reminiscent of the situation in Benson, as discussed supra, where the Supreme
18
Specifically, SmartGene proposed that “[t]he term ‘first knowledge base’ should be construed as a database of
information accumulated from a body of knowledge of human specialists in the field of therapeutic treatment
regimens. The term ‘second knowledge base’ should be construed as a database of information distinct from the
first knowledge base, wherein the second knowledge base is accumulated from a body of knowledge of human
specialists in the field of expert rules. The term ‘third knowledge base’ should be construed as a database of
information distinct from the first knowledge base and the second knowledge base, wherein the third knowledge
base is accumulated from a body of knowledge of human specialists in the field of advisory information.” Defs.’ Cl.
Constr. Br. at 3.
36
Court expressed concern that a claim was “so abstract and sweeping as to cover both known and
unknown uses,” which could “vary from the operation of a train to verification of drivers’
licenses to researching the law books for precedents” and “be performed through any existing
machinery or future-devised machinery or without any apparatus.” Benson, 409 U.S. at 68.
Indeed, the breadth of these proposed constructions only underlines the abstractness of Claim 1
of the ‘786 patent. The defendants’ claims are “invalid as being directed to an abstract idea
preemptive of a fundamental concept or idea that would foreclose innovation in this area.”
DealerTrack, 2012 U.S. App. LEXIS 1161, at * 47; see also MySpace, Inc. v. Graphon Corp.,
2012 U.S. App. LEXIS 4375, at *39 (Fed. Cir. Mar. 2, 2012) (J. Mayer, dissenting) (noting that
patent claims over “abstract” concepts “fall outside the ambit of section 101 because they are too
useful and too widely applied to possibly form the basis of any patentable invention”).
IV. CONCLUSION
For the reasons discussed above, this Court finds that the defendants’ Patent Nos.
6,081,786 and 6,188,988 B1 constitute ineligible subject matter under 35 U.S.C. § 101, and are
therefore invalid. Accordingly, SmartGene’s Motion for Partial Summary Judgment, ECF No.
47, is granted. Since the patents at issue are invalid, the remaining claims and counterclaims
pending in the suit are dismissed. An Order consistent with this Opinion shall be filed.
DATED: March 30, 2012
/s/ Beryl A. Howell
BERYL A. HOWELL
United States District Judge
37