A federal appeals court's decision in a patent case Tuesday could give investors more confidence in biotech products. But uncertainty around what can be patented may persist until the Supreme Court weighs in again.
A three-judge panel of the U.S. Court of Appeals for the Federal Circuit ruled Tuesday in favor of In Vitro, which wanted its patent upheld for a process of repeatedly freezing and thawing a type of liver cell useful for testing, diagnostic and treatment purposes. A lower court had ruled In Vitro's process wasn't patentable because it covered a law of nature and laws of nature can't be patented.
The Federal Circuit, however, disagreed Tuesday, saying In Vitro's patent claims in this case involve a “new and useful laboratory technique.” The court also said that it doesn't matter that the steps of this new technique were already known; the process is still patentable because it involves putting those steps together in a way that “was itself far from routine and conventional.”
“This ruling is extremely significant to the life sciences industry,” said Adam Kelly, a partner at Loeb & Loeb who represented the appellants in the case, In Vitro and Rapid Litigation Management. The ruling “signals that committing resources for research and development in the life sciences industry, there is a reward for those efforts, there is a patent that will hold up when the merits of that patent are challenged,” Kelly said.
A spokesman for Thermo Fisher Scientific, which owns Cellzdirect and Invitrogen, defendants in the case, declined to comment on the ruling Tuesday. But the companies argued in court filings that the patent was invalid and that concerns about effects of the lower court's ruling on the broader life sciences industry were “overblown.”
A 2012 U.S. Supreme Court ruling in Mayo Collaborative Services, et al., v. Prometheus Laboratories, Inc., created much uncertainty in the life sciences area, Kelly said. That decision invalidated patents that the court said were based on the laws of nature. Since then, he said, courts have been finding a number of patents in the life sciences industry invalid.
That uncertainty surrounding patents has been difficult for the life sciences industry because so much investment is needed to bring a discovery to market, said Andrew Pincus, a partner at Mayer Brown, who also represented In Vitro and Rapid Litigation Management.
“I think what the court has begun to do here is say, yes, there are limits set by the Supreme Court … but that doesn't mean there still aren't clear pathways to patentability and the court laid out two of them in this decision,” Pincus said.
The National Venture Capital Association had filed a brief in the case supporting In Vitro, saying that removing patent protection “threatens future investment and the future of the life sciences industry.” The association noted that venture capital investment in the life sciences industry totaled $6.9 billion in 2013.
Arti Rai, a Duke University intellectual property law expert who was not involved in the case, called the ruling “a major attempt to carve out a space for biomedical type patents.” She said the ruling is a step forward for the life sciences industry but she cautioned that “there's going to be no slam dunk” until the U.S. Supreme Court clarifies its position.
The U.S. Supreme Court recently decided not to hear a case over a similar issue. In that case, life sciences company Sequenom had asked the Supreme Court to overturn the Federal Circuit's decision to invalidate its patent for an invention that tests a mother's blood for genetic traits in her fetus. Many had worried that the Supreme Court's decision not to take the Sequenom case—letting the lower court ruling stand—would threaten the patents of many medical and biotechnology inventions.