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Supreme Court Analysis of Drug Dosing Patent May Affect Financial Services Patents

March 20, 2012

Today’s Supreme Court decision in Mayo Collaborative Services v. Prometheus Laboratories, Inc. provides additional guidance on how to determine whether a new and not obvious method is patent eligible subject matter.  On its face, the opinion relates to the specific question of whether a claimed invention is directed to a law of nature.  However, the analysis appears to have more universal application and is likely to be applied in financial services cases where the issue is whether an abstract idea is being claimed.

The Prometheus Patent

The patent at issue claims a method for optimizing the dosage of a medicine used to treat Crohn’s disease and colitis.  Specifically, the claimed invention recites administering the medicine to a patient, testing the patient’s blood for a metabolite, and then determining whether the current dosage is too high, too low, or just right, based on the metabolite level.  The use of the medicine to treat these conditions was well-known before the patent was filed, as were the tests for the metabolite level and the existence of a correlation between the metabolite level and the dosage of the medicine.  What was not known, was the precise metabolite levels that were so high as to cause harm or so low to be ineffective.  Therefore, the inventor was the first to accurately determine metabolite levels that indicated a need to increase or decrease the dosage of the medicine for a patient.

The Analysis

The Supreme Court found the patent to be invalid under 35 U.S.C. § 101 because it is directed to a law of nature.  The Court reasoned that the correlation between the level of metabolites in a patient’s blood and the efficacy of the drug was merely a law of nature because the correlation exists in nature and was not created by the inventor.  The additional steps added to this law of nature—administering the drug, testing for a metabolite level, and realizing the correlation—were not enough to make the claim an application of that law of nature as opposed to a mere re-statement of the law.  Of great significance was the fact that the steps, other than the correlation, were all conventional steps.  Skilled people already knew how to administer the drug and check for the level of the metabolites in blood.  The only thing skilled people did not know before this invention was the specific levels of the correlation.  Furthermore, the only use for the correlation is to properly optimize dosage of the medicine.  Therefore, the claims are a complete monopoly over the law of nature.  Said another way, the claims amounted to nothing more than simply “apply the correlation.”

Application to Financial Services Inventions

Supreme Court decisions have generally identified three types of innovation that are not eligible for patent protection:  laws of nature, physical phenomena, and abstract ideas.  While Mayo relates specifically to the “law of nature” analysis, the Court seemed to be setting forth an analysis that would be applied in abstract idea cases.  In particular, it purported to derive its analysis from the Diehr and Flook cases, which were mathematical formula cases, rather than laws of nature cases.  Furthermore, the Court also circled back after its primary analysis to confirm that the decision comported with the Bilski hedge fund case.  Therefore, the analysis of financial services patents is likely to follow the Mayo model—at least in so far as the claims include mathematical calculations or mental steps.

The Mayo analysis appears to require a consideration of whether the claims–apart from the law of nature, mathematical formula, or (presumably) abstract idea–include anything novel and not obvious.  The recited steps of the claim need to include some unconventional step over and above any new abstract idea or mathematical formula.  This will likely be a stumbling block for several existing financial services patents that are in essence applying a new formula for calculating account values or payment amounts.   In these financial calculation patents, the issue will become whether there are any unconventional steps or structures recited that convert the claims into a patentable application of the formula rather than just a re-statement of the formula.

The Take-Away

This case will likely be a popular tool for patent examiners to reject pending applications.  In new and pending cases, we will want to craft claims that include steps or structures apart from any mathematical formulas or mental steps that can be characterized as being unconventional.  On its face, it seems like a bad case for patent owners and patent applicants, and good case for patent defendants.  However, if it can be applied in a bright-line fashion such that it provides some certainty about what is an abstract idea and what is not, it may ultimately be good for patent applicants who can craft their applications to meet a known standard, rather than a moving target.

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