Source: https://www.fenwick.com/publications/pages/threading-the-needle-between-divided-infringement-issues-and-patentable-subject-matter.aspx
Timestamp: 2019-04-23 14:00:28+00:00

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Personalized medicine is an emerging approach to medical practice that carries the promise of effective, individualized treatment. Investment required to bring these life-saving innovations to market are traditionally secured through appropriate patent protection. Recently, this has become challenging due to patent law developments in the areas of divided infringement and patentable subject matter.
Innovative personalized medicine diagnostics can include methods for data gathering and data analysis. Data gathering may be separated from subsequent analysis, e.g., drug sensitivity or disease prognosis. These steps can be performed by different parties, which can give rise to issues of divided infringement.
The legal standard for joint infringement of patent claims is currently unsettled. 35 U.S.C. Section 271(a) governs direct infringement: “whoever without authority makes, uses, offers to sell or sells any patented invention …” Direct infringement requires an entity to perform each and every element of the claimed invention. Warner-Jenkinson Corp. v. Hilton Davis Corp., 520 U.S. 17 (1997).
Divided infringement occurs when the actions of multiple entities are combined to perform every step of a claimed method. Prior to 2007, courts were willing to find a defendant liable for direct infringement when two entities’ actions were combined to infringe the claim, and the defendant instructed the other entity to perform the infringing steps. Shields v. Halliburton, 493 F. Supp. 1376 (W.D. La. 1980); Mobil Oil Corp. v. W.R. Grace & Co., 367 F. Supp. 207 (D. Conn. 1973).
More recently, courts have required that an entity control or direct each step of the process performed by another entity to find joint infringement. MuniAuction, Inc. v. Thomson Corporation LLC, 532 F.3d 1318 (Fed. Cir. 2008); BMC Resources, Inc. v. Paymentech, L.P., 498 F.3d 1373, 1380 (Fed. Cir. 2007).
Now, a stricter legal standard for joint infringement - an agency relationship or a contractual obligation - has been proposed in Akamai Technologies, Inc. v. Limelight Networks, Inc., 629 F.3d 1311 (Fed. Cir. 2010), and McKesson Technologies Inc v. Epic Systems Corp., 2011 U.S. App. LEXIS 7531 (Fed. Cir. 2011).
In Akamai, the patents at issue included methods for a content delivery service that delivers a webpage from a content provider domain and stores embedded objects for the webpage on a separate server. Akamai’s competitor, Limelight, practiced some of the claimed steps, but Limelight’s customers performed the remaining steps for “tagging” and “serving” the embedded objects. Although a jury found Limelight liable, the district court rejected the jury verdict and found that Limelight had not directed or controlled its customers’ actions.
These decisions, now vacated, were granted en banc rehearing. Oral arguments were heard, and a decision is expected later this year.
Petitioners for Akamai have proposed a less restrictive concerted action standard: “a person is subject to liability when he or she does a tortuous act in concert with the other or pursuant to a common design.” Brief for Plaintiff-Appellant on Rehearing En Banc at 23. Akamai Technologies, Inc. v. Limelight Networks, Inc., 629 F.3d 1311 (Fed. Cir. 2010).
The Federal Circuit may affirm the existing standard in Akamai and McKesson. If the Federal Circuit adopts a concerted action standard, it will be beneficial for patent holders, but can increase exposure to litigation and curtail commercial transactions. Applicants should take care to draft method claims that recite actions performed by a single entity. For instance, a step for diagnosing a patient, typically performed by a physician, should not be included in a claim reciting steps performed by a laboratory.
Method claims drafted to avoid divided infringement, for example, by claiming only the data analysis and not the data collection steps, can give rise to patentability issues under the patent law’s eligible subject matter statute, 35 U.S.C. Section 101.
The Supreme Court has interpreted the broad language of this statute to exclude the patenting of abstract ideas, physical phenomena, and laws of nature. See Gottschalk v. Benson, 409 U.S. 63 (1972); Diamond v. Chakrabarty, 447 U.S. 303 (1980). Recent cases have interpreted the scope of Section 101’s exceptions.
In Bilski v. Kappos, 130 S. Ct. 3218 (2010), the Court rejected the “machine or transformation” test as the sole way for determining patent-eligibility of business method claims and held that the “concept of hedging” was an unpatentable abstract idea.
Courts have since addressed the law of nature exception in life science cases.
In Classen Immunotherapies, Inc. v. Biogen Idec, et al. (Fed. Cir. 2011), the Federal Circuit distinguished between claims directed to a law of nature and those directed to the application of that law.
In Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S.Ct. 1289 (2011), the Supreme Court held unpatentable as directed to a law of nature claims covering the relationship between concentrations of certain metabolites in the blood and the likelihood that a thiopurine drug dosage would prove ineffective or cause harm.
In Assn. for Molecular Pathology v. Myriad Genetics, Inc. (Fed. Cir. 2011), the Federal Circuit held isolated DNA molecules to be patent eligible, but invalidated claims to certain methods of analyzing or comparing BRCA1 and BRCA2 genes. After petitions for writ of certiorari were made, the Supreme Court GVR’d the case for reconsideration in view of Prometheus.
In Smartgene, Inc. v. Advanced Biological Laboratories, SA, et al., 2012 U.S. Dist. LEXIS 44138 (D. D.C. 2012), a patent for guiding the selection of a treatment regimen for a patient was patent ineligible because the claims tracked the abstract mental processes of a doctor treating a patient. In dicta, the court stated that the recitation of a computing device “does not impose any meaningful limit on the scope of the claims” and amounted to “insignificant post solution activity.” However, the court suggested that this may be resolved by claiming a “particular” type of machine or showing that the computing device is necessary to carry out the method.
Thus, in satisfying the requirements under Section 101, applicants can face a divided infringement problem. On the other hand, in attempting to avoid divided infringement, claims may be interpreted as a law of nature or an abstract idea.

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