RegenxBio Inc. v. Sarepta Therapeutics, Inc. (D. Del. 2024) | McDonnell Boehnen Hulbert & Berghoff LLP
A consequence (predominantly negative) of the Supreme Court’s recent foray into defining (however inadequately) the contours of patent-eligible subject matter is to give the district courts (and to a somewhat lesser extent, the Patent and Trademark Office) free rein to apply any Supreme Court precedent (no matter how archaic, ill-defined or incoherently reasoned) in invalidating claims on Section 101 grounds. This tendency was exhibited in the district court invalidation of the Sequenom patent portfolio (Ariosa Inc. v. Sequenom, Inc.), and has arisen, phoenix-like in a decision in the District Court of Delaware, based on of all things, Funk Bros. Seed Co. v. Kalo Inoculant Co. (see RegenexBio Inc. v. Sarepta Therapeutics Inc., Civil Action No. 20-1226 RGA).
The case arose over Sarepta’s use of an adeno-associated virus variant disclosed and claimed in RegenxBio’s U.S. Patent No. 10,526,617* to make a gene therapy product to treat Duchenne’s muscular dystrophy. The ‘617 patent considered claim 1 to be representative:
1. A cultured host cell containing a recombinant nucleic acid molecule encoding an AAV vp1 capsid protein having a sequence comprising amino acids 1 to 738 of SEQ ID NO: 81 (AAVrh.10) or a sequence at least 95% identical to the full length of amino acids 1 to 738 of SEQ ID NO: 81, wherein the recombinant nucleic acid molecule further comprises a heterologous non-AAV sequence.
The District Court considered the parties’ arguments regarding subject matter eligibility by applying the tests enunciated in Mayo Collaborative Services v. Prometheus Laboratories, Inc. as further explicated in Alice Corp. v. CLS Bank International. According to the District Court, Defendants asserted that the claims were directed to “naturally occurring rh.10 sequences,” which were not patent eligible thereby, and further that the claims “monopolize” the use of these sequences in cultured host cells “for any research or commercial application” (perhaps supplying all the motivation the court needed for invalidating them). Having “established” satisfaction of step 1 of the Mayo/Alice test as being directed to naturally occurring sequences, the District Court accepted that under step 2 of that test, the skilled worker would have had “all the tools needed to make and use cultured host cells containing nucleic acids encoding the full scope of the claimed capsid proteins.” (This argument echoes the rationale enunciated successfully in In re Kubin, and unsuccessfully in In re Bell and In re Deuel, that having a method for making something was equivalent to having the composition itself, in the obviousness context.) Generically, Defendants argued that “cultured host cells, recombinant nucleic acid molecules, heterologous non-AAV sequences” and other components were all well-known and hence fail step 2 of the test, illustrating the lessons of Sequenom and other instances where broad claiming and disclosure are used against a patentee in the eligibility context. Defendants concluded their argument (and the District Court seemed to accept it) by asserting that the combination of the elements do not add an “inventive concept” that amounts to the requisite (and undefined) “significantly more” needed to confer eligibility in the face of the naturally occurring rh.10 sequences themselves.
Plaintiffs argued that the proper test was the “markedly different” test, satisfied here by the claim elements considered as a whole, i.e., the recombinant host cells that was not naturally occurring and indeed were “structurally and functionally different.” Defendants limited their counter argument, according to the opinion, on the straw man that the rh.10 sequences were not themselves markedly different, rather than the recombinant cell that is the proper subject of the claim.
The District Court’s rationale centered on whether the resulting cell represented a “change” from what occurred in nature, concluding it did not. Relying on Funk Bros., the District Court opined that “taking ‘two sequences from two different organisms and put[ting] them together’ is no different than taking two strains of bacteria and mixing them together.” According to the opinion, the inventors here “have not changed any of the claimed invention’s naturally occurring components” and “[w]ithout some change, the mere fact that the ‘617 patent’s inventors combined natural products and put them in a host cell does not make the invention patentable [(sic, patent eligible)] under §101” (ignoring that the combination is itself a change in the properties of the cell transformed into a recombinant cell).
The remainder of the District Court’s analysis under step 2 followed the familiar regimen of selecting statements in the ‘617 patent specification relating to ways of producing the components of the claimed invention to illustrate the “well-known, routine, and conventional” nature thereof in support of the District Court’s non-eligibility conclusion (as well as a short detour regarding whether use of the claimed invention for gene therapy, as used by Defendants, would make a difference, the District Court concluding that it would not).
The analysis applied by the District Court exemplifies how the complicated “framework” set forth under the Supreme Court tests in Mayo and Alice can (and in this case did) encourage courts to lose the forest for the trees. This is illustrated by the District Court’s reliance on Funk Bros., wherein the combination of two naturally occurring species of bacteria was held to be ineligible for patenting. The difference, of course, is there was no change in either species of bacteria in that case. In this case, the cells have been transformed by introduction of the AAV vector (“a recombinant nucleic acid molecule,” per se non-naturally occurring) that further comprises “a heterologous non-AAV sequence,” which combination does not occur in nature and is “a non-naturally occurring manufacture or composition of matter and a product of human ingenuity ‘having a distinctive name, character and use'” under Chakrabarty. The District Court founders on the specifically recited AAV sequence (encoding AAV vp1 capsid protein) being itself naturally occurring, another example of a court cherry-picking the elements of a claim despite avowing to be considering the claim “as a whole,” as the District Court does here (Defendants encouraging such foundering by their arguments set forth in the opinion.)
Ironically, the District Court’s decision is contrary to Justice Thomas’s opinion in AMP v. Myriad Genetics, which it purports to apply. Specifically the opinion states:
[T]his case does not involve patents on new applications of knowledge about the BRCA1 and BRCA2 genes. Judge Bryson aptly noted that, “[a]s the first party with knowledge of the [BRCA1 and BRCA2] sequences, Myriad was in an excellent position to claim applications of that knowledge. Many of its unchallenged claims are limited to such applications” [emphasis in opinion].
The meaning of Funk Bros. is similarly misunderstood (albeit a misunderstanding shared by most in view of the sparse nature of Justice Douglas’s language in the Court’s opinion). As explained by Justice Frankfurter’s concurring opinion:
Insofar as the court below concluded that the packaging of a particular mixture of compatible strains is an invention and as such patentable, I agree, provided not only that a new and useful property results from their combination, but also that the particular strains are identifiable and adequately identified. I do not find that Bond’s combination of strains satisfies these requirements. The strains by which Bond secured compatibility are not identified and are identifiable only by their compatibility. . . . [The patentee] appears to claim that since he was the originator of the idea that there might be mutually compatible strains and had practically demonstrated that some such strains exist, everyone else is forbidden to use a combination of strains whether they are or are not identical with the combinations that Bond selected and packaged together. It was this claim that, as I understand it, the District Court found not to be patentable, but which, if valid, had been infringed. . . . The consequences of such a conclusion call for its rejection. Its acceptance would require, for instance in the field of alloys, that if one discovered a particular mixture of metals, which when alloyed had some particular desirable properties, he could patent not merely this particular mixture but the idea of alloying metals for this purpose, and thus exclude everyone else from contriving some other combination of metals which, when alloyed, had the same desirable properties. In patenting an alloy, I assume that both the qualities of the product and its specific composition would need to be specified. The strains that Bond put together in the product which he patented can be specified only by the properties of the mixture.
The careless, improvident, and unnecessary resurrection of Funk Bros. in the Supreme Court’s Myriad decision, indicating the Court’s desire to re-impose its own jurisprudence over that developed by the Federal Circuit, thus bears fruit here. As noted by a former Solicitor General, the Federal Circuit spent 30 years “quietly walking away from” Supreme Court decisions it found to have been wrongly reasoned or decided, but the consequence of the correction is shown in this case, where such a decision is used in the broader context of subject matter eligibility to invalidate heretofore conventionally eligible claims.
It should also be noted that co-plaintiff in this case is the University of Pennsylvania, which along with the Biden administration’s equally ill-considered effort to warp the march-in rights provisions of the Bayh-Dole Act into a basis for the government to set drug prices threatens to throw a spanner into the engine of innovation (at least for biotechnology and pharmaceuticals). The Twentieth Century gave us all an object lesson in governmental overreach in managing an economy and those whose inventive efforts provide the basis for real-world advances in technology, the economy, and citizens’ lives. One would think (incorrectly, it would seem) that lesson having been learned the hard way would inform governmental actions in the Twenty-First century.
* The ‘617 patent had an earliest priority date of November 12, 2002 and thus expired on November 12, 2022.
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