Kappos Says Pandemic Calls For New Medical IP Precedent

By Dani Kass
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Law360 (March 23, 2020, 8:07 PM EDT) -- An organization chaired by former U.S. Patent and Trademark Office Director David Kappos on Monday asked the agency's current head to designate two Patent Trial and Appeal Board opinions dealing with the patent eligibility of medical inventions as precedential, saying the COVID-19 pandemic highlights the need for clarity.

The Naples Roundtable, which says it's focused on strengthening the patent system, wants Director Andrei Iancu to bump Ex parte Olson and Ex parte Fautz from their current "informative" designation to be fully binding on the PTAB. In both cases, the board said medical invention patent applications were patent eligible under Section 101 of the Patent Act.

"The need for ongoing medical discovery and innovation in the life sciences has been highlighted by the recent outbreak of the COVID-19 pandemic — the very novelty of which will require innovation that should not be inhibited by a misapplication of Section 101," the letter states. "Designating these decisions as precedential will reduce the likelihood that Section 101 will be misapplied and, in turn, will promote innovation in the life sciences and encourage a robust response to public health challenges like the COVID-19 pandemic."

Kappos, now a partner at Cravath Swaine & Moore LLP, told Law360 that the letter was in the works before the pandemic reached the level it has now, but that it was worth tying in "given the urgent need for investment in innovation to create not only a vaccine but also new medical devices and diagnostic kits."

"We thought it worth mentioning the critical dependence of life science innovation on the incentives provided by a patent system that includes their efforts as eligible for patent protection," Kappos said. 

The Olson opinion involved St. Jude Medical's application for a patent that covers a 3D mapping system used for heart procedures. A USPTO examiner had denied the application, saying the claims essentially cover a general algorithm that was executed by a conventional computer.

While the PTAB agreed that the claims fell into the bucket of mathematical concepts, it said the invention applied the algorithm in a "meaningful way, such that it is more than a drafting effort designed to monopolize the mathematical concepts exception."

The Fautz decision deals with a Siemens application involving a medical imaging technology called MR tomography. The board similarly found that Siemens' invention used mathematical equations to improve the imaging system. The PTAB again reversed, saying the claims were not directed to an abstract idea. 

"We chose these particular cases because they are well-reasoned and well-articulated, and they represent good policy that provides needed guidance to all participants in the IP ecosystem — patent applicants, lawyers, USPTO Examiners, and judges alike," Kappos said. "The fact that these decisions are currently designated as 'informative' shows that the USPTO already recognizes their significance, thus making these decisions especially attractive candidates for elevation to 'precedential' status."

The Naples Roundtable told Iancu that both rulings provided insight into how to interpret 2019 guidance from the USPTO over subject matter eligibility. Following U.S. Supreme Court rulings in Alice and Mayo , the USPTO calls for first looking at whether an invention is patent-eligible subject matter, and if not, whether it's "integrated into a practical application."

In both Olson and Fautz, the move to step two wasn't needed, because the PTAB found that both inventions passed the first step, the nonprofit said. If these rulings are applied consistently, the court is saved from moving to the second step, which increases efficiency and "[guards] office personnel from going astray," the letter states. The USPTO's initial ruling otherwise in both of these cases is proof that the USPTO needs to step in, the letter states. 

"The need for such clarification is evident from the examiner's rejection, and the opinion provides appropriate blazemarks for both examiners and the board in applying the guidance in light of this decision," the Naples Roundtable said about the Olson decision.

The letter is signed by the Naples Roundtable's president, Pillsbury Winthrop Shaw Pittman LLP senior counsel Gary Hoffman; vice president and Smith Baluch LLP partner Andy Baluch; McDonnell Boehnen Hulbert & Berghoff LLP partner Kevin E. Noonan; and secretary Teresa Summers, who runs her own firm. 

--Editing by Haylee Pearl.

For a reprint of this article, please contact reprints@law360.com.

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