The patent eligibility of diagnostic methods after Prometheus: a redefined test for transformation.

Author:Peachman, Scott Frederick
 
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Introduction I. Attributes of Diagnostic Methods A. Examples of Diagnostic Methods B. Factors Affecting Diagnostic Method Development II. Basic Patent Law Principles and The Legal Debate Over Diagnostic Method Patent Eligibility A. Patent System Foundation B. The Legal Debate Over Diagnostic Method Patent Eligibility III. Two Common Arguments against Diagnostic Method Patents A. Preemption and the Exclusion of General Concepts B. An Ethical Dilemma: The Duty to Disseminate Treatment Information and the Duty to Treat 1. Dissemination of Treatment Information: The AMA Response & the Physician's Immunity Statute 2. The Duty to Treat in Lab. Corp.: To Commit Patent Infringement or Medical Malpractice? IV. The Effect of Prometheus Laboratories v. Mayo Clinic Diagnostic Method Patent Eligibility A. The Path to Prometheus I: Uncertainty for Diagnostic Method Patents B. Bilksi v. Kappos: A "New" Test for Patent Eligible Subject Matter C. Prometheus H: A Second Win for Diagnostic Method Patents D. The Aftermath of Prometheus II: A Limited Application or a Further Broadening of Patent Eligible Subject Matter? V. A Redefined Test For Transformation A. A Proposed Test B. Raising the Transformation Barrier: The "More Than Predictable" Standard 1. Scholarly Support for the More Than Predictable Standard 2. Judicial Support for a "More than Predictable" Standard: Judge Moore's Classen Dissent 3. The Distinction between Predictability and Obviousness C. The Remaining Elements of the Proposed Test 1. An Article Smaller Than the Human Body 2. The Article Should Be Particular and Sufficiently Removed from Nature 3. Imperceptible and Assayable D. Application of the Proposed Test: Diagnostic Methods in Recent Federal Circuit Cases 1. Prometheus II 2. Classen II 3. Myriad Conclusion INTRODUCTION

Diagnostic methods offer a tremendous value to our society, with benefits that usually far exceed their costs. Physicians and laboratory technicians use diagnostic methods to determine the presence of diseases or disorders without having to perform expensive surgery. A series of non-invasive steps, such as obtaining a sample from a patient, running tests on the sample, and interpreting results, is one example of a simple diagnostic method that can yield essential treatment information. A recent study shows that, while diagnostic methods comprise about 5 percent of hospital costs and about 1.6 percent of all Medicare costs, their results may influence up to 60-70 percent of health-care decision-making. (1) There is a noticeably high benefit-to-cost ratio when performing diagnostic methods that warrants our attention to their future development and implementation in health care.

Unfortunately, the benefits of diagnostic methods have been diminished by increased competition to develop the most lucrative tests. (2) Corporations involved in the diagnostic market have placed a "heavy reliance" on obtaining patent protection in order to recoup money spent on research and development. (3) Patents enable corporations to block their competitors from making or using any diagnostic method that is similar to a patented method. (4) While aggressively seeking patent protection may represent a wise business decision on behalf of a diagnostic corporation, it does not take into account the negative implications for society. Some diagnostic method patents are overly broad and include what is arguably an exclusive right to use the human body's natural pathways or mental faculties. (5) These sorts of patents hinder the progress of science and medicine by imposing barriers to research and patient treatments that require access to the human body's natural functions. (6)

While the purpose of the patent system is to enhance social welfare by incentivizing research and development, (7) the subsequent blocking of critical avenues of research and treatment is contrary to this purpose, and therefore can be seen as an "unintended effect." (8) This unintended effect has been acutely recognized by pathology labs, which routinely perform patented diagnostic methods in order to study disease. (9) The Association for Molecular Pathology (AMP) has stated that while patents "are originally intended to provide incentives" to conduct basic research, they have, in reality, hindered the growth of pathology labs by imposing exorbitant licensing fees. (10) The Supreme Court (11) and the American Medical Association (AMA) (12) have also identified this unintended effect on physicians who are forced to conduct extensive patent research before ordering a diagnostic test for a patient.

This Note will attempt to reconcile the traditional role of the patent system, to provide incentives to invent, with its unintended effect of blocking essential avenues of research and treatment. To achieve this end, this Note will focus on what types of diagnostic methods should be eligible for patenting. Clarifying the proper scope of patent eligibility should prohibit patents on overly-broad diagnostic methods while still retaining traditional incentives to invent. In Part I, I will provide background on common diagnostic methods and the factors affecting their development. In Part II, I will provide background on basic patent law principles and the current legal debate over diagnostic method patent eligibility. In Part III, I will discuss two common arguments against granting patents on diagnostic methods. In Part IV, I will discuss the recent Prometheus decision and its effect on patent eligibility. In Part V, I will propose a redefined version of the current test for patent-eligible subject matter, the machine-or-transformation test, and apply it to the diagnostic method patents at issue in recent Federal Circuit cases.

I. ATTRIBUTES OF DIAGNOSTIC METHODS

With each passing year, diagnostic methods are becoming more accurate, precise, and comprehensive. (13) While present diagnostic methods have already been shown to increase patient health and reduce health-care costs, (14) future tests should provide more effective treatments that are better calibrated to treatment risks and perhaps even tailored to individual characteristics. (15) While many diagnostic methods have yet to be implemented for consumers and health-care providers, a few are routinely used today. Common diagnostic methods used by health-care providers include, but are not limited to, medical imaging, blood assays, and genetic tests.

A. Examples of Diagnostic Methods

X-ray methods are a form of medical imaging used to diagnose bone disorders. A high frequency electromagnetic signal is transmitted and becomes attenuated as it passes through the body. (16) The remaining signal is captured on film for subsequent analysis. (17) An alternative to X-ray methods is Medical Resonance Imaging (MRI), which is used to diagnose disease in soft tissues such as the brain, muscles, and heart. (18) MRI methods involve the application of a magnetic field to a patient and the transmission of radio frequency pulses. (19) Resonance energy is emitted by the patient and picked up by a receiver that outputs data onto a screen for viewing. (20) To improve image clarity, both X-rays and MRIs involve the oral or intravenous administration of a contrast agent to a patient. (21)

Unlike medical imaging methods, blood assays and genetic tests require a physical sample to be extracted from a patient. (22) Blood assays are used to identify immune response deficiencies, drug levels, and other forms of disease. (23) A typical first step is to take a blood sample from a patient using a hypodermic syringe and needle. The blood sample is then subjected to a number of tests involving reagents. (24) Test results are analyzed individually by a medical technician or in quick succession by a machine. (25)

Genetic tests are more complex than blood assays and are used to diagnose diseases which can be traced to genetic alterations. Myriad's BRACAnalysis test, for example, is used to diagnose breast cancer. (26) The first step is to take a sample from a patient by drawing blood or using a cheek swab or mouthwash. (27) The sample is then sent to Myriad for purification of specific gene fragments, amplification, and sequencing. (28) The sample sequence is compared against a reference sequence in order to make a diagnosis. (29)

B. Factors Affecting Diagnostic Method Development

There are three main factors affecting the development of new diagnostic methods: administrative regulation, insurance coverage and reimbursement policies, and industrial competition. (30) The FDA regulates diagnostics similarly to medical devices by categorizing them into three risk-based classes. (31) Class I represents minimal potential for harm, while Class III includes riskier diagnostics such as HIV test kits. (32) Class III diagnostics are placed under the most regulatory scrutiny and may be subject to a pre-market approval process. (33)

Diagnostics performed in a hospital setting account for 60 percent of the diagnostic industry's revenue; (34) therefore their implementation is highly dependent on insurance coverage and reimbursement policies. Medicare reimbursement policies often affect the policies of other medical insurance groups because Medicare is "the largest purchaser of clinical laboratory services in the US." (35) The reimbursement rates set by Medicare for diagnostic methods do not always correspond with development costs, and novel diagnostics are often reimbursed at rates similar to outdated tests. (36) This reimbursement structure discourages development and may hinder innovation. (37)

The third factor affecting diagnostic method development is competition to create the most lucrative diagnostic methods. The creation of novel diagnostic methods involves highly technical research that is often risky and expensive. (38) To offset this risk and increase the chance of recouping research and development costs, corporations work extremely hard to "protect" their investments through patents....

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