The Federal Circuit ruled that the cryopreservation methods at issue in Rapid Litigation Mgmt. Ltd. v. CellzDirect Inc., are patent eligible under 35 USC § 101. It therefore vacated and remanded the decision of the U.S. District Court for the Northern District of Illinois that held the claims invalid on summary judgment. The Federal Circuit distinguished the claims at issue from other method claims invalidated under recent patent eligibility jurisprudence, and provided additional guidance on when methods that exploit a natural phenomenon are not “directed to” non-eligible subject matter.

The Laboratory Method Patent At Issue

The patent at issue was U.S. Patent 7,604,929, issued to In Vitro Technologies, Inc. Claim 1 reads as follows:

A method of producing a desired preparation of multi-cryopreserved hepatocytes, said hepatocytes, being capable of being frozen and thawed at least two times, and in which greater than 70% of the hepatocytes of said preparation are viable after the final thaw, said method comprising:

(A) subjecting hepatocytes that have been frozen and thawed to density gradient fractionation to separate viable hepatocytes from non-viable hepatocytes,

(B) recovering the separated viable hepatocytes, and

(C) cryopreserving the recovered viable hepatocytes to thereby form said desired preparation of hepatocytes without requiring a density gradient step after thawing the hepatocytes for the second time, wherein the hepatocytes are not plated between the first and second cryopreservations, and wherein greater than 70% of the hepatocytes of said preparation are viable after the final thaw.

The court also commented on claim 5:

The method of claim 1, wherein said preparation comprises a pooled preparation of hepatocytes of multiple sources.

As noted in this article on the oral hearing, the district court recognized that “[p]revailing wisdom … taught that [hepatocyte] cells could be frozen only once and then had to be used or discarded,” which “severely limited the creation of pooled hepatocyte products.” The inventors of  ‘929 Patent discovered that some hepatocyte “cells can be frozen and refrozen without losing significant cell viability, so that pooled hepatocyte products are far more readily attained.” However, instead of viewing the laboratory method claims as a patent eligible application of a natural phenomenon, the district court held the claims invalid under 35 USC § 101, finding the claims to be directed to an ineligible law of nature–the discovery that hepatocytes are capable of surviving multiple freeze-thaw cycles–and finding that the recited method steps “reapplied a well-understood freezing process.”

The Federal Circuit Decision

The Federal Circuit opinion was authored by Chief Judge Prost, and joined by Judge Moore and Judge Stoll.

Eligibility Under Mayo/Alice Step 1

Applying the two-part Mayo/Alice framework, the Federal Circuit found that the claimed methods could be found eligible at step one, because they are not “directed to” a patent-ineligible concept:

[T]he claims are simply not directed to the ability of hepatocytes to survive multiple freeze-thaw cycles. Rather, the claims of the ’929 patent are directed to a new and useful laboratory technique for preserving hepatocytes. This type of constructive process, carried out by an artisan to achieve “a new and useful end,” is precisely the type of claim that is eligible for patenting.

The Federal Circuit distinguished the claims at issue from those found ineligible in Genetic Technolgies., Ltd. v. Merial L.L.C., Ariosa Diagnostics, Inc. v. Sequenom, Inc., and In re BRCA1- & BRCA2-Based Hereditary Cancer Test Patent Litigation, emphasizing that “[t]he end result of the ’929 patent claims is not simply an observation or detection of the ability of hepatocytes to survive multiple freeze-thaw cycles. Rather, the claims are directed to a new and useful method of preserving hepatocyte cells.”

With regard to claim 5, the Federal Circuit noted:

Our conclusion applies even more so to claim 5, which requires the additional step of pooling hepatocytes from multiple donors. Because the claimed process involves both multiple freeze-thaw cycles and pooling cells from various donors, it results in a preparation that is both new and vastly more useful for research than hepatocyte preparations made by conventional methods.

Am only the only one who would prefer a “pass/fail” grade for eligibility rather than a graduated scale?

Eligibility Under Mayo/Alice Step 2

Even though the Federal Circuit found the claims eligible under the first step of the Mayo/Alice framework, it went on to explain that the claims also would be found eligible under step two:

The claimed method is patent eligible because it applies the discovery that hepatocytes can be twice frozen to achieve a new and useful preservation process. …. That each of the claims’ individual steps (freezing, thawing, and separating) were known independently in the art does not make the claim unpatentable. …. To the contrary, in examining claims under step two, we must view them as a whole, considering their elements “both individually and ‘as an ordered combination.’” …. Repeating a step that the art taught should be performed only once can hardly be considered routine or conventional. This is true even though it was the inventor’s discovery of something natural that led them to do so.

The Eligibility Of Other Methods

The Federal Circuit’s focus on the “directed to” aspect of step one of the Mayo/Alice framework and the “ordered combination” aspect of step two of the Mayo/Alice framework is consistent with recent USPTO guidance on eligibility, and its May 4, 2016 Memorandum to the Patent Examining Corps. Explaining how the claims at issue here can be found eligible under either step of the Mayo/Alice framework may provide some insurance against Supreme Court review of this decision, and may provide helpful precedent for applicants pursuing new patents and for patent holders defending existing patents. In pointing out the error in the district court’s analysis, the Federal Circuit also noted that methods of  “producing a new compound,” “treating cancer with chemotherapy, or “treating headaches with aspirin” all are patent eligible even though they depend on “the natural ability of the subject matter to undergo the process.” While these examples are consistent with current USPTO guidance, they may be useful to rein in examiners and district court judges who have been applying more extreme interpretations of § 101.