On May 8, 2014, the Federal Circuit affirmed a Patent Trial and Appeal Board (PTAB) decision that the claims of U.S. Patent Application No. 09/225,233 (the '233 application) are not patentable eligible subject matter under 35 U.S.C. § 101.

This decision is of importance to the Biotech industry as it shows that the Courts may be: (i) broadening the "natural product" exception to patent eligibility under 35 U.S.C. § 101, (ii) further narrowing the Biotech inventions that may be patented in the United States and (iii) increasing the divide between U.S. patent law and the patent laws of other jurisdictions.

On July 5, 1996, Keith Henry Stockman Campbell and Ian Wilmut successfully produced the first mammal ever cloned from an adult somatic cell: Dolly the Sheep. To create Dolly, Campbell and Wilmut fused the nucleus of an adult, somatic mammary cell with an enucleated oocyte. Campbell and Wilmut obtained a patent on the somatic method of cloning mammals, which is assigned to the Roslin Institute, the assignee of the '233 application. See U.S. Patent No. 7,514,258 (the '258 patent). Neither the '258 patent nor its predecessor, U.S. Patent No. 6,147,276 (Quiescent Cell Populations for Nuclear Transfer in the Production of Non-Human Mammals and Non-Human Mammalian Embryos), are part of the appeal. Instead, the dispute concerns the U.S. Patent and Trademark Office's (USPTO's) rejection of Campbell's and Wilmut's claims to the clones themselves, set forth in the '233 application, titled Quiescent Cell Populations for Nuclear Transfer. Exemplary claims of the ’233 application read:

• 155. A live-born clone of a pre-existing, nonembryonic, donor mammal, wherein the mammal is selected from cattle, sheep, pigs, and goats.

• 164. The clone of any of claims 155-159, wherein the donor mammal is non-foetal.

On November 10, 2008, the examiner issued a non-final rejection of Campbell's and Wilmut's patent claims because she found that they were directed to nonstatutory subject matter under 35 U.S.C. § 101 as well as anticipated and obvious under 35 U.S.C. §§ 102 and 103. The Examiner's rejections were affirmed by the PTAB. Although the PTAB acknowledged that the claimed clones "may be called a composition of matter or a manufacture" as required by 35 U.S.C. § 101, it concluded that the claimed subject matter was ineligible for patent protection under 35 U.S.C. § 101 because it constituted a natural phenomenon that did not possess "markedly different characteristics than any found in nature."

The Federal Circuit upheld the 35 U.S.C. § 101 rejection—not patent eligible subject matter—stating that Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980), and Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948), are the "Court's opinions [that make it] clear that naturally occurring organisms are not patentable."

The Federal Circuit took the position that Dolly herself is an exact genetic replica of another sheep and does not possess "markedly different characteristics from any [farm animals] found in nature" (citing Chakrabarty, 447 U.S. at 310, and Campbell's and Wilmut's Reply Brief at page 13 as stating that "the clones are genetic copies"). In short, Dolly’s genetic identity to her donor parent renders her patent ineligible.

Campbell's and Wilmut's argument that environmental factors lead to phenotypic differences between its clones and their donor mammals that render their claimed subject matter patentable was unsuccessful because these differences were unclaimed. According to the Federal Circuit, the word "cloned" in the pending claims connotes genetic identity and the claims are silent about a phenotypic difference between the claimed subject matter and the donor mammals. Arguments that the clones are distinguishable from their original donor mammals because of differences in mitochondrial DNA were also unsuccessful because differences in mitochondrial DNA were also unclaimed. The argument that the clones are patent eligible because they are time-delayed versions of their donor mammals, and therefore different from their original mammals, was also unsuccessful because, according to the Court, this distinction cannot confer patentability.

The Federal Circuit clarified that having the same nuclear DNA as the donor mammal may not necessarily result in patent ineligibility in every case. Here, however, the claims do not describe clones that have markedly different characteristics from the donor animals of which they are copies.

Accordingly, with thoughts of "Jurassic Park," it seems that the Court has left open the question of whether a clone of an extinct animal, such as a Dodo Bird, may be patent-eligible since having the same nuclear DNA as a donor animal may not necessarily result in patent ineligibility in every case (and the extinct animal arguably does not exist in nature at this time). But moreover, from this case, the "takeaway" is: Biotech patent applicants need to ensure that distinctions (e.g., phenotypic, mitochondrial distinctions) between donor animals and clones are recited in claims before the USPTO—as well as in claims taken up on appeal to the PTAB or the Federal Circuit—so as to recite patent eligible subject matter.

Furthermore, as to this particular case, the applicants (Campbell and Wilmut; the Roslin Institute) may pursue appeal to the U.S. Supreme Court, and it is within the Court's discretion as to whether the case will be heard by the "Highest Court in the Land." Thus, the Federal Circuit's decision in this particular case may not be the last word. Whether in this particular case or in others, the Biotech industry can anticipate more from both the Courts and the USPTO, fleshing out the contours of what is patent eligible subject matter as to Biotech inventions.