On March 4, 2014, the U.S. Patent and Trademark Office (USPTO) released a guidance memorandum (the "Guidance") to the Patent Examining Corps providing guidelines for analyzing subject matter eligibility under 35 U.S.C. Section 101 of claims reciting or involving laws of nature/natural principles, natural phenomena and/or natural products in view of recent Supreme Court decisions, the Association for Molecular Pathology v. Myriad Genetics, Inc. and Mayo Collaborative Services v. Prometheus Laboratories, Inc.

The impact of the Guidelines is significant. For claims involving natural products (such as active ingredients from natural products or naturally occurring nucleic acids) to be patent eligible, they must be "significantly" or "markedly" different from the natural products. Therefore, we anticipate that there will be additional Section 101 rejections to claims directed to natural products and diagnostic methods—the subject matter of many biotechnology and pharmaceutical patent applications as alluded to in our July 10, 2013 webinar regarding Myriad.

The Guidance addresses the impact of Myriad on the rule against patents on naturally occurring things as exemplified in Diamond v. Chakrabarty, 447 U.S. 303 (1980) andPrometheus. According to the Guidance, Myriad clarified that not every change to a product will result in a marked difference, and that the mere recitation of particular words (such as "isolated") does not automatically confer eligibility under Section 101. The Guidance acknowledged that while the holding of Myriad was limited to nucleic acids, Myriad is a reminder that claims reciting or involving natural products should be examined for a marked difference under Chakrabarty.

The Guidance sets forth a flow chart for analyzing subject matter eligibility under Section 101 with several questions:

1. Is the claim directed to one of the four statutory categories (i.e., a process, machine, manufacture or composition of matter)? If yes, proceed to Question 2; if no, then reject claim as drawn to ineligible subject matter.

2. Does the claim recite or involve judicial exception(s) (which include abstract ideas, laws of nature/natural principles, natural phenomena and natural products)? If no, then claim qualifies as eligible subject matter; if maybe or yes, then proceed to question 3 unless the claim recites or involves an abstract idea—then use MPEP 2106 to analyze the claim for eligibility.

3. Does the claim as a whole recite something significantly different than the judicial exception(s)? If yes, then the claim qualifies as eligible subject matter; if no, then reject claim as drawn to ineligible subject matter.

The term "significantly different" in Question 3 is difficult to analyze and the Guidance sets forth factors for analyzing a claim to determine what is "significantly different." A significant difference can be shown in multiple ways such as including elements or steps in addition to the judicial exception and/or the claim includes features or steps that demonstrate that the claimed subject matter is markedly different from what exists in nature.

Factors that weigh toward eligibility (significantly different):

• Claim is a product claim reciting something that initially appears to be a natural product, but after analysis is determined to be non-naturally occurring and markedly different in structure from naturally occurring products.

• Claim recites elements/steps in addition to the judicial exception(s) that impose meaningful limits on claim scope, i.e., the elements/steps narrow the scope of the claim so that others are not substantially foreclosed from using the judicial exception(s).

• Claim recites elements/steps in addition to the judicial exception(s) that relate to the judicial exception in a significant way, i.e., the elements/steps are more than nominally, insignificantly or tangentially related to the judicial exception(s).

• Claim recites elements/steps in addition to the judicial exception(s) that do more than describe the judicial exception(s) with general instructions to apply or use the judicial exception(s).

• Claim recites elements/steps in addition to the judicial exception(s) that include a particular machine or transformation of a particular article, where the particular machine/transformation implements one or more judicial exception(s) or integrates the judicial exception(s) into a particular practical application. (See MPEP 2106(II)(B)(1) for an explanation of the machine or transformation factors).

• Claim recites one or more elements/steps in addition to the judicial exception(s) that add a feature that is more than well-understood, purely conventional or routine in the relevant field.

Factors that weigh against eligibility (not significantly different):

• Claim is a product claim reciting something that appears to be a natural product that is not markedly different in structure from naturally occurring products.

• Claim recites elements/steps in addition to the judicial exception(s) at a high level of generality such that substantially all practical applications of the judicial exception(s) are covered.

• Claim recites elements/steps in addition to the judicial exception(s) that must be used/taken by others to apply the judicial exception(s).

• Claim recites elements/steps in addition to the judicial exception(s) that are well-understood, purely conventional or routine in the relevant field.

• Claim recites elements/steps in addition to the judicial exception(s) that are insignificant extra-solution activity, e.g., are merely appended to the judicial exception(s).

• Claim recites elements/steps in addition to the judicial exception(s) that amount to nothing more than a mere field of use.

The guidance also provides several examples. One example relates to claims directed to a fictional compound, specifically a claim to purified amazonic acid, another claim to purified 5-methyl amazonic acid, and another claim to a method of treating colon cancer by administering a specific dosage of purified amazonic acid. The claim directed to purified amazonic acid would be considered patent ineligible because the claim is a composition matter, recites a judicial exception (naturally occurring chemical) and does not recite something significantly different than the natural product. The claim to 5-methyl amazonic acid would be considered patent eligible because the claim is a composition matter, may recite a judicial exception (naturally occurring chemical) and does recite something significantly different than the natural product because the compound is structurally different than what exists in nature. The claim to a method of treatment is considered patent eligible because the claim is a method, may recite a judicial exception (naturally occurring chemical) and does recite something significantly different than the natural product because it had not been previously contemplated to treat colon cancer with the claimed specific dosage of amazonic acid.

The interpretation of the Guidelines by the USPTO, especially with respect to an interpretation of what is "significantly different" will initially likely raise more questions than answers and it will take some time to ascertain what the USPTO considers "significantly different." In our July 10, 2013 webinar regarding Myriad, we predicted that Myriad andPrometheus would dovetail and that Myriad would extrapolate to other naturally occurring products. Please contact any Vedder Price attorney or agent in the Intellectual Property group with any questions regarding the Guidelines (available for download below), especially with respect to claim drafting to overcome Section 101 rejections.