Addressing for the first time eligibility issues under 35 USC § 101 for a method of preserving organ cells, the US Court of Appeals for the Federal Circuit reversed the district court’s ruling that the claims were directed to a patent-ineligible law of nature. Rapid Litigation Management Ltd. v. Cellzdirect, Inc., Case No. 15-1570 (Fed. Cir., July 5, 2016) (Prost, J).

The patent at issue was directed to an improved process of preserving hepatocytes, a type of liver cell. Hepatocyte preparations are useful in a variety of research, diagnostic and therapeutic contexts. The prior art preservation process was limited to a single freeze/thaw cycle, as conventional wisdom held that a single cycle was all that the cells could withstand. As a result, it was difficult to produce multi-donor pools of cells using the prior art process. The inventors discovered that a portion of the liver cells in a preparation could withstand an additional freeze-thaw cycle, and they used this knowledge to design an improved preservation process. 

The district court concluded that the claims were not patent eligible under the Supreme Court Alice decision (IP Update, Vol. 17, No. 7) With respect to step one of Alice, the district court concluded that the claims were directed to an “an ineligible law of nature: the discovery that hepatocytes are capable of surviving multiple freeze-thaw cycles.” The district court also found that the claims lacked the “inventive concept” required by step two of Alice, because the claimed steps were well known in the art. The patent owners appealed.

The Federal Circuit disagreed on both parts of the analysis. Addressing the first step of Alice, the Federal Circuit found that the claims were “directed to a new and useful laboratory technique,” not a law of nature. The Court cautioned that “it is not enough to merely identify a patent-ineligible concept underlying the claim; we must determine whether that patent-ineligible concept is what the claim is ‘directed to.’” While acknowledging the inventors’ discovery of a natural phenomenon (the ability of cells to survive multiple freeze-thaw cycles), the Court noted that the inventors did not stop there. Instead, they “employed their natural discovery to create a new and improved way of preserving hepatocyte cells for later use.” The Court emphasized that the invention resulted “in a preparation that is both new and vastly more useful for research than hepatocyte preparations made by conventional methods.” 

The Federal Circuit also explained that even if the claims in issue were directed to a law of nature, they still would be patent eligible under step two of Alice. “Under step two, claims that are ‘directed to’ a patent-ineligible concept, yet also ‘improve[] an existing technological process,’” pass muster under § 101 because they achieve an “inventive application of the patent-ineligible concept.” Here again the Federal Circuit concluded that 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.” The Court also emphasized the need to consider the invention as a whole, because “a new combination of steps in a process may be patentable even though all the constituents of the combination were well known . . . .” As the Court explained, “[t]o require something more at step two would be to discount the human ingenuity that comes from applying a natural discovery in a way that achieves a ‘new and useful end.’” 

Practice Note: On July 14, 2016, the US Patent and Trademark Office (PTO) issued a memorandum to its examiners, noting that the Rapid Litigation Management decision does not change the subject matter eligibility framework and is consistent with the PTO’s current subject matter eligibility guidance. Rapid Litigation Management does, however, highlight several important points regarding the subject matter eligibility analysis, in particular regarding whether a claim is directed to a law of nature. According to the PTO, because the claims in Rapid Litigation Management were focused on the process for achieving a desired outcome, the Federal Circuit determined that they, like thousands of other claims that recite methods of producing things or methods of treating disease, were not directed to a judicial exception. The PTO also explained that claims applying a law of nature are distinguishable from patent-ineligible concepts that merely observe or identify the patent-ineligible law of nature.