Let’s get one thing straight: neither the Federal Circuit nor the Supreme Court has any interest in overseeing the destruction of the patent system. Not only will this decision not overthrow the patent regime, it won’t affect even a discernible percentage of existing patents (with one possible exception discussed at the end).

If the sky is not falling, what then? What did the Supreme Court really do? The key to understanding the real gist of the opinion lies in Justice Breyer’s discussion of Diehr and Flook, and the difference between a specific diagnostic test and a general diagnostic principle. Spoiler alert: the former is still patentable, while the latter is not. To put it another way, you can legitimately claim a specific diagnostic test, but you cannot claim it so broadly that it precludes everyone else from using the theoretical or scientific principle that underlies the test.

In Diehr, the Court upheld a patent that used a law of nature (a mathematical equation) within a larger, multi-step process of treating rubber. The mathematical equation informed the process, but there were additional steps that were necessary and unique to the claimed process. As a result, the unpatentable law of nature was appropriately integrated into a valid invention.

In Flook, the inventor similarly used a law of nature (a novel mathematical algorithm) within a larger process of adjusting alarm limits during a catalytic conversion of hydrocarbons. The difference was that the inventor then attempted to claim the naked algorithm, divorced from any aspect of the alarm system. None of the other steps in the process served to limit the challenged claim, and so the Court held the patent invalid.

The message is that, when a law of nature is employed by an invention, it must play an ancillary role to other aspects of the invention, or at least have a strong supporting cast. It cannot be a solo act.

But how do we know what constitutes a “law of nature”? The cynical view, expressed by some pessimists, is that it is a tautological term for anything that a judge “feels” should belong in the public domain, either because it is “as old as time” or because it is “too big to patent.” The first category is meaningless, they say, because anything that has been known for that long is already in the public domain, and does not require a separate doctrine. Meanwhile, all newly discovered principles are then pushed into the latter camp, which provokes anger because it seems like an arbitrary label set up to disqualify legitimate inventions.

A better view is that a law of nature is a principle that has no inherent utility on its own. A mathematical equation or statistical correlation is not something that one uses without it being incorporated into something else that is tangible. And after all, the purpose of granting patent exclusivity is to reward the development of useful products and processes. The problem with Mayo’s patent was that it failed to contribute anything beyond a pure recitation of the correlation of therapeutic dosage. The fact that the correlation was previously undiscovered did not mean it had patentable utility. On the other hand, a device or diagnostic test that incorporates the correlation, and makes it useable in a specific and applied manner, is fully patentable.

Looking ahead, what developments can we expect to see in the wake of Mayo? The most immediate impact has been the remand of Association of Molecular Pathology v. Myriad Genetics to the Federal Circuit. But that remand was rash and ill-considered. Mayo asks whether any real utility has been added beyond a pure restatement of a law of nature, whereas Myriad’s patents claim tangible, isolated molecules, which have long received idiosyncratic treatment as patentable products. Based on the reasoning of the Federal Circuit’s first opinion in that case, which depended heavily on the specifics of the chemical isolation process as well as the longstanding PTO practice of granting gene patents, it seems highly unlikely that Mayo could have much if any effect on the outcome. The Federal Circuit has already made its determination; it is now up to the Supreme Court to respond.

Looking more generally to the medical diagnostics industry, we might see some increase in the use of trade secrets to protect new diagnostic tests. To take one example, Myriad already conducts all its diagnostic tests within its own proprietary labs. That would be a simple way to prevent competitors from reverse engineering a commercialized diagnostic test. Such efforts may not always be practicable, though, depending on regulatory disclosure requirements, as well as the cost of building and maintaining proprietary labs.

The most intriguing development may be in the software industry, rather than in the medical diagnostics industry. Currently, software patents are too trivial to obtain because there is virtually no minimum standard for what must be disclosed. But Mayo, as extrapolated to software patents, could be interpreted as stating that a disclosure of an algorithm, along with a simple instruction to apply the algorithm to a computer, is not patentable subject matter. Either actual code or pseudocode would be needed to render pure software into a patentable invention. (Less might be needed if the use of the algorithm were attached to a limiting application such as a printer or GPS device.) Attempts to claim exclusive ownership over broad swaths of the internet would become a thing of the past. If so, then Mayo could earn a worthy legacy within the software industry, by offering a fresh path out of a patent thicket that nobody wants.

ACTA to Be Signed – But Can it Enter into Force?
US, EU, Canada, Japan, Australia, & Others to Sign ACTA this Weekend Despite Legal Concerns

and of course

The Impact of the Anti-Counterfeiting Trade Agreement on the Knowledge Economy: The Accountability of the Office of the U.S. Trade Representative for the Creation of IP Enforcement Norms Through Executive Trade Agreements

and

Anti-Counterfeiting Agreement Raises Constitutional Concerns

The ISP provides a forum for resident fellows, visiting fellows, and student fellows to collaborate on and discuss significant research and policy projects. The ISP Working Paper Series makes the most significant of these initiatives available for public consumption and discussion.

David’s paper suggests that to avoid significant First Amendment problems and chilling effects, the PROTECT IP Act should be stripped of Internet blocking provisions, and passed as a surgically focused law that will dry up revenue sources for “rogue” web sites.