Puzzling out the patent-eligibility of natural products

Patent eligibility under Section 101 of the United States Patent Act continues to confound practitioners and create uncertainty as to the value of patents in the life sciences. Recent changes by the Supreme Court and the analyses applied by various tribunals have contributed to this confusion.

The Supreme Court recently upended the law of patent-eligibility in life sciences when it held that isolated segments of DNA were products of nature, not eligible for patent protection (Molecular Pathology v. Myriad Genetics Inc., 133 S. Ct. 2107, 2117 [2013]). This decision reversed the long-standing practice at the United States Patent & Trademark Office (USPTO), which had been issuing patents claiming isolated DNA segments for decades. Yet, the concept that natural products may not be patentable was not new. Seventy years ago, the Supreme Court held in Funk Bros. Seed Co. v. Kalo Inoculant Co. (1948) that a combination of naturally occurring strains of bacteria was not patentable, explaining that the claimed bacteria are “manifestations of laws of nature,” and the claimed combination produced “no enlargement of the range of their utility. Each species has the same effect it always had.” This case is often cited for the proposition that combinations of natural products are not eligible for patent protection absent a marked change in function or activity.

Despite these setbacks to patent eligibility in the life sciences, patents claiming combinations of natural products have continued to issue from the USPTO. When reviewing such patent applications, the USPTO considers whether such combinations have markedly different characteristics from any naturally occurring counterpart(s) in their natural state. Where the combination itself does not exist in nature, the USPTO considers the combination a product of nature and compares the combination to the individual naturally occurring components. Applying these principles, the USPTO has issued patents claiming naturally occurring components (e.g., strains of bacteria), where the patentee established that the resulting combination exhibited activity not seen in the individual components. The USPTO has also issued patents claiming combinations with added features or functionalities that distinguish them from nature, including natural combinations contained in stabilized formulations, having an added bacterial spore coating, or existing in a different state (e.g., lysed versus live bacterial cells). On the other hand, the USPTO has rejected claims to combinations that do not differ markedly from their natural counterparts, including combinations containing potentially non-natural but arguably conventional ingredients (e.g., liquid carriers, surfactants, diluents, adjuvants and disease control agents). Formulating such combinations to have ratios, amounts or concentrations not found in nature does not typically alter this result.

While the Patent Trials & Appeals Board (PTAB) has generally applied the same analysis as the USPTO, in two notable instances, the PTAB reversed the USPTO’s conclusions. In the first, the PTAB determined that combinations of natural products that do not exist as a combination in nature qualified for patent protection, stating that “absent evidence that these constituents co-exist in any naturally occurring composition, any composition combining these constituents must necessarily be an artificially constructed one, and not a natural phenomenon excluded from patentability by Section 101” (Ex parte Calvin, No. 2016-004128; Aug. 31, 2017). In the second case, the PTAB noted that “[w]hile any of these components alone may be naturally occurring, the combination of all the claimed elements does not occur naturally, as transfer factor derived from animal sources would not be found naturally with herb or plant extracts” (Ex parte Hennen, No. 2016-002575; May 10, 2017). These statements may indicate an inclination to analyze these cases outside the rubric of Section 101. This has some logical appeal. If a combination does not exist in nature, how can it constitute a natural phenomenon? Such a result, however, would potentially conflict with the Supreme Court’s decision in Funk Bros. Perhaps for this reason, in both cases, the PTAB also relied on evidence that the claimed combinations resulted in “significantly more” than the individual components, thereby distinguishing the claimed combinations from the invention in Funk Bros. and arguably bringing these decisions in-line with precedent.

In contrast to these PTAB decisions, a district court recently determined that a variety of claims relating to non-naturally occurring combinations of natural products did not qualify for patent protection under Section 101. In Natural Alternatives International (NAI) v. Creative Compounds LLC, the court concluded that claims to combinations of creatine, carbohydrate and free amino acid beta-alanine, and (separately) glycine and beta-alanine compounds did not qualify for patent protection. (S.D. Cal. Sept. 5, 2017). The court rejected arguments that these combinations were patentable because they produced unexpected biological results, finding that the resulting biological activities themselves implicated natural phenomena.

The district court decision in NAI is presently on appeal to the United States Court of Appeals for the Federal Circuit. An amicus brief submitted by Biotechnology Innovation Organization (BIO) frames the issues well, arguing that laboratory-created biologically active compositions should be patentable under Section 101, because such combinations and related biological activities do not exist absent human innovation. This case may thus present the court with an opportunity to provide much-needed guidance on the patentability of natural product combinations.

Maximilienne Giannelli, Ph.D., is Of Counsel at Finnegan, Henderson, Farabow, Garrett & Dunner LLP. She counsels clients on intellectual property issues across a wide range of technologies in the pharmaceutical and chemical industries and has extensive experience litigating patent and trade secret matters in federal district courts and at the U.S. International Trade Commission. Amana Abdulwakeel is a law clerk at Finnegan.