Supreme Court Raises Bar for Patent Infringement
U.S. Patent and Trademark Office

Supreme Court Raises Bar for Patent Infringement

U.S. biotech companies are worried that a patent decision yesterday involving two Internet technology companies could undermine patents on methods to diagnose and treat illnesses.

The case before the Supreme Court, Limelight Networks, Inc. v. Akamai Technologies, Inc., dealt with a claim on a process to store and retrieve Web content. Akamai patented a process that involves storing and retrieving content on its servers to be loaded to a webpage. Limelight Networks offered a similar service, but it didn’t perform every step of that process itself. Instead, it instructed its customers to perform one important step—“tagging” the information designated to be stored on the servers.

Akamai sued for infringement, and in 2012 the U.S. Court of Appeals for the Federal Circuit ruled that Limelight was not liable for direct infringement because it hadn’t performed every step in the process. But the court said Limelight was still liable for “inducing” infringement, meaning that it advised or encouraged others to perform steps that led to infringement.  

The suggestion that there are different standards for direct and induced infringement didn’t sit well with the Supreme Court, which yesterday decided unanimously that the appellate court was wrong. For there to be induced infringement, Justice Samuel Alito explained, some single entity must also be liable for direct infringement. In other words, someone has to perform all the steps in the process; they can’t be distributed.

That interpretation worries many biotech companies, which often hold patents involving complex, multistep methods. “It invites circumvention. It invites gaming,” says Hans Sauer, an intellectual property counsel for the Biotechnology Industry Organization (BIO), which submitted a brief urging the Supreme Court to uphold the lower court’s decision. Sauer says the ruling provides a “road map” for those looking to mimic a patented process without getting sued. That road map might be useful if someone wanted to parcel out the manufacturing of a drug among several companies, for instance. However, pharmaceutical companies rely much more heavily on product patents than method patents, says Arti Rai, a patent law expert at Duke University in Durham, North Carolina. If multiple groups collectively produce an already patented drug, they will quickly run up against more clear-cut product patent laws. “If you’re using the thing, you’re probably infringing,” she explains.

But Rai says the threat to method patents could pose a serious problem in the emerging field of personalized medicine. Patient-specific approaches to diagnosis and treatment will often involve multistep method claims, she says. For example, a company may want to file a claim on the process of drawing blood from a patient, looking for a particular biomarker, and making a diagnosis or administering a drug.

This scenario remains largely hypothetical, she notes, thanks in part to previous Supreme Court decisions on what is patentable. (In 2012, the Supreme Court decided in Mayo Collaborative Services v. Prometheus Laboratories, Inc. that the adjustment of drug dosage based on metabolites in a patient’s blood relied fundamentally on a law of nature, and thus couldn’t be patented.) But as companies try to obtain method patents by making the steps in the method more detailed, the Akamai decision may diminish the power of those patents. The high bar for patentability will force biotech companies to describe more specific, detailed steps in their methods, Rai says, and competitors could then avoid being sued by outsourcing any one of those steps.

BIO’s Sauer agrees that this is a primary concern. “We don’t think it’s fair to sue a doctor or a patient or a clinical laboratory for the infringement of such a method,” he says, “but nonetheless, maybe it’s fair to sue somebody who masterminds the whole process and sells an infringing product to be used as part of that process.”

*Correction, 4 June, 10:15 a.m.: The Supreme Court ruled on 2 June, not on 3 June, as was previously reported.