Last week, the Federal Circuit released its opinion in Restem, LLC v. Jadi Cell, LLC, a patent case that attracted an amicus brief. In this case, Restem appealed a determination by the Patent Trial and Appeal Board that it failed to prove claims in Jadi Cell’s patent were unpatentable. The Federal Circuit, in an opinion authored by Chief Judge Moore and joined by Judges Schall and Taranto, affirmed the PTAB’s determination. This is our opinion summary.
Chief Judge Moore began by outlining the procedural and factual background of the case:
Jadi Cell, LLC (Jadi Cell) owns the ’176 patent, which is directed to stem cells with specific cell markers (i.e., the Claimed Cells) obtained from the subepithelial layer (SL) of mammalian umbilical cord tissue through a two-step process: (1) placing the SL in direct contact with a tissue culture growth substrate and (2) culturing the SL. . . . Restem challenged claims . . . of the ‘176 patent as inherently anticipated by Majore, or, in the alternative, obvious in view of Majore, Phan, or Kita, in combination with five secondary prior art references. The Board held all challenged claims were not shown to be unpatentable. . . . Restem appeals.
After noting that “[c]laim construction is a question of law that may be based on underlying factual findings,” Chief Judge Moore explained that the panel would “review the Board’s claim construction de novo and any underlying factual findings for substantial evidence.”
First, Chief Judge Moore highlighted the PTAB’s construction of a “placing” step claim: “placing a subepithelial layer of a mammalian umbilical cord tissue in direct contact with a growth substrate,” according to the PTAB, means “to intentionally place umbilical cord tissue comprising the subepithelial layer so that it touches a growth substrate to permit cell culture.” She further explained how the PTAB “declined to import” two additional steps “because the specification does not uniformly require those steps in all disclosed embodiments.”
Next, she noted Restem’s argument: “the Board legally erred,” according to Restem, “by implicitly construing the claims to require steps beyond the claimed two-step process.” In his way, she highlighted, Restem argues the PTAB “read requirements into the claims that were not described in the specification.”
Chief Judge Moore rejected Restem’s argument that the PTAB’s “analysis constituted an implicit construction of the ‘placing’ step beyond its stated construction.” Rather, she explained, the PTAB made “factual findings that supported its anticipation analysis” because the PTAB recognized “differences between Majore’s process and the claimed process,” in particular that the prior art’s “process steps do not necessarily produce cells with the claimed cell marker expression profile. Thus, she reasoned, the PTAB made “no error” in construing the “placing” step.
Next, Chief Judge Moore addressed the PTAB’s decision to decline to construe “isolated cell” and its construction of “expresses/does not express.” She explained that the PTAB construed “expresses/does not express” to mean “the marker is confirmed present/absent relative to a control sample.” She indicated this construction was consistent with the PTAB’s implicit interpretation of an “isolated cell” as indicating a cell population. While Restem argued that the PTAB “legally erred by implicitly construing ‘isolated cell’ contrary to” an “express definition” in the patent, Chief Judge Moore explained that the “claims and specification support” the PTAB’s construction. Specifically, she highlighted, “[t]he ‘express/does not express’ claim language . . . supports a conclusion that the claimed ‘isolated cell’ is a ‘cell population.’” As for why, she explained that the claim refers to “isolated cell” in the context that it “expresses/does not express” certain cell markers, which is a “population of cells.”
Moving to the issue of inherent anticipation, Chief Judge Moore explained that “[a]nticipation is a question of fact” reviewed for “substantial evidence.” She noted that inherent anticipation requires disclosure of prior art that shows “the natural result flowing from the operation as taught in the prior art would result in the claimed product.” Additionally, she highlighted, in a “product-by-process claim,” the “focus is on the product and not the process of making it.” She reasoned that the PTAB’s finding that the cells produced by the prior art’s “process would not necessarily have the claimed cell marker expression profile” was supported by substantial evidence. Explaining why, she indicated the patent did “not address whether an isolated cell with a cell marker expression profile consistent” with the claim would always result from the two-step process.
Finally, Chief Judge Moore addressed Restem’s obviousness challenge. She found that, because the PTAB determined claim 9 “would not have been obvious for two independent reasons” and Restem “only challenge[d] the Board’s alternative basis,” the Federal Circuit “need not reach the Board’s alternative basis to affirm.”
As a result of Chief Judge Moore’s analysis, the Federal Circuit affirmed the PTAB’s judgment that Restem failed to prove the patent claims are unpatentable.