Last week, the Federal Circuit heard oral argument in US Synthetic Corp. v. International Trade Commission, a patent case that attracted an amicus brief. In this case, the Federal Circuit is reviewing a judgment of the International Trade Commission, which found patent claims invalid for being directed to a patent-ineligible abstract idea. Judges Dyk, Chen, and Stoll heard the oral argument. This is our argument recap.
Daniel C. Cooley argued for US Synthetic. He began by arguing that “the Supreme Court has warned that courts must tread carefully when applying the judicial exceptions to [35 U.S.C.] § 101, lest they swallow all of patent law.” He went on to explain that the case raises that “precise concern” because the ITC found “US Synthetic’s claim to a polycrystalline diamond compact [PDC] as ineligible for patent protection because it was directed to an abstract idea.” Basing his argument on precedent, he argued that “Diamond v. Charkabarty bears directly on this issue.” Under that case, he argued, “US Synthetic’s claims of composition is patent eligible and the ITC must be reversed.”
One judge raised the two-part test for patent eligibility under recent Supreme Court precedent, asking Cooley what step he thinks best applies to the case. In response, Cooley said step one best applies because of “what the composition is directed to.” He explained that, under step one, “the court must consider the character as a whole of the claimed invention.” And, he continued, “here the character as a whole of the claimed invention is a composition of matter,” which is “defined in part by its constituent elements” and “properties of the material as a whole.”
Another judge asked whether the claim is “not directed to an abstract idea.” This judge suggested that, under step one, the court asks “what is the claimed advance recited in the claim over the prior art.” Cooley responded by arguing that “the claimed advance over the prior is that the properties . . . of the material as a whole perform better than the prior art materials.”
Cathy Chen argued for the International Trade Commission. Chen opened her argument by contending that “the Commission’s decision here doesn’t swallow all of patent law, nor does Chakrabarty decide the facts of the case.” She argued, moreover, that affirming “does not require this court to articulate some new § 101 inquiry.” She maintained “the Commission faithfully applied long standing Supreme Court and this court’s precedent that consistently and repeatedly applied the abstract idea exception to prohibit patenting of mere performance goals.”
A judge quickly interjected to disagree, saying that the Federal Circuit has not applied the abstract idea exception in the “context of a composition of matter claim.” According to this judge, this “case is breaking new territory.” He expressed concern that “patent eligibility would start running rampant through composition of matter claims,” like it has through “computer software and diagnostic claims.”
In response, Chen disagreed. She argued the § 101 analysis “has always been a case-by-case judgment” and, “here, the § 101 inquiry is aided by factual findings made by the Commission.” In more detail, she explained that “the factual findings include what the inventor characterizes as their contribution to prior art.” A judge, however, quickly noted that § 101 “is not a factual finding analysis” but, rather, a “legal question.”
Another judge asked about concern with preemption and, in particular, if the ITC’s argument is that, “because the patent specification only discloses one method of making the composition of matter, that [the patentee] shouldn’t be able to claim the composition of matter.” In response, Chen argued that “Synthetic briefly mischaracterizes the Commission’s position.” She went to explain that Synthetic is claiming it is “going to make PDC without actually defining what the concrete composition is.” In short, she argued, Synthetic is functionally claiming “absurd results.”
Theodore Angelis argued on behalf of the Intervenors. In his opening, he rejected “the suggestion by US Synthetic that it is never proper to have an underlying finding of fact in connection with” step one of the required eligibility analysis. The court’s precedent, he maintained, “supports the opposite.” Angelis argued “the Commission needed to engage in fact finding to determine what the claims are directed to.” Moreover, he continued, “there are certain structural, conventional pieces of this claim” and “what the claim is actually directed to is these magnetic side effects and this performance measure.”
Another judge asked Angelis how “the Commission’s enablement findings interact with its § 101 analysis.” Angelis responded by arguing that the Federal Circuit “can affirm on the grounds that [there is] a lack of enablement for the full scope” of the claims.
In his rebuttal, Cooley responded to the concern about preemption, first arguing that there is no “preemption evidence . . . on record of this case.” He also pointed out that the Federal Circuit has “found evidence of a design around to [indicate] a lack of preemption.”
Toward the end of the argument, a judge indicated that the “heart of the dispute” is whether “the claim goes beyond what was invented.” Cooley responded by arguing that “what is claimed here . . . is allowed under § 101” because “there is a genus” that “covers a range of potential solutions.”
We will continue monitoring this case and report on any developments.