Last month, the Federal Circuit issued its opinion in REGENXBIO Inc. v. Sarepta Therapeutics, Inc., a patent case we have been following because it attracted three amicus briefs. In it, REGENXBIO appealed a decision of the District of Delaware, which granted a motion for summary judgment and held the asserted claims to be ineligible for patenting. In an opinion authored by Judge Stoll and joined by Judges Dyk and Hughes, the panel reversed the judgment and remanded the case for further proceedings. This is our summary of the panel’s opinion.
Judge Stoll began by reciting the factual and procedural background:
The ’617 patent . . . is directed to genetically engineered host cells that contain adeno-associated virus rh.10 sequences. . . . The Background of the Invention explains that [Adeno-Associated Virus] AAVs are nonenveloped viruses with singlestranded DNA. . . . The Background of the Invention recognizes that ‘[w]hat are desirable are AAV-based constructs for gene delivery.’ . . . The inventors of the ’617 patent sought to develop such constructs and specifically developed ‘molecules which utilize the novel AAV sequences of the invention . . . for production of molecules useful in delivery of a [transgene comprising a] heterologous gene or other nucleic acid sequences to a target cell.’ . . . In pursuit of this, the inventors created host cells that ‘contain sequences encoding a novel AAV capsid’—and a heterologous non-AAV sequence. . . . The cultured host cells required by the claims are undisputedly human made. They do not exist in nature. Notably, a recombinant nucleic acid molecule is created by chemically splicing together nucleic acid sequences from two different organisms.
REGENXBIO accused Sarepta of infringing . . . the ’617 patent based on Sarepta’s use of the AAV variant rh.74 in cultured host cells to make a gene therapy product . . . . Both parties moved for summary judgment on whether the asserted claims were eligible under 35 U.S.C. § 101. . . . The parties debated whether the claims disclose natural products and both analogized this case to Association for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576 (2013), in which the Supreme Court considered the eligibility of composition claims under the markedly different characteristics test from Diamond v. Chakrabarty, 447 U.S. 303 (1980).
Starting with the markedly different framework from Chakrabarty, the district court noted that ‘[t]he ’617 patent’s claims disclose natural products, including the rh.10 sequence and a heterologous non-AAV sequence.’ . . . The district court then posited that in both Chakrabarty and Myriad the Supreme
Court ‘highlight[ed] the importance of change’ between naturally occurring subject matter and the claimed composition. . . . Turning to . . . the ’617 patent, however, the district court determined that none of the individual naturally occurring components in the claims had been changed and that ‘combin[ing] natural products and put[ting] them in a host cell does not make the invention patentable under § 101.’ Instead, the district court determined that the claims here were ‘similar to the ineligible claims in Funk Brothers [Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948)],’ because ‘[t]aking “two sequences from two different organisms and put[ting] them together” is no different than taking two strains of bacteria and mixing them together.’ . . . The district court thus granted Sarepta’s summary judgment motion and held all asserted claims of the ’617 patent ineligible under § 101. REGENXBIO appeals.
After briefly discussing the standard of review, Judge Stoll surveyed the Supreme Court’s decisions in Chakrabarty, Funk Brothers, and Myriad, as well as the Federal Circuit’s decision in ChromaDex, Inc. v. Elysium Health, Inc.
Judge Stoll, for example, explained how, in Chakrabarty, the Supreme “Court held eligible claims directed to a genetically engineered bacterium” capable of breaking down multiple components of crude oil—a capability no naturally occurring bacterium possessed.” She noted how, because “‘the patentee ha[d] produced a new bacterium with markedly different characteristics from any found in nature and one having the potential for significant utility,’ the Court upheld the claims.” Judge Stoll noted how the Court “distinguished the claimed invention from that in Funk Brothers,” where the claimed mixed culture was deemed ineligible as “only some of the handiwork of nature.”
Turning to Myriad, Judge Stoll explained how the Supreme Court considered two sets of claims: those “directed to isolating an individual’s BRCA1 and BRCA2 genes” and those “directed to cDNA.” As explained by Judge Stoll, the Court held the first set ineligible because “Myriad did not create or alter any of the genetic information encoded in the BRCA1 and BRCA2 genes”—it had merely discovered their location. By contrast, she continued, the second set was eligible because “creation of a cDNA sequence from mRNA results in an exons-only molecule that is not naturally occurring.”
After noting that the Federal Circuit applied Chakrabarty and Myriad in ChromaDex, focusing on the “markedly different characteristics” framework, Judge Stoll turned to the composition claims at issue.
The relevant question in this case, Judge Stoll explained, is “whether the claimed host cells have ‘markedly different characteristics’ and have ‘the potential for significant utility’ from that which is naturally occurring.” Here, Judge Stoll said, “the claimed host cells include a recombinant nucleic acid molecule that does not and cannot exist in nature.” She indicated the claimed nucleic acid molecules are, although containing naturally occurring segments of DNA, “not nature’s handiwork” and “not . . . a hitherto unknown natural phenomenon, but . . . a nonnaturally occurring manufacture or composition of matter.”
Judge Stoll concluded the district court erred in analogizing the claims to Funk Brothers. In doing so, she said, “the district court ignored the Supreme Court’s holding in Chakrabarty,” where the claimed invention combined naturally occurring plasmids without altering each one individually, yet still qualified as a non-naturally occurring composition. She pointed out, moreover, how “the district court’s analysis takes too narrow a view” by focusing on whether each component was markedly different rather than considering “whether the claimed composition as a whole was ‘not naturally occurring.'”
Judge Stoll further noted that, “unlike the claims in Funk Brothers, the claimed composition here has ‘the potential for significant utility.'” She recognized that, while “the parties dispute whether unclaimed functional distinctions . . . can be considered as part of the Chakrabarty inquiry,” the Supreme Court itself emphasized functional capabilities in upholding the engineered bacterium in that case.
Addressing Sarepta’s remaing arguments and authorities, Judge Stoll concluded they did “not undermine Chakrabarty.” Because “the claimed host cells here contain a recombinant nucleic acid molecule that, by definition, is markedly different from anything occurring in nature,” Judge Stoll concluded, the claims are “not patent-ineligible claims to naturally occurring subject matter.”
As a result of Judge Stoll’s analysis, the panel reversed the district court’s summary judgment and remanded the case for further proceedings consistent with the opinion.