By Rahul Deo, CNLU Patna
Editors Note: In recent years, there has been an explosive growth in biotechnology research. The society has witnessed the completion of the human genome project, the success of animal cloning, pharmaceutical research, and other notable advances. The situation grows complex and this project deals with this issue in the light of problem of non obviousness.
Biotechnology plays an important role in the fields of medicine, food, fertilizer, energy, and protection of the environment. Biotechnology concerns living organisms, such as plants, animals and micro-organisms, as well as non-living biological material, such as seed, cells, enzyms, plasmids and the like.[i]
In recent years, there has been an explosive growth in biotechnology research, especially in DNA recombinant engineering. The society has witnessed the completion of the human genome project, the success of animal cloning, pharmaceutical research, and other notable advances. These recent advances promise to bring us a higher standard of living by benefiting medicine, agriculture, and industry.[ii] Therefore, inventions in the biotechnology field must be adequately protected to ensure continued innovation. As a result, the growth of the biotechnology industry is directly proportional to the number of biotechnology patent applications that have been filed and the relationship between patent law and biotechnology invention is an issue of immediate interest.
“Biotechnological inventions” are inventions which concern a product consisting of or containing biological material or a process by means of which biological material is produced, processed or used.[iii] “Biological material” means any material containing genetic information and capable of reproducing itself or being reproduced in a biological system. This is the reason why these inventions pose unique challenges to the patent system. Despite there has been much controversy relating to the issue of whether or not it is appropriate to patent biotechnology inventions, it is now clear that biotechnology inventions are regarded from the same perspective as other inventions as far as patent law is concerned. However, there may need adaptations to take into account the fact that research often involves living material.
The basis for deciding the fate of patent application involving biological material as well as other kinds of inventions is described in TRIPS[iv]. “Patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application”. This is an attempt to bring some international uniformity to the access requirement for a patent. However, it only sets the minimum patentability standards with which signatories must comply. National rules may vary beyond this minimum and member states are free to set their own access requirements.
Biotechnology has faced problems in relieving equal protection in the patent. Still, the question of whether biotech innovations are patentable subject matter has to be fought out in the courts. The Kolkata High Court has in the Dimminaco matter held that biotech innovations are patentable. However, there has been not much development in the Indian circuit after that.
Among those three standards for access requirements, industrial application is a relatively self-explanation and the majority of innovation in biotechnology usually has some aspect of use or otherwise, they would not be pursued. The more difficult concept in determining the patentability is the notion of novelty and non-obviousness, especially in a field that characterized by rapid growth, complexity and comparative youth like biotechnology, the subject matters are new and inventive today are frequently routine and obvious in only a few years ‘time.[v]
NOVELTY AND BIOTECHNOLOGICAL PATENTS
Novelty is a patentability requirement. An invention is not new and therefore not patentable if it was known to the public before the date of filing of the patent application, or before its date of priority if the priority of an earlier patent application is claimed. The purpose of the novelty requirement is to prevent the prior art from being patented again.
A patent grants an inventor a legally enforceable monopoly over their invention. This means that others can be legally restrained from exploiting the invention. It is not the intention of the patent system to deny anyone what they have been free to do before someone claims an invention. For example, one cannot patent the wheel, as that would exclude others from doing what they had previously been free to do. The legal test is that the invention must be something new, i.e. it must possess “novelty”. The invention of the wheel is not new, because the wheel already forms part of the prior art.
The novelty requirement in Europe is specified in the Art.54 EPC which states that “an invention shall be considered to be new if it does not form part of the state of the art”. And the state of the art is defined that “The state of the art shall be held to comprise everything made available to the public by mean of a written or oral description, by use, or in any other way before the date of filing the European patent application”.
In the US, “novelty,” defined in 35 U.S.C. Art. 102, is satisfied by a showing that the claimed product or process was not previously known or used by any other person in the United States. In addition, the invention must not have been patented or described in a printed publication in the United States or a foreign country, or in public use or on sale in the United States more than one year prior to the application date.[vi]
Formerly, the main objection against the novelty of biotechnological invention was the existence of the substance in nature. However, nowadays, the mere existence in nature is not the criterion used to determining novelty. The important is that the substance is known, i.e. it must have been not only described, but also made available to the public. In Europe, a substance is new in the absolute sense if there was no previously recognized existence which in practice means that the substance found in nature must be isolated from its surroundings. Furthermore, the biological substance must also be definable by either its structure or by the process by which it is obtained to render it a novel. The used process for obtaining or the isolation of the novel substance can also be novel.[vii]
The established practice of recognizing novelty for a natural substance which has been isolated for the first time and which had no previously recognized existence has been confirmed by a decision of the Opposition Division in the EPO in the Relaxin case. Similar view has been expressed in the US. The doctrine of the product of nature in its crude form, which provides that one may not obtain a patent on something that is indistinguishable from a product of nature, is no longer applied to biotechnological inventions. It has been transposed to more purely technical problems by comparing the substance to a product in nature in terms of increased activity or purity.
It means that claims direct to a substance which is distinguished from the “natural” substance by its method of production or level of activity can be accepted and the product is not considered as a product of nature. In this context, we may refer to the famous decision of the US Supreme Court in Chakrabarty case in this case Court stated that that an invention can include “anything under the sun that is made by man” When the issue of biotechnological invention and the existence of substance in nature has been solved, in general, there is no reason why decision on the novelty of biotechnology patent claims should be any more difficult than for claims relating to the other areas of technology.
In addition to the patentable subject matter issue, biotech product patent applications must face the four hurdles faced by all patients; the product must be novel, non-obvious, must have involved an inventive step and useful[viii]. For commercial efforts in biotechnology, which at least initially were mostly concerned with using biotech methods to make what already existed in nature (say a human protein), one can readily see that these hurdles are not automatically cleared. The key in that context to meeting these four requirements lies in the fact that biotech provides the product in a form that is purer and easier to administer in the treatment of disease, while at the same time being cheaper to produce than through conventional pharmaceutical processes. Justice Sandra Panem has concisely summarized the early promise of biotechnology, “The power of this new technology lies in the ability to produce rare biological products in large quantity, with high purity, and at low cost”[ix].
The courts have approached the biotech cases in the traditional patent law manner, which is to treat patent law as unitary and then to apply that law to the facts as if there were nothing extraordinary about the new technology. The novelty question, which is simply whether the naturally occurring product is new, had already been answered in the pharmaceutical cases. Those cases held that if a protein is isolated and purified, then it is new for the purpose of the novelty test. This result not only solves a riddle inherent in the nature of biotechnology, but also, does so in a way that promotes the incentive principle[x].
NON-OBVIOUSNESS AND BIOTECHNOLOGY PATENTS
The inventive step and non-obviousness reflect the same general patentability requirement present in most patent laws, according to which an invention should be sufficiently inventive i.e., non-obvious in order to be patented. In other words, “the non-obviousness principle asks whether the invention is an adequate distance beyond or above the state of the art.”
The expression “inventive step” is predominantly used in Europe, while the expression “non-obviousness” is predominantly used in United States patent law. Although the basic principle is roughly the same, the assessment of the inventive step and non-obviousness varies from one country to another. For instance, the practice of the European Patent Office (EPO) differs from the practice in the United Kingdom.[xi]
The purpose of the inventive step, or non-obviousness, requirement is to avoid granting patents for inventions which only follow from “normal product design and development”, in order to eventually achieve a proper balance between the incentives provided by the patent system, namely encouraging innovation, and the social cost of the patent system, namely conferring temporary monopolies.
- Under the European Patent Convention (EPC)
Pursuant to the Article 52(1) in conjunction with Article 56, EPC, European patents shall be granted for inventions which, among other things, involve an inventive step, that is, the invention, having regard to the state of the art, must not be obvious to a person skilled in the art.
The Examining Divisions, the Opposition Divisions, and the Boards of Appeal of the EPO almost always apply the “problem-solution approach” in order to decide whether an invention involves an inventive step. The approach consists in:
- identifying the closest prior art, the most relevant prior art;
- determining the objective technical problem, that is, determining, in the view of the closest prior art, the technical problem which the claimed invention addresses and successfully solves; and
- examining whether or not the claimed solution to the objective technical problem is obvious for the skilled person in view of the state of the art in general.
Under the United Kingdom
A set of rules regarding the approach taken by the United Kingdom courts was laid out by the Court of Appeal in Windsurfing International Inc. v Tabur Marine (GB) Ltd.[xii], in determining the requirements for the inventive step:
- Identifying the inventive concept embodied in the patent;
- Imputing to a normally skilled but unimaginative addressee what was common general knowledge in the art at the priority date;
- Identifying the differences if any between the matter cited and the alleged invention; and
- Deciding whether those differences, viewed without any knowledge of the alleged invention, constituted steps which would have been obvious to the skilled man or whether they required any degree of invention.
“Non-obviousness” is the term used in US patent law to describe one of the requirements that an invention must meet to qualify for patentability, codified in 35 U.S.C. sec. 103. One of the main requirements of patentability is that the invention being patented is not obvious, meaning that a “person having ordinary skill in the art” would not know how to solve the problem at which the invention is directed by using exactly the same mechanism.
Teaching-suggestion-motivation (TSM) test
Further, the combination of previously known elements can be considered obvious. As stated by Winner Int’l Royalty Corp. v. Wang[xiii], there must be a suggestion or teaching in the prior art to combine elements shown in the prior art in order to find a patent obvious. Thus, in general, the critical inquiry is whether there is something in the prior art to suggest the desirability, and thus the obvious nature, of the combination of previously known elements.
This requirement is generally referred to as the “teaching-suggestion-motivation” (TSM) test and serves to prevent against hindsight bias.[xiv]As almost all inventions are some combination of known elements, the TSM test requires a patent examiner (or accused infringer) to show that some suggestion or motivation exists to combine known elements to form a claimed invention. Some critics of the TSM test have claimed that the test requires evidence of explicit teaching or suggestion to make a particular modification to the prior art, but the Federal Circuit has made clear that the motivation may be implicit, and may be provided for example by an advantage resulting from the modification. In other words, an explicit prior art teaching or suggestion to make a particular modification is sufficient, but not required for a finding of obviousness.
The TSM test has been the subject of much criticism. The U.S. Supreme Court addressed the issue in KSR v. Teleflex (2006). The unanimous decision, rendered on April 30, 2007, overturned a decision of the Federal Circuit and held that it “analyzed the issue in a narrow, rigid manner inconsistent with §103 and our precedents,” referring to the Federal Circuit’s application of the TSM test. The court held that, while the ideas behind the TSM test and the Graham analysis were not necessarily inconsistent, the true test of non-obviousness is the Graham analysis. However, according to former Chief Judge Michel and current Chief Judge Rader, the TSM test remains a part of the Federal Circuit’s analysis, though it is applied mindfully of the decision in KSR[xv]. A KSR-style obviousness analysis was used in Perfect Web Technologies, Inc. v. Info USA, Inc[xvi]. to invalidate a patent due to the obvious nature of the asserted claims.
The Supreme Court of Canada affirmed the test for non-obviousness laid out in Windsurfing International Inc. v. Tabur Marine (Great Britain) Ltd.[xvii]
- Identify the notional “person skilled in the art” and identify the relevant common general knowledge of that person;
- Identify the inventive concept of the claim in question or if that cannot readily be done, construe it;
- Identify what, if any, differences exist between the matter cited as forming part of the “state of the art” and the inventive concept of the claim or the claim as construed;
- Viewed without any knowledge of the alleged invention as claimed, do those differences constitute steps which would have been obvious to the person skilled in the art or do they require any degree of invention?
The novelty cases do not answer the obviousness question, the second hurdle to patentability. How can the isolated, purified form of a protein fail to be obvious if it is otherwise identical to a naturally occurring protein, which we already know about? This is a complicated question that the courts have struggled with. But the courts have not tried to construct a separate biotechnology patent doctrine. Rather, they have used the traditional approach of comparing what is claimed with the prior art. The crucial point is that the prior art is not what is known to nature, but what is known to man.
For example, if what is known to man is a protein and what is claimed is a gene and the gene has been isolated and purified so that it clears the novelty hurdle, then the obviousness question is not whether it is obvious that a particular gene having a par ticular nucleotide sequence exists in principle, but whether it would be obvious to one skilled in the art to identify and isolate it.
The leading case of In re Bell held that while “it may be true that knowing the structure of the protein, one can use the genetic code to hypothesize possible structures for the corresponding gene and that one thus has the potential for obtaining that gene,” nevertheless, the degeneration of technologies that simply because a new research approach is ‘obvious to try’ does not mean that a resulting product would be obvious. Thus, unless there is something in the prior art that would suggest to a researcher a particular gene in question, as opposed to the thousands or millions of other possible nucleotide sequences that might possibly encode the particular protein, the resulting isolated and purified DNA molecules are not obvious and may be patented.
While the processes any of the genetic code is such that there are more than 1036 different possible nucleotide sequences in a gene that might code for that protein. This recognition of the special nature of the genetic code does not involve, however, any separate doctrine favoring biotechnology patents, but rather constitutes an application of the long-established principle applied across a wide range for looking for the right nucleotide sequence might be known, it is not obvious how to pick the right one out of this human haystack.[xviii]
This approach seems eminently good common sense in the protein to gene case, but it does not provide a rule for the protein-to-protein situation where biotech methods are used to produce a protein identical to a protein found in nature. The patent application may meet the novelty test if the protein is isolated and purified, but does it meet the obviousness test? One possible, but inadequate, the answer is that if the biotech process used to obtain the biotech form of the protein is new and non-obvious, then, of course, the patentability standard is met. But the problem is that the inventor can obtain a process patent, not a product patent, and as the courts have recognized in the pharmaceutical cases, process patents may be so hard to enforce that they do not provide a sufficient property rights basis to finance the risky development and clinical trials necessary to bring a new drug to market. The effort to emphasize the incentive function through the isolation and purification rationale has created a problem of deterring future innovation.
In the Scripps case, a patent involving a blood growth factor produced by a chemical purification process was held potentially infringed by the biotech version of the same product. The full impact of that decision on innovation over time becomes clearer when one considers that its doctrine could presumably preclude a subsequent biotech firm from producing the same growth factor through still newer and even more superior biotech processes.[xix] As biotechnology has progressed, the obviousness question tends not to arise in the simplistic way just discussed in which the applicant claims the biotech equivalent of the naturally occurring substance, for example, a protein or a gene, but rather claims some new bio-technological half-way house. To the extent that biotechnology today creates substances that do not exist in nature, the obviousness issue rather becomes the generic issue of what would have been obvious to one skilled in the art.
INDETERMINACY IN THE NON-OBVIOUSNESS STANDARD
The dominant current perception in patent law is that the core requirement of non-obviousness is applied too leniently, resulting in a proliferation of patents on trivial inventions that actually retard technological innovation in the long run. The non-obviousness standard is not too low, but both too high and too low. It is indeterminate. Three principal factors produce non-obviousness indeterminacy: a failure to identify the quantum of innovation necessary to satisfy the standard, a failure to define the baseline level of ordinary skill against which to measure an innovation, and the epistemic infeasibility of requiring a technologically lay decision maker to judge from the perspective of a more highly trained and educated person of ordinary skill in the art.[xx]
Indeterminacy in non-obviousness decisions has several unexpected consequences. First, indeterminacy results in an excessive total number of patent grants, and in many patent grants on obvious inventions. Second, indeterminacy leads to too many patent applications on obvious inventions and too few applications on non-obvious inventions. Third, uncertainty causes more patent litigation than is optimal and leads to incorrect litigation outcomes. Fourth, indeterminacy leads to inefficiently low incentives to research and develop great advances, and excessively high incentives to invest in mundane innovation. All of these effects occur even assuming that decision makers apply the non-obviousness standard correctly on average.
That many of the current patent system ills may result from indeterminacy rather than from too low a non-obviousness standard has significant consequences for the patent system and for current recommendations for reform. Perhaps most critically, arguments for raising (or lowering) the non-obviousness threshold, a mainstay of recent legal and economic analysis, may be somewhat inapposite, unless and until we can establish greater specificity in the standard.[xxi]
The core requirement for obtaining a patent is that the invention was not obvious at the time it was made. An inventor does not receive a patent for a merely new and useful invention, but only for an invention that measures a significant advance over existing technology. The non-obviousness requirement protects society against the social costs both of denying a deserving patent and of granting an undeserving monopoly. Improper application of the non-obviousness standard results either in inefficiently low incentives to innovate (reducing technological innovation) or permits the patenting of trivial advances, leading to patent thickets and other inefficiencies, and similarly reducing future technological advance. Patent litigation demonstrates the importance of the non-obviousness requirement; it is the most commonly litigated patent validity issue and the requirement most likely to result in patent invalidation. The non-obviousness requirement stands at the center of innovation policy and the technology economy in the United States.[xxii]
Section 103 of the Patent Act establishes the non-obviousness requirement, providing that a patent may not be obtained on an invention: if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains. The statutory non-obviousness standard thus requires an inquiry that involves several elements. The first is determining what a person of ordinary skill in the art would have already known. This current state of the art presents a baseline against which to measure non-obviousness. The second is establishing the quantum of innovation beyond the baseline necessary to satisfy non-obviousness. The final element requires measuring the advance provided by the invention over prior art. Combining these three elements answer the ultimate non-obviousness question: whether the inventor’s advance over the baseline exceeds the required quantum necessary to satisfy the Sec. 103 standard.
Current non-obviousness doctrine is indeterminate because neither the measure of ingenuity necessary to satisfy the standard nor the manner of determining the level of ordinary skill in the art are adequately defined. The failure to define the quantum of advance required may be the most spectacular flaw. The Supreme Court and Federal Circuit have provided some instruction on determining the level of ordinary skill in the art.
Non-obviousness is a mixed question of fact and law. The factual part of the inquiry concerns the prior art, the differences between the invention and the prior art, the level of skill in the art and other considerations. The legal part of the inquiry requires determining whether the differences between the invention and the prior art would have been obvious to one of ordinary skill in the art. The Supreme Court has delineated only limited aspects of the non-obviousness inquiry. The opinions have either developed the jurisprudence of the factual portion of the inquiry or have stated a conclusion concerning the legal part of the inquiry (some opinions do both). The opinions have not, however, developed the legal standard of non-obviousness.
THE INDETERMINATE NON OBVIOUSNESS STANDARD PRODUCES EXCESSIVE PATENT GRANTS
Appropriate application of the non-obviousness standard is critical to the function of patent law. Too high a non-obviousness standard reduces the incentives for innovators to invent and disclose. Too low a non-obviousness standard allows excessive patenting, resulting in inefficient patent thickets, anti-commons, minefields, hold-ups, and other problems. This too can reduce innovators’ incentives to invent. Either too lax or too restrictive a non-obviousness standard can retard technological progress and be socially and economically detrimental.
Because the non-obviousness standard is undefined, it is impossible for decision makers to apply the standard consistently. Simply using the term “non-obvious” as a standard does not create an applicable metric; it is nothing more than a bare legal conclusion. They only intended the standard to serve as a basis for the development of criteria to judge obviousness. Because this development has not occurred, what remains is an empty legal conclusion without standards to provide a framework for decision-making, a consequence that is woefully indeterminate. Not surprisingly, non-obviousness determinations are highly inconsistent and unpredictable.
Viewed in this light, the strong and widespread recent criticism of the judicial system and Patent Office for improperly applying too low a non-obviousness standard appears to be at least partially misplaced. Decision makers cannot consistently or accurately apply an indeterminate standard. Though criticism of the failure to define the non-obviousness standard is warranted, criticism for failure to apply it correctly may not be well-grounded.
Non-obviousness is the most important and also the most ambiguous patentability requirement. Determination of non-obviousness is very complicated because of the ambiguities inherent in making the assessment.[xxiii] Patent protection for biotechnology did not require a ‘go/no go’ decision by either legislature or courts. The only question was under what circumstances biotech patents met the standards of novelty, utility, inventive step and non-obviousness. However, as we shall see, the courts did have to wrestle with some judicially created exceptions to the patentable subject matter. Since Parliament did not undertake to protect biotechnology by copyright, protection has been sought and accorded only by patent despite the fact that Parliament also took no action under the patent code. This differential result of Parliament’s non-action in both fields is significant not just because there is secondary literature suggesting copyright protection for biotechnology, but because at least some of the field would lend itself to copyright protection insofar as it has the equivalent of letters, words, and sentences. Among the steps for making the assessment, the mode of combination of the prior art is a critical step.
Biotechnology has faced problems in achieving equal protection in the patent system. Nearly every principle of patent law has to be rethought and interpreted anew in biotechnology, which is a reason why so many leading patent law decisions of the last decade have resulted from biotech cases[xxiv]. For this reason and in order to explore more deeply the application of the incentive and access principles to contemporary patent law, it is worth reviewing not merely patentable subject matter, but also, how the courts have handled other core patent issues, such as novelty, non- obviousness and utility in the biotechnology field.
The TSM test made the mode of combination of prior art objective and certain to some extent and was effectively used by courts to ascertain non-obviousness. However, the KSR case expanded the test for combining prior art for assessing non-obviousness beyond the TSM test and the broadened test increases ambiguity in such a determination. While the increased ambiguity would impact non-obviousness assessment in all fields, the impact would be higher in the field of biotechnology as the field is filled with uncertainties. This increases the intricacies in patentability analysis of biotechnology inventions and makes it difficult to predict patentability of an invention. Furthermore, the expanded test exposes granted patents, which were issued based on the TSM test open for invalidation based on obviousness because the broadened test allows consideration of factors other than teaching, suggestion or motivation. Such a situation adds complications in making strategic decisions relating to patent protection.
Indian biotech companies have been filing and acquiring numerous biotechnology patents in the USA. About 629 patents have been granted to Indian organizations in the USA till Dec. 2007. Around eighty Indian organizations have acquired biotech patents in USPTO. Such organizations include CSIR, AIIMS, Aurobindo Pharma, Biocon, Cadillac, Bharat Biotech, Dabur, Dr. Reddy’s Labs and so on. In the light of the change in the law relating to non-obviousness, the companies have to be wary in making strategic decisions on patent filings. They should look beyond the TSM test and be aware of the uncertainties inherent in non-obviousness assessment.
Formatted on 18th February 2019.
[i] V K Ahuja, Law Related to Intellectual Property Rights, Lexis-Nexis, Nagpur,2007, 1st and, p.403.
[ii]https://www.google.co.in/?gws_rd=cr&ei=yHFjUsmZO8eprAe39oCAAg#q=biotechnology+patents+and+the+problem+of+non+obviousness visited on 09 oct, 2013.
[iii] WIPO,Background Reading Material on Intellectual Property, Geneva, 1988,p.375
[iv] Art. 27(1) of the TRIPS Agreement.
[v] Jitesh Kumar, Biotechnology Patenting, Journal of IPR, Vol 9, Supreme Court of India, NewDelhi,2004,p.474
[vi]https://www.google.co.in/?gws_rd=cr&ei=ZtBrUp25B8OmrQf7qoD4AQ#q=+Biotechnology+Patenting+by+jidesh+kumar last visited on 18 sep, 2013
[vii] Minh Chau Dao, Novelty and Non-Obviousness of Biotechnological Inventions Under EU and US Law, Institute of Intellectual Property Studies, Issue- July 2010.
[viii] Amgen Inc. V. Chugai Pharmaceutical Co,13 USPQ2d 1737(D Mass. 1989)
[ix] Sandra Panem J, in Merck v. Olin Mathiesm Chemical, 253 F.2d 156(4 th cir. 1958)
[xi] Minh Chau Dao, Novelty and Non-Obviousness of Biotechnological Inventions Under EU and US Law, Institute of Intellectual Property Studies, Issue- July 2010.
[xii]  RPC 59
[xiii] 202 F.3d. 1340, 1348 (Fed. Cir., 2000)
[xiv] In re Kahn, Fed. Cir. 2006
[xv] KSR Int’l Co. v. Teleflex, Inc., 550 U.S. 398 (2007)
[xvi] 587 F.3d 1324 Fed. Cir. Dec. 2, 2009
[xvii]  R.P.C.
[xviii] Jidesh Kumar, Biotechnology Patenting, Journal of IPR, Vol 9, Supreme Court of India, NewDelhi, 2004.
[xx] Gregory Mandel, The Non-Obvious Problem: How the Indeterminate Non-obviousness Standard Produces Excessive Patent Grants, University of California, Davis ,Vol.57, 2008.
[xxiii] http://www.lawschool.cornell.edu/research/cornell-law-review/upload/cannon-note.pdf last visited on 19 oct, 2013.
[xxiv] Diamond v Chakrabarty, 447 US 303 (1980)