CAFC Reverses 101 Ineligibility Ruling, Finds Gene Therapy Claims Are Not Directed to a Natural Phenomenon

The U.S. Court of Appeals for the Federal Circuit (CAFC) in a precedential decision on Friday reversed a district court’s grant of summary judgment that REGENEXBIO, Inc.’s patent claims were ineligible as directed to a natural phenomenon.

The U.S. District Court for the District of Delaware found that REGENXBIO’s and the Trustees of the University of Pennsylvania’s gene therapy patent claims were directed to a natural phenomenon and therefore patent ineligible under 35 U.S.C. § 101. But the unanimous CAFC decision, authored by Judge Stoll and joined by Judges Dyk and Hughes, reversed that ruling, thereby reviving REGENEXBIO’s infringement suit against Sarepta Therapeutics, Inc. and Sarepta Therapeutics Three, LLC.

The dispute began when REGENXBIO filed a patent infringement suit in the District of Delaware alleging that Sarepta infringed claims 1 through 9, 12, 15, and 18-25 of U.S. Patent No. 10,526,617. The ‘617 patent, titled “Method of Detecting and/or Identifying Adeno-Associated Virus (AAV) Sequences and Isolating Novel Sequences Identified Thereby,” is directed to genetically engineered host cells that contain AAV rh.10 sequences. REGENXBIO accused Sarepta of infringing the patent by using the AAV variant rh.74 in cultured host cells to produce SRP-9001, a gene therapy product for Duchenne muscular dystrophy.

Representative claim 1 of the patent recites a “cultured host cell containing a recombinant nucleic acid molecule” that encodes an AAV capsid protein sequence and further comprises a “heterologous non-AAV sequence,” meaning a sequence from a different species. The claimed cultured host cells are undisputedly human-made and do not exist in nature. A recombinant nucleic acid molecule is created by chemically splicing together nucleic acid sequences from two different organisms.

REGENXBIO and Sarepta both moved for summary judgment on patent eligibility. The district court granted Sarepta’s motion, holding the asserted claims ineligible as directed to a natural phenomenon. Applying the markedly different characteristics test from Diamond v. Chakrabarty, the district court determined that none of the individual naturally occurring components in the claims had been changed and that combining natural products and placing them in a host cell does not make the invention patentable. The district court analogized the claims to the ineligible invention in Funk Brothers Seed Co. v. Kalo Inoculant Co., reasoning that taking two sequences from two different organisms and putting them together is “no different than taking two strains of bacteria and mixing them together.” The district court then found the claims also lacked an inventive concept under the second step of the Alice/Mayo framework.

On appeal, the Federal Circuit explained that the proper inquiry, as defined by the Supreme Court in Chakrabarty, is whether the claimed composition has “markedly different characteristics” and has “the potential for significant utility” compared to what is naturally occurring. Applying that framework, the court concluded that the claims were more analogous to the eligible inventions in Chakrabarty and the complementary DNA (cDNA) claims in Association for Molecular Pathology v. Myriad Genetics, Inc. than to the ineligible claims in Funk Brothers, Myriad, and ChromaDex, Inc. v. Elysium Health, Inc.

The Federal Circuit emphasized that it was uncontested that the claimed host cells include a recombinant nucleic acid molecule that does not and cannot exist in nature. The recombinant molecule must be spliced together through human intervention from at least two different species to meet the claim limitations. The court reasoned that, as with the man-made plasmid in Chakrabarty, the claimed nucleic acid molecules, “although containing naturally occurring segments of DNA, are ‘not nature’s handiwork.”’ Similarly, as with the cDNA claims in Myriad, “the lab technician unquestionably creates something new” when she splices together the claimed recombinant nucleic acid molecule and inserts it into a host cell.

The CAFC also found the district court’s analogy to Funk Brothers to be “flawed and inconsistent with the undisputed scientific evidence.” Genetically engineering two nucleic acid sequences from separate species into a single molecule is “materially different from growing more than one naturally occurring bacteria strain in a culture where none of the bacteria undergo any change from their natural state.”

Moreover, the Federal Circuit held that the district court took “too narrow a view of the asserted claims” by focusing on whether the individual components were markedly different from what is naturally occurring rather than considering the claimed “composition as a whole.” The court rejected Sarepta’s argument that conventional claim limitations should be disregarded, citing the Supreme Court’s instruction that it is “inappropriate to dissect the claims into old and new elements and then to ignore the presence of the old elements in the [§ 101] analysis.”

The Federal Circuit additionally noted that, unlike the claims in Funk Brothers, the claimed composition here has undisputed “potential for significant utility.” Various embodiments of the claimed compositions “are beneficial for gene delivery to selected host cells and gene therapy patients,” a fact touted in the patent’s specification. This stood in “stark contrast” to Funk Brothers, where the composition functioned no differently whether the individual components were packaged together or separately.

Ultimately, the Federal Circuit concluded that the claimed host cells are not patent-ineligible claims to naturally occurring subject matter. Since the claims are not directed to a natural phenomenon under the first step of the Alice/Mayo test, the court did not need to proceed to the second step. The judgment was reversed, and the case remanded for further proceedings.

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Author: almoond