By Duane Moore, Esq. Cahn & Samuels, LLP

On January 24, 2014, the Federal Circuit issued a unanimous opinion, in SmartGene, Inc. v. Advanced Biological Laboratories, SA, No. 2013-1186, affirming the district court’s finding that the claims of the asserted patents were ineligible for patent protection under 35 U.S.C. §101.

SmartGene filed a declaratory judgment action against the patentee (“ABL”), alleging non-infringement and invalidity of U.S. Patent Nos. 6,081,786 and 6,188,988, both owned by ABL.  On summary judgment, the District Court found both patents invalid under section 101. ABL’s patents disclose a method for guiding the selection of a therapeutic treatment regimen for a patient with a known medical condition. The method ranks therapeutic treatment regimens for the patient, and generates advisory information (e.g., drug warnings, dosage) for the therapeutic treatment regimens based on patient information and expert rules. As claimed, the method steps are performed in a “computing device” having three separate knowledge bases.

Relying heavily on its decision in CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir. 2011) and Supreme Court precedent, the Court held that the claims were directed to a patent-ineligible “mental process”. In CyberSource, the Federal Circuit “held that section 101 did not embrace a process defined simply as using a computer to perform a series of mental steps that people, aware of each step, can and regularly do perform in their heads”. SmartGene, Inc. v. Advanced Biological Labs., SA, 2013-1186, 2014 WL 259824 (Fed. Cir. Jan. 24, 2014).  The Court also cited “Supreme Court decisions indicating that section 101 covers neither ‘mental processes’ – associated with or as part of a category of ‘abstract ideas’ – nor processes that merely invoke a computer and its basic functionality for implementing such mental processes, without specifying even arguably new physical components or specifying processes defined other than by the mentally performable steps”. Id. (citing Gottschalk v. Benson, 409 U.S. 63 (1972); Parker v. Flook, 437 U.S. 584 (1978)).

Applying this precedent to the claims at issue, the Court held the patents invalid, since every step in claim 1 could be performed by doctors in their heads. Id. (“[c]laim 1 does no more than call on a ‘computing device,’ with basic functionality for comparing stored and input data and rules, to do what doctors do routinely”).

The opinion was authored by Judge Taranto, who did not participate in the Federal Circuit’s controversial and fractured decision in CLS Bank International v. Alice Corp. Pty. Ltd., 717 F.3d 1269 (Fed. Cir. 2013) (en banc). Judge Taranto was joined in the SmartGene opinion by Judges Lourie and Dyk.  Judge Lourie, Judge Dyk, and three other judges wrote a concurring opinion in CLS Bank affirming the district court’s holding that all claims were patent ineligible under section 101.  The U.S. Supreme Court will rule in the hotly-anticipated appeal in CLS Bank in the summer of 2014, a case that may set a precedent for the types of computerized business methods that are patentable in the United States.