Natural Alternatives International, Inc. v. Creative Compounds, LLC, 031519 FEDFED, 2018-1295
|Opinion Judge:||MOORE, CIRCUIT JUDGE|
|Party Name:||NATURAL ALTERNATIVES INTERNATIONAL, INC., Plaintiff-Appellant v. CREATIVE COMPOUNDS, LLC, Defendant-Appellee DOES 1-100, CORE SUPPLEMENT TECHNOLOGIES, INC., HONEY BADGER, LLC, MYOPHARMA, INC., Defendants|
|Attorney:||Kevin M. Bell, Porzio, Bromberg & Newman, PC, Washington, DC, argued for plaintiff-appellant. Also represented by Scott A. M. Chambers, Billy Dell Chism, Caroline Cook Maxwell, Richard J. Oparil; Matthew Zapadka, Bass, Berry & Sims, PLC, Washington, DC. Kevin John O'Shea, O'Shea Law LLC, Jackson,...|
|Judge Panel:||Before Moore, Reyna, and Wallach, Circuit Judges. Reyna, Circuit Judge, concurring-in-part, dissenting-in-part.|
|Case Date:||March 15, 2019|
|Court:||United States Courts of Appeals, Court of Appeals for the Federal Circuit|
Appeal from the United States District Court for the Southern District of California in No. 3:16-cv-02146-H-AGS, Judge Marilyn L. Huff.
Kevin M. Bell, Porzio, Bromberg & Newman, PC, Washington, DC, argued for plaintiff-appellant. Also represented by Scott A. M. Chambers, Billy Dell Chism, Caroline Cook Maxwell, Richard J. Oparil; Matthew Zapadka, Bass, Berry & Sims, PLC, Washington, DC.
Kevin John O'Shea, O'Shea Law LLC, Jackson, MO, argued for defendant-appellee.
Melissa A. Brand, Biotechnology Innovation Organization, Washington, DC, for amicus curiae Biotechnology Innovation Organization. Also represented by Hansjorg Sauer; Brian Paul Barrett, Eli Lilly and Company, Indianapolis, IN.
Kevin Edward Noonan, McDonnell, Boehnen, Hulbert & Berghoff, LLP, Chicago, IL, for amici curiae Christopher Michael Holman, David Lund, Adam Mossoff, Kristen J. Osenga, David O. Taylor. Also represented by Aaron Vincent Gin.
Before Moore, Reyna, and Wallach, Circuit Judges.
MOORE, CIRCUIT JUDGE
Opinion concurring-in-part and dissenting-in-part filed by Circuit Judge Reyna. Moore, Circuit Judge.
Natural Alternatives International, Inc., appeals a decision of the U.S. District Court for the Southern District of California granting Creative Compounds, LLC's motion for judgment on the pleadings that the asserted claims of U.S. Patent Nos. 5, 965, 596, 7, 825, 084, 7, 504, 376, 8, 993, 610, 8, 470, 865, and RE45, 947 are not patent eligible. Because Creative Compounds has failed to demonstrate under Natural Alternatives' proposed claim constructions that the claims are not patent eligible, we reverse and remand.
Natural Alternatives owns a number of patents that relate to dietary supplements containing beta-alanine and have substantially similar specifications. Beta-alanine is an amino acid. Together with histidine, another amino acid, it can form dipeptides that are found in muscles. E.g., '596 patent 1:59-64. The dipeptides are involved in the regulation of intra-cellular pH during muscle contraction and development of fatigue, and variations in dipeptide concentrations affect the anaerobic work capacity of individual athletes. Id. at 4:58-62, 5:1-3. One of these dipep-tides is carnosine, which contributes to hydronium ion buffering. Id. at 2:11-13. During certain sustained exercise, hydronium ions and lactate can accumulate and severely reduce intracellular pH. Id. at 1:50-54. The reduced pH interferes with the creatine-phosphorylcrea-tine system, a part of the process by which energy is generated in cells, particularly muscle cells. Id. at 1:31-43, 1:54-55. The claimed patents generally relate to the use of beta-alanine in a dietary supplement to "increas[e] the anaerobic working capacity of muscle and other tissue." Id. at 2:16-18.
Natural Alternatives has asserted its patents in multiple suits in the Southern District of California. Creative Compounds moved for judgment on the pleadings, which the district court granted. Applying the two-part test from Alice Corp. Party Ltd. v. CLS Bank International, 573 U.S. 208, 217 (2014), it held all of the asserted claims were directed to patent ineligible subject matter under 35 U.S.C. § 101 and lacked an inventive concept sufficient to render them patent eligible. The district court granted judgment in favor of Creative Compounds, and Natural Alternatives timely appealed. We have jurisdiction under 28 U.S.C. § 1295(a)(1).
Section 101 of the Patent Act provides that "[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title." 35 U.S.C. § 101. The term "process" "includes a new use of a known process, machine, manufacture, composition of matter, or material." 35 U.S.C. § 100(b). The Supreme Court has explained that under § 101, patent protection does not extend to the patent ineligible concepts of laws of nature, natural phenomena, and abstract ideas, which are "building blocks of human ingenuity." Alice, 573 U.S. at 216-17. We must therefore distinguish between claims to patent ineligible subject matter and those that "integrate the building blocks into something more." Id. at 217.
In doing so, we first determine whether the claims at issue are "directed to" a patent ineligible concept. Id. As the Supreme Court has cautioned, we must be careful in this analysis as "too broad an interpretation of this exclusionary principle could eviscerate patent law. For all inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas." Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 71 (2012). If we determine that the claims are directed to a patent ineligible concept, "we consider the elements of each claim both individually and 'as an ordered combination' to determine whether additional elements 'transform the nature of the claim' into a patent-eligible application," i.e., whether there is an "inventive concept." Alice, 573 U.S. at 217 (quoting Mayo, 566 U.S. at 78-79).
Eligibility under § 101 is a question of law based on underlying facts that, ultimately, we review de novo. SAP Am. v. InvestPic, LLC, 898 F.3d 1161, 1166 (Fed. Cir. 2018). It may be resolved on a motion to dismiss where "there are no factual allegations that, taken as true, prevent resolving the eligibility question as a matter of law." Aatrix Software, Inc. v. Green Shades Software, Inc., 882 F.3d 1121, 1125 (Fed. Cir. 2018).
The district court held that the claims at issue are not patent eligible and dismissed. We review a district court's Rule 12(c) dismissal for judgment on the pleadings under the law of the regional circuit. Amdocs (Isr.) Ltd. v. Openet Telecom, Inc., 841 F.3d 1288, 1293 (Fed. Cir. 2016). The Ninth Circuit reviews a court's grant of judgment on the pleadings de novo. Newton v. Parker Drilling Mgmt. Servs., Ltd., 881 F.3d 1078, 1083 (9th Cir. 2018). This analysis is "functionally identical" to the standard for deciding a motion to dismiss. Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1055 n.4 (9th Cir. 2011) (quoting Dworkin v. Hustler Magazine Inc., 867 F.2d 1188, 1192 (9th Cir. 1989)). In doing so, the court "inquire[s] whether the complaint's factual allegations, together with all reasonable inferences, state a plausible claim for relief." Id. at 1055. In the Ninth Circuit, a court deciding a motion under Rule 12 may consider "material which is properly submitted as part of the complaint," including documents that are not physically attached to the complaint, if their authenticity is not contested and the complaint necessarily relies on them, and it may take judicial notice of matters of public record. See Lee v. City of L.A., 250 F.3d 668, 688-89 (9th Cir. 2001).
The district court stated that in performing its eligibility analysis, it accepted Natural Alternatives' proposed claim constructions. J.A. 7 n.3. This was proper given the stage of the litigation. Applying the proposed claim constructions, we hold that the complaint's factual allegations, together with all reasonable inferences, plausibly establish the eligibility of the representative claims.1
Several of the asserted patents claim methods of treatment using beta-alanine ("the Method Claims"). Claim 1 of the '596 patent and claim 1 of the '865 patent have been treated as representative of the claims in those patents. Claim 1 of the '596 patent recites: 1. A method of regulating hydronium ion concentrations in a human tissue comprising:
providing an amount of beta-alanine to blood or blood plasma effective to increase beta-alanylhisti-dine dipeptide synthesis in the human tissue; and
exposing the tissue to the blood or blood plasma, whereby the concentration of beta-alanylhistidine is increased in the human tissue.
Claim 1 of the '865 patent recites:
1. A method of increasing anaerobic working capacity in a human subject, the method comprising:
a)providing to the human subject an amount of an amino acid to blood or blood plasma effective to increase beta-alanylhistidine dipeptide synthesis in the tissue, wherein said amino acid is at least one of:
i) beta-alanine that is not part of a dipep-tide, polypeptide or oligopeptide;
ii) an ester of beta-alanine that is not part of a dipeptide, polypeptide or oligopeptide; or
iii) an amide of beta-alanine that is not part of a dipeptide, polypeptide or oligopeptide; and
b)exposing the tissue to the blood or blood plasma, whereby the concentration of beta-alanylhistidine is increased in the tissue, wherein the amino acid is provided through a dietary supplement.
Natural Alternatives' proposed construction of the "effective" limitations is to "elevates beta-alanine above natural levels to cause an increase in the synthesis of beta-alanyl-histidine dipeptide in the tissue." J.A. 579-81. It defines "dietary supplement" as "an addition to the human diet, which is not a natural or conventional food, which effectively increases athletic performance when administered to the human over a period of time." J.A. 581. It also defines "increasing anaerobic working capacity" as "increasing the amount of work performed by a muscle under lactate producing conditions." J.A. 580.
The district court held both claims are directed to natural laws. It held claim 1 of...
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