Rapid Litig. Mgmt. Ltd. v. CellzDirect, Inc.

• Decision Date: 05 July 2016
• Docket Number: 2015-1570
• Citation: 827 F.3d 1042,119 U.S.P.Q.2d 1370
• Parties: Rapid Litigation Management Ltd., formerly Celsis Holdings, Inc., in Vitro, Inc., Plaintiffs–Appellants v. CellzDirect, Inc., a Delaware Corporation and wholly-owned Subsidiary, Invitrogen Corporation, a Delaware Corporation, Defendants–Appellees.
• Court: U.S. Court of Appeals — Federal Circuit

827 F.3d 1042

119 U.S.P.Q.2d 1370

Rapid Litigation Management Ltd., formerly Celsis Holdings, Inc., in Vitro, Inc., Plaintiffs–Appellants

v.CellzDirect, Inc., a Delaware Corporation and wholly-owned Subsidiary, Invitrogen Corporation, a Delaware Corporation, Defendants–Appellees.

2015-1570

United States Court of Appeals, Federal Circuit.

Decided: July 5, 2016

Andrew John Pincus, Mayer Brown LLP, Washington, DC, argued for plaintiffs-appellants. Also represented by Paul Whitfield Hughes ; Adam Glenn Kelly, John A. Cotiguala, Loeb & Loeb LLP, Chicago, IL; Laura Ann Wytsma, Los Angeles, CA.

David G. Mangum, Parsons Behle & Latimer, Salt Lake City, UT, argued for defendants-appellees. Also represented by C. Kevin Speirs.

Lynn Pasahow, Fenwick & West, LLP, Mountain View, CA, for amicus curiae National Venture Capital Association. Also represented by Carolyn Chang, Michael Jeffrey Shuster.

Alice O. Martin, Barnes & Thornburg LLP, Chicago, IL, for amicus curiae Biotechnology Industry Organization. Also represented by Bradley John Olson, Washington, DC; Hansjorg Sauer, Biotechnology Industry Organization, Washington, DC.

Before Prost, Chief Judge, Moore and Stoll, Circuit Judges.

Prost, Chief Judge.

Appellants seek review of the district court's summary judgment determination that U.S. Patent No. 7,604,929 (“'929 patent”) is invalid under 35 U.S.C. § 101. The district court concluded that the '929 patent is directed to a patent-ineligible law of nature—that hepatocytes are capable of surviving multiple freeze-thaw cycles—and that the patented process lacks the requisite inventive concept. Celsis In Vitro, Inc. v. CellzDirect, Inc. , 83 F.Supp.3d 774 (N.D. Ill. 2015), supplemented , 94 F.Supp.3d 940 (N.D. Ill. 2015). Because the '929 patent claims are not directed to a patent-ineligible concept, we vacate and remand.

I

Hepatocytes are a type of liver cell that have a number of attributes useful for testing, diagnostic, and treatment purposes. For example, hepatocytes can be used to investigate how drugs under development may be metabolized by the liver or can be used to measure a drug's toxicity or other effects on liver biology. Certain factors, however, limit their use: fresh hepatocytes can only be obtained from liver resections or non-transplantable livers of organ donors, and their lifespan is short. '929 patent col. 2 ll. 25-35. Supply is thus erratic, making availability limited and unpredictable. Id. at col. 2 ll. 22-35.

Prior to the invention of the '929 patent, scientists developed “cryopreservation ” techniques to preserve hepatocytes for later use. Id. at col. 2 ll. 36-40. These methods generally comprised freezing hepatocytes at frigid temperatures; then, when needed, thawing them and recovering the viable cells using density gradient fractionation. Id. at col. 2 l. 36-col. 3 l. 4, col. 10 ll. 30-60.

The prior art cryopreservation method had its problems, however. It was understood that the process could damage the hepatocytes, leading to poor recovery numbers of viable cells. Id. at col. 3 ll. 5-32. Furthermore, these prior methods were unsuitable for preparing multi-donor hepatocyte pools. Id. at col. 3 ll. 33-60. Because hepatocytes from different donors generally have different metabolic properties, researchers desired to pool hepatocytes from various source livers to create a hepatocyte preparation approximating average liver cells. Id. at col. 11 ll. 5-27. Such pools are useful research tools to study a drug's impact on a representative population. But because of the limited availability of donor livers and hepatocytes' short lifespan, pooled samples from multiple donors could only be created by first accumulating and freezing enough hepatocytes from single donors, then thawing and combining them for immediate use. Id. at col. 3 ll. 49-60. Given the understanding that cryopreservation could damage cells, prevailing wisdom was that hepatocytes could be frozen only once and then had to be either used or discarded. Celsis , 83 F.Supp.3d at 777–78. This severely limited the creation of pooled hepatocyte products. Id.

The inventors of the '929 patent discovered that some fraction of hepatocytes are capable of surviving multiple freeze-thaw cycles. As inventor Dr. Hardy testified, “initially we just proved that you could twice freeze the cells and still have viable cells.... [T]he unexpected outcome was that cells twice frozen behaved like cells that were once frozen.” Id . at 778–79 (quoting J.A. 148-49).

Armed with this discovery, the inventors developed an improved process of preserving hepatocytes, claimed in the '929 patent. In general, the improved process comprises: (A) subjecting previously frozen and thawed cells to density gradient fractionation to separate viable cells from non-viable ones; (B) recovering the viable cells; and (C) refreezing the viable cells. '929 patent col. 19 l. 56-col. 20 l. 20. The claims specify that the resulting hepatocyte preparation can be thawed and used immediately, exhibiting 70% viability after the second thaw. Id.

The '929 patent ed process has a number of advantages over the prior art. By separating out and refreezing only the viable cells, the preserved hepatocyte preparations can be thawed and used later without unacceptable loss of viability. Id. at col. 3 ll. 64-67. Pooled hepatocyte preparations are also much more easily made: hepatocyte samples from single donors can be pooled together to create a composite preparation that can be refrozen for later use. Id. at col. 3 l. 67-col. 4 l. 6, col. 11 l. 2- col. 12 l. 27. This was not possible with the prior art cryopreservation techniques. Appellant employs the improved process in its LiverPool™ product, which comprises multi-cryopreserved, pooled hepatocyte preparations useful for a wide variety of research purposes.

Claim 1 is representative of the '929 patent. It recites:

1. A method of producing a desired preparation of multi-cryopreserved hepatocytes, said hepatocytes being capable of being frozen and thawed at least two times, and in which greater than 70% of the hepatocytes of said preparation are viable after the final thaw, said method comprising:

(A) subjecting hepatocytes that have been frozen and thawed to density gradient fractionation to separate viable hepatocytes from nonviable hepatocytes,

(B) recovering the separated viable hepatocytes, and

(C) cryopreserving the recovered viable hepatocytes to thereby form said desired preparation of hepatocytes without requiring a density gradient step after thawing the hepatocytes for the second time, wherein the hepatocytes are not plated between the first and second cryopreservations, and wherein greater than 70% of the hepatocytes of said preparation are viable after the final thaw.

Additional dependent claims are directed to the type of density gradient fractionation, the type of hepatocytes, viability, and pooling. For example, with respect to pooling, claim 5 recites:

5. The method of claim 1, wherein said preparation comprises a pooled preparation of hepatocytes of multiple sources.

IVT sued LTC for infringing the '929 patent.¹ In response, LTC filed a motion for summary judgment of invalidity under 35 U.S.C. §§ 101 and 112. The district court granted the motion, finding the '929 patent invalid under § 101 and dismissing the action with prejudice (without reaching the § 112 issues). Celsis , 83 F.Supp.3d at 785–86. In finding the patent invalid under § 101, the court applied the Supreme Court's two-step framework for determining patent eligibility. See Alice Corp. v. CLS Bank Int'l , ––– U.S. ––––, 134 S.Ct. 2347, 2355, 189 L.Ed.2d 296 (2014) (citing Mayo Collaborative Servs. v. Prometheus Labs., Inc. , –––U.S. ––––, 132 S.Ct. 1289, 1294, 1296–98, 182 L.Ed.2d 321 (2012) ). At step one, the court concluded that the '929 patent “is directed to an ineligible law of nature: the discovery that hepatocytes are capable of surviving multiple freeze-thaw cycles.” Celsis , 83 F.Supp.3d at 783. At step two, the court determined that “the patented process lacks the requisite inventive concept,” observing that, upon discovering the cells' capability of surviving multiple freeze-thaw cycles, the inventors simply “reapplied a well-understood freezing process.” Id. at 783–84.

IVT appeals the court's decision. We have jurisdiction under 28 U.S.C. § 1295(a)(1). We review the court's grant of summary judgment under the law of the regional circuit; here, the Seventh Circuit's de novo standard. Memorylink Corp. v. Motorola Sols., Inc. , 773 F.3d 1266, 1270 (Fed. Cir. 2014) (citing Chaklos v. Stevens , 560 F.3d 705, 710 (7th Cir. 2009) ). The issue of patent-eligibility under § 101 is a question of law that we review without deference. CyberSource Corp. v. Retail Decisions, Inc ., 654 F.3d 1366, 1369 (Fed. Cir. 2011).

II

Section 101 permits the patenting of “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof,” subject to other requirements of the title. 35 U.S.C. § 101. The Supreme Court has “interpreted § 101 and its predecessors ... for more than 150 years” to “contain[ ] an important implicit exception: Laws of nature, natural phenomena, and abstract ideas are not patentable.” Alice , 134 S.Ct. at 2354 (quoting Ass'n for Molecular Pathology v. Myriad Genetics, Inc. , ––– U.S. ––––, 133 S.Ct. 2107, 2116, 186 L.Ed.2d 124 (2013) ). The concern underlying these judicial exclusions is that “patent law not inhibit further discovery by improperly tying up the future use of these building blocks of human ingenuity.” Id. (internal quotation marks omitted) (quoting Mayo , 132 S.Ct. at 1301 ).

The Supreme Court has recently articulated a two-part test for distinguishing patents that claim one of the patent-ineligible exceptions from those that claim patent-eligible applications of those concepts. Id. (citing Mayo , 132 S.Ct. at 1294, 1296–97 ). Step one asks whether the claim is “directed to one of [the] patent-ineligible concepts.”...