Tun-Jen Chiang on Patentable Subject Matter

Patent law is usually justified on utilitarian grounds. To be sure, significant contrary views have appeared in recent scholarship. For example, Professor Robert Merges’ work provides a partly Lockean account of intellectual property. The dominant view, nonetheless, is that the rules of patent law serve consequentialist goals of inducing invention, commercialization, and disclosure. In support of this view, scholars often cite the moribund state of the “moral utility” doctrine and the Constitution itself, which empowers Congress to enact laws that would “promote the Progress of Science and Useful Arts.” Professor Tun-Jen Chiang’s forthcoming article, “Competing Visions of Patentable Subject Matter,” challenges this account as a descriptive matter insofar as it relates to the judicially recognized exclusions from patentability.

Chiang explains that, once one strips away the cost-benefit rhetoric of cases like Association for Molecular Pathology v. Myriad Genetics and Mayo Collaborative Services v. Prometheus Laboratories, the Supreme Court’s decisions in these cases can be understood as reflecting moral concerns. As an initial matter, though, Chiang notes that the excessive monopoly cost theory provides an attractive justification for the exclusion of laws and products of nature, abstract ideas, and the like from patentability. Because terms like “law of nature” are not self-defining, it makes intuitive sense to understand them as labels for patent claims that fail the cost-benefit balancing test. In Chiang’s view, though, close inspection of the Court’s opinions shows that the utilitarian theory does not do the work that the Court’s rhetoric about disproportionate rewards to would-be patentees and preemption of downstream research might lead one to believe.

One clue that Chiang points to is the Court’s rejection of Prometheus’ argument that, even if the claim at issue—directed to determining whether dosages of a particular drug should be adjusted in response to the measured amount of a probe molecule in the patient’s blood—appropriated a law of nature, it is such a narrow law that the claim would not preempt much of anything. Once the Court attached the “law of nature” label to the claim, though, it was game over for Prometheus. Even if the claim passed the cost-benefit balancing test, it would still be unpatentable because, in Chiang’s words, it belongs to “a preexisting non-economic category of things known as ‘laws of nature.’” To be sure, the Court notes in the opinion that the “law of nature” designation is a proxy for the utilitarian “building-block” concern about ownership of artifacts of basic research. But because the Court did not articulate any test for determining what a “law of nature” is, we do not know whether the rule that excludes laws of nature from patentability actually serves the consequentialist goal of promoting innovation. More importantly, Chiang argues that economic theory alone cannot provide a definition for the “law of nature” category that does not reduce to a case-by-case cost-benefit balancing test. But if this is the case, the patentable subject matter (PSM) requirement loses its purpose as a threshold inquiry and becomes redundant—because other doctrines (e.g., nonobviousness and enablement) already provide, or are supposed to provide, for the sorts of fact-incentive tests that get at the costs and benefits of patents. (It might be interesting to compare this point with Professor Sean Seymore’s proposal to eliminate the utility doctrine and replace it with enablement and nonobviousness inquiries.)

Where does this leave us? Chiang argues that moral values, like human dignity and the inviolability of nature, help explain the results of Myriad and Mayo. Certainly, the public interest in the Myriad case largely reflected the moral concern over the patenting of human genes, not the utilitarian worry that downstream research might be preempted by claims to isolated genomic DNA. Although it is difficult to find evidence for this in the decisions themselves, Chiang’s point is that the failure of the economic explanations—and other subtle clues like the very formulation of the Question Presented in Myriad (“Are human genes patentable?”)—lead to this conclusion.

Chiang further illustrates his point by comparing the reasoning in Parke-Davis v. H.K Mulford, which he views as a strong example of a court’s utilitarian focus on the commercial value of an isolated product of nature as a justification for patentability, with Myriad, which he takes to stand for the proposition that that even valuable, newly discovered products are unpatentable per se if they are insufficiently altered from their respective natural states. Chiang reiterates that it is, at best, unclear how the doctrine holding products of nature unpatentable serves economic goals. He argues that the result in Myriad might instead be justified by the moral positions that artifacts of nature that preexisted human intervention are not proper subject matter for appropriation and that the patenting of genes compromises human dignity. Chiang further suggests that Lockean labor-desert theory, which justifies appropriation only when an individual applied his or her labor to the preexisting state of nature, might also explain the natural-artificial distinction that courts appear to be drawing in cases like Myriad. Chiang’s overarching point is that, if courts do take moral considerations into account, they should be honest that this is what they are really doing. The payoffs of the greater clarity include a sharper focus on the natural-artificial distinction in the caselaw and improved quality of the scholarly debate.

I think that Chiang’s article gets at many important aspects of the PSM doctrine that have not been explored in prior literature. I agree with Chiang’s initial premise that the PSM requirement might not reflect utilitarian goals. Consider, for example, the products of nature doctrine. Leaving aside the well-documented difficulties in determining what a law of nature is and drawing the line between “natural” and “artificial,” it is not clear whether prohibiting patents on artifacts that are natural rather than artificial will serve the constitutional goal of promoting the progress of useful arts. Suppose, for example, that courts interpret Myriad to hold patent-ineligible claims on chemical compounds isolated from natural sources—like adrenaline in Parke-Davis—because they are not markedly different from products of nature. Although empirical data on the point is probably not available, it is a good bet that this rule might disserve innovation. Natural products chemistry is a time- and resource-intensive industry, and the fruits of the discoveries are often large and unusual chemical compounds—nothing like the ubiquitous genes. Indeed, I doubt that patent claims to such products would threaten diverse avenues of downstream research. If this is correct, those who are committed to the utilitarian justification of patent law would need to rethink the products of nature doctrine. I think that other commentators—for example, the authors who argued that the rule excluding abstract ideas from patent eligibility should be reformulated to police overbroad claiming—would also agree with Chiang’s general point that there is a disconnect between the rules of PSM and patent law’s purported utilitarian goals.

If utilitarian explanations fail, then Chiang must be right that moral considerations must be at play in some way, even if through the process of elimination. The result in Mayo seems difficult to rationalize any other way. In addition, the cases provide direct clues that validate Chiang’s “inviolability of nature” explanation. For example, the statements in Funk Brothers v. Kalo Inoculant that the features of the invention at issue are “the handiwork of nature” and “serve the ends nature originally provided and act quite independently of any effort of the patentee” quite clearly support Chiang’s thesis.

More generally, I note that even though utilitarian cost-balancing may be the aspirational goal of patent law, existing doctrine in areas other than PSM does not seem to reflect it in a consistent manner. Consider nonobviousness: Professors Michael Abramowicz and John Duffy and Judge Richard Posner have all argued that nonobvoiusness doctrine in its current form does not clearly serve the goal of inducing innovation that would not have been produced in the absence of the patent incentive. Perhaps, as suggested by Merges, nonobviousness doctrine relies mainly on the mid-level principle of “nonremoval” from the public domain, which might reflect but does not directly engage larger normative questions. The PSM doctrine, too, has this feature—according to Chiang, the mid-level “artificiality principle” underlies the outcomes of the cases like Myriad, Mayo, and even Alice Corp. v. CLS Bank. And I would further argue that another mid-level principle—that of prohibiting patents on basic research—might explain the results of some PSM (and other) cases, and might reflect a mix of moral and utilitarian concerns.

There is a wide agreement that the PSM doctrine is quite muddled. The courts have had a great deal of trouble in coming up with tests for identifying laws of nature, natural phenomena, and abstract ideas, and have relied mostly on gut instinct and comparisons with patents invalidated in prior cases. But then, the concepts of “principle patents” and “scientific property” have always been elusive. We may be able to do better someday. For now, though, we are left with utilitarian rhetoric that can be contrasted with case outcomes whose utilitarian grounding is less than clear. The major contribution of Chiang’s article is placing this problem into sharp focus.

Note: Cross-posted on the Center for Law and the Biosciences Blog