Ius et Iustitium is happy to present this guest post by Jake Neu. This is the second and final post in a series on patent law and the common good. The first can be found here. Mr. Neu is a partner at Bradley Arant Boult Cummings LLP.
When a craftsman loses a tool, he can improvise in the moment to get the work done. For example, a man without a screwdriver can use a butter knife. But the knife cannot fully compensate for the lost screwdriver; it is not sized to the slot on the screw head, and the rounded knife point slips from the slot. The general need that prompted the invention of a screwdriver remains, and substituting a knife is just a half-measure until a screwdriver can be found.
In my first post, “The Common Good in Patent Law,” I explained how U.S. patent law had a historical doctrine known as beneficial utility, which held that patents should be denied to inventions that are “frivolous or injurious to the well-being, good policy, or sound morals of society,” that is, inventions not directed to the common good of all. Beginning in 1960, the Supreme Court and the Court of Appeals for the Federal Circuit (which hears all patent appeals) excised beneficial utility from the body of patent law.
This second post provides a case study in what happens when the courts remove the common good from their toolkit. A recent quartet of Supreme Court cases involving the issue of patentable subject matter demonstrates that the need that generated beneficial utility—concerns about awarding patents to inventions that inhibit the common good—remains as strong as ever. But to deal with these concerns, the Supreme Court finds itself relying on patentable subject matter (PSM) jurisprudence, trying to create judge-made, value-neutral exceptions to what is otherwise patentable. This is like using a butter knife to drive screws—it might work in a pinch, but it is not the right tool. The Court should pick up the tool it discarded in 1960, beneficial utility, to address questions of public policy when considering granting or invalidating patents.
Patentable Subject Matter and Beneficial Utility
Briefly, PSM concerns the scope of what is potentially patentable, subject to meeting other conditions for patentability. A patentable invention may be a “process, machine, manufacture, or composition of matter.” This is intentionally broad. Per Diamond v. Chakrabarty in 1980, “anything under the sun that is made by man” is potentially patentable, subject to certain judge-made exceptions. These exceptions are abstract ideas, laws of nature, and physical phenomena, which are all deemed unpatentable subject matter. These exceptions go back to at least the 1850s. Until the late 20th century, they were uncontroversial.
Beneficial utility was a historical patent doctrine used to address public concerns about the propriety of granting patent rights in certain inventions. Those concerns about what is properly patentable for the benefit of all are perennial, and indeed they arise from the very nature of the quid pro quo that is the foundation for the patent system. However, modern courts have effectively abandoned beneficial utility in favor of value-neutral legal doctrines and analysis.
Although the courts discarded beneficial utility, such general welfare concerns have not gone away. Instead, they were imported into arguments and jurisprudence concerning the PSM exceptions. A first glimpse of this may be found in Justice Brennan’s dissent in Chakrabarty. There, a divided court held that a new artificial bacterium was patentable subject matter. Writing for the liberals, Brennan ended his dissent by pointing out that patenting a living thing “uniquely implicate[d] matters of public concern.” Brennan was concerned that absent more express direction from Congress, the courts should be reticent to permit patents that implicated public concerns about the common good of the invention in question or the granting of a patent monopoly in it.
Modern Confusion on Patentable Subject Matter Exceptions
Brennan’s concerns exploded into public view 30 years later when the Supreme Court decided four cases over five years involving PSM. In Bilski v. Kappos in 2010, the Court held that a particular software process directed to a business method of hedging risk was an “abstract idea” and unpatentable, but it did not rule out software or business methods as unpatentable per se. Then in 2012, the Court in Mayo Collaborative Services v. Prometheus Labs., Inc. held a that diagnostic method for treating a gastrointestinal disorder, which involved measuring the amount of a metabolite in a patient and then administering an amount of drug based on the amount of metabolite measured, was an unpatentable “law of nature.” In 2013, the Court held that isolating naturally occurring DNA sequences was not patentable because it was found in nature (a physical phenomenon), but developing complimentary DNA (a synthesized DNA strand based on an original strand of RNA) was patentable in Association for Molecular Pathology v. Myriad Genetics, Inc. Finally in 2014 the Court returned to software in Alice Corp. v. CLS Bank, Int’l, holding that an electronic escrow service for facilitating financial transactions was an unpatentable “abstract idea.”
I will spare readers the specific technical issues in each case, which are complex. We turn instead to the contextual issues that generated intense public interest in them. Bilski and Alice each involved software patents, which have been abused by patent trolls for years. Myriad involved patents on gene sequences, which impact personal privacy, healthcare, and insurance. Mayo concerned a diagnostic patent for personalized medicine, potentially impacting what methods doctors can choose to treat their patients. Underlying these varying public interests was a foundational question—does granting a patent to this or that invention promote the common good?
The numerous amicus briefs in each case exemplify how to analyze patents in view of the common good. A few examples will suffice. In Bilski, the Free Software Foundation argued the patent system “is disproportionately expensive” for individuals and large companies to compete fairly in the software realm and resulted in individual developers “losing control of one’s own computing in his or her daily life.” Similarly, the Electronic Frontier Foundation in Alice cited the “exponential growth of vague software patents” as slowing down innovation in software methods. In Myriad, the co-discoverer of DNA James Watson filed an amicus brief stating that genetic sequences and information “should not be monopolized by any one individual, company, or government,” but rather available to all because of “the important social consequences of restricting” their use. And in Mayo, the Biotechnology Industry Organization argued for the patentability of diagnostic and personalized treatment applications by citing the cost of development and the ensuing importance to companies to have the patent monopoly to bring these drugs to market. Whether you agree or disagree with these arguments, the point is that all concern the social benefit that may or may not result from the Court adopting a given rule.
Nevertheless, the Court’s decisions all avoided that foundational question. In the only opinion to touch on the issue of the benefit of patent protection to the general welfare, Justice Breyer’s decision for the unanimous Court in Mayo punts to Congress: “[W]e must hesitate before departing from established general legal rules[,] . . . and we must recognize the role of Congress in crafting more finely tailored rules where necessary. . . . We need not determine here whether, from a policy perspective, increased protection for discoveries of diagnostic laws of nature are patentable.”
Even worse, in each case the justices steadfastly refused to define a general standard for evaluating any of the PSM exceptions. Justice Thomas’ statement in Alice is typical of this abdication of judging by judges: “[W]e need not labor to delimit the precise contours of the ‘abstract ideas’ category in this case.” Responding at SCOTUSBlog, Robert Merges summed up the frustration: “To say we did not get an answer is to miss the depth of the non-answer we did get.” Since then, the Supreme Court has avoided PSM. In 2019, the Federal Circuit denied rehearing en banc on PSM and split across eight opinions lamenting the utter morass that PSM analysis has become since Bilski.
Beneficial Utility Is Better than PSM for Evaluating the Propriety of Patenting Certain Inventions
Such is the woeful state of PSM jurisprudence today. But returning to the analogy that opened this post, these woes demonstrate that, like using a butter knife when a screwdriver is needed, PSM jurisprudence is a poor substitute for beneficial utility to evaluate the social usefulness of patenting specific innovations. The litigants and amici before the Court demand that the justices consider public policy rationales to expand or limit PSM, which they steadfastly refuse to do. The Court instead tries to redirect these value-laden concerns into value-neutral “objective” determinations like whether a claimed invention is “abstract” or has “concrete limitations.” The Court’s resulting failure to provide bright-line rules or even a workable analytical framework for the PSM exceptions is a direct consequence of its refusal to consider public policy. Any bright-line rule on software patentability, for example, would require a value judgment on whether software patents are good for society, a decision the justices shirk. But even if they did give bright line rules, it’s unclear how a better definition on patenting gene segments, for example, would affect the patentability of a different biotech invention, such as personalized diagnostics in medicine. These are the problems inherent in using a butter knife to perform the functions of a screwdriver.
Instead, we should use the better tool. Beneficial utility provides several advantages over PSM. First, it allows judges and litigants to speak the same language. In the PSM cases, the amici clamor about public policy effects, but the courts just want objective neutral jurisprudence. Switching to an analysis of beneficial utility puts everyone—litigants, amici, and judges—on the same page. Second, the general principles of beneficial utility are broad enough to apply to all inventions without regard to subject matter. The question is whether the invention or the granting of a patent for it would actively harm the general welfare.
A critic to this proposal might argue that such a broad question will inevitably result in numerous close questions and nuances. How harmful must the invention be to be denied patent protection? What is the proper weighing of harm and benefit? But this leads to the third advantage. Because the bright-line rules are broadly agnostic as to subject matter, we can consider the beneficial utility of each invention separately. We would no longer need to ask whether software patents as a whole are “abstract” or “concrete,” or whether particular medical advances are “laws of nature” or concrete applications of them. We can ask instead whether each individual software innovation or medical advance inhibits the common good. Paradoxically, should the court take up the responsibility of actually judging beneficial utility on substantive grounds, its decisions could be narrowly tailored to avoid the broad “unforeseen impacts” that concerned Justice Breyer.
Over time, courts could draw nuances and distinctions between inventions and modify the location of the line as needed. That is exactly the sort of question we routinely entrust to a judge’s careful case-by-case analysis. A judge might not know the technical specifics of an invention, but she can understand broader societal impacts resulting from its use. These still involve difficult questions, but beneficial utility provides the right framework for answering them. Meanwhile, the PSM exceptions can do what they are best suited for, policing the outer bounds of patentable subject matter instead of trying to catch every policy concern the public has about patents in general. It’s just a matter of recognizing that beneficial utility is the better tool for the job.
Jake Neu