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In Rare Reversal, Federal Circuit Revives Liver Cell Patent

6 July 2016

Health care companies that couldn’t persuade the U.S. Supreme Court last week to reconsider the patentability of human cells have received a consolation prize from the Federal Circuit.

The D.C.-based appellate court ruled Tuesday that a method of freezing and thawing liver cells to retain their viability for medical procedures can be patented, contrary to a district court ruling that the invention failed to satisfy Section 101 of the Patent Act.

“The end result of the ’929 patent claims is not simply an observation or detection of the ability of hepatocytes to survive multiple freeze-thaw cycles,” Chief Judge Sharon Prost wrote in Rapid Litigation Management v. CellzDirect. “Rather, the claims are directed to a new and useful method of preserving hepatocyte cells.”

It’s the first time the U.S. Court of Appeals for the Federal Circuit has turned away a Section 101 attack on a natural phenomenon at least since the Supreme Court’s Alice decision bolstered its Section 101 jurisprudence.

“The Federal Circuit today vindicated the patent-eligibility of a discovery that made an important advance in providing liver cells for testing, diagnostic, and treatment purposes,” said Jay LeCoque, managing partner of Rapid Litigation Management, the London-based co-owner of the patent rights at issue, in a written statement. “It did so in a way that provides new and important assurance that numerous other life science advances are similarly eligible for patent protection.”

More than a few life science companies were disappointed when the Supreme Court declined last week to review Ariosa Diagnostics v. Sequenom, a Federal Circuit decision that invalidated a groundbreaking fetal diagnostics test. The Biotechnology Industry Organization and the National Venture Capital Association, both of which had backed Sequenom’s push for patentability, threw amicus support behind Rapid Litigation Management and co-plaintiff In Vitro Inc.

“There has been deep concern in the biotechnology and pharmaceutical industries that lower courts’ narrowing of Section 101’s patentability standards, based on the Supreme Court’s Mayo decision, would have significant adverse consequences on investment in research,” said Mayer Brown partner Andrew Pincus, who argued the appeal for Rapid Litigation Management. The Federal Circuit’s decision should assuage some of that concern, Pincus said in a written statement.

U.S. Patent 7,604,929 is focused on hepatocytes, liver cells that are useful for testing, diagnostic and treatment purposes. The cells have a short life span, and freezing them repeatedly can cause damage, according to Prost’s opinion. To study a drug’s impact on the general population, researchers previously had to pull together pools of liver tissue from multiple donors, then unfreeze them all at once for a single use.

The inventors of the ‘929 patent discovered that some cells could be frozen and thawed multiple times. They used a process called density gradient fractionation to isolate those cells, finding that 70 percent of them could be refrozen and used again.

U.S. District Judge Milton Shadur ruled that the patent is “directed to an ineligible law of nature: the discovery that hepatocytes are capable of surviving multiple freeze-thaw cycles.”

But, Prost said Tuesday, “that is not where [the inventors] stopped, nor is it what they patented.” Rather, the inventors “employed their natural discovery to create a new and improved way of preserving hepatocyte cells for later use.”

Plus, she wrote, while freezing and thawing hepatocytes was conventional at the time, the process of doing it twice “was itself far from routine and conventional.” Prost’s reliance on that “ordered combination” of steps echoed Judge Raymond Chen’s reasoning turning back a software patent eligibility challenge just last week.

Judges Kimberly Moore and Kara Stoll concurred in Prost’s opinion.

Pincus said the ruling clarifies that “a patent claim that relies on the operation of a natural law is not automatically invalid.” Otherwise, he said, production of new compounds and new forms of medical treatment “all would be unpatentable because they depend on, in some respect, a law of nature.”

Mayer Brown litigated the appeal alongside Loeb & Loeb. The Loeb team included partners Adam Kelly and Laura Wytsma and associate John Cotiguala. Mayer Brown partner Paul Hughes also contributed.

CellzDirect and Invitrogen were represented by Parsons Behle & Latimer partner David Mangum. He argued before the Federal Circuit that the very words of the patent itself “call out the natural phenomenon, the capability of a subpopulation of these cells to survive a freeze-thaw cycle.”

Reprinted with permission from the July 6, 2016 edition of © 2016 ALM Properties, Inc. All rights reserved. Further duplication without permission is prohibited.

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