Natural Alternatives wins 101 appeal at CAFC: We live in the natural world, and all inventions are constrained by the laws of nature.
The outcome
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.
This was an appeal of a dismissal under FRCP 12(c):
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). T
his 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).
As to method claims:
The Method Claims at issue are treatment claims.
They cover using a natural product in unnatural quantities
to alter a patient’s natural state, to treat a patient with
specific dosages outlined in the patents. We hold, therefore,
that the Method Claims are not directed to ineligible
subject matter
(...)
Under Natural Alternatives’ proposed claim constructions,
the Method Claims are not directed to an exception
to § 101 under the first step of the Alice test. Therefore,
judgment on the pleadings was inappropriate.
Separately
Moreover, at step two, factual impediments exist to resolving the case at this stage.
Claim 1 of the ’865 patent
requires “the amino acid is provided through a dietary supplement,”
with the dietary supplement limitation construed as “an addition to the human diet, which is not a
natural or conventional food.” J.A. 581 (emphasis added).
Creative Compounds argues that the “inventors admitted
in the ’865 patent, and all of the patents-on-appeal, that
placing a natural substance into a dietary supplement for
administration to a human, in order to increase the function of tissues is a conventional,
well-known activity.” Appellee Br. 37 (citing ’865 patent 1:41–44). The language it
cites, however, does not stand for that proposition. Instead,
the patent states “[n]atural food supplements are
typically designed to compensate for reduced levels of nutrients in the modern human
and animal diet. In particular, useful supplements increase the function of tissues
when consumed.” ’865 patent 1:41–44. At most, this language shows that the prior art
contained food supplements
containing natural products, and typically those were used
to compensate for reduced levels of nutrients. It does not
establish that the dietary supplement in the claims, which
Note the "Big Mac" standard in footnote 3:
Indeed, the record contains an expert declaration
stating that “one 3.2 gram daily supplement of beta-alanine
is the equivalent to eating at least 109 Big Macs per
day.”
Of a procedural point:
Although Natural Alternatives argued that claim 34 is eligible as
it is a treatment claim with a very specific dosing
regimen contained within the claim itself, at oral argument
Natural Alternatives acknowledged that this patent was
not asserted against Creative Compounds. Oral Arg. 0:52–
1:20. Though rendered ineligible in the same district court
opinion as the other patents at issue in this appeal, the ’947
patent was not asserted against Creative Compounds.4
Claims not asserted in this litigation against this appellee,
Creative Compounds, are not properly before this court in
this appeal. This does not prejudice the patentee’s ability
to defend the eligibility of the ’947 patent in future proceedings.
Of the product claims, Chakrabarty is cited:
Although beta-alanine is a natural product, the Product Claims are
not directed to beta-alanine. A claim to a
manufacture or composition of matter made from a natural
product is not directed to the natural product where it has
different characteristics and “the potential for significant
utility.” See Diamond v. Chakrabarty, 447 U.S. 303, 310
(1980). Just as the Method Claims are directed to specific
methods of treatment that employ a natural law, the Product Claims
are directed to specific treatment formulations
that incorporate natural products, but they have different
characteristics and can be used in a manner that beta-alanine as it appears in nature cannot.
Funk Brothers is mentioned:
Moreover, even though claim 6 contains a combination
of glycine and beta-alanine, both of which are natural products,
that is not necessarily sufficient to establish that the
claimed combination is “directed to” ineligible subject matter.
The Court’s decision in Funk Brothers does not stand
for the proposition that any combination of ineligible subject matter is itself ineligible.
In Funk Brothers, the Court
held that claims to a mixture of two naturally occurring
bacteria were not patent eligible where each bacteria species in the
claimed combination “ha[d] the same effect it
always had,” and the “combination of species produce[d] . . .
no enlargement of the range of their utility.” 333 U.S. at
131. The combination of the bacteria into the same package did
“not improve in any way their natural function.”
Id. Here, as Creative Compounds’ counsel acknowledged
at oral argument, the record indicates that the claimed
combination of glycine and beta-alanine could have synergistic
effects allowing for outcomes that the individual components could not have.
(...)
Given that this is the pleading stage, we would have to accept this statement as true even if it were just an allegation
in the pleadings. Instead, what we have goes far beyond
that, including a statement in an article attached to an expert report explaining that “one of insulin’s effects is to increase amino acid (such as beta-alanine) into our cells,”
J.A. 1063, a statement in the specification that “[i]t may be
that glycine enhances insulin sensitivity,” ’376 patent at
6:3–5, and an expert declaration explaining that direct supplementation of a different amino acid had no effect unless
“co-supplemented with glucose or other compounds increasing the concentration of insulin in circulation,”
J.A. 1132. All of these suggest that when combined the
beta-alanine and glycine have effects that are greater than
the sum of the parts. At a minimum, there are sufficient
factual allegations to render judgment on the pleadings inappropriate. Accordingly, given the factual allegations,
these claims would still survive a motion for judgment on
the pleadings at the first step of the Alice test
AND
Finally, even if the Product Claims were directed to ineligible subject matter,
judgment on the pleadings would
still be inappropriate under step two. Like claim 1 of the
’865 patent, the Product Claims contain a dietary supplement limitation,
with the same proposed construction. See
J.A. 572, 574. As we explained with regard to the Method
Claims, the specification does not contain language supporting the idea that this limitation was well-understood,
routine, and conventional. The language in the specification does not support this proposition, and patentee’s claim
construction contradicts Creative Compounds’ position, so
such a determination may not be made on a motion for
judgment on the pleadings.
The Conclusion
The claims at issue are not directed to ineligible subject
matter under step one of the Alice test. We live in the natural world,
and all inventions are constrained by the laws
of nature. As the Supreme Court has warned, we must be
careful not to overly abstract claims when performing the
Alice analysis. For the foregoing reasons, we reverse the
district court’s decision that the claims are directed to ineligible subject matter,
and we remand for further proceedings consistent with this opinion.
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.
This was an appeal of a dismissal under FRCP 12(c):
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). T
his 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).
As to method claims:
The Method Claims at issue are treatment claims.
They cover using a natural product in unnatural quantities
to alter a patient’s natural state, to treat a patient with
specific dosages outlined in the patents. We hold, therefore,
that the Method Claims are not directed to ineligible
subject matter
(...)
Under Natural Alternatives’ proposed claim constructions,
the Method Claims are not directed to an exception
to § 101 under the first step of the Alice test. Therefore,
judgment on the pleadings was inappropriate.
Separately
Moreover, at step two, factual impediments exist to resolving the case at this stage.
Claim 1 of the ’865 patent
requires “the amino acid is provided through a dietary supplement,”
with the dietary supplement limitation construed as “an addition to the human diet, which is not a
natural or conventional food.” J.A. 581 (emphasis added).
Creative Compounds argues that the “inventors admitted
in the ’865 patent, and all of the patents-on-appeal, that
placing a natural substance into a dietary supplement for
administration to a human, in order to increase the function of tissues is a conventional,
well-known activity.” Appellee Br. 37 (citing ’865 patent 1:41–44). The language it
cites, however, does not stand for that proposition. Instead,
the patent states “[n]atural food supplements are
typically designed to compensate for reduced levels of nutrients in the modern human
and animal diet. In particular, useful supplements increase the function of tissues
when consumed.” ’865 patent 1:41–44. At most, this language shows that the prior art
contained food supplements
containing natural products, and typically those were used
to compensate for reduced levels of nutrients. It does not
establish that the dietary supplement in the claims, which
Note the "Big Mac" standard in footnote 3:
Indeed, the record contains an expert declaration
stating that “one 3.2 gram daily supplement of beta-alanine
is the equivalent to eating at least 109 Big Macs per
day.”
Of a procedural point:
Although Natural Alternatives argued that claim 34 is eligible as
it is a treatment claim with a very specific dosing
regimen contained within the claim itself, at oral argument
Natural Alternatives acknowledged that this patent was
not asserted against Creative Compounds. Oral Arg. 0:52–
1:20. Though rendered ineligible in the same district court
opinion as the other patents at issue in this appeal, the ’947
patent was not asserted against Creative Compounds.4
Claims not asserted in this litigation against this appellee,
Creative Compounds, are not properly before this court in
this appeal. This does not prejudice the patentee’s ability
to defend the eligibility of the ’947 patent in future proceedings.
Of the product claims, Chakrabarty is cited:
Although beta-alanine is a natural product, the Product Claims are
not directed to beta-alanine. A claim to a
manufacture or composition of matter made from a natural
product is not directed to the natural product where it has
different characteristics and “the potential for significant
utility.” See Diamond v. Chakrabarty, 447 U.S. 303, 310
(1980). Just as the Method Claims are directed to specific
methods of treatment that employ a natural law, the Product Claims
are directed to specific treatment formulations
that incorporate natural products, but they have different
characteristics and can be used in a manner that beta-alanine as it appears in nature cannot.
Funk Brothers is mentioned:
Moreover, even though claim 6 contains a combination
of glycine and beta-alanine, both of which are natural products,
that is not necessarily sufficient to establish that the
claimed combination is “directed to” ineligible subject matter.
The Court’s decision in Funk Brothers does not stand
for the proposition that any combination of ineligible subject matter is itself ineligible.
In Funk Brothers, the Court
held that claims to a mixture of two naturally occurring
bacteria were not patent eligible where each bacteria species in the
claimed combination “ha[d] the same effect it
always had,” and the “combination of species produce[d] . . .
no enlargement of the range of their utility.” 333 U.S. at
131. The combination of the bacteria into the same package did
“not improve in any way their natural function.”
Id. Here, as Creative Compounds’ counsel acknowledged
at oral argument, the record indicates that the claimed
combination of glycine and beta-alanine could have synergistic
effects allowing for outcomes that the individual components could not have.
(...)
Given that this is the pleading stage, we would have to accept this statement as true even if it were just an allegation
in the pleadings. Instead, what we have goes far beyond
that, including a statement in an article attached to an expert report explaining that “one of insulin’s effects is to increase amino acid (such as beta-alanine) into our cells,”
J.A. 1063, a statement in the specification that “[i]t may be
that glycine enhances insulin sensitivity,” ’376 patent at
6:3–5, and an expert declaration explaining that direct supplementation of a different amino acid had no effect unless
“co-supplemented with glucose or other compounds increasing the concentration of insulin in circulation,”
J.A. 1132. All of these suggest that when combined the
beta-alanine and glycine have effects that are greater than
the sum of the parts. At a minimum, there are sufficient
factual allegations to render judgment on the pleadings inappropriate. Accordingly, given the factual allegations,
these claims would still survive a motion for judgment on
the pleadings at the first step of the Alice test
AND
Finally, even if the Product Claims were directed to ineligible subject matter,
judgment on the pleadings would
still be inappropriate under step two. Like claim 1 of the
’865 patent, the Product Claims contain a dietary supplement limitation,
with the same proposed construction. See
J.A. 572, 574. As we explained with regard to the Method
Claims, the specification does not contain language supporting the idea that this limitation was well-understood,
routine, and conventional. The language in the specification does not support this proposition, and patentee’s claim
construction contradicts Creative Compounds’ position, so
such a determination may not be made on a motion for
judgment on the pleadings.
The Conclusion
The claims at issue are not directed to ineligible subject
matter under step one of the Alice test. We live in the natural world,
and all inventions are constrained by the laws
of nature. As the Supreme Court has warned, we must be
careful not to overly abstract claims when performing the
Alice analysis. For the foregoing reasons, we reverse the
district court’s decision that the claims are directed to ineligible subject matter,
and we remand for further proceedings consistent with this opinion.
posted by Lawrence B. Ebert at 8:36 AM
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