Doctors have been diagnosing patients for centuries. So you might suspect this work can’t be patented. After all, physicians base their diagnoses on natural phenomena, which are unpatentable under longstanding Supreme Court precedents.

More and more often, however, physicians are using technology to help make their diagnoses. This technology is patentable.

So what about the process of using technology to make a diagnosis? When, if ever, are such diagnostic methods patentable?

This controversial issue has been before the Supreme Court twice in the past five years. Both times, the high court sidestepped a decision.

Recently, however, the Federal Circuit marched in where the Supreme Court hesitated to tread. A three-judge panel unanimously held in Prometheus Labs. v. Mayo Collaborative Servs. that diagnostic methods involving laboratory tests are patentable subject matter. The court also held that medical treatment methods involving the administration of drugs are patentable subject matter.

“The ruling will be very important, especially in diagnostics and the field of personalized medicine,” says Peter Armenio, a partner in Quinn Emanuel Urquhart & Sullivan. He adds that personalized medicine is “the trend in pharmaceuticals–tailoring the drug to the individual, rather than everyone taking the same dosage at the same time.”

The Federal Circuit’s ruling, however, is subject to one significant qualification. “It is very important if it stands up,” says Prof. Christopher Holman of the University of Missouri-Kansas City School of Law. The problem is that the Federal Circuit’s ruling may not fit with recent Supreme Court jurisprudence.

Tale of Two Patents

Prometheus arises from two patents on methods of using thiopurine drugs to treat autoimmune diseases. These drugs need to be administered carefully; too low a dose is ineffective, while too high a dose is toxic.

The patents cover two basic methods. One method consists of “administering” the drug, followed by “determining” the amount of the drug’s metabolites in the patient’s blood, then adjusting future dosages as needed. Adjustment is determined by comparing the amount of the drug metabolites in the bloodstream with metabolite levels known to be ineffectively low or dangerously high.

The second patented method consists of simply “determining” the amount of the drug metabolites in the patient’s blood and adjusting future dosages as needed. As in the first method, the adjustment is determined pursuant to natural correlations of drug metabolite concentrations in human blood.

Prometheus, the exclusive licensee of these patents, marketed drug tests covered by these patents. Mayo announced in 2004 that it would use and market its own version of these tests. Mayo’s tests would measure the same metabolites as Prometheus’ tests, but would use different drug levels to determine efficacy and toxicity–and these tests would be less expensive than those Prometheus sold.

Soon after Mayo’s announcement, Prometheus sued Mayo for patent infringement. The district court struck down the patents at issue in 2008, finding they claimed unpatentable natural phenomena–the correlations between thiopurine metabolite levels, on one hand, and efficacy and toxicity, on the other hand. The court held the patents’ “administering” and “determining” steps are “merely necessary data-gathering steps for any use of the correlations” and that the final step of the claimed methods–adjusting future dosages based on metabolite levels–is an unpatentable “mental step.”

Different Decision

The Federal Circuit saw things differently. It held, in 2009, that the claimed methods were patentable subject matter.

Mayo appealed, and the Supreme Court granted certiorari. Many anticipated an important holding on the patentability of medical diagnostic and treatment processes. Instead, on June 29, 2010, the high court tersely vacated the Federal Circuit’s decision and remanded the case “for further consideration in light of Bilski v. Kappos,” which the Supreme Court had decided one day earlier.

On remand, the Federal Circuit again found the claimed methods were patentable. The court held in December 2010 that both methods at issue satisfied the “machine-or-transformation test,” which Bilksi ruled was an important guide for determining whether a method is patent-eligible subject matter. (This test is satisfied if a process either uses a particular machine or transforms a particular article into a different state or thing.)

The Federal Circuit held, as it had before, that “administering” the drug transformed the human body, thus satisfying the transformation prong of the test. And the court again held that simply “determining” the level of drug metabolites in the blood “necessarily involves a transformation.” The laboratory procedures that extract metabolites from a bodily sample and determine their concentration change the original sample. The court quoted one Prometheus expert: “[A]t the end of the process, the human blood sample is no longer human blood; human tissue is no longer human tissue.”

The ruling is good news for companies seeking to patent methods of medical diagnosis or treatment. The Federal Circuit “was trying to make clear that anything that involves laboratory techniques–taking a sample from a patient and transforming it–is patent eligible. And if a claim involves treating a patient, that is patent eligible,” Holman says.

Law of the Land

This issue isn’t settled yet. “Mayo intends to file a petition for certiorari,” says Jonathan Singer, a Fish & Richardson principal who is representing Mayo in this litigation. “For Mayo, the case is important for the principle for which it will ultimately stand: whether doctors can freely use natural relationships in the treatment of their patients. It’s widely perceived as a biotech case of national importance. It’s been up to the Supreme Court once before, and they have certainly shown a real interest in this issue.”

The justices also may be interested in the Federal Circuit’s response to Laboratory Corp. v. Metabolite Labs. This 2006 Supreme Court case concerned the patentability of a medical diagnostic method. The high court never ruled on the case, instead dismissing the writ of certiorari as improvidently granted. But three justices issued a blistering dissent, asserting that this issue was of great public import and that the diagnostic method here was unpatentable because it sought exclusive rights in natural phenomena (a correlation between vitamin deficiency and an elevated level of homocysteine).

This dissent isn’t a dead letter. It was cited approvingly by five justices in Bilski. But the Federal Circuit dismissed it in a footnote, stating “we decline to discuss a dissent” because “it is not controlling law.”

There may be another, more important reason why the Federal Circuit wanted to avoid the LabCorp dissent: The Federal Circuit’s position in Prometheus basically contradicts the dissent, according to many legal experts. “I think the Federal Circuit would find the LabCorp claim to be patent eligible because it involves taking a sample from a patient and assaying it,” Holman says.

For now, Prometheus is the law of the land. “But stay tuned,” Armenio says. “We’ll have to see how it plays out over time.”