The United States Court of Appeals for the Federal Circuit recently issued a significant ruling in Restem, LLC v. Jadi Cell, LLC, upholding the validity of Jadi Cell’s U.S. Patent No. 9,803,176. This case, which originated from an inter partes review (IPR) before the Patent Trial and Appeal Board (PTAB), revolved around whether Restem could prove that Jadi Cell’s patent claims were unpatentable due to anticipation or obviousness. The Federal Circuit affirmed the PTAB’s decision, reinforcing critical aspects of intellectual property law, particularly regarding claim construction, inherent anticipation, and obviousness in biotechnology patents.

Key Legal Issues in the Case

1. Claim Construction and the Definition of “Isolated Cell”

One of the central disputes in the case was the proper construction of the term “isolated cell” in Jadi Cell’s patent. Restem argued that an “isolated cell” should be construed as a single cell derived from the subepithelial layer of mammalian umbilical cord tissue. However, the Federal Circuit agreed with the PTAB’s construction that “isolated cell” referred to a cell population, based on how cell marker expression was analyzed in the industry and throughout the patent prosecution history. This interpretation was critical because it influenced how prior art disclosures were evaluated for anticipation and obviousness.

2. Inherent Anticipation and Prior Art

Restem challenged the patent on the grounds that prior art (specifically, the Majore reference) inherently anticipated the claimed invention. To establish inherent anticipation, Restem needed to show that following Majore’s process would necessarily and inevitably result in the claimed isolated cells. The court, however, found that the prior art did not disclose the specific cell marker expression profile required by the ‘176 patent. Because cell marker expression can depend on multiple variables, including cell-to-cell interactions and culture conditions, the court concluded that inherency had not been established.

This ruling reinforces a fundamental principle in patent law: inherency must be more than just a possible or likely result—it must be a guaranteed outcome of the prior art.

3. Obviousness and the Influence of Culture Media

Restem also argued that the patent was obvious based on a combination of prior art references, including Kita, Majore, and other secondary references. One of the dependent claims (claim 9) specified that the isolated cells were cultured in media free of animal components. The PTAB ruled that claim 9 was non-obvious for two reasons: (1) Restem failed to prove that the prior art inherently produced the claimed cells, and (2) the record evidence suggested that animal components were commonly used in culture media at the time, making the patented method distinct.

The Federal Circuit’s decision underscores the importance of demonstrating a clear motivation to combine prior art references and a reasonable expectation of success—both key requirements in proving obviousness.

Implications for Intellectual Property Law

This case has several important takeaways for intellectual property practitioners and companies in the biotechnology space:

1. Claim Scope Matters: How patent claims are constructed and interpreted can make or break a validity challenge. The court’s recognition of “isolated cell” as referring to a population of cells rather than a single cell highlights the importance of precision in drafting patent claims and prosecution history estoppel.
2. Inherent Anticipation Requires Certainty: Simply arguing that a prior art process might result in the patented invention is not enough. The challenger must show that the patented invention necessarily results from the prior art.
3. Obviousness Requires Stronger Evidence: In biotechnology patents, particularly those involving complex biological processes, showing that a claimed invention was obvious requires clear evidence of motivation to combine references and a reasonable expectation of success.

Conclusion

The Federal Circuit’s ruling in Restem v. Jadi Cell is a crucial win for patent holders in the biotech industry, reaffirming that patents must be carefully analyzed before they are invalidated. The decision reinforces the standards for claim construction, inherency, and obviousness, ensuring that patent rights remain robust where innovation is demonstrated.

As biotechnology and stem cell research continue to evolve, this case will likely serve as a precedent in future disputes over similar intellectual property rights. Companies and practitioners should take note of the court’s reasoning when drafting patent applications and preparing for potential challenges.

By Charles Gideon Korrell