CASE ANALYSIS

Name of the Case: Diamond vs. Chakrabarty

Decided On: June 16, 1980

Citation no: 447 U.S. 303

Judges:

1. Assenting Judges:- Burger (C.J), Stewart, Blackmun, Rehnquist; and

Stevens.
2. Dissenting Judges:- Brennan, White, Marshall; and Powell.

Provisions Involved:
Title 35 United States code, Section 101, “Whoever invents or discovers any new and useful
process, machine, manufacture, or composition of matter, or any new and useful improvement
thereof, may obtain a patent therefor, subject to the conditions and requirements of this title."

Brief fact:
In 1972, Ananda Chakrabarty, an immunologist working at the University Of Illinois College
Of Medicine, filed a patent application, assigned to the General Electric Company. The
application asserted 36 claims related to Chakrabarty’s invention of “a bacterium from the
genus Pseudomonas containing therein at least two stable energy-generating plasmids, each of
said plasmids providing a separate hydrocarbon degradative pathway.” This human-made,
genetically engineered bacterium is capable of breaking down multiple components of crude
oil. Because of this property, which is possessed by no naturally occurring bacteria,
Chakrabarty’s invention is believed to have significant value for the treatment of oil spills.

Chakrabarty’s patent claims were of three types:

1. Process claims for the method of producing the bacteria;

2. Claims for an inoculum comprised of a carrier material floating on water, such as straw,
and the new bacteria; and
3. Claims to the bacteria themselves.

The patent examiner allowed the claims falling into the first two categories, but rejected claims
for the bacteria. His decision rested on two grounds: (1) that micro-organisms are “products

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of nature,” and (2) that as living things they are not patentable subject matter under 35 U.
S. C. §101 .

Chakrabarty appealed the rejection of these claims to the Patent Office Board of Appeals.
Chakrabarty argued that the genetic engineering he did on the bacteria was a form of
manufacture, therefore it is a patentable subject matter. However, the Board affirmed the
Examiner on the second ground. Relying on the legislative history of the 1930 Plant Patent
Act, in which Congress extended patent protection to certain asexually reproduced plants, the
Board concluded that §101 was not intended to cover living things such as these laboratory
created microorganisms.

On appeal by Chakrabarty to the United States Court of Customs and Patent Appeals, it
overturned the case in Chakrabarty's favor. It held that "since the micro-organism is a non-
naturally occurring manufacture or composition of matter and is a product of human
ingenuity having a distinctive name, character and use, the fact that micro-organisms are
alive is without legal significance for purposes of the patent law. Moreover, the fact that
genetic technology was unforeseen when Congress enacted Section 101 require the
conclusion that micro-organism cannot qualify a patentable subject-matter until Congress
authorizes such protection" Sidney A. Diamond, Commissioner of Patents and Trademarks,
then filed a petition for writ of certiorari to the Supreme Court.

The Supreme Court heard the Chakrabarty case in March 1980. Deputy Solicitor General
Lawrence Wallace argued on behalf of USPTO. Edward McKie, William Schuyler, and Dale
Hoscheit of Schuyler, Birch, McKie and Beckett represented Chakrabarty.

Issues:
Primary Issue:-

Whether genetically engineered microorganism constitutes “manufacture” or “composition

of matter” within the meaning of Section 101 of Title 35 United States Code?

Secondary Issues:-

1. Whether micro-organism has been excluded as living thing as per Plant Patent Act, 1930
and Plant Varieties Protection Act, 1970?

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2. Whether micro-organism could qualify as a patentable subject-matter without express

authorization by the Congress?

Arguments Advanced:
 Primary Issue:

 Whether genetically engineered microorganism constitutes “manufacture” or “composition

of matter” within the meaning of Section 101 of Title 35 United States Code?

Court’s View:-
Before dealing with controversy, the Court took into account the decision of Southeastern
Community College v. Davis1 where it was held that in cases of statutory construction, the
language of the statute should be read first. As the Patent Act did not define the words
“manufacture” or “composition of matters” it reverted back to Perrin v. United States,2 decision
where it was held that “unless otherwise defined, words will be interpreted as taking their
ordinary, contemporary, common meaning.” It also took into account United States v. Dubilier
Condenser Corp. case3 guideline that “the courts should not read into the patent laws limitations
and conditions which the legislature has not expressed.”

Guided by these canons of construction, the Court read the term “manufacture” in §101 in
accordance with its dictionary definition to mean “the production of articles for use from raw
materials prepared by giving to these materials new forms, qualities, properties, or
combinations whether by hand labor or by machinery” which was used in American Fruit
Growers, Inc. v. Brogdex Co.4 Similarly, “composition of matter” has been construed
consistent with its common usage to include “all compositions of two or more substances and
all composite articles, whether they be the results of chemical union, or of mechanical
mixture, or whether they be gases, fluids, powders, or solids” as used in Shell Dev. Co. v.
Watson.5 After choosing such expansive terms as “manufacture” and “composition of matter,”
modified by the comprehensive “any,” Court held that Congress plainly contemplated that the
patent laws would be given wide scope.

1
442 U.S. 397, 405 (1979)
2
444 U.S.37, 42 (1979).
3
289 U.S. 178, 199, 17 USPQ 154, 162 (1933).
4
283 U.S. 1, 11, 8 USPQ 131, 133 (1931).
5
279, 280, 113 USPQ 265, 266 (DC 1957)

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Reviewing the broad congressional mandate regarding patentable subject matter, the Supreme
Court concluded that it did and asserted the principle that “anything under the sun that is made
by man” is eligible for patenting. Thus the Court held that the patentee has produced a new
bacterium with markedly different characteristics from any found in nature and one having the
potential for significant utility. His discovery is not nature’s handiwork, but his own;
accordingly it is patentable subject matter under §101.

Judged in this light, respondent’s micro-organism plainly qualifies as patentable subject matter.
His claim is not to a hitherto unknown natural phenomenon, but to a non-naturally occurring
manufacture or composition of matter – a product of human ingenuity “having a distinctive
name, character and use.”

Secondary Issues:-
1. The petitioner's first argument rests on the enactment of the 1930 Plant Patent Act,
which afforded patent protection to certain asexually reproduced plants, and the Plant
Variety Protection Act, 1970, which authorized protection for certain sexually
reproduced plants but excluded bacteria from its protection. In the petitioner's view, the
passage of these Acts evidences congressional understanding that the terms
"manufacture" or "composition of matter" do not include living things; if they did, the
petitioner argues, neither Act would have been necessary.

Court’s View:-

Rejecting this argument, the Court held that there is a clear and logical distinction between
the discovery of a new variety of plant and of certain inanimate things, such, for example,
as a new and useful natural mineral. The mineral is created wholly by nature unassisted by
man. On the other hand, a plant discovery resulting from cultivation is unique, isolated, and
is not repeated by nature, nor can it be reproduced by nature unaided by man. Congress
thus recognized that the relevant distinction was not between living and inanimate things,
but between products of nature, whether living or not, and human-made inventions. Here,
respondent's micro-organism is the result of human ingenuity and research. Hence, the
passage of the Plant Patent Act affords the Government no support.

Nor does the passage of the 1970 Plant Variety Protection Act support the Government's
position. As the Government acknowledges, sexually reproduced plants were not included
under the 1930 Act because new varieties could not be reproduced true-to-type through

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seedlings. However, it was generally recognized that true-to-type reproduction was

possible and that plant patent protection was therefore appropriate. The 1970 Act extended
that protection. There is nothing in its language or history to suggest that it was enacted
because 101 did not include living things.

In particular, we find nothing in the exclusion of bacteria from plant variety protection to
support the petitioner's position. The legislative history too gives no reason for this
exclusion.

2. The petitioner's second argument is that micro-organisms cannot qualify as patentable

subject matter until Congress expressly authorizes such protection. It is argued that
resolution of the patentability of inventions such as respondent's should be left to
Congress.

Court’s View:

The Court held that although the Congress must define the limits of patentability; but it is
equally true that it is the province and duty of the judicial department to say what the law
is as discussed in Marbury v. Madison6. Congress has performed its constitutional role in
defining patentable subject matter in 101; we perform ours in construing the language
Congress has employed. In so doing, our obligation is to take statutes as we find them,
guided, if ambiguity appears, by the legislative history and statutory purpose. Here, we
perceive no ambiguity. The subject-matter provisions of the patent law have been cast in
broad terms to fulfill the constitutional and statutory goal of promoting "the Progress of
Science and the useful Arts" with all that means for the social and economic benefits. Broad
general language is not necessarily ambiguous when congressional objectives require broad
terms. The language of Section 101 fairly embraces respondent's invention.

Decision of the Court:

In the majority opinion, Chief Justice Warren Burger asserts that the novelty and utility of
Chakrabarty’s microorganism was “not nature’s handiwork, but his own.” His claim is not to
a hitherto unknown natural phenomenon, but to a non-naturally occurring manufacture or

6
1 Cranch 137, 177 (1803)

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composition of matter – a product of human ingenuity “having a distinctive name, character

and use. Accordingly, the judgment of the Court of Customs and Patent Appeals was affirmed.

The court again reassured its earlier decisiions that the laws of nature, physical phenomena,
and abstract ideas cannot be patented.7 A new mineral discovered in the earth or a new plant
found in the wild is not patentable subject matter. Likewise, Einstein could not patent his
celebrated law that E=mc2; nor could Newton have patented the law of gravity. Such
discoveries are “manifestations of nature, free to all men and reserved exclusively to none”.

Distinction drawn by the Court:

The distinction drawn by the Court relating to the Chakrabarty’s invention with that in
Funk Brother’s case to make understand the reason as to why the latter was not allowed patent.
There, the patentee had discovered that there existed in nature certain species of root-nodule
bacteria which did not exert a mutually inhibitive effect on each other. He used that discovery
to produce a mixed culture capable of inoculating the seeds of leguminous plants. Concluding
that the patentee had discovered “only some of the handiwork of nature,” the Court ruled the
product non-patentable. The reason is that:-

Each of the species of root-nodule bacteria contained in the package infects

the same group of leguminous plants which it always infected. No species
acquires a different use. The combination of the six species produces no new
bacteria, no change in the six bacteria, and no enlargement of the range of
their utility. Each species has the same effect it always had. The bacteria
perform in their natural way. Their use in combination does not improve in
any way their natural functioning. They serve the same ends nature originally
provided and act quite independently of any effort by the patentee.

Here, by contrast, the patentee has produced a new bacterium with markedly different
characteristics from any found in nature and one having the potential for significant utility. His
discovery is not nature’s handiwork, but his own; accordingly it is patentable subject matter
under §101.

7
Parker v. Flook

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Analysis of the Case:

The Supreme Court’s decision in Diamond v. Chakrabarty thirty-three years ago today
was instrumental in spurring the creation of a dynamic and flourishing biotech industry. By
finding that subject matter derived from nature is eligible for patenting if it is modified by man
into something new, useful and unobvious, the Court provided assurance to biotech companies
and their investors. This case has wide opened the scope of patentable subject matter. As from
the averments made and the reasons put forwarded by the U.S. Supreme Court in this case, it
has cleared all doubts as what can and cannot be patented. Moreover, the distinction the court
has drawn in this case with that of Funk Brother’s case has even clarified the subject-matter of
patentability. Thus, the court had taken a futuristic approach in understanding the developments
that is yet to happen and provided assurance to inventors, investors and researcher to develop
in the field by extending the scope of patent to a new level. The decision in this case had a great
impact, especially in biotechnology industry and in my view has been correctly decided which
paved the way for further developments.

Impact of the Decision:

Shortly after Diamond vs. Chakrabarty case was decided, the USPTO issued a statement on
April 7, 1988, announcing that “the Patent and Trademark Office now considers non-naturally
occurring non-human multicellular living organisms, including animals, to be patentable
subject matter within the scope of 35 U.S.C. 101”. Since the Court’s decision, the
biotechnology industry in the United States has improved and saved lives around the world
through breakthrough medical therapies, increased crop yields, and renewable fuels.

As stated by Chakrabarty’s counsel, Dale Hoscheit:

“The issue decided in Chakrabarty was a narrow one, but it led to the removal of barriers to
patents for a wide variety of biotechnological innovations. The patents for these innovations
are limited only by the skill of the individuals drafting the claims. Although there are moral
and ethical issues involved in the manufacture of living things, patents themselves are not
designed to address such issues. The role of the Patent Office is to determine novelty and non-
obviousness; issues of morality and ethics are best left to other organizations specifically tasked
to deal with those issues.”

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Conclusion:

The Chakrabarty patent was not the first US patent to issue on a living organism. The USPTO
had granted patents on single-cell organisms on several occasions dating back to 1873, when
Louis Pasteur obtained a patent (US Patent No. 141,072) on a purified yeast cell. Although it
is impossible to know whether biotechnology research and development would have been
stunted had the Supreme Court ruled against the inventor in Chakrabarty yet, the decision in
Chakrabarty surely provided companies in the nascent biotechnology industry with the needed
incentives to invest in the production of new medical treatments and drug therapies, new and
better diagnostic tools, and stronger and more disease-resistant crops. It also emboldened the
industry to seek patent protection on an ever-broadening range of technological advances. As
biotechnology has progressed from the genetic manipulation of microorganisms to transgenic
animals and human gene sequences, some religious and public interest groups who oppose the
patenting of animal life forms on moral and ethical grounds have raised objections. Yet, these
issues have less to do with patent law than with defining the appropriate ethical limits on
scientific development.

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