Genetically Engineered Host Cells Are Not "Nature's Handiwork": The Federal Circuit Breathes New Life into Biotech Patent Eligibility in REGENXBIO Inc. v. Sarepta Therapeutics, Inc.
Introduction
On February 20, 2026, the United States Court of Appeals for the Federal Circuit issued its precedential opinion in REGENXBIO Inc. v. Sarepta Therapeutics, Inc., Case No. 2024-1408, reversing the District of Delaware's grant of summary judgment of patent ineligibility under 35 U.S.C. § 101. Writing for a unanimous panel composed of Judges Dyk, Hughes, and Stoll, Judge Stoll held that claims directed to genetically engineered cultured host cells containing recombinant nucleic acid molecules are not directed to a natural phenomenon, and therefore are patent-eligible subject matter. The decision is a significant victory for REGENXBIO Inc. and the Trustees of the University of Pennsylvania, and more broadly, for the biotechnology and gene therapy industries, which had watched with alarm as the District Court held that claims covering laboratory-made, genetically engineered cultured host cells were patent-ineligible under § 101. The case drew amicus briefs from the Parker Institute for Cancer Immunotherapy, the J. David Gladstone Institutes, the Dana-Farber Cancer Institute, and AIPLA, underscoring the profound implications this decision carries for innovation in the life sciences.
Patent at Issue
The patent at the center of this case is U.S. Patent No. 10,526,617 ("the '617 patent"), titled "Method of Detecting and/or Identifying Adeno-Associated Virus (AAV) Sequences and Isolating Novel Sequences Identified Thereby". The patent is assigned to the Trustees of the University of Pennsylvania, with REGENXBIO Inc. as an exclusive licensee. The '617 patent has a long prosecution history: it is a divisional of U.S. Patent Application Ser. No. 13/633,971, filed October 3, 2012, which itself is a divisional of U.S. Patent Application Ser. No. 12/962,793, filed December 8, 2010 (now U.S. Pat. No. 8,524,446), which is a continuation of U.S. Patent Application Ser. No. 10/291,583, filed November 12, 2002, claiming priority back to several provisional applications filed in 2001 and 2002. The '617 patent issued on January 7, 2020.
The claims asserted in the litigation were claims 1–9, 12, 15, and 18–25 of the '617 patent.
What Is the Technology?
The technology at the heart of the '617 patent lies at the intersection of virology, molecular biology, and gene therapy — a field with enormous therapeutic potential for treating devastating genetic disorders such as cystic fibrosis, hemophilia, sickle cell anemia, and Duchenne muscular dystrophy.
Gene Therapy and AAV Vectors
Genetic disorders are caused by mutations or deletions in the sequences of nucleotides in an individual's DNA. Gene therapy provides a mechanism to deliver a new therapeutic gene, called a "transgene", into a patient's cells to replace the defective or missing gene, potentially treating or even curing the disease by addressing its underlying genetic cause.
The delivery vehicles for gene therapy are typically modified virus "vectors." Among the most promising viral vectors are adeno-associated viruses (AAVs) — small, nonenveloped viruses with single-stranded DNA genomes. AAVs possess several biologically favorable properties: non-pathogenicity, broad host range infectivity, and the potential for site-specific chromosomal integration, making them particularly attractive tools for gene transfer.
AAVrh.10 and the Claimed Host Cells
The '617 patent is specifically directed to genetically engineered host cells containing sequences from a particular AAV serotype known as AAVrh.10. The inventors developed molecules utilizing novel AAV sequences for the production of molecules useful in delivering a transgene to a target cell.
The claimed invention is a cultured host cell containing a recombinant nucleic acid molecule, that is, a molecule created by chemically splicing together nucleic acid sequences from two different organisms. This recombinant molecule encodes an AAV vp1 capsid protein (the capsid is the outer shell of a virus vector) or a sequence at least 95% identical to the AAVrh capsid.10 sequence, and it further comprises a heterologous non-AAV sequence (i.e., a sequence from a different species).
The creation of such recombinant DNA is a complex, multi-step laboratory process, as explained by the amici: (1) fragments of DNA are created using restriction enzymes chosen to cleave DNA at specific sites; (2) the desired DNA fragments are joined by DNA ligases; (3) the recombinant nucleic acid sequence is ligated into a plasmid used to transform a host cell; (4) the plasmid is amplified by growing colonies of host cells; and (5) the recombinant DNA is extracted and purified. The resulting host cell takes up the exogenous nucleic acid sequence via transfection — "the process of artificially introducing nucleic acids (DNA or RNA) into cells".
Critically, both parties in this case agreed that the claimed cultured host cells are human-made and do not occur in nature.
The Accused Product
Sarepta's accused product, SRP-9001 (marketed as ELEVIDYS), is an AAV-based gene therapy product using the AAV variant rh.74, cultured in host cells to produce a therapy for Duchenne muscular dystrophy. ELEVIDYS is FDA-approved and represents one of the first gene therapies for this devastating disease.
Representative Claim
The Federal Circuit identified claim 1 as representative for purposes of the appeal. The claim reads:
1. A cultured host cell containing a recombinant nucleic acid molecule encoding an AAV vp1 capsid protein having a sequence comprising amino acids 1 to 738 of SEQ ID NO: 81 (AAVrh.10) or a sequence at least 95% identical to the full length of amino acids 1 to 738 of SEQ ID NO: 81, wherein the recombinant nucleic acid molecule further comprises a heterologous non-AAV sequence.
While the decision discusses claim 1 as representative, claims 1–9, 12, 15, and 18–25 were all asserted in the litigation, and the District Court's summary judgment of ineligibility and the Federal Circuit's reversal applied to all asserted claims.
Procedural History
The procedural history of this case is relatively streamlined but procedurally significant:
Filing of the Complaint: REGENXBIO Inc. and the Trustees of the University of Pennsylvania filed a patent infringement suit in the United States District Court for the District of Delaware (Case No. 1:20-cv-01226-RGA), before Judge Richard G. Andrews, accusing Sarepta Therapeutics, Inc. and Sarepta Therapeutics Three, LLC of infringing claims 1–9, 12, 15, and 18–25 of the '617 patent.
Cross-Motions for Summary Judgment: Both parties moved for summary judgment on whether the asserted claims were eligible under 35 U.S.C. § 101. The District Court noted, and the parties agreed, that there were no underlying factual disputes pertaining to eligibility. Both parties analogized the case to Association for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576 (2013), and the "markedly different characteristics" test from Diamond v. Chakrabarty, 447 U.S. 303 (1980). Neither party asserted that the claims were ineligible as an abstract idea or on any other ground.
District Court Decision (January 5, 2024): The District Court granted Sarepta's motion for summary judgment, holding all asserted claims of the '617 patent ineligible under § 101 as directed to a natural phenomenon. The Court reasoned that:
The '617 patent's claims "disclose natural products, including the rh.10 sequence and a heterologous non-AAV sequence".
None of the individual naturally occurring components in the claims had been changed, and "combining natural products and putting them in a host cell does not make the invention patentable under § 101".
The claims were "similar to the ineligible claims in Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948)" because "[t]aking 'two sequences from two different organisms and putting them together' is no different than taking two strains of bacteria and mixing them together".
The utility of the claimed cells for gene therapy could be disregarded because nothing in the claims expressly disclosed the use of the recombinant nucleic acid for a particular purpose.
Under step two of the Alice/Mayo framework, the claims lacked an inventive concept because "the claimed invention is made using well-understood, routine, and conventional steps".
Appeal to the Federal Circuit: REGENXBIO timely appealed to the Federal Circuit. The case attracted amicus briefs in support of reversal, including from the Parker Institute for Cancer Immunotherapy, the J. David Gladstone Institutes, the Dana-Farber Cancer Institute, and AIPLA. Oral argument was held in October 2025 before Judges Dyk, Hughes, and Stoll.
Key Issues on Appeal
The central question on appeal was whether the District Court erred in holding the asserted claims of the '617 patent ineligible under 35 U.S.C. § 101 as directed to a natural phenomenon. More specifically, the appeal involved the following sub-issues:
Whether the claimed cultured host cells, containing a recombinant nucleic acid molecule created by splicing together genetic material from at least two different species, constitute patent-ineligible "products of nature" under the Chakrabarty "markedly different characteristics" framework.
Whether the District Court erred in analogizing the claims to the ineligible claims in Funk Brothers, where the Supreme Court held that merely combining naturally occurring bacteria strains without altering them was not patentable.
Whether conventional claim limitations may be disregarded in the § 101 eligibility analysis, specifically, whether a court may strip away the "cultured host cell," "recombinant," and "heterologous" limitations and focus only on the AAV rh.10 sequence in isolation.
Whether unclaimed functional distinctions (i.e., the utility of the claimed composition for gene therapy) may be considered under the Chakrabarty inquiry, even when the claims do not expressly recite a particular function.
Whether the Alice/Mayo two-step framework applies, as the claims were directed to a product of nature at step one, and, if so, whether they recite an inventive concept at step two.
Holdings of the Federal Circuit
The Federal Circuit reversed the District Court's grant of summary judgment and remanded the case for further proceedings. The Court's detailed analysis proceeded as follows:
The Chakrabarty "Markedly Different Characteristics" Framework Controls
The Federal Circuit held that the proper inquiry is defined by Chakrabarty: whether the claimed composition possesses "markedly different characteristics" and "the potential for significant utility" compared to what is naturally occurring. The Court provided a thorough overview of the Supreme Court's decisions in Chakrabarty, Funk Brothers, and Myriad, and the Federal Circuit's own decision in ChromaDex, Inc. v. Elysium Health, Inc., 59 F.4th 1280 (Fed. Cir. 2023), before applying the framework to the claims at issue.
The Claimed Host Cells Are Analogous to Eligible Claims in Chakrabarty and Myriad
The Court concluded that the claims here are more analogous to the eligible claims in Chakrabarty (genetically engineered bacteria) and Myriad (cDNA) than to the ineligible claims in Funk Brothers, Myriad (isolated DNA), and ChromaDex.
The Court emphasized several undisputed facts:
The claims require a "recombinant" nucleic acid, meaning segments of nucleic acid from one source are artificially manipulated or inserted into the nucleic acid of another source through gene splicing.
The claims further require a "heterologous" non-AAV sequence, meaning the sequence comes from a different species.
Thus, the recombinant nucleic acid molecule must be spliced together via human intervention from at least two different species to meet the claim limitations.
The claimed host cells do not and cannot exist in nature, a point undisputed by Sarepta.
Like the man-made bacterium in Chakrabarty, the claimed compositions are "not nature's handiwork" but rather "a non-naturally occurring manufacture or composition of matter". As in Myriad, the cDNA claims hold that "the lab technician unquestionably creates something new" when she splices together the recombinant molecule and inserts it into a host cell.
The District Court's Analogy to Funk Brothers Was Flawed
The Federal Circuit found the District Court's reliance on Funk Brothers to be "flawed and inconsistent with the undisputed scientific evidence in the record". In Funk Brothers, the patentee merely discovered that certain naturally occurring bacterial strains did not inhibit one another and combined them into a single package, an improvement in packaging, but not a transformation of the organisms themselves. In contrast, the claims here require genetically engineering two nucleic acid sequences from separate species into a single molecule and transforming a host cell to incorporate that new molecule — "thus fundamentally creating a cell containing a molecule that could not form in nature on its own," which "is materially different from growing more than one naturally occurring bacteria strain in a culture where none of the bacteria undergo any change from their natural state".
The District Court Erred by Focusing on Individual Components Rather Than the Claimed Composition as a Whole
The Federal Circuit held that the District Court's analysis "takes too narrow a view of the asserted claims by focusing on whether the individual components of the claim were markedly different from what is naturally occurring and failing to consider whether the claimed composition as a whole was 'not naturally occurring'". The Court cited Myriad for the proposition that the proper analysis considers the claimed composition as a whole. The Court also invoked Diamond v. Diehr, 450 U.S. 175, 188 (1981), for the established principle that "it [is] inappropriate to dissect the claims into old and new elements and then to ignore the presence of the old elements in the [§ 101] analysis".
Conventional Limitations Cannot Be Stripped Away in the § 101 Analysis
Sarepta urged the Court to set aside the claims as a whole and focus only on isolating the AAV rh.10 sequence because the other claim limitations (cultured host cell, recombinant, heterologous) are "conventional". The Federal Circuit declined this invitation, holding that "[c]ontrolling precedent does not direct us to disregard conventional limitations when considering whether claims are 'markedly different' from products of nature". The Court emphasized the importance of not conflating the novelty and obviousness inquiries under §§ 102 and 103 with the eligibility inquiry under § 101, citing PowerBlock Holdings, Inc. v. iFit, Inc., 146 F.4th 1366, 1373 n.3 (Fed. Cir. 2025).
Unclaimed Functional Utility May Be Considered
Although the Court held the claims eligible on structural grounds alone, it also addressed whether unclaimed functional distinctions may be considered under Chakrabarty. The Court held that they may, pointing to Chakrabarty itself, where the Supreme Court considered the hydrocarbon-degrading properties of the claimed bacterium even though those properties were attributable to the plasmids rather than explicitly claimed as capabilities of the bacterium itself. Here, it was undisputed that the claimed compositions "are beneficial for gene delivery to selected host cells and gene therapy patients," representing "the potential for significant utility”, even though this utility is only implicit in the claims.
The Court distinguished ChromaDex, noting that in that case the claims expressly required a particular function (increasing NAD+ biosynthesis), and the Court therefore had to consider that limitation in its markedly different characteristics analysis. Here, however, the Court found the claims eligible solely on the basis of structural differences.
The Alice/Mayo Framework, If Applied, Yields the Same Result
Following the approach in ChromaDex, the Court noted that its "inquiry could end" with the markedly different characteristics analysis. However, the Court stated that if resort to the Alice/Mayo two-step framework were necessary, the claims were not directed to a product of nature at step one for the same reasons stated in the markedly different characteristics analysis. Because the claims passed at step one, the Court did not reach step two.
Key Takeaways
1. Recombinant DNA Constructs and Genetically Engineered Cells Are Patent-Eligible
This decision provides a resounding affirmation that claims directed to genetically engineered compositions, particularly host cells containing recombinant nucleic acid molecules created by splicing genetic material from different species, are not products of nature under § 101. This is enormously reassuring for the gene therapy and broader biotech industries, where such compositions form the backbone of therapeutic platforms.
2. The Chakrabarty "Markedly Different Characteristics" Framework Governs Composition Claims
The Federal Circuit confirmed that, for composition-of-matter claims involving biological materials, the proper eligibility inquiry is the Chakrabarty "markedly different characteristics" test, rather than the Alice/Mayo two-step framework, in the first instance. The Supreme Court has "never applied the Alice/Mayo two-step framework" to such composition claims, "despite deciding [Myriad] after Mayo".
3. Claims Must Be Evaluated as a Whole — Not Dissected into Components
The Federal Circuit firmly rejected the approach of dissecting claims into individual components and asking whether each component, standing alone, is markedly different from what occurs in nature. The proper analysis looks at the claimed composition as a whole. This is a critical principle for biotech patent claims that combine individually known components into novel compositions.
4. Conventional Limitations Cannot Be Stripped Away in the § 101 Analysis
The Court declined to ignore claim limitations merely because they may be "conventional" or found in the prior art. Citing Diamond v. Diehr, the Court reiterated that it is "inappropriate to dissect the claims into old and new elements and then to ignore the presence of the old elements in the [§ 101] analysis". While such limitations may be relevant to novelty (§ 102) or obviousness (§ 103), they may not be disregarded in the threshold eligibility inquiry.
5. Unclaimed Functional Utility Can Support Eligibility
The Court held that courts may consider "the potential for significant utility" of a claimed composition even when that utility is not expressly recited in the claims — so long as it is implicit and undisputed. This is an important tool for patent holders whose claims are drafted in structural terms without express functional limitations.
6. Funk Brothers Has Narrow Application to Modern Biotech
The Court drew a sharp distinction between the claims here and the "repackaging" scenario in Funk Brothers. Where a claimed composition involves genuine genetic engineering — creating molecules that could not form in nature on their own — the analogy to merely mixing unchanged, naturally occurring organisms in a single container does not hold.
7. The Case Is Not Over
While this is a significant win for REGENXBIO, the Federal Circuit remanded the case for further proceedings. The Court expressly noted that other validity challenges, such as novelty under § 102 and obviousness under § 103, remain open and are separate inquiries from patent eligibility. The infringement case will proceed as well. Patent practitioners and industry observers should continue to monitor this case as it returns to the District of Delaware.
This post was written by Lisa Mueller.