On January 7, 2019, the U.S. Patent and Trademark Office published in the Federal Register revised guidance to examiners and other USPTO personnel concerning the evaluation of subject matter eligibility under 35 U.S.C. § 101. 84 Fed. Reg. 50. The guidance modifies the USPTO’s application of the Alice/Mayo framework by more carefully defining categories of abstract ideas and by requiring consideration of whether a claim involves a “practical application” of a judicial exception as a basis for patent eligibility. The USPTO supported its revised guidance, which deviates in some respects from the Federal Circuit’s caselaw applying the Alice/Mayo framework, by referencing foundational concepts of subject matter eligibility found in Supreme Court caselaw. Although the new guidance may result in fewer Section 101 rejections for inventions involving computer-related processes, the actual impact will depend on how the examining corps applies the guidance and whether the revised approach ultimately is accepted by the courts.
Since at least the Supreme Court’s decision in Bilski v. Kappos, 561 U.S. 593 (2010), the USPTO and the courts have grappled with subject matter eligibility questions for patents involving abstract ideas, which are not eligible for patent protection by judicial interpretation of § 101. Many commentators have concluded that efforts to construct a cogent and predicable standard for eligibility have been futile.
Prior to the revised guidance, the USPTO has attempted to apply an analytical framework based upon two influential Supreme Court cases, Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208 (2014) and Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66 (2012). The Alice/Mayo framework requires several steps. In Step 1 of that analysis, the examiner determines whether a claim falls within one of the four statutory categories of invention – process, machine, manufacture, or composition of matter. In Step 2A, the examiner considers whether the claim is directed to an abstract idea or one of the other judicially-recognized exceptions. If not, the claim recites eligible subject matter. But if so, the examiner further applies Step 2B and considers whether the claim recites an element or combination of elements sufficient to support patent eligibility by ensuring that the claim as a whole amounts to significantly more than the judicial exception itself (often referred to as a search for an “inventive concept.”)
The USPTO’s new guidance alters the prior Alice/Mayo analysis is two major ways. First, in Step 2A, with only rare exceptions, a claim will be considered to be directed to an “abstract idea” only if it the claim includes one of three groupings of subject matter:
(a) Mathematical concepts — mathematical relationships, mathematical formulas or equations, mathematical calculations.
(b) Certain methods of organizing human activity — fundamental economic principles or practices (including hedging, insurance, mitigating risk); commercial or legal interactions (including agreements in the form of contracts; legal obligations; advertising, marketing or sales activities or behaviors; business relations); managing the personal behavior or relationships or interactions between people (including social activities, teaching, and following rules or instructions); or
(c) Mental processes — concepts that are performed in the human mind (including an observation, evaluation, judgment, opinion).
84 Fed. Reg. at 52. By redefining abstract ideas, the USPTO is moving to provide a definition that has eluded the courts. In the guidance, the USPTO notes that it “aims to clarify” the subject matter eligibility analysis. “In accordance with judicial precedent and in an effort to improve consistency and predictability, the [guidance] extracts and synthesizes key concepts identified by the courts as abstract ideas to explain that the abstract idea exception includes” those three groupings of subject matter.
The second change also affects Step 2A. If a claim does not recite subject matter from one of the three groupings, or another judicially-recognized exception, then the claim is eligible. On the other hand, if the claim is directed to one of the abstract idea groupings, the guidance provides that it is only “directed to” an abstract idea if the claim does not recite a “practical application” of the subject matter:
[I]f a claim recites a judicial exception (a law of nature, a natural phenomenon, or an abstract idea as grouped . . . , above), it must then be analyzed to determine whether the recited judicial exception is integrated into a practical application of that exception. A claim is not ‘‘directed to’’ a judicial exception, and thus is patent eligible, if the claim as a whole integrates the recited judicial exception into a practical application of that exception. A claim that integrates a judicial exception into a practical application will apply, rely on, or use the judicial exception in a manner that imposes a meaningful limit on the judicial exception, such that the claim is more than a drafting effort designed to monopolize the judicial exception.
84 Fed. Reg. at 53 (emphasis added). Notably, if the recited judicial exception is integrated into a practical application, the claim is patent-eligible, regardless of whether the judicial exception is an abstract idea, law of nature, or natural phenomenon. The guidance also provides specific examples of claims that would establish a “practical application,” and examples of those that would not. The USPTO also announced that it is accepting comments on the guidance for 60 days.
The proposed guidance is consistent with Director Iancu’s comments to the IPO Annual Meeting in October and is a step toward streamlining the Alice/Mayo analysis, which has become difficult to apply due to a plethora of court decisions with largely inconsistent results.
Basically, this new guidance introduces a “practical application” aspect into the analysis of what a claim is “directed to.” In the old step 2A, an examiner would determine whether a claim recites a judicial exception. For the revised step 2A, if the claim recites an abstract idea, then the claim is only directed to the abstract idea if the recited judicial exception is not integrated into a practical application. Also, in the revised step 2B, regardless of whether the judicial exception is an abstract idea, a law of nature, or a natural phenomenon, if the recited judicial exception is integrated into a practical application then the claim is patent-eligible. The guidance also offers that a claim that integrates a judicial exception into a practical application will apply, rely on, or use the judicial exception in a manner that imposes a meaningful limit on the judicial exception, such that the claim is more than a drafting effort designed to monopolize the judicial exception.
This change seems directed more toward examination of electrical/computer cases, as the revised step 2A includes specific additional inquiries for abstract ideas.
Also, before this guidance, arguments that a claim does not pre-empt the abstract idea because of limitations that relate to a particular application or task being performed would typically be ignored by the office which would counter that the Alice/Mayo test is the way the office decides pre-emption. Now, per this new guidance, the office is actually required to consider arguments that the abstract idea identified by the examiner is integrated into a practical application.
This change should allow applicants in front of the patent office to get to the heart of the issue, which is whether the claim is to an invention or whether the claim attempts to capture the entire idea itself.
It is unclear whether this additional rulemaking would have any effect outside of the patent office however.