September 2014
By Anthony C. Tridico, Ph.D.; Christopher C. Johns; Timothy P. McAnulty
Authored by Christopher C. Johns; Timothy P. McAnulty; and Anthony C. Tridico, Ph.D.
Sadly, the Supreme Court's decision1 in Alice Corp. v. CLS Bank has only muddied the waters. And the guidance provided by the USPTO following the decision left examiners with an almost impossible to implement toolkit. It will likely be some time before we have a better idea as to what is patentable. In the meantime, practitioners would be wise to be patient and wait for clearer guidance before making any rash decisions.
The USPTO reacted quickly. The decision in Alice was issued on June 19, 2014. Six days later, the USPTO issued a new Memorandum entitled "Preliminary Examination Instructions in view of the Supreme Court Decision in Alice Corporation Pty. Ltd. v. CLS Bank International, et al." The Memorandum briefly summarizes the decision in the case and explains the Mayo framework to patent examiners. What makes this framework so difficult for the PTO—and thus, examiners—to understand and apply?
A fundamental reason is the Supreme Court refused to clarify what is and, perhaps more importantly, what is not an abstract idea. On page 10 of the Alice decision the Court explained:
In any event, we need not labor to delimit the precise contours of the "abstract ideas" category in this case. It is enough to recognize that there is no meaningful distinction between the concept of risk hedging in Bilski and the concept of intermediated settlement at issue here. Both are squarely within the realm of "abstract ideas" as we have used that term.
Thus, moving forward U.S. Examiners are combining their technical knowledge with Memoranda, such as the one issued on June 19, but with little clear guidance for determining the metes and bounds of an abstract idea. In fact, the only clear tools examiners are given for determining whether something is drawn to an "abstract idea" are those mentioned in the Memorandum: (1) fundamental economic practices (Alice), (2) certain methods of organizing human activities (Bilski), (3) ideas per se, and (4) mathematical formulas or relationships. For those more difficult cases—such as those involving financial transactions that are not "fundamental" or those involving practical applications of mathematical formulas or relationships—examiners were not provided much in the way of practical guidance.
Given such a short list of clear examples, the challenge for practitioners is that examiners are forced to be over inclusive with their application of the law. In other words, when you have a hammer, everything looks like a nail. Other than the four categories listed in the Memorandum, examiners simply do not have enough guidance with which to decide whether a claim is drawn to an "abstract idea." Anecdotally, applicants have received Office Actions citing Alice and rejecting claims that many didn't expect to be categorized as abstract ideas under § 101. Often, it is a fine line between the "inventive concept" behind a patent claim—a short synopsis of what the inventor created—and an "abstract idea"—a fundamental truth or principle behind such a concept. And unfortunately, with such little guidance, it is difficult for the USPTO to provide a clear rationale for identifying when claims cross that line and how practitioners can respond to § 101 rejections.
The USPTO also issued a Request for Comments on the implementation of Alice,2 giving a deadline of July 31, for members of the public to comment on the Memorandum and to give their thoughts on the final rules implementing Alice. One recurring theme in many of the responses was that examiners need more training (including concrete examples) in order to competently apply Alice. Unfortunately, we are still waiting for the USPTO to issue a final rule or provide internal training to examiners. The reality may be that the scope of the decision makes it difficult for the USPTO to implement guidelines much different from the broad guidance set forth in the Memorandum.
Another side effect is the unusual practice within the USPTO to withdraw a substantial number of Notices of Allowance as well as withdraw some applications from issue after payment of the issue fee. According to the USPTO, however, only a "small group" of applications was affected by this.
So what is the practitioner to do? If the USPTO follows its normal course, perhaps waiting will help. Like the USPTO's response to previous decisions from the Supreme Court, the USPTO released its guidance on Alice relatively soon afterwards, in an effort to deliver immediate guidance to the examining corps. Likewise, the day after the decision in Mayo v. Prometheus, the USPTO released an initial Memorandum3 with guidance. That memo mostly summarized Mayo. It did provide guidance for cases that were likely to be affected by the decision. Nearly three months later, the USPTO issued another Memorandum4 regarding Mayo. The new Memorandum gave a fuller background to Mayo, with additional explanation of the "Essential Inquiries" needed to determine eligibility under § 101, and set forth examination procedures to use in determining whether an invention was drawn to eligible subject matter. Most importantly, the new Memorandum also gave "Detailed Guidance" for using each one of the inquiries. Whereas the first Mayo Memorandum stated that examiners should determine whether claims are drawn to more than an abstract idea, the second Mayo Memorandum discussed various sub questions for examiners to consider in determining whether a rejection under § 101 was justified. The second Mayo Memorandum also gave sample claims and a detailed consideration of each factor of those sample claims.
We expect the same thing to happen here. Many of the responses to the Request for Comments regarding Alice urge the USPTO to provide examiners with concrete guidance like example claims, presentations to examiners, and straightforward factors for consideration. New USPTO guidance is likely, in response to the comments. Unfortunately, we do not expect that guidance until at least October, at the start of the USPTO's new fiscal year.
In the interim, practitioners should be careful to avoid making statements on the record about the scope of their claims. Making statements during prosecution regarding the scope of the claims or the "technical nature" of the invention may not be necessary, depending on further guidance from the USPTO, and may have unforeseen consequences during litigation. At the moment, if there is time to wait before filing a response, it may be beneficial to wait for the updated guidance.
If there is an imminent reply due, a safer response is to address the Examiner's rationale behind the rejection. For example, practitioners can argue that the Examiner has not provided sufficient evidence that the alleged "abstract idea" is, in fact, abstract. In particular, identifying and arguing deficiencies in the examiner's characterization of the technology may be helpful. Additionally, interviews with the examiner and/or the supervisor may be helpful to assess the examiner's concerns. And finally, if appropriate, amending may be a more direct route to overcoming the § 101 rejection while pursuing the original claims in a continuation application.
It's hard to predict where the USPTO will go with the new rules post Alice. Examiners have not received guidance and likely won't for some time. However, it's unlikely that the USPTO will drastically change its approach in the Memorandum. Practitioners as well as patentees would be wise to approach a rejection on these grounds cautiously—and patiently.
Endnotes
1 Alice Corp v. CLS Bank, Int'l, 573 U.S. ___ (2014).
2 Request for Comments and Extension of Comment Period on Examination Instruction and Guidance Pertaining to Patent-Eligible Subject Matter, 79 Fed. Reg. 36,786 (June 25, 2014).
3 Hirshfeld, Andrew H. "Supreme Court Decision in Mayo Collaborative Services v. Prometheus Laboratories, Inc." (March 21, 2011).
4 Hirshfeld, Andrew H. "2012 Interim Procedure for Subject Matter Eligibility Analysis of Process Claims Involving Laws of Nature." (July 3, 2012).
Originally printed in CIPA Journal. This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. This article is only the opinion of the authors and is not attributable to Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, or the firm's clients.
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