September 2015
CIPA Journal
By Anthony C. Tridico, Ph.D.; Forrest A. Jones; Erin M. Sommers, Ph.D.
Authored by Forrest A. Jones; Erin M. Sommers; and Anthony C. Tridico, Ph.D.
In an effort to implement several significant Supreme Court and Federal Circuit decisions on patent eligible subject matter, the United States Patent and Trademark Office (USPTO) published its 2014 Interim Guidance on Patent Subject Matter Eligibility (2014 IEG).1 The 2014 IEG was prepared for examiners to reference when determining whether claims are patent eligible as part of the examination process. The USPTO solicited public comments on the 2014 IEG and in response to those public comments, the USPTO recently issued its July 2015 Update on Subject Matter Eligibility (July 2015 Update).2 The July 2015 Update responded to six major themes from the comments and included supplemental appendix material. The July 2015 Update augments the earlier 2014 IEG, and is now itself available for public comment.
As most readers know, the examiner must ask whether the claim "is directed to a process, machine, manufacture, or composition of matter," in other words, one of the statutory classes of eligible subject matter. 35 U.S.C. § 101. If the examiner determines that the claim is not directed to one of those statutory classes, the analysis ends—the claim is not directed to eligible subject matter. If, instead, the examiner concludes that the claim is directed to one of those statutory categories, the examiner moves on to Step 2.
Step 2 is in itself a two-part analysis, otherwise known as the Mayo test.3 The first part, Step 2A, requires the examiner to determine whether the claim is directed to a law of nature, a natural phenomenon, or an abstract idea, all of which are judicial exceptions to patent eligibility. If it does not, the claim encompasses eligible subject matter. If the claim is directed to one of these judicial exceptions, the examiner must move on to Step 2B to determine whether any element in the claim "is sufficient to ensure that the claim as a whole amounts to significantly more than the judicial exception." If there is no element by itself or the claim as a whole does not amount to significantly more than the judicial exception, the examiner must reject the claim as patent ineligible subject matter. If, however, the examiner concludes that the claim elements and claim as a whole add "significantly more" to the judicial exception, the claim may encompass eligible subject matter. The USPTO provided the following flowchart to illustrate this process.
From the comments the USPTO received in response to its 2014 IEG, the USPTO identifies six themes: (1) requests for additional examples, particularly for claims directed to abstract ideas and laws of nature; (2) further explanation of the markedly different characteristics (MDC) analysis; (3) further information regarding how examiners identify abstract ideas; (4) discussion of the prima facie case and the role of evidence with respect to eligibility rejections; (5) information regarding application of the 2014 IEG in the corps; and (6) explanation of the role of preemption in the eligibility analysis, including a discussion of the streamlined analysis. The July 2015 Update addresses each of these themes, provides 7 additional examination examples, and includes an index of the examples issued to date, summaries of relevant court decisions, and a Quick Reference Guidance Sheet.
Despite numerous practical examples of the two-step analysis in the 2014 IEG, commenters wanted more, especially about what constitutes "significantly more" in the Step 2B analysis. In particular, like many practitioners, the commenters wanted more examples demonstrating where the "significantly more" inquiry is met in the affirmative. In response, the USPTO provides additional examples.
Example 25 illustrates what the USPTO deems "significantly more" in Step 2B. This example, based on the well-known Supreme Court case Diamond v. Diehr, relates to a process for molding rubber using the Arrhenius equation. Exemplary Claim 1 is directed to a method of operating a rubber-molding press where a thermocouple constantly monitors the temperature in the press and uses that data to calculate a final cure time, at which point the press automatically opens.
Because Claim 1 covers a process, it meets the statutory criteria of Step 1 of the analysis (see the chart above). As the example points out, however, it also is directed to a judicial exception because it uses a mathematical equation that represents an underlying law of nature. So Step 2A is also "yes," prompting the examiner to next determine whether the claim adds "significantly more." The USPTO explains that the additional elements—the constant determination of the temperature of the mold, the repetitive calculations and comparisons, and the opening of the press based on those calculations—amount to significantly more than simply calculating the mold time using the Arrhenius equation because they add meaningful limits on use of the equation, thus transforming the claim into eligible subject matter. Claim 2 of the example, directed to a "non-transitory computer-readable medium" is likewise patent eligible based on a similar analysis. Key to both of these analyses is the fact that the equation itself is not being used alone. It is tied to a specific technological field and process, and it transforms a particular article into something new and different (here raw rubber to a cured, molded rubber product). As a result, the USPTO concludes that the claim amounts to "significantly more" than simply claiming a mathematical relationship.
Commenters also sought guidance and examples on the requirement that the examiner consider all of the additional elements both individually and in combination to answer the "significantly more" question. The July 2015 Update highlights the importance of considering those additional elements both separately and together: Examples 3, 4, 21, and 25.
In Example 25, the Claim 2 analysis specifically illustrates how elements must be considered together to determine if they add up to "significantly more" than one of the judicial exceptions. There, the USPTO notes that a computer calculating the result of an equation, in this case the Arrhenius equation, would not be enough to overcome a judicial exception. But that element, taken together with the remaining elements to generate software that enhances the ability of a specific rubber molding device to automatically monitor and terminate itself, adds meaningful limitations on the use of the mathematical relationship. So alone, the computer-related limitations may not amount to "significantly more," but when looked at in total, the claim itself covers "significantly more" than a judicial exception.
As the 2014 IEG makes clear, Step 2A (in the flowchart above) requires the examiner to consider whether the claim includes a nature-based product, another judicially recognized exception to eligible subject matter. If it does, the examiner must then consider whether the claimed nature-based product is "markedly different" from what is found in nature. If, and only if, the claimed nature-based product is not markedly different, then the analysis continues to Step 2B. If, however, the examiner concludes that the claimed nature-based product is markedly different, then the claim covers eligible subject matter, and the analysis ends.
The July 2015 Update noted that many commenters sought additional explanation of the MDC, particularly whether the analysis itself should be kept in Step 2A or relocated to Step 2B.4 The USPTO, after consideration, decided to retain the MDC analysis as part of Step 2A for three reasons. First, the USPTO asserts that having the MDC analysis as part of Step 2A ensures that the patent eligibility of certain nature-based product claims will be confirmed earlier in the Mayo analysis, saving office time and resources. Second, placing the MDC analysis in Step 2A provides an additional pathway to eligibility for "product of nature" claims if the examiner determines that there are no apparent markedly different characteristics. In other words, carrying out the MDC analysis in Step 2A ensures that that analysis is distinct from the "significantly more" analysis of Step 2B. So, for "close call" nature-based product claims, there may be two bites at the apple to show subject matter eligibility. And third, keeping the MDC as part of Step 2A maintains a consistent analysis across all types of claims.
Bottom line for practitioners: the MDC analysis will be conducted by examiners early on in Step 2A of the Mayo process. This appears to be beneficial to patent applicants seeking protection for such claims, especially if applicants can show that its nature-based products are markedly different according to the USPTO's 2014 IEG. And if the examiner should determine that a nature-based product fails the MDC, all hope is not lost, and applicants can still assert patent eligibility under the "significantly more" rubric.
The eligibility analysis in Step 2A requires examiners to consider whether the claim is directed to an "abstract idea." Comments on the 2014 IEG also requested clarification as to what is an "abstract idea," and the July 2015 Update provides additional explanation regarding how examiners should approach that question.
The USPTO notes that because courts have resisted explicitly defining what constitutes an abstract idea, the USPTO likewise will refrain from strict definitions. The 2014 IEG and July 2015 Update challenge examiners to compare the claim at issue to the body of case law precedent regarding abstract ideas to determine whether the claim is similar to any of the judicially recognized abstract ideas.
The July 2015 Update goes one step further and, while not coming out and defining an "abstract idea," provides "judicial descriptors" to assist examiners in considering this part of the Mayo analysis. These descriptors include "fundamental economic practices," "certain methods of organizing human activity," "an idea 'of itself,'" and "mathematical relationships/formulas." The USPTO urges examiners to keep in mind that abstract ideas do not need to be old or prevalent. Even a newly identified mathematical relationship may be an abstract idea, especially if it is a basic tool of scientific development.
Here again, the USPTO did not change the analysis related to "abstract ideas," but instead sought to further clarify how examiners will be conducting the analysis. When crafting claims, applicants and their agents would be wise to consider the case law highlighted in this section by the USPTO in an effort to steer clear of falling within one of the newly branded judicial descriptors.
Theme 4: Requirements of a Prima Facie Case
The prima facie case is a procedural tool that allocates the burden between the examiner and the applicant. When it comes to subject matter eligibility, the examiner has the initial burden of showing that the claimed subject matter is patent ineligible. The July 2015 Update indicates that commenters requested further guidance as to what satisfies that burden.
The USPTO explains that the burden is met by clearly articulating the reasons why the claimed invention is not eligible, which can be shown, for example, by providing a reasoned rationale that identifies the relevant judicial exception and why the additional elements do not amount to "significantly more." The July 2015 Update cautions, however, that examiners need not provide evidence to support this analysis since prevailing court precedent likewise resolves questions of eligibility without providing any underlying factual findings. As a result, examination training materials prompt examiners to compare the claimed concepts to the inventions of controlling prior court decisions. Examiners should also refer to well-understood, routine, and conventional concepts from the relevant area of art when determining that the additional elements do not add "significantly more." It appears as though examiners will not be required to provide citations to support their contention that an additional element is, in fact, well-understood or routine but rather may rely on their own knowledge of the field. In support of such an approach, the USPTO asserts that courts have typically treated such issues as matters appropriate for judicial notice.
Even so, evidence has a place. The July 2015 Update leaves open the possibility for patent applicants and their agents to rebut any prima facie case by showing—with evidence—that the elements and/or functions are not well-understood, routine, or conventional, demonstrating that the claim does constitute "significantly more."5 Here again, it appears that patent applicants will be most successful at demonstrating their claims cover eligible subject matter when they are able to distance themselves from prior inventions that courts have already concluded were patent ineligible.
The July 2015 Update indicates that concern was also raised about the application of the 2014 IEG by the USPTO's examiners, and the need for proper training. The USPTO responded, stating that the examiners are indeed being trained on these new procedures for determining patent eligibility. In addition, the USPTO is supplying additional examples and appendixes which provide further guides and worksheets to help examiners apply the new procedures.
Preemption in this context relates to whether the claim precludes all uses of a judicially recognized exception. For example, if the claim is directed to a mathematical relationship underpinning a natural phenomenon, if the claim does no more than describe that equation, any and all uses would be tied up—or preempted—by that claim. Courts have founds that such situations are not permitted. The 2014 IEG allowed for a streamlined analysis where even if Step 2A was answered in the affirmative, the examiner could otherwise find that the claim was patent eligible if it did not clearly seek to tie up (or preempt) the judicial exception. One such type of claim that clearly comes to mind is a method of treating a particular disease with a nature-based product. Commenters on the 2014 IEG raised concerns about whether this streamlined process, in particular, and the two-step analysis, in general, adequately address preemption. In response, the USPTO concludes that the current analysis will be retained, including the streamlined analysis.
The USPTO sought to allay concerns that preemption was not being given its due by indicating that the 2014 IEG already incorporates the concept of preemption where appropriate. In other words, preemption is inherent in the current two-step process and need not be given its own step. With respect to the streamlined analysis, the USPTO notes that the result of the streamlined analysis should always be the same as that after conducting a full analysis. In other words, preemption is not merely a preemption test. It is simply one way for examiners to avoid unnecessary time and effort to conduct the full analysis. Since a distinct step regarding preemption is not necessary, the USPTO and inventors benefit from keeping the simpler more streamlined analysis in place, which allows for a faster determination of patent eligibility.
Patent applicants and agents will, no doubt, note that the USPTO's discussion on this theme is somewhat murky. It is possible that the USPTO's assertion that the results are the same either way—streamlined or full—may not always play out. But because examiners need not identify which analysis they conducted, this begs the question whether examiners will inappropriately use the streamlined analysis to save time and resources. While winning on a streamlined analysis may be good in the first instance for patent applicants, future opponents (either at the PTAB or in district court) may challenge a patent's validity, asserting that under a full Mayo analysis the claims are not patent eligible, especially since litigants are in a position to present facts and expert opinion showing that the additional limitations (only considered in the full Mayo analysis) were entirely well-understood, routine, and conventional not amounting to significantly more. Thus, in art areas where patent eligibility is a potential validity issue, patent applicants may want to perform the full 2014 IEG to ensure that it leads to the same results as any streamlined analysis the examiner may have conducted.
This update to the guidelines is, of course, like the 2014 IEG itself, merely a guide to interpreting judicial precedent. As such, it will change with subsequent updates and new decisions by the courts. The USPTO has acknowledged that the Federal Circuit has issued a number of decisions on eligibility since the 2014 IEG was published, such as Ariosa Diagnostics, Inc. v. Sequenom, Inc., 19 F. Supp. 3d 938 (Fed. Cir. 2013) regarding detecting fetal nucleic acids and several cases regarding computer implementation of abstract ideas. The USPTO also indicates that the current examples must be supplemented in the biotechnology area. Consequently, we expect that the USPTO will provide further updates on these areas and others in the coming months. In addition, the July 2015 Update is itself open to public comment, and the USPTO will likely respond to these comments in the coming months as well. Stay tuned because the July 2015 Update is most certainly not the last word on patent eligibility from the USPTO.
Endnotes
1 2014 Interim Guidance on Patent Subject Matter Eligibility, 79 Fed. Reg. 74618, Dec. 16, 2014; see also Tridico, A. C.; Gramenopoulos, C.G.; Cooke, J. A.; Mouta, C., "What Was Everyone Waiting For? 2014 Interim Guidance on Patent Subject Matter Eligibility," CIPA Journal, January 2015.
3 2014 Interim Guidance on Patent Subject Matter Eligibility, 79 Fed. Reg. 74618, 74621-22, Dec. 16, 2014, referring to Mayo v. Prometheus, 132 S. Ct. 1289 (2012) and Alice Corp. Pty. Ltd. v. CLS Band Int'l, 134 S. Ct. 2347 (2014).
4 The July 2015 Update does not comment on or change what makes a nature-based product "markedly different."
5 July 2015 Update at 7.
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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