January 2015
CIPA Journal
By Anthony C. Tridico, Ph.D.; C. Gregory Gramenopoulos; James A. Cooke III, Ph.D., Carla Mouta-Bellum, Ph.D.
The patent eligibility of business methods, computer-implemented inventions, and inventions directed to laws of nature and natural products-based inventions has been the subject of increasing scrutiny by both the U.S. Patent and Trademark Office (USPTO) and the U.S. federal courts. Until recently, the statutory requirements for patent-eligible subject matter, as codified in 35 U.S.C. § 101, represented a minor hurdle for all three types of inventions. In decisions starting with Bilski (Bilski v. Kappos, 561 U.S. 593 (2010)), followed by Myriad (Association for Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107 (2013)) and Mayo (Mayo v. Prometheus, 132 S. Ct. 1289 (2012)), and finally by Alice (Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 134 S. Ct. 2347 (2014)), the U.S. Supreme Court transformed the issue of eligibility under § 101 as one requiring not cursory review, but more substantive analysis.
Initially, in response to Myriad and Mayo, the USPTO released a memorandum1 entitled "Procedure For Subject Matter Eligibility Analysis Of Claims Reciting Or Involving Laws Of Nature/Natural Principles, Natural Phenomena, And/Or Natural Products" (i.e., the "March 2014 Procedure"). The March 2014 Procedure applied to "claims (i.e., machine, composition, manufacture and process claims) reciting or involving laws of nature/natural principles, natural phenomena, and/or natural products." March 2014 Procedure at 1. Training Slides ("Slides") issued on March 19, 2014, and two public meetings were held to discuss them. The March 2014 Procedure began with three questions. Question 1: Is the claim directed to one of the four statutory categories, i.e., process, machine, manufacture, or composition of matter? Question 2: Does the claim recite or involve one or more judicial exceptions? Question 3: Does the claim as a whole recite something significantly different than the judicial exception(s)? Patent eligibility was set to arise when the claim includes features or steps that either (i) demonstrate that the claimed subject matter is markedly different from what exists in nature or (ii) practically apply the judicial exception in a significant way, e.g., by adding significantly more to the judicial exception. Only marked differences in structure were to be considered. In addition, up to twelve factors had to be balanced in determining whether the claim adds "significantly more" to the judicial exception (e.g., natural law).
A few months after the USPTO's release of the March 2014 Procedure, the Supreme Court decided Alice. In response to Alice, the USPTO issued a memorandum2 on June 25, 2014, outlining "Preliminary Examination Instructions" for the treatment of claims under § 101 on June 25, 2014. In the Preliminary Examination Instructions, the USPTO outlined the two-part test for patent eligibility set forth in Mayo (and reiterated in Alice), and instructed the examining corps to apply the two-part Mayo test to all types of judicial exceptions (e.g., abstract ideas and laws of nature), and further, to all statutory categories of claims (e.g., process and product claims). See Preliminary Examination Instructions, p. 2. In particular, the USPTO instructed examiners to determine first whether a claim, as a whole, is directed to an abstract idea. Id. Examples of abstract ideas referenced in Alice and noted in the Preliminary Examination Instructions include, but are not limited to, a fundamental economic practice, certain methods or organizing human activity, an "idea of itself," and mathematical relationships or formulas.
If the claim were directed to an abstract idea, the Preliminary Examination Instructions required examiners to determine whether any element in the claim, or combination of elements, is sufficient to ensure that the claim amounts to "significantly more" than the abstract idea itself. Id. For example, claim limitations identified in the Preliminary Examination Instructions (and referenced in Alice) that, when recited in a claim with an abstract idea, might be sufficient to ensure that the claim amounts to "significantly more" than the abstract idea include, but are not limited to, improvements to another technology or technical field, improvements to the functioning of a computer, and meaningful limitations beyond generally linking a use of an abstract idea to a particular technological environment. Id.
Conversely, and by way of example, claim limitations that, when recited in a claim with an abstract idea, are insufficient to ensure that the claim amounts to "significantly more" than the abstract idea include, but are not limited to, adding the words "apply it" (or an equivalent) to an abstract idea, mere instructions to implement an abstract idea on a computer, and limitations requiring no more than a generic computer to perform generic computer functions that are well-understood, routine and conventional activities previously known to the industry. Id. The Preliminary Examination Instructions also indicate that, after conducting the two-part Mayo analysis, examiners should proceed with examination of the claim, regardless of whether a rejection under § 101 has been made, to determine patentability in accordance with the other requirements of § 101 (utility and double patenting), non-statutory double patenting, and §§ 112, 102, and 103. Id.
Although providing valuable initial guidance to both examiners and practitioners, the Preliminary Examination Instructions lack sufficient details or a framework for determining what constitutes an "abstract idea" after Alice, and further, concrete examples of claim limitations that amount to "significantly more" than the abstract idea and thus render the abstract idea patent-eligible under § 101. In practice, the lack of guidance in the Preliminary Examination Instructions enabled examiners to shift the burden of establishing patent eligibility to applicants, and left practitioners with uncertainty on how to address § 101 rejections through responsive arguments and/or claim amendments.
In response to public comments on the March 14 Procedure and the Preliminary Examination Instructions, the USPTO issued the "2014 Interim Guidance on Patent Subject Matter Eligibility"3 on December 16, 2014 (the "Interim Guidance"). The Interim Guidance, which became effective upon publication in the Federal Register, supersedes the March 2014 Guidance and supplements the Preliminary Examination Instructions issued on June 25, 2014, and applies to all applications filed before, on, or after December 16, 2014. See Interim Guidance, 79 Fed. Reg. 74618, at 74619. This Interim Guidance was issued in conjunction with a set of explanatory examples (i.e., the "Examples") relating to nature-based products. The Examples "address themes raised in the public comments and adopt many suggestions from the comments." Id.
The Interim Guidance embraces and incorporates the two-part Mayo test for patent eligibility under § 101 outlined in Alice, which is reiterated in the Preliminary Examination Instructions. See id, at 74621-22. The Interim Guidance casts the two step Mayo test within a decision-making framework that first requires examiners to determine whether a claim is directed to one of the four categories of claims set forth in § 101, and when the claim is directed to one of the four statutory claim categories, instructs the examiners to apply to two-part Mayo test to the claim. See id.
In a flow chart summarizing the "subject matter eligibility test for products and processes," the Interim Guidance points out at least two "notable changes from the prior guidance." Id, at 74621. First, "[a]ll claims (product and process) with a judicial exception [under § 101] (any type) are subject to the same steps." Id. Second, "[c]laims including a nature- based product are analyzed in Step 2A to identify whether the claim is directed to (recites) a 'product of nature' exception." Id. "This analysis compares the nature- based product in the claim to its naturally occurring counterpart to identify markedly different characteristics based on structure, function, and/ or properties. The analysis proceeds to Step 2B only when the claim is directed to an exception (when no markedly different characteristics are shown)." Id. Also, the application of the overall analysis is based on claims directed to judicial exceptions under § 101 (defined as claims reciting the exception, i.e., set forth or described), rather than claims merely "involving" an exception. Id. at 74619 (emphasis added).
The Interim Guidance also extends the framework set forth in the Preliminary Examination Instructions to outline a discrete process for establishing that a claim is directed to an abstract idea (i.e., the first part of the two-part Mayo test). See id, at 74622. As an initial step, the Interim Guidance requires examiners to scrutinize the claims and identify the concept to which the claims are directed. See id. The Interim Guidance then instructs examiners to determine whether the identified concept is directed to an abstract idea (or other judicial exception), while noting that no "bright lines" exist between the exceptions and that many concepts could fall under multiple exceptions. See id.
Furthermore, the Interim Guidance incorporates the exemplary abstract ideas noted in the Preliminary Examination Instructions and referenced in Alice (e.g., a fundamental economic practice, certain methods or organizing human activity, an "idea of itself," and mathematical relationships or formulas), and provides additional examples of abstract ideas identified by the Federal Circuit and Supreme Court before, after, and within Alice. See id. For example, the abstract ideas set forth in the Interim Guidance include, but are not limited to: mitigating settlement risk (see Alice); hedging (see Bilski v. Kappos, 561 U.S. 593 (2010)); creating a contractual relationship (see buySAFE, Inc. v. Google, Inc., ___ F.3d ___, 112, USPQ2d 1093 (Fed. Cir. 2014)); using advertising as an exchange or currency (see Ultramercial, LLC v. Hulu, LLC and WildTangent, ___ F.3d ___, 112 USPQ2d 1750 (Fed. Cir. 2014)); processing information through a clearinghouse (Dealertrack Inc. v. Huber, 674 F.3d 1315 (Fed. Cir. 2012)); comparing new and stored information and using rules to identify options (SmartGene, Inc. v. Advanced Biological Labs., SA, 555 Fed. Appx. 950 (Fed. Cir. 2014) (non-precedential)); using categories to organize, store, and transmit information (Cyberfone Sys. v. CNN Interactive Grp., 558 Fed. Appx. 988 (Fed. Cir. 2014) (non precedential)); organizing information through mathematical correlations (Digitech Image Tech., LLC v. Electronics for Imaging, Inc., 758 F.3d 1344 (Fed. Cir. 2014)); managing a game of bingo (Planet Bingo, LLC v. VKGS LLC, ___ Fed. Appx. ___ (Fed. Cir. 2014) (non-precedential)); using the Arrhenius equation to calculate the cure time of rubber (Diamond v. Diehr, 450 U.S. 175 (1981)); a formula for updating alarm limits (Parker v. Flook, 437 U.S. 584 (1978)); a mathematical formula relating to standing wave phenomena (Mackay Radio & Tel. Co. v. Radio Corp. of Am., 306 U.S. 86 (1939)); and a mathematical procedure for converting one form of numerical representation to another (Gottschalk v. Benson, 409 U.S. 63, 67 (1972)). See Interim Guidance, 79 Fed. Reg. 74618, 74622. Other types of concepts that courts have found to be laws of nature or abstract ideas include a correlation that is the consequence of how a certain compound is metabolized by the body (see Mayo) and the chemical principle underlying the union between fatty elements and water (Tilghman v. Proctor, 102 U.S. 707 (1881)).
When the claim is directed to an abstract idea or law of nature, the Interim Guidance instructs examiners to determine whether any element, or combination of elements, in the claim is sufficient to ensure that the claim amounts to significantly more than the abstract idea or law of nature. See id., 79 Fed. Reg. 74618, at 74624. Expanding on the guidance provided by the Preliminary Examination Instructions, the Interim Guidance notes that, to be patent eligible under § 101, a claim directed to an abstract idea must include additional features to ensure that the claim describes a process or product that applies the abstract idea in a "meaningful way," such that it is "more than a drafting effort designed to monopolize the exception." Id. The Interim Guidance further emphasizes that the claim must be considered as a whole, because the claim elements, when viewed individually, may not appear to add "significantly more" to the claim, but when viewed in combination, may amount to "significantly more" than the abstract idea. Id. Additionally, the Interim Guidance reiterates that examiners must analyze individually each claim in an application to identify elements amounting to "significantly more" than the abstract idea, and should not automatically judge a claim to stand or fall with similar claims in the application. Id.
The Interim Guidance also provides examples of claim limitations beyond those set forth in the Preliminary Examination Instructions that might be sufficient to ensure that a claim amounts to "significantly more" than the abstract idea, or alternatively, are insufficient to ensure that the claim amounts to "significantly more" than the abstract idea. See id. By way of example, additional claim limitations that, when recited in a claim with an abstract idea, might be sufficient to ensure that the claim amounts to "significantly more" than the abstract idea include, but are but are not limited to: applying the abstract idea with, or by use of, a particular machine (see Bilski, 130 S. Ct. at 3227); effecting a transformation or reduction of a particular article to a different state or thing (see Diehr, 450 U.S. at 184); and adding a specific limitation other than what is well-understood, routine and conventional in the field or adding unconventional steps that confine the claim to a particular useful application (see Mayo, 132 S. Ct. at 1299, 1302). Interim Guidance, 79 Fed. Reg. 74618, 74624.
Examples of additional claim limitations identified in the Interim Guidance that, when recited in a claim with an abstract idea, are insufficient to ensure that the claim amounts to "significantly more" than the abstract idea include, but are not limited to: simply appending well-understood, routine and conventional activities previously known to the industry, specified at a high level of generality, to the abstract idea (see Alice, 134 S. Ct. at 2360); adding insignificant extra-solution activity to the abstract idea, such as mere data gathering in conjunction with the abstract idea (see Mayo, 132 S. Ct. at 1297–98); and generally linking the use of the judicial exception to a particular technological environment or field of use (see, e.g., Mayo 132 S. Ct. at 1300–01). Interim Guidance, 79 Fed. Reg. 74618, 74624.
If, after applying the second portion of the two-part Mayo test to the claim, an examiner finds no meaningful limitations that render the abstract idea patent eligible, the Interim Guidance instructs the examiner to reject the claim under § 101. Id. The Interim Guidance further instructs the examiner, when rejecting the claims, to identify the abstract idea by "referring to where (i.e., set forth or described) in the claim" and the bases for identifying the abstract idea. Id. "Then, if the claim includes additional elements, [the Interim Guidance instructs the Examiner to] identify the elements in the rejection and explain why they do not add significantly more to the exception." Id.
The eligibility test under § 101 is different when the claim is directed to a nature-based product (i.e., Step 1: YES). In the second step, nature-based products, which include, for example, antibiotics, antibodies, cells, immunogenic compositions, nucleic acids, organic compounds, recombinant proteins, and vaccines are subject to a "markedly different characteristics" analysis. The revised analysis in the Interim Guidance "represents a change from prior guidance, because now changes in functional characteristics and other non-structural properties can evidence markedly different characteristics, whereas in the March 2014 Procedure only structural changes were sufficient to show a marked difference." Id., at 74623. The "beverage composition comprising pomelo juice and an effective amount of an added preservative" is an instructive example regarding this change. Examples, at 1-2. In this situation, "there is no naturally occurring counterpart to the claimed combination, so the combination is compared to the individual components as they occur in nature." Id. Because of its "slower spoiling," the properties of the claimed combination are considered markedly different from the properties of the juice by itself in nature. (Step 2: NO). Id. This is true regardless of whether the preservative is a natural product or a non-natural product. Id. In the March 2014 procedure, the composition comprising pomelo juice and another natural product (vitamin E) was considered patent ineligible, the opposite result. See Training materials accompanying March 2014 Guidance, Slide 69.
In the biotechnology field, an "isolated man-made human pacemaker cell expressing marker Z" represents another patent eligible example. Examples, at 13-14. And so does a " population of human pacemaker cells, wherein the population is about 10-15% positive for marker Z, and 85-90% positive for marker P." Id., at 14. In the first instance, the claimed cells are markedly different from a "nature-based product, i.e., a cell" because they express marker Z and have increased oxygen utilization. Id. In the latter, the marked difference comes from the finding that "the cells interact with each other to affect their growth rates, e.g., the cells expressing marker P grow faster in the mixed population than when they are by themselves." Id. Thus, "phenotype, including functional and structural characteristics" can provide a markedly different characteristic. Interim Guidance, 79 Fed. Reg. 74618, 74623. However, only if these are not "an inherent or innate characteristic of the naturally occurring counterpart. Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130 (1948)." Id. Otherwise, the case law dictates that, if "any phenotypic differences came about or were produced 'quite independently of any effort of the patentee' and were 'uninfluenced by Roslin's efforts', they 'do not confer eligibility on their claimed subject matter." In re Roslin Inst. (Edinburgh), 750 F.3d. 1333, 1338 (Fed. Cir. 2014) (quoting Funk Bros.). Here, "these phenotypic differences were created by applicant's efforts (e.g., by culturing the stem cells in a particular growth medium in the presence of growth factor A, at various temperatures." Interim Guidance, 79 Fed. Reg. 74618, 74326.
Many commercially valuable patents and patent applications contain claims that are directed to isolated or purified natural products, including organic compounds and proteins. It is unclear whether or not the recitation of the markedly different characteristic in the claims is a requirement. In the March 2014 Procedure, a claim directed to "purified amazonic acid" was considered ineligible because "the claim does not include elements in addition to the judicial exception that add significantly more to and also does not include features that demonstrate that the recited product is markedly different from what exists in nature." March 14 Procedure, at 7. Under the Interim Guidance, an analogous claim to "purified Antibiotic L" was deemed patent eligible. Examples, at 5-6. The different result is because "the specification's definition of purified Antibiotic L, the claim is limited to Antibiotic L in the form of tetrahedral crystals or having a high-mannose N-glycan on residue 49. Id. The claim does not encompass naturally occurring Antibiotic L (which forms hexagonal-pyramidal crystals, and has a bacillosamine N-glycan on residue 49)." Id., at 6. The suggestion from these two explanations is that the claim must recite the property that deems the claim patent eligible. This can be done explicitly, as an element of the claim, or implicitly, through the definitions in the specification.
Other types of possibly markedly different characteristics exemplified in the Interim Guidance include: "biological or pharmacological functions or activities; chemical and physical properties; and structure and form, whether chemical, genetic or physical." Interim Guidance, 79 Fed. Reg. 74618, 74623 (citations omitted).
Methods of treatment with natural products also emerged from the Interim Guidance as patent eligible. Indeed, although purified amazonic acid (see above) was considered a judicial exception, a claim to a "method of treating breast or colon cancer, comprising: administering an effective amount of purified amazonic acid to a patient suffering from breast or colon cancer" was not. Examples, at 3-4. This example resolved some doubts previously left by the March 2014 Procedure. There, a balancing of a number of factors was required before a method of treatment claim was deemed patent eligible. And in that case, the recitation of particular dosages, for a particular time, to a particular patient, was key to several important pro-eligibility factors in the analysis. March 2014 Procedure, at 7-9. In the revised, Interim Guidance, the analysis was quite different. Here, it sufficed that "analysis of the claim as a whole indicates that the claim is focused on a process of practically applying the product to treat a particular disease (breast or colon cancer), and not on the product per se." Examples, at 5. No balancing of factors was applied, also "it is not necessary to apply the markedly different characteristics analysis in order to conclude that the claim is not directed to an exception (Step 2A: NO)." Id.
Streamlining the eligibility analysis was a goal of the Interim Guidance and that, to some extent, appears to have been achieved. Interim Guidance, 79 Fed. Reg. 74618, 74625. A public criticism of the March 14 Procedure was that the required explicit balancing of up to twelve factors toward and against eligibility was impractical, cumbersome, and not dictated by case law. Many of the factors remain a consideration, although they have been re-written. See Interim Guidance, 79 Fed. Reg. 74618, 74624, versus March 14 Procedure, 4-5. But the overt balancing is no longer required and was not applied, neither in the Interim Guidance nor in its accompanying examples.
The Interim Guidance also establishes procedures by which examiners may address multiple judicial exceptions under § 101 (e.g., a law of nature and an abstract idea) within a single claim. See id., at 74625. In these instances, the Interim Guidelines instruct examiners to conduct the eligibility analysis outlined above (e.g., the second prong of the two-part Mayo test) on one of the judicial exceptions recited by the claim, and if an element or combination of elements amount to significantly more than that judicial exception, consider whether the element or combination of elements also amounts to significantly more than the other judicial exceptions. See id. The Interim Guidance counsels that additional elements or combinations of elements that render patent-eligible one of the judicial exceptions will likely render patent-eligible all of the judicial exceptions recited by the claim. See id.
The Interim Guidance also establishes a "streamlined eligibility analysis" that may be used by an examiner for a claim that "may or may not recite a judicial exception but, when viewed as a whole, clearly does not seek to tie up any judicial exception such that others cannot practice it." Id. According to the Interim Guidance, these claims need not proceed through the full, two-part Mayo test, as their patent eligibility will be "self-evident." Id.
Finally, the publication of the Interim Guidelines in the Federal Register establishes a ninety-day period during which the public may submit comments on the Interim Guidance and suggest exemplary claims for use in examiner training on § 101 issues. The USPTO will accept electronically submitted comments through March 16, 2015, and the received comments will be available for viewing on the USPTO's external web site (e.g., http://www.uspto.gov).
Endnotes
1 Hirshfeld, Andrew H., "Procedure For Subject Matter Eligibility Analysis Of Claims Reciting Or Involving Laws Of Nature/Natural Principles, Natural Phenomena, And/Or Natural Products" (March 4, 2014).
2 Hirshfeld, Andrew H., "Preliminary Examination Instructions in view of the Supreme Court Decision in Alice Corporation Pty. Ltd. v. CLS Bank International, et al." (June 25, 2014).
3 "2014 Interim Guidance on Patent Subject Matter Eligibility," 79 Fed. Reg. 74618, 74622 74624 (December 16, 2014) (to be codified at 37 C.F.R. pt. 1).
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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