The US Patent & Trademark Office (USPTO) recently announced revised guidance on how it will review patents and applications for subject-matter eligibility.1 The revised guidance went into effect on 7 January 2019, and applies to all patents and patent applications. In setting the revised guidance, the USPTO noted the attention (and continued uncertainty) that subject-matter eligibility has experienced over the last decade and the “unique challenges” the USPTO faces ensuring examiners and administrative patent judges “apply the Alice/Mayo test in a manner that produces reasonably consistent and predictable results.” The revised guidance outlines an updated analysis that the USPTO will follow when evaluating claims under Step 2A of the Alice/Mayo test – whether the claim is directed to one of the judicial exceptions to patent eligibility. It includes three sections and, in effect, separates the analysis required under Alice Step 2A into two inquiries (Prong One and Prong Two). Sections I and III introduce new Prongs One and Two, respectively. Section II explains that the new procedure is “rooted in” the continuing case law from the Supreme Court and Federal Circuit.
Under new Prong One, a claim is evaluated to determine if it recites a judicial exception to patent eligibility. Prong One is similar to the USPTO’s prior guidance but with some changes explained below. In particular, the claim under review will no longer be compared to claims already determined (by a court) to be directed to an abstract idea as the USPTO previously did. If the claim is found to not recite a judicial exception under Prong One, the claim is determined to be patent eligible. If it is found to recite a judicial exception, the claim is further evaluated under new Prong Two to determine if it recites additional elements that integrate the exception into a practical application. If so, the claim is determined to be patent eligible. If not, the claim is further evaluated to determine if it meets the requirements of Alice Step 2.
On a practical note, the revised guidance supersedes the Manual of Patent Examining Procedure (“MPEP”) §2106.04(II) (discussing patent eligibility under Alice Step 2A) and supersedes all versions of the USPTO’s “Eligibility Quick Reference Sheet Identifying Abstract Ideas” (first published in July 2015 and most recently updated in July 2018). While the revised guidance does not itself constitute substantive rule making or have the force of law, it provides guidance on the USPTO’s interpretation and application of patent eligibility law in view of the (continuing) decisions from the Federal Circuit and the Supreme Court.
Under the USPTO’s prior guidance, much of the attention focused on how it applied the US Supreme Court’s framework enumerated in Alice Corp. Pty. Ltd. v CLS Bank International, which relied on Mayo Collaborative Services v Prometheus Laboratories, Inc.2 The Alice test sets forth two steps for determining whether a claim is patent eligible. Under Alice Step 1, the claim is evaluated to determine if it recites a judicial exception. Alice Step 1 corresponds to the USPTO’s Step 2A (which now includes Prongs One and Two). Under the USPTO’s prior Step 2A guidance, a claim was compared to those claims already found to be directed to an abstract idea in previous
cases.3 To support this approach, the USPTO periodically issued guidance with updates on Federal Circuit decisions applying the Alice test. In the revised guidance, the USPTO noted that that approach has become “impractical” because the number of Federal Circuit decisions on patent eligibility is growing, and similar subject-matter has been determined both as abstract and not abstract in different cases. The revised guidance also notes that:
“concerns have been raised that different examiners within and between technology center [using this approach] may reach inconsistent results.”
Under Alice Step 2, the claim is evaluated to determine whether the claim recites only routine or conventional elements merely implementing an otherwise abstract idea or if it recites additional elements that provide significantly more than just the judicial exception. Alice Step 2 corresponds to the USPTO’s Step 2B (which remains unchanged under the USPTO’s revised guidance).
The USPTO’s application of the Alice test includes a preliminary Step 1 to determine if the claim recites a statutorily enumerated class of invention (e.g., process, machine, manufacture, or composition of matter). The Alice test (previously implemented by the USPTO) is outlined in MPEP § 2106, which provides a flowchart (reproduced below). In September 2018, USPTO Director Iancu made remarks
at the Intellectual Property Owners Association Annual Meeting. Director Iancu expressed his view on patent eligibility issues that:
“the [judicial] exceptions should capture only those claims that the Supreme Court has said remain outside the categories of patent protection, despite being novel, nonobvious, and well-disclosed.”4 Consistent with Director Iancu’s views, the revised guidance
appears to favour finding eligibility. And the new Prongs One and Two (under the USPTO’s Step 2A) should create more pathways to finding claims are patent eligible.
Incorporating the USPTO’s revised guidance into its previous flowchart will provide a new flowchart like the following, and explained in more detail in Figure 2 (opposite).5
USPTO’s Step 1
The revised guidance did not make any changes to Step 1 or the USPTO’s “streamlined analysis.” Thus, as explained above, Step 1 determines whether the claim is directed to one of the four statutory categories of inventions – process, machine, manufacture and composition of matter. If so (STEP 1: YES), the claim will be further evaluated in Step 2A. In cases where the patent eligibility is self-evident, the claim can be readily determined to be patent eligible using a streamlined analysis (i.e., bypassing the USPTO’s Steps 2A and 2B). If the claim does not recite a statutory category (STEP 1: NO), no further analysis is needed – the claim is not patent eligible.
USPTO’s Revised Step 2A
Step 2A first determines if the claim is directed to a natural phenomenon, a law of nature, or an abstract idea. Step 2A addresses this preliminary determination in two sub-steps, separating abstract ideas from natural phenomena and laws of nature. If the claim recites a law of nature or natural phenomenon, the claim is further evaluated under Prong Two (i.e., the analysis bypasses Prong One). If the claim recites an abstract idea, the specific language believed to be the abstract idea is analyzed under Prong One.
Prong One determines whether the identified abstract idea falls into one of the three enumerated categories provided by the revised guidance:
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 personal behavior or relationships or interactions between people (including social activities, teaching, and following rules or instructions).
c. Mental processes: concepts performed in the human mind (including an observation, evaluation, judgment, opinion). If the claim language believed to be an abstract idea does not fall within one of the three groupings (Prong One: NO), the claim is not directed to a judicial exception and is determined to be patent eligible. In rare cases, a claim limitation that does not fall within the enumerated categories can nonetheless be treated as reciting an abstract idea. The revised guidance instructs that such a determination “must be approved by the Technology Center Director,” and “must provide a justification for why such claim limitation is being treated as reciting an abstract idea.”
If the claim language does fall within one of the three groupings (Prong One: YES), the claim must still be analyzed under Prong Two to determine whether the recited judicial exception is integrated into a practical application. Prong Two – Integration into a Practical Application If a claim falls within one of the three groupings of abstract idea as explained above, or a claim recites a law of nature or a natural phenomenon, Prong Two will apply.
Prong Two determines whether the claim as a whole integrates the recited judicial exception (law of nature, natural phenomena, or enumerated abstract idea) into a practical application. The claim is analyzed to first identify any additional recited elements beyond the judicial exception. If so, those additional elements, both individually and in combination, are evaluated to determine whether they integrate the exception into a practical application.
The revised guidance explains 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.”
If the claim does integrate the exception into a practical application (Prong Two: YES), the claim is not “directed to” the judicial exception and is determined to be patent eligible. If not (Prong Two: NO), the claim must still be analyzed under Step 2B to finally determine whether the claim is patent-eligible.
The USPTO’s Step 2B
Step 2B of the USPTO’s guidance is the same as Alice Step 2. Step 2B determines whether the additional recited elements (again) individually and in combination provide an inventive concept (i.e., whether the additional elements amount to significantly more than the exception itself). In particular, under Step 2B, the USPTO analyzes whether an additional element or combination of elements:
“[a]dds a specific limitation or combination of limitations that are not well-understood, routine, conventional activity in the field, which is indicative that an inventive concept may be present.”
If the additional elements amount to significantly more (STEP 2B: YES), the claim is determined to be patent eligible. If not (STEP 2B: NO), the claim is determined to be patent ineligible. The revised guidance did not make any changes to Step 2B but emphasizes that it is a separate step from Prong Two of revised Step 2A. Thus, the revised guidance explains that a claim may provide an inventive concept, even when the claim is not integrated into a practical application.
As shown in the annotated flowchart (page 33), the revised guidance provides more pathways for determining a claim is patent-eligible under the USPTO’s Step 2A, which corresponds to the Alice test Step 1 (whether the claim is directed to a natural phenomenon, law of nature, or abstract idea). For example, under Prong One, claims that do not recite one of the enumerated abstract ideas (mathematical concepts, methods of organizing human activity, or mental processes) should be found patent eligible, except for rare cases. In effect, the revised guidance provides a more detailed analysis under Alice Step 1 and, if applied as intended, may lead to more claims being found to be patent eligible by the USPTO. At the very least, the more detailed analysis should help provide more consistent and predictable outcomes. Moreover, the revised guidance suggests that it applies to the examiner corps (during prosecution) and to administrative patent judges (at the PTAB) and applies to pending applications and issued patents. Accordingly, it should provide practitioners more opportunities to present arguments and amendments to show claims are patent eligible in cases before the USPTO. Stay tuned as we continue to follow this ever-evolving area of US patent law.
Endnotes
1 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 54 (Jan. 7, 2019), available at https://www.govinfo.gov/
content/pkg/FR-2019-01-07/pdf/2018-28282.pdf (all quotations refer to the revised guidance unless otherwise noted).
2 Alice Corp. Pty. v CLS Bank Int’l, 573 U.S. 208, 217-18 (2014) (citing Mayo Collaborative Servs. v Prometheus Labs., Inc., 566
U.S. 66 (2012)).
3 See Enfish, LLC v Microsoft Corp., 822 F.3d 1327, 1334 (Fed. Cir. 2016); see also Amdocs (Israel) Ltd. v Openet Telecom, Inc., 841
F.3d 1288, 1294 (Fed. Cir. 2016) (“[T]he decisional mechanism courts now apply [to identify an abstract idea] is to examine earlier cases in which a similar or parallel descriptive nature can be seen – what prior cases were about, and which way they were decided.”).
4 Remarks by Director Iancu at the Intellectual Property Owners Association 46th Annual Meeting (24 September 2018), available at https://www.uspto.gov/about-us/news-updates/remarks-director-iancu-intellectual-property-owners-46thannual-meeting (emphasis added).
5 This flow chart annotates the USPTO’s flowchart in view of the changes implemented by the USPTO’s Revised Guidance.
United States Patent and Trademark Office (USPTO), patent-eligible, Alice Corp. v. CLS Bank International, Mayo Collaborative Services v. Prometheus Laboratories Inc.
Originally printed in CIPA Journal in April 2019. 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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