United States: New USPTO Guidance On Patent Subject Matter Eligibility Seeks To Standardize Abstract Idea Analysis

The Supreme Court's decisions in Mayo v. Prometheus and Alice Corp v. CLS Bank created a three-part test for determining subject matter eligibility of patent claims under 35 U.S.C. §101 that has unfortunately led to confusing, unpredictable, and inconsistent results. The test required Patent Examiners and courts to first determine whether a patent claim was directed to a statutory category (e.g. a process, machine, article of manufacture, or composition of manufacture) (step 1); then identify if the claim was "directed to a judicial exception," such as a law of nature, natural phenomenon, or an abstract idea (step 2A); and finally, if the claim was directed to such an exception, then determine whether additional elements in the claim included "significantly more" than the exception (step 2B). However, the Court expressly declined to define what constituted an abstract idea or what qualified as "significantly more," setting the stage for inconsistent applications of the test. In the intervening years, some patent examining groups at the Patent Office have issued thousands of subject matter eligibility rejections, such as Art Unit 3689 ("data processing: financial, business practice, management, or cost/price determination") with a 6% allowance rate since 2013; while others have barely issued any, such as Art Unit 2182 ("data processing systems") with an 83.8% allowance rate in the same time frame. Overcoming these rejections may be time-consuming and expensive, and may depend on unpredictable subjective determinations by appellate judges.

On January 7, 2019, U.S. Patent and Trademark Office Director Andrei Iancu published new guidance for subject matter eligibility analysis in the Federal Register that provides a clearer path through this confusing area of law, particularly with regard to software related applications. In particular, the 2019 Revised Patent Subject Matter Eligibility Guidance splits step 2A of the Mayo/Alice test into two prongs by (1) providing explicit groupings of subject matter that is considered an abstract idea, and (2) clarifying that a claim is not directed to a judicial exception if the claim integrates the exception into a practical application of that exception. By splitting step 2A in two and providing Examiners and Applicants with a specific process for evaluating step 2A, this guidance may allow patent applications to avoid step 2B entirely by providing guideposts for claims that will be determined to include subject matter eligible at step 2A.

In the first prong ("step 2A(1)"), Examiners are directed to identify specific limitations in the claim that recite an abstract idea from the following groupings:

  • mathematical concepts – mathematical relationships, mathematical formulas or equations, or mathematical calculations;
  • 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); and
  • mental processes – concepts performed in the human mind (including an observation, evaluation, judgment, opinion).

In particular, these new groupings remove a previously applied category of abstract ideas that was ill-defined – "an idea 'of itself'" that was used to reject patent claims directed to subject matter as diverse as digital rights management (FairWarning IP v. Iatric Systems); data backups (Int. Ventures v. Symantec); graphical user interfaces (Apple v. Ameranth); and encoding and decoding images (RecogniCorp v. Nintendo). Under the new guidance, if Examiners believe that claims recite an abstract idea that is not included in the three enumerated groupings, any rejection must be approved by the Technology Center Director overseeing their art unit. This may provide some additional consistency between Examiners and art units.

If a claim recites an abstract idea or other judicial exception, then under the second prong ("step 2A(2)"), Examiners must evaluate whether the recited exception is integrated into a practical application. If so, then the claim is not directed to the abstract idea and is eligible under 35 U.S.C. §101 (though other rejections over prior art or written description may still apply). To apply this prong, Examiners are directed to identify any additional elements recited in the claim beyond the judicial exception, and evaluate those additional elements individually and in combination to determine whether they integrate the exception into a practical application. Examiners must consider all of the additional elements, regardless of whether they are considered well-understood, routine, or conventional.

The Guidance provides several examples of claims that integrate an exception into a practical application, that include:

  • elements that reflect an improvement to the functioning of a computer or another technology, such as dynamic production of dual-source hybrid web pages;
  • elements that apply an exception to effect a particular treatment or prophylaxis for a disease or medical condition, such as an immunization step that reduces the risk of chronic immune-mediated diseases;
  • elements that implement the judicial exception with a particular machine or manufacture integral to the claim, such as paper manufacturing via a Fourdrinier machine;
  • elements that effect a transformation of an article to a different state, such as a process that transforms uncured synthetic rubber into cured and molded synthetic rubber; or
  • elements that apply the judicial exception in a meaningful way beyond generally linking the use of the exception to a particular technological environment, such as steps that include installing rubber in a press, closing the mold, constantly measuring the temperature in the mold, and automatically opening the press at the proper time, all of which together meaningfully limited the use of a mathematical equation to a practical application of molding rubber products.

The guidance also notes that software-based innovations can make non-abstract improvements to technology and are not inherently abstract, and suggests that claims that specify how particular functions are performed by computers, rather than merely reciting a result to be achieved, may integrate an abstract idea into a practical application.

By removing the problematic "idea 'of itself'" category and providing clear guidance that practical applications of abstract ideas may nonetheless be eligible for patentability, the Director has provided some encouragement for the software industry. Applicants may want to consider focusing on aspects of their inventions that relate to practical implementations of an improvement in technology in order to possibly experience an easier path through the Patent Office under the new framework for evaluating eligibility. And while the guidance only applies to Patent Examiners and judges at the Patent Office's Patent Trial and Appeals board, the Federal courts may look favorably on applications that have been evaluated under this new process, strengthening the resulting patents against invalidity charges.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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