2019 Revised Patent Subject Matter Eligibility Test
The United States patent system was established by the U.S. Constitution (Article 1, Section 8). The laws governing the patent system are described in Statutes (35 USC) issued by our congress, procedures for obtaining patents, termed Rules of Practice, are found in Regulations (37 CFR) published by the USPTO (United States Patent and Trademark Office), and detailed examination practice is set forth in detail in a manual (MPEP), written for examiners by the USPTO, but available to the public. These materials, together with court cases that interpret our laws, are fundamental to patent practice in the United States.
U.S. patents are available for technology that is useful, new and unobvious over prior art. However, this provision includes an implicit exception. The exception includes inventions directed to abstract ideas, natural phenomena, and laws of nature. To assess whether the claim falls within the exception category, the Supreme Court formulated a two-steps test in its Alice decision. The first step is often referred to as an “abstract idea” step and the second step is often referred to as an “inventive concept” step. In the abstract idea step, it is determined whether the claim as a whole is directed to a judicial exception (e.g., abstract idea, natural phenomena, and laws of nature). If not, the claim is considered patent eligible under 35 USC 101. If, however, it is determined that the claim is directed to a judicial exception, then the claim is reviewed further under the “inventive concept” step to determine whether the additional claim elements alone or as proposed combination render the claim from abstractness to a patent eligible idea.
The Alice two-steps test although sounds straight forward, it is far from it. Examiners, patent attorneys, courts, applicants have all struggled with applying the test in a consistent manner. This is demonstrated by many recent case laws where similar facts have led to completely different outcomes, some pointing to a patent eligible subject matter and some pointing to contrary conclusion of a patent ineligible subject matter. Much is the same at the USPTO, where examiners continue to struggle with the application of the test to the patent applications. Some examiners attach an unreasonably broad definition to the abstract idea and some attach a more focused definition. In either case, once the examiners conclude the claims recite an abstract idea, it appears way too often that conclusion will automatically lead to the next conclusion that the claim as a whole is directed to an abstract idea and the additional elements do not bring the claims outside of this abstractness and as such the claim is not patent eligible. I have seen many cases, where I have simply disagreed with the Examiner that the claim is directed to an abstract idea. In one recent case, after several written arguments and telephonic interviews proved futile, I did a personal interview with the examiner and her supervisor to convince them that the invention is not directed to an abstract idea. I am not alone in this and many other practitioners handling software patent applications struggle with the same thing.
To address these concerns, USPTO has now revised its internal procedures set forth in MPEP for examiners for determining whether a patent claim or patent application claim is directed to one of the above-identified judicial exceptions under the first prong of the Alice decision. Specifically, the first step is revised compared to the prior guidance to include two prongs as shown in the chart below.
Under prong-one, a determination should be made as to whether the claim recites a law of nature, a natural phenomenon, or an abstract idea. If not, the claim is patent eligible. If yes, proceed to prong-two. Under prong one, natural phenomenon and law of nature are treated as before. The universe for the abstract idea, however, is now limited to the following three categories:
- Mathematical concepts: mathematical relationships, mathematical formulas or equations, 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;
- Concepts performed in the human mind: an observation, evaluation, judgment, opinion
If the claim recites a judicial exception, proceed to prong-two and evaluate whether the claim recites additional limitation that integrate the judicial exception into a practical application of that exception. To make this determination, the examiners must (a) identify the additional elements in the claims and (b) evaluate whether the additional elements alone or in combination integrate the claim into a practical application.
The following considerations are indicative that the additional elements alone or in combination integrate the claim into a practical application of the judicial exception:
- An additional element results in an improvement of the functionality of a computer;
- An additional element uses the judicial exception to treat a medical condition;
- An additional element transforms a particular article to a different state or thing; and
- An additional element applies the judicial exception in some other meaningful ways than those identified above and is not just linking the judicial exception to a known technological environment to avoid 101.
The following considerations are indicative that the additional elements alone or in combination do not integrate the claim into a practical application of the judicial exception:
- An additional element merely ties the judicial exception to a known technological environment in a drafting effort to avoid 101; and
- An additional element adds insignificant extra-solution activity to the judicial exception.
It is important for the examiners to consider the claim as a whole when making the determination as to whether the claim is “directed to” an abstract idea. Sometimes, one or more additional elements can bring the claim outside the realm of abstractness. Sometimes, the additional elements in combination bring the claim outside the realm of abstractness. It is important to note that under prong-two of Step 2A, it is irrelevant whether the additional element is well-understood, conventional or routine in the art. This inquiry is suited for Step 2B of Section 101 and determination whether the claim is novel and nonobvious under Sections 102, 103.
If the determination is made that the claim is “directed to” a judicial exception (Step 2A, prong-one, YES) and the additional elements alone or in combination do not integrate the claim into a practical application of the judicial exception (Step 2A, prong-two, Yes), then the inquiry proceeds to Step 2B to determine whether the claim recites additional elements that amount to significantly more than the judicial exception.
It appears that if the conclusion is reached at Step 2A, that the claim is directed to a judicial exception and the claim fails to integrate the judicial exception into a practical application of that exception (Step 2A, NO), then it will likely be difficult to avoid a determination of patent ineligibility under Step 2B because Step 2B makes sort of same inquires as Step 2A, prong-two. Although I suspect it will be rare, it is still possible for the claim to fail Step 2A, prong-two and pass Step 2B. For example, the additional element is categorized as insignificant extra-solution activity under Step 2A, prong-two, the examiner may determine this additional limitation alone or in combination with other limitations in the claim is not conventional, routine, or well-known and therefore may consider the claim is patent eligible under Step 2B.
To illustrate, the updated USPTO guidelines refer to the claims in Berkheimer decision, in which independent claim 1 was held to be patent ineligible for comparing data and reconciling differences between the data using a computer. However, dependent claim 4 was held to be patent eligible for storing the reconciled data in a storage without substantial redundancy, which was described in the specification as unconventional and improving system operating efficiency and storage costs. The examiner may consider this as insignificant extra-solution activity under Step 2A; however, under Step 2B, the examiner may determine this additional limitation alone or in combination with other limitations in the claim is unconventional.
Practice Notes:
- The revised guideline should reduce the 101 rejections significantly because 1) the examiners should no longer be able to make a subjective determination as whether something is abstract or not as the guideline limits the universe of abstractness to only 3 categories.
- There will likely be a lot confusion as to whether the claim integrates the judicial exception into a practical application of that exception. However, I believe the guideline above should be helpful to the practitioners in making that argument.
- New examples 37-42 (USPTO Jan 2019 Subject Matter Eligibility Examples) are extremely helpful in making arguments supporting patent eligibility. Practitioner should find the example that correspond most to their client’s invention and mirror the rational to support patent eligibility.
- Useful links:
USPTO Jan 2019 Revised Patent Subject Matter Eligibility Guidance