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USPTO Announces Revised Guidance for Subject Matter Eligibility

The United States Patent and Trademark Office (USPTO) kicked off the new year in a big way by releasing its “2019 Revised Patent Subject Matter Eligibility Guidance”.  This guidance for USPTO examiners and Patent Trial and Appeal Board judges does not have the force of law, but it is still particularly important for those in the tech sector, whose patent applications for software and computer-based inventions have suffered from inconsistent application of the law on subject matter eligibility (35 U.S.C. § 101).  While key points from the guidance are detailed below, the bottom line is that, based on this attempt to essentially define the oft-critical term “abstract idea”, applicants can expect more predictability with regard to subject matter eligibility and fewer rejections on such grounds.

As an initial matter, the guidance notes that, on the heels of the U.S. Supreme Court’s Alice v. CLS Bank opinion, courts and the USPTO attempted to make eligibility decisions by comparing claims at issue to those found to be abstract and unpatentable in previous court rulings.  This new guidance notes “that approach was effective soon after Alice was decided, [but] it has since become impractical”, due to the sheer volume of Federal Circuit eligibility decisions and that “similar subject matter has been described both as abstract and not abstract in different cases”.

As is well known by now, the first step of the eligibility test under Alice is to determine whether the patent claim at issue is directed to a patent-ineligible concept such as the “judicial exceptions” of abstract ideas or natural phenomena.  The new guidance sets forth three categories or “groupings” of inventions that the USPTO believes constitute the term “abstract idea”:

  • Mathematical concepts (i.e., mathematical relationships, mathematical formulas or equations, and mathematical calculations);
  • Certain methods of organizing human activity (i.e., 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 (i.e., concepts performed in the human mind (including an observation, evaluation, judgment, or opinion)).

Per the USPTO’s guidance, a claim which does not recite a subject matter falling within one of these three groups “should not [ordinarily] be treated as reciting abstract ideas”.

Should a “rare circumstance” occur where a claim does not fall within one of the groups, but the USPTO “employee” (i.e., the examiner) believes the claim nevertheless should be treated as reciting an abstract idea, the employee will be required to justify his or her decision and have it approved by the applicable Technology Center Director, with the justification and approval included in the record.

The guidance also includes a “two-prong inquiry” for whether a claim is “directed to” a patent-ineligible concept.  The first prong entails examiner consideration of whether the claim at issue recites a patent-ineligible concept. If the claim does, the examiner proceeds to the second prong.  Under the second prong, the examiner must consider whether the ineligible concept is “integrated into a practical application”. If the concept is integrated into a practical application, the claim’s subject matter is patent-eligible.  If a claim both recites a patent-ineligible concept and does not integrate that concept in a practical application, then the claim is deemed “directed to” a judicial exception and “further analysis pursuant to the second step of the Alice … test” is required.

In analyzing this “directed to” issue, the examiner should look to whether the claim uses the subject matter in a way “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”.  The guidance provides a non-exhaustive list of examples of abstract ideas and other judicial exceptions, such as laws of nature that have been integrated into a practical application. These examples include when the subject feature improves the functioning of a computer, treats a particular disease or medical condition, is implemented into a machine that is integral to the claim, transforms an item into a different thing, or otherwise “applies or uses” the judicial exception with a particular technology in a “meaningful way”. For subject matter eligibility purposes, the broad phrase “practical application” does not require that the practical application be novel or non-obvious.

At the same time, the UPSTO released new guidelines for “Examining Computer-Implemented Functional Claim Limitations for Compliance with 35 U.S.C. § 112”. As the title indicates, the focus here is on software inventions and how an examiner should apply certain requirements found in Section 112 of the U.S. Patent Act, to ensure that an application under review contains a sufficient written description and enables others to make or use the subject invention.  While the guidance largely summarizes existing case law, it serves as a strong reminder that Section 112 is still a hurdle for applicants to overcome.