USPTO Rings in 2019 with New Guidance for Computer-Implemented Inventions – Part I: Subject Matter Eligibility

USPTO Rings in 2019 with New Guidance for Computer-Implemented Inventions – Part I: Subject Matter Eligibility

Blog Post Submitted by Adam J. College

If the USPTO makes New Year’s resolutions, “release new guidance documents” must have been at the top of its list for 2019. Patent practitioners were treated to not one, but two new examination guidance documents in the Federal Register as they showed up for work on the first Monday of the year. There’s a lot to unpack in both of these documents, so this week, we’ll look at the first guidance document, “2019 Revised Patent Subject Matter Eligibility Guidance[1],” and next week, we’ll dive into the second, “Examining Computer-Implemented Functional Claim Limitations for Compliance with 35 U.S.C. 112.”[2]

The Subject Matter Guidance revises examining procedure with respect to the “Step 2A” of the Alice/Mayo framework;[3] other parts of the Alice/Mayo framework are unaffected by the Subject Matter Guidance.[4] The key question in Step 2A is to determine whether the claims are “directed to’” a judicial exception,[5] and the key new insight in the Subject Matter Guidance is to break down this question into two “prongs.” Prong One asks whether the claim “recites” a judicial exception, and Prong Two asks whether the claim is “integrated into a practical application.”[6] A claim is “directed to” a judicial exception only when both prongs are met: that is, a claim that both recites a judicial exception and fails to integrate the exception into a practical application is “directed to” the judicial exception.

For Prong One, the Subject Matter Guidance “extracts and synthesizes key concepts identified by the courts as abstract ideas,”[7] and provides three “groupings” of abstract ideas: (1) mathematical concepts, such as mathematical relationships, formulas, equations, or calculations; (2) “certain methods of organizing human activity,” which includes economic practices such as hedging, insurance, or risk mitigation, as well as commercial or legal interactions and managing behavior or relationships between people; and (3) mental processes, such as observing, evaluating or making judgments or opinions.[8] Notably, the Subject Matter Guidance explains that “the abstract idea exception includes [these] groupings of subject matter, when recited as such in a claim limitation(s) (that is, when recited on their own or per se).”[9] In other words, if a claim does not recite subject matter that falls within these enumerated groupings, then the claim should not be treated as reciting an abstract idea, except in rare circumstances.[10] If a claim does not “recite” an abstract idea, then the claim cannot be “directed to” the abstract idea, and the examiner can end the analysis here.

However, if the claim does recite subject matter that falls within at least one of the enumerated groupings, then Prong Two instructs examiners to evaluate whether the claim as a whole “integrates” the recited judicial exception into a practical application of the exception.[11] A claim that integrates a judicial exception into a practical application “applies, relies on, or uses 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.”[12] If a claim “integrates” the exception, then the claim is not “directed to” the abstract idea.

The Subject Matter Guidance includes a non-exhaustive list of “considerations” to be used in determining whether an integration exists, such as whether the claim includes an additional element that “reflects an improvement in the functioning of a computer, or an improvement to other technology or technical field,” or an element that “applies or uses a judicial exception to effect a particular treatment or prophylaxis for a disease or medical condition,” or an element that “implements a judicial exception with, or uses a judicial exception in conjunction with, a particular machine or manufacture that is integral to the claim.”[13] Even an element that “effects a transformation or reduction of a particular article to a different state or thing” may suffice to show integration of the recited exception into a practical application.[14] These “considerations” are also used in Step 2B of the Alice/Mayo framework, and while there is therefore a high degree of overlap between Step 2A Prong Two and Step 2B, there is one major difference. Unlike Step 2B, Step 2A Prong Two does not include an evaluation of whether an additional element is well-understood, routine, or conventional, and the Subject Matter Guidance explicitly reminds examiners that a claim that includes conventional elements may still integrate an exception into a practical application, thereby satisfying the subject matter eligibility requirement of Section 101.”[15]

Bringing clarity to the murky waters of patent eligibility is a key priority of the USPTO under Director Andrei Iancu,[16] and the formulation of Prong One and Prong Two in the new Subject Matter Guidance suggests a potential sea change in how 101 rejections are formulated by examiners, and in how applicants respond to issued rejections. One major vote of confidence in the Subject Matter Guidance has come from the Patent Trial and Appeals Board, which rendered two separate decisions in less than two weeks that each reversed 101 rejections using the Subject Matter Guidance, despite not being bound by guidance documents.[17]  In ex parte Fanaru, the PTAB hewed very closely to the groupings discussed in the Subject Matter Guidance, finding that claim recitations of “collecting usage information,” is not a “mathematical concept, an identified method of organizing human activity, or a mental process.”[18] In ex parte Rockwell, the PTAB ruled that the claims for updating vehicle software over-the-air integrated the asserted abstract ideas into specific practical applications of those ideas.[19]

The initial reporting on the Subject Matter Guidance, and on the PTAB’s usage of the Subject Matter Guidance, has been one of cautious optimism, especially for software-based inventions. The identified groupings in Prong One suggest that applications not directed to “math, money, or mental steps,”[20] should more easily survive examination under 101. The list of considerations in Prong Two, as well as the absence of an evaluation into whether an additional element is well-understood, routine, or conventional, also may be potentially favorable to applicants, especially in view of the Subject Matter Guidance’s reminder examiners that a claim that includes conventional elements may still integrate an exception into a practical application and thereby satisfy the subject matter eligibility requirement of Section 101.[21] Of course, a claim that relies only on conventional and well-known elements may have difficulty overcoming art-based rejections under Sections 102 and 103.

Here at Myers Bigel, we also have cautious optimism that the Subject Matter Guidance will bring some consistency to the questions surrounding patent eligibility. That said, it’s too early to tell whether and how much the rejection numbers will change, or even if the USPTO guidance will be approved by higher courts, who may find the identified groupings too rigid, or find the “integrated into a practical application” analysis under Prong Two unsupported by Supreme Court or Federal Circuit decisions.

It’s not all smooth sailing, however. Next week, we’ll look at the Functional Claiming Guidance,[22] which has received significantly less coverage or attention, but may in fact portend a coming wave of rejections under 35 U.S.C. 112 for computer-implemented inventions. Until then, we welcome any questions you have on the Subject Matter Guidance, and whether it affects your patent strategy.

[1] 84 Fed. Reg. 50 (January 7, 2019) (herein, “Subject Matter Guidance”).

[2] 84 Fed. Reg. 57 (January 7, 2019)

[3] See Alice Corp. Pty. Ltd. 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)).

[4] In other words, the Subject Matter Guidance does not modify the Step One requirement that the claims need to recite statutory subject matter (i.e., whether the claim recites a “process, machine, manufacture, or composition of matter”). Step 2B of the Alice/Mayo framework, which looks into whether the claim “directed to” an abstract idea recites “significantly more” than the abstract idea, is also unmodified by the Subject Matter Guidance.

[5] Alice, 573 U.S. at 217 (citing Mayo, 566 U.S. at 77).

[6] 84 Fed. Reg. 50, at 51.

[7] Id., at 52.

[8] Id.

[9] Id.

[10] Id., at 53.

[11] 84 Fed. Reg. 50, at 53.

[12] Id.

[13] Id., at 55.

[14] Id.

[15] 84 Fed. Reg. 50, at 55.

[16] 84 Fed. Reg. 50, at 50.

[17] Patel, A. and Kronenthal, C. “First PTAB Reversals Under New Subject Matter Eligibility Guidance,” IP Watchdog, Feb. 14, 2019, available at https://www.ipwatchdog.com/2019/02/14/first-ptab-reversals-new-subject-matter-eligibility-guidance/id=106312/

[18] Appeal No. 2017-002898, Jan. 22, 2019.

[19] See Ex parte Rockwell, Appeal No. 2018-004973, p. 8 (PTAB Jan. 16, 2019).

[20] Bultman, M. “PTAB Taking Patent Eligibility Revamp to Heart,” Law360, Feb. 15, 2019, available at https://www.law360.com/articles/1130012/ptab-taking-patent-eligibility-revamp-to-heart

[21] 84 Fed. Reg. 50, at 55.

[22] See note 2, supra.