“Director Iancu has carefully and logically synthesized the case law on eligibility in the Section 101 Guidance. Congress and courts alike would do well to use it as a model.”
For almost ten years, U.S. patent law has experienced extraordinary confusion and uncertainty about what types of inventions and discoveries are patent eligible. The U.S. system changed from offering strong protection for novel and nonobvious inventions to questioning whether groundbreaking technologies are even the type the Founders thought would promote the progress of the “Useful Arts.” But recent developments, including the USPTO’s 2019 Revised Patent Subject Matter Eligibility Guidance (Section 101 Guidance), suggest that winds of change may clear the fog and bring back some clarity to U.S. patent law.
A Decade of Uncertainty
As I’ve explained in detail elsewhere, the confusion about what inventions are patent eligible began with Bilski. The Supreme Court in Bilski resurrected non-statutory “judicial exceptions” to Section 101. Rather than stay true to the statutory text, the Bilski Court viewed the wording of Section 101 as not controlling. The result: “Any” did not mean “any” with respect to the categories of “process, machine, manufacture or composition of matter.” It meant only those the Supreme Court thought important enough. Bilski also applied a rigid view of stare decisis, invoking old precedents such as Funk Brothers, which confused patent eligibility with novelty and nonobviousness.
The Bilski Court also avoided any attempt to define “abstract.” The scope of patent-ineligible “abstract” inventions was left adrift, at the mercy of the subjective interpretative efforts of thousands of federal judges, administrative patent judges, and patent examiners. This caused complete chaos in the vast world of computer-implemented inventions, which are incorporated into nearly all technologies.
The Supreme Court confronted Section 101 after Bilski, and each time the innovation and business communities were left with more questions than answers. Mayo involved a medical diagnostic claim having an awkwardly-worded “wherein” clause that added little, if anything, to the claimed method. The Mayo Court set the stage for a two-step process for deciding patent eligibility under Section 101. First, a court determines whether the claims are directed to a patent-ineligible concept. In the context of the diagnostic claim, patent eligibility now depended on whether the claim elements “transform the nature of the claim” into a patent-eligible application and whether the claimed invention had an “inventive concept,” i.e., something “sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.”
Next came Myriad, which dealt only with the “product of nature” exception in the unique situation of information-conveying genes. Myriad suggested nothing about the meaning of “abstract concept” or otherwise enlightened the eligibility of computer-implemented inventions.
Alice is the most recent Supreme Court pronouncement on Section 101, and with it the Court reiterated that the test of eligibility was not non-preemption, but “inventive concept”—and that, after eliminating the implied exception from the analysis and looking to see if the remaining limitations of the claim contained “something more” that was sufficient “to transform” it into an eligible invention. As with “abstract concept,” no definition was provided for what “something more” meant. And like “abstract,” it was explicitly described as a relative notion because both opinions acknowledged that all inventions can be reduced to abstractness if one went far enough.
The ensuing invalidation rates in the trial courts, the Patent Trial and Appeal Board (PTAB), and the International Trade Commission (ITC) increased to very high rates. Just as problematic was the too-often superficial analysis of claim language. Invalidity decisions focused on the gist of the invention, instead of the claim language. Section 101 morphed into a nebulous, undisciplined proxy for novelty and non-obviousness. The rigor of evidentiary proof required to prove anticipation or obviousness was supplanted by subjective conclusions of what should be patentable.
More can be said about the current limitations, and I’ve written more elsewhere. Suffice it to say, our patent system can and should do better. Many hoped that, with time, the Federal Circuit or the Supreme Court itself, would have resolved the problem. But in the over eight years since Bilski, over six years since Mayo, and over four years since Alice, the high court has declined all of the many cert petitions seeking clarification. What then of the Federal Circuit? Unlike the Supreme Court, it must decide every case appealed to it. In scores of appeals, it has struggled to make sense of the opaque Supreme Court decisions hamstrung by outdated precedent. But in addition to seemingly inconsistent results in like cases, it has introduced its own confusing notions and language.
For example, in some cases, the Federal Circuit starts the analysis by determining what the claim “focuses on”—an apparent attempt to define what the Supreme Court meant when it said one must determine whether a claim is “directed to” an ineligible concept such as an “abstract idea.” But does a patent claim focus on anything other than what is included within the scope of protection defined by all the limitations? The “focus on” notion seems inconsistent with the axiom of patent law that every limitation is presumed meaningful and none may be ignored in assessing either validity or infringement. Worse, it conflicts with the command of Mayo and Alice that eligibility must be judged in view of all the limitations as “an ordered combination.”
Beyond those issues, the courts are struggling with Section 101 judgments at the pleading stage. The Federal Circuit’s decisions in Berkheimer and Aatrix sought to require part of the Section 101 analysis to rest on a proper evidentiary record. Now, the Supreme Court signaled possible interest in Berkheimer when it called for the views of the Solicitor General in response to the cert petition that’s been filed. Inventors and innovators will have to wait longer to know whether Berkheimer and Aatrix are the correct approach.
In short, the courts have left us with two undefined, undescribed notions of patent eligibility. They are not real legal “tests,” in the usual sense. Whether viewed under the “rule” versus “standard” terminology, the current Section 101 law is inherently unclear and therefore could not be consistently administered by patent examiners and judges, much less juries. As I’ve stated before, patent eligibility has been reduced to Justice Stewart’s test for obscenity: “I know it when I see it.”
The USPTO’s New 101 Guidance
Accepting all that, the question is “how can the Section 101 problem be solved?” If not the courts, then maybe Congress? But thus far, Congress has been hesitant to take up meaningful reform. And Congress has enough on its plate, negotiating with the President to reopen the federal government.
So that leaves us with the USPTO itself. And, thankfully, we have seen some positive developments that leave me cautiously optimistic. Director Andrei Iancu has instituted new procedures with the PTAB that should make the process more equitable for inventors and innovators.
More specific to the patent-eligibility chaos is the Section 101 Guidance announced in early January. Much has already been written about the Guidance, and much more will come. It’s too soon, of course, to accurately prognosticate all effects, but I have reasons to be optimistic.
From a high level, the Section 101 Guidance is a reasoned effort to synthesize existing case law and impart a more reasoned analytical framework to the notoriously nebulous 101 inquiry. The USPTO recognized that “[p]roperly applying the Alice/Mayo test in a consistent manner has proven to be difficult, and has caused uncertainty in this area of the law.” To address this uncertainty, the USPTO revised how examiners should apply the Alice/Mayo judicial exception test: “The procedure set forth herein (referred to as ‘revised Step 2A’) changes how examiners should apply the first step of the Alice/Mayo test, which determines whether a claim is “directed to” a judicial exception.”
In Prong Two, examiners should evaluate whether the claim as a whole integrates the recited judicial exception into a practical application of the exception. 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. When the exception is so integrated, then the claim is not directed to a judicial exception (Step 2A: NO) and is eligible. This concludes the eligibility analysis. If the additional elements do not integrate the exception into a practical application, then the claim is directed to the judicial exception (Step 2A: YES), and requires further analysis under Step 2B (where it may still be eligible if it amounts to an inventive concept), as explained in Section III.B of the 2019 Revised Patent Subject Matter Eligibility Guidance.
The Section 101 Guidance incorporates a careful consideration of current Federal Circuit case law, to the extent general rules can be extracted from those cases. In doing so, the USPTO compiled a list of specific considerations and exemplary claims that will be deemed patent eligible under Section 101.
Without doubt, the Section 101 Guidance will restore at least some of the much-needed clarity to patent eligibility. The PTAB itself quickly took notice of the Guidance by ordering additional briefing in related covered business method (CBM) review proceedings. The PTAB permitted the parties to file short supplemental briefing on the Guidelines, in advance of the scheduled hearing.
An important question is whether the courts will follow or be persuaded by the Guidance. USPTO guidance on substantive issues of patent law is not controlling, and the courts will not be bound by it, as it may not be correct in all instances. But the courts should find the Guidance persuasive, at least. Given the years of jurisprudential confusion, the courts ought to give serious weight to the USPTO’s careful consideration of these issues.
Director Iancu has carefully and logically synthesized the case law on eligibility in the Section 101 Guidance. Although some practitioners will not agree with or favor it, many will. At the very least, the Guidance grapples with the contradictory case law and intolerable vagueness and unadministrability of the underlying doctrinal notions created by the Supreme Court. The USPTO Guidance is the best articulation available, and Congress and courts alike would do well to use it as a model.
It may be that the Federal Circuit and the Supreme Court have to acknowledge that some of their prior work was deficient. But that need not, in all instances, be seen as error in the first instance. Technology changes quickly—computer technology even faster these days. And legal doctrines must keep up with the times. Old case law about mixtures of bacteria may have only limited importance when deciding if claims to complex computer algorithms are patent eligible. The USPTO Guidance is a first positive step in filling the gap in the Section 101 analytical framework and restoring some clarity to the U.S. patent system.
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17 comments so far.
anonymousJanuary 28, 2019 12:40 pm
Anon @13 – I’ve tried the exact approach you suggested, but I’m finding examiners will not rescind any office action made pre-2019 Revised Guidance, even though they know the rejection is necessarily based on now superseded guidance and will eventually have to be redone.
Director Iancu ought to fix this immediately, requiring examiners to rescind office actions based on old, superseded guidance and issue new office actions that comply with the revised guidance. Otherwise, all that has been done is to force all applications currently rejected on 101 to undergo another senseless volley of prosecution, without advancing it at all. It is an unnecessary delay and expense for every applicant.
CuriousJanuary 28, 2019 12:21 pm
I think that Trump could lose the next election and we may have another director completely reverse this.
Who knows what a different president or a second term for Trump will beget? Like with Congress, patent policy is likely something of little interest to the President (whoever that may be). Lasting change needs to come out of Congress or the Courts.
No matter which direction a new Director may want to take patent policy, he/she will be hamstrung by case law.
concernedJanuary 28, 2019 04:37 am
Exactly, 100% agree with every word! I am up for rejection after we filed our PTAB appeal (we were awaiting the revised s101 guidelines for inclusion with all the other official memos/portions of court cases that get discarded to arrive at a rejection).
Applaud the Director, he can be my public servant any day.
TernaryJanuary 27, 2019 11:49 pm
Anon, good advice. Unfortunately, the rejection is not only administratively flawed. Technically it makes no sense. Remember what DHS says: if you see something, say something. That is how this rejection reads. It just says something. It is all soooooo tiresome.
My previous boss, who is a brilliant patent prosecutor and litigator, gave up on patent work a couple of years ago. He explained to me that he loved technology and law but there is no science in patents anymore. Just empty words against empty words. Blah, blah, blah, blah, blah. Meaningless blabber against meaningless blabber.
I need to have strong patents, so I go through the process. But every time I get an Office Action like this and I dig into the details of the rejection I get this feeling of utter futility and fatigue. Like we live in different worlds, wherein terms and words are detached from their meaning and significance. Patent prosecution has become this Byzantine process that follows empty and meaningless rules to satisfy the requirements of some unspecified intention. A Kafka like process in which the inventors are guilty of something, anything. Yet to be determined. But guilty and unworthy they will be found. I have yet to find anyone in the USPTO or the Courts who praises an invention and regrets to be unable to allow a patent or find it valid. Any invention seeking patent protection is bad, bad. I find it telling that we have a patent system that worries about cryptographic systems like RSA or Diffie-Hellman because it uses mathematics. They should admire it for its brilliance for using such simple expressions and its effectiveness. But they cannot and they will not.
A famous philosopher of science, Paul Feyerabend, was a proponent of “epistemological anarchism” captured as “anything goes.” I have the feeling the USPTO has reached this stage years ago. Unmoored from its own rules and from basic scientific theory through flawed SCOTUS handouts. Nobody cares, nobody watches (except IPWatchdog readers), nobody corrects and the most idiotic nonsense, not supported by even the most basic facts, is written down and approved by the system to be distributed into the world. Everybody shrugs. A self perpetuating and useless system. It had a purpose ages ago, but except for pharma companies, that purpose has long been lost, forgotten or ignored.
I could understand it if Examiners were just cutting corners, but there are pages and pages of empty arguments that take a lot of work. As Bill Murray says in Stripes: “there is something wrong with us, something very, very wrong with us.”
Sorry Director Iancu. Unless you crack the whip, all your good intentions may come to naught. Part of that is to request if not demand from Congress to solve the 101 issue, rather than try to soft-pedal the Alice decision. Science has to be brought back into patents.
AnonJanuary 27, 2019 11:43 am
“After writing @9 I received a 101 rejection on a case….I am not entirely sure what additional training an Examiner requires“…
Make a telephone call to the examiner (with SPE, as may be applicable), and point out the immediate deficiency of the current action, stressing that the action is NOT COMPLETE per the mandatory protocol. Give the examiner a chance to issue a new action sua sponte, or remind the examiner that a reply by you showing point blank how the rejection does not comply with protocol will not only result in the Office having to provide another action anyway, but that with the new PAP, this will be reflected on the examiner for at least one (and possibly several) critical errors. Politely pointing this out, while offering that you are trying to advance prosecution in a meaningful way under the new guidance should open the examiner’s eyes. If the examiner is junior, this will prompt a discussion with the SPE. If the examiner is senior, it will take force to change the examiner’s habits.
As to Court deference – there is none, so do not expect any. The only possible angle there is the administrative act and the requirement for the administration to follow their own rules, but that may only provide a pyrrhic victory, not one resulting in an enforceable property right.
TernaryJanuary 27, 2019 10:38 am
After writing @9 I received a 101 rejection on a case. It is all the same nonsense. No mention of “fails to integrate that exception into a practical application” at all. No “further analysis pursuant to the second step of the Alice/Mayo test” as promised. The Examiner provides some guidance as to overcome the rejection and that is appreciated. But it is nothing as promised.
I am not entirely sure what additional training an Examiner requires to determine that a claimed invention is a “practical application.” Or even more intriguing: how does an Examiner come to a conclusion that something is not a practical application? It seems it is up to Applicant to assert the “2019 Revised Patent Subject Matter Eligibility Guidance” with convincing arguments.
A Court would make a reasonable conclusion that when even an Examiner does not apply the new Guidance then certainly the Court does not have to give any deference to it.
As a former bureaucrat (sort of) I understand how a new rule has to work its way through the system and overcome internal resistance. But this is not a very auspicious start of the New Guidance. Perhaps a warning to keep a critical eye on if claims would be deemed “directed to an abstract idea” under pre-New Guidance rules.
BJanuary 25, 2019 10:41 am
@ ternary “I doubt if claims allowed under the New Guidance will survive the Courts.”
That is the central issue that Judge Michel does not address. No amount of sanity by Iancu will fix the courts
AnonJanuary 25, 2019 10:28 am
Not a bad strategy Ternary.
I am contemplating a deeper criticism of the Iancu effort, but as a teaser, let me hint here that the criticism is NOT because Iancu is trying. The Ends are laudable.
The criticism (at least in part) is that the trying is NOT in line with the law. The Means are both ineffective AND attempting to do something that is NOT the domain of the Executive Branch (and thus, will NOT effect what happens in the Judicial Branch).
More to come…
TernaryJanuary 25, 2019 09:23 am
Anon @7, You are probably right and bitter experience has taught me not to rely on about anything the PTO says about validity or eligibility. However, this is the first time in that the USPTO has published something that is useful for independent inventors to get at least past prosecution. A situation where many (I believe way too many) independent inventors are stuck.
I doubt if claims allowed under the New Guidance will survive the Courts. Alice has become a too powerful a tool for scientifically and technologically challenged bureaucrats to let go. Let’s not forget that the patent system is basically geared to deny a patent.
However, I applaud Director Iancu to try to get the system moving again on this miserable and scientifically misguided eligibility situation.
I personally do not trust (yet?) that substantial change has been achieved and I will continue to file at least Continuations on allowed cases that have potential 101 issues.
Paul MorinvilleJanuary 25, 2019 02:22 am
This is the best description of the problem I’ve yet seen: ‘ “Any” did not mean “any” with respect to the categories of “process, machine, manufacture or composition of matter.” ‘
Gorsuch and Kavanaugh both claim to interpret the text of the law to mean what it says. How can “any” mean anything but any? (Webster. Any: one or some indiscriminately of whatever kind)
Maybe they can sway the others who cannot read and do not have a dictionary.
AnonJanuary 24, 2019 07:04 pm
I can easily tell you how it will turn out: the protocols by the executive branch have NO force of law and do not — and cannot — bind the judicial branch, who remain playing ping-pong with the Void for Vagueness Supreme Court opening of the Pandora’s Box of unrestrained Common Law law writing of the statutory law that is patent law.
It has been immediately evident, given that court cases still flow in for which the new guidelines would not help a patentee.
TernaryJanuary 24, 2019 05:15 pm
Thanks for pointing out the examples Appearance @1. Example 41 solves for now the question if RSA encryption is still patent eligible. It is! Unfortunately, it is the only example that does not have a counter claim that does not integrate into a practical application. The PTO is unable to provide the contours of actual math in claims. Avoid it if you can, it seems. But I very much appreciate the suggested elements to carry claims over the Alice hump. Next stop PTAB and then the Courts to see how it works out.
Night WriterJanuary 24, 2019 02:53 pm
I think that Trump could lose the next election and we may have another director completely reverse this. Plus, the anti-patent forces are stronger than ever and that any ground that we try to take back will be met with fierce resistance.
I think the odds of getting something through Congress to reform 101 are about zero percent for at least the next five years.
AnonJanuary 24, 2019 02:31 pm
The 2019 Revised Patent Subject Matter Eligibility Guidance is fatally flawed in numerous ways.
It is both over and under inclusive, but critically, it attempts to point out that the Common Law law that has been written (in the wake of the Supreme Court usurping the rightful place of Congress in writing the statutory law that is patent law) is already full of contradictions (a veritable Gordian Knot), but then attempts to include the contradictory sides in its protocols.
You cannot have a protocol that itself is not contradictory if you are going in include the very thigns that you note AS contradictory.
BJanuary 24, 2019 02:08 pm
Dear Judge Michel,
I for one appreciate your sentiment, and agree with most of your positions of the Supreme Court’s various errors. That said, as to your assertion that “[i]t may be that the Federal Circuit and the Supreme Court have to acknowledge that some of their prior work was deficient.” Respectfully, this is an amazing understatement and misstatement. At best, the SCOTUS may acknowledge the mistakes of the CAFC, but getting the SCOTUS to admit to their own?
I guarantee that there will be another s101 case filed at the SCOTUS within the following seven days that prominently mentions the recent Schein decision and makes most of your points and more.
With this in mind, rather than address the Alice/Mayo test narrowly, the CAFC has taken large liberties in using the word “inventive concept” without actually making any attempt to define it. That’s okay, everyone who ever read Graham v Deere. knows (or should know) the term is meaningless.
As to the test of determining whether additional limitations are “sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself,” the “well-understood, routine, and conventional” language is nonsense. The language should relate to whether or not the additional limitations are inherently necessary to practice an abstract idea. Judge Rader hit on this in his own Alice Corp. analysis.
That said, don’t blame the SCOTUS entirely for Bilski. The CAFC did its own rewrite of s101, and the SCOTUS rightfully shot the machine-or-transformation test down. However, once it was determined that business methods were a process under s101, the claims SHOULD have been addressed under s103. See In re Venner. Granted I understand the CAFC was constrained by the APA, but I am acutely aware of two instances in the last few years where the CAFC ignored the APA when considering a s101 rejection and not a single CAFC judge did anything on petition for rehearing.
That said, welcome to the club of frustrated jurists – the difference being that it is our clients who directly suffer at the courts’ maladministrations of Alice/Mayo.
Paul ColeJanuary 24, 2019 01:14 pm
Judge Michel’s hopes could be undone at a stroke if the Supreme Court grants certiorari in Berkheimer and hands down another negative decision.
The superb brief filed before the Supreme Court on behalf of Berkheimer stands in stark contrast to disgracefully negative amicus briefs filed on behalf of the Electronic Frontier Foundation, T-Mobile and Sprint Spectrum, the Computer and Communications Industry Association, Engine Advocacy, Askeladden and Check Point Software Technologies. I had been sceptical of comments to this effect up to now, but this disgraceful anti-patent chorus comes as a revelation. Unfortunately the certiorari application appears to have received little attention in the blogs, and pro-patent amicus briefs are unfortunately missing.
It is greatly to be hoped that Director Iancu and the USPTO will take a strongly pro-patentee position and that this will be reflected in the brief to be filed by the Solicitor General in order to restore balance to the docket.
Appearance of …January 24, 2019 11:41 am
I am a big supporter of the 2019 Revised Patent Subject Matter Eligibility Guidance.
However, the USPTO is also publishing, on the same website, and on the same January 7, 2019 date, the new: “Subject Matter Eligibility Examples 37 to 42”. Some of these examples (See example 37 claim 3) continue older practices, such as finding a claim ineligible at new step 2A prong 2 because it recites “a generic processor”.
This is unfortunate, particularly because Example 37 claim 3 is so short and so vague that it would fail under 102, 103, and 112 as well.
This directly contradicts the 2019 guidance that “revised Step 2A specifically excludes consideration of whether the additional elements represent well understood, routine, conventional activity”.
Thus, at least some of these new examples appear to act to undermine the 2019 guidance. I recommend that the USPTO and the patent community review these new examples, and consider corrective action.