Iancu: USPTO Guidance Gets 101 Right; Time for Courts to Follow Suit

“If the courts do not adjust, and Iancu says he says sees no reason to suggest they will, the only hope will be legislative reform. But still, because of the USPTO efforts to create standards, Iancu believes the Office has turned the corner on 101.”

Panelists at Monday’s IIPCC event on Capitol Hill.

On Monday, the International Intellectual Property Commercialization Council (IIPCC) gathered patent office and Federal Circuit experts, including current USPTO Director Andrei Iancu and former Federal Circuit Chief Judge Randall Rader, at the Capitol Building to discuss “The State of Innovation in the Union.” The panel was moderated armchair style and resulted in some poignant questions and answers from a few of the best-known players in the patent world.

Rowing the Right Way

I attended the event, and at the end of the panel on which he participated I had the opportunity to ask Iancu what he thought about the current roundtables taking place in Congress and the efforts to reform Section 101. I reminded him that, at this time last year, he was giving speeches and testifying to Congress, saying to anyone who would listen that 101 should be something that we are all talking about and considering from a variety of angle. Then, as a newly minted Director, Iancu would tell Congress that if and when they were interested in engaging on 101 reform he and the Office would be ready to offer any assistance necessary. Congress seems to be working on the precursor to what will soon become legislative language. So, where does the Director stand on the issue today?

His response was both correct, and something of a wake-up call. The final takeaway I think was that Iancu’s the only hope we’ve got, at least for the foreseeable future.

“In the end, all three branches need to be rowing in the same direction on something like 101,” Iancu said. An obvious if seemingly cautious statement, but he did not stop there.

“Let’s assume there’s legislation passed tomorrow; it will immediately be challenged, subject to interpretation, and years of litigation and debate will ensue about what each and every new word means. If the courts continue to think that it’s their job to say diagnostics are not patent eligible in the United States, or that certain computer algorithms are not eligible, you can almost always find ways to interpret almost any words. I suppose you could eliminate 101 completely or something, but I suspect that, no matter what the new statute says, you’re going to have a long period of debate, so it’s important for the courts to go in the same direction.”


As Iancu noted, none of that is going to happen anytime soon. “In the meantime, we have a patent system,” he added. “Every day we have to make decisions, and patent owners have to make business decisions now, today, tomorrow, next week, next month; what do we do now? It would be great if the courts would just let us do what we are doing. That’s not to say that legislation isn’t needed—it may be.”

If the courts do not adjust, and Iancu says he says sees no reason to suggest they will, the only hope will be legislative reform. But still, because of the USPTO efforts to create standards, Iancu believes the Office has turned the corner on 101. “I cannot imagine going back to a world where we were prior to our guidance,” he said.

And frankly, neither can I. The Federal Circuit dismantling the USPTO guidance as it applies to Step 2A and Step 2B would return the industry to a place where the patent eligibility inquiry is purely subjective. So much of what is abstract and what is innovative is by its very nature subjective, even with the layering of objective criteria. To remove the objective criteria would be unthinkable, but the Federal Circuit hasn’t exactly operated as a rational actor post-Alice. If the Federal Circuit wants to distinguish Alice and Mayo they can. The fact that these highly regarded, eminently qualified jurists do not distinguish the non-innovations present in Alice and Mayo from discoveries of great renown and paradigm shifting innovation is a choice.

I followed up my initial question by asking Iancu what people like us – patent practitioners and innovators on the front line – should be doing from a practical perspective in this uncertain time? He said, in a nutshell, follow the guidance. “I believe our guidance is fully compliant with case law today. If it’s followed, I believe a patent will issue that should be sustained by the courts, applying the court cases to date.”

While others will disagree, I share Iancu’s belief that the guidance is fully compliant with the case law—at least what the Supreme Court has actually decided. The problem is the Federal Circuit has continued to ignore the Supreme Court caution that an expansive reading of Alice and Mayo would swallow all of patent law. A second problem of equal importance is the irreconcilable nature of Supreme Court precedent. While the Supreme Court likes to say that all of its prior patent eligibility precedents remain good law, that is an impossibility. But the fact that it is an impossibility to reconcile all of the Supreme Court’s precedent into a coherent singular test is precisely why the guidance is faithful to the cases. Everyone has to pick and choose which cases they give the most weight to when deciding an issue, so as long as the USPTO guidance is true to the holdings of the cases – which the guidance is – then the guidance represents the best hope for a sensible objective approach.

As far as the larger policy debate, Iancu urged practitioners to stay involved. “It’s really important for everyone to hear how important this issue is for industry, inventors, and for the public to understand what patents are out there to invest in or invent around. We need all voices to be heard.” I refrained from mentioning that my particular voice was excluded from that debate, at least publicly.

Figure it Out or Face the Consequences

As the Director pointed out earlier in the event, it’s is especially urgent that we resolve the problems one way or another, and soon. “Where will we be in five years?” Iancu asked. “We know, just look at the trends.”  He explained that, each year for the last decade, American companies have filed 3% more patent applications than the year prior in the technical fields that China identifies in its Made in China 2025 initiative—- robotics, AI, biotech, etc. In China, that figure is 24% growth year over year, which Iancu pointed out, when compounded, tells the tale of where we will be if trends remain uninterrupted.

Former Federal Circuit Chief Judge Randall Rader reiterated this point in closing remarks reflecting on the issues, and the event. Rader asked attendees to compare the era in which the Bayh-Dole Act and the Federal Circuit were created, and the Supreme Court’s response to those developments with cases like Chakrabarty and Diehr, to the last decade or so.

“In the legislative arena, we had to focus most on the creation of the PTAB, which prides itself on eliminating some 60% to 80% of the patents that are important enough to be in litigation. In the judicial arena, you have cases like eBay, Lexmark, Alice, Mayo, and Myriad, all of which have severely handicapped the innovative capacity of the United States.

And now, compare the current era to the great challenge we face, according to our panel, with China. In just the last three weeks to a month you see the creation in China of an appellate court like the CAFC; an announcement by the country’s Standing Committee of a revision to their trade secrets law to enhance civil penalties; a revision of their trademark law to focus on actual use; and you’ve seen in their judicial arena statistics which show that China is the nation with the best chance of winning as an alien litigator in the world, not the United States.

Looking at those two comparisons, don’t we have an even greater imperative to take some of the advice we’ve been given today in both the judicial and legislative arenas and see if we can’t revive the spirit of the [19]80s?”



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Join the Discussion

16 comments so far.

  • [Avatar for NJ Thomas]
    NJ Thomas
    May 10, 2019 12:48 pm

    If Director Iancu is making things right, why are TC unit 3600 rejections still above 90%?

  • [Avatar for NJ Thomas]
    NJ Thomas
    May 10, 2019 10:25 am

    The outline that Coons and Tillis is too complicated and will only result in years more uncertainty in it’s application in the PTO and courts. There is much simpler language that Congress can pass.

  • [Avatar for NJ Thomas]
    NJ Thomas
    May 10, 2019 10:10 am

    If Iancu is doing such a good job, why are TC 3600 rejections still at over 90%?

  • [Avatar for Anon]
    May 9, 2019 12:55 pm

    Of note to Night Writer’s post is that South Korea used the (then strong-patent inclined) US as its model foundation.

    (for the most part, as there are certain cultural adaptations which leads to a slightly different Chaebol effect)

  • [Avatar for Night Writer]
    Night Writer
    May 9, 2019 09:38 am

    When analyzing China it is good to also consider South Korea. South Korea has a pretty good innovation engine and a great economy. Many say that China has focused on South Korea as a pattern to build an innovation engine. And, indeed, we may see South Korea surpassing the USA before China does.

  • [Avatar for Appearance of ...]
    Appearance of …
    May 8, 2019 10:31 pm

    Just got a PTAB ruling today. In my case, it was clear that they were not following the new 2019 guidelines honestly.

    The case was for an advertising-related mobile phone and internet technology patent application. The claims all had many hardware limitations.

    PTAB ruled that it was “abstract” on the basis that it was a “mental process” and that in their opinion, it was not integrated into “a practical application.”

    Although the ruling did use a number of the 2019 “buzzwords”, the underlying logic was unchanged from the standard “Alice” rejection logic. Old cases, such as Ultramercial Inc. v Hulu were still cited.

    PTAB’s process of “reading the claim as a whole” was to merely recite, “as a whole”, and then ignore the actual claim limitations.

    And so it goes…

  • [Avatar for Clifton David Croan]
    Clifton David Croan
    May 8, 2019 05:00 pm

    Will we pay a little, or, a lot, for a “nearly perfect” USPTO ?

    A famous inventor once opined, “Even a small leak (‘expense’) will sink a great ship.”

  • [Avatar for D.H.L.1]
    May 8, 2019 02:45 pm

    Legislative reform on 35usc101 will not change until 2030 that will be when the 20-year U.S.A. control over my invention ends. its the subject matter that the prior art does not process.1st March 2011 she was appointed as my pro bono.

  • [Avatar for Joe]
    May 8, 2019 01:45 pm

    Rader remarks are pointless scaremongering. Like comparing a fat guy with a starving man. Give them both adequate healthy food. The starving man will gain weight, while the fat guy may lose weight. Both are coming back into balance. Still much better to be the fat guy than the starving one.

    The US is returning to balance. Nothing to be alarmed about.

  • [Avatar for George D. Morgan]
    George D. Morgan
    May 8, 2019 01:10 pm

    I agree that the courts, USPTO, and legislature need to be in sync, but one thing missing from the discussion is public opinion. From the start, there has been resistance to the notion that “software” should be patented,. There has not been sufficient rebuttal of the arguments against “software patents.” Worse, most of the arguments against “software patents” are really just arguments against all patents.Change will no occur until the public is convinced as to the value of patents (and other forms of intellectual property).

  • [Avatar for PTO-Indentured]
    May 8, 2019 11:36 am

    China tech’s (proven) new best friend: ‘Payola-enhanced’ U.S. patent policy

    Better than an imperialist-marketed opium, and the intended lethargy it once achieved in China:

    A handful of tech elites in and/or operating in the U.S. don’t just have a good deal of money. They each have more money (cash on hand) than any company in the recorded history of mankind. So much so, that no more than a fraction of 1% is needed to regularly provide U.S. politicians, on both sides of the aisle, six-figure campaign ‘contributions’. Once ingested two or three times, an intended addiction ensues accompanied by a known, proven side-effect: legislative lethargy.

    This is a tough equation to crack, because it isn’t just a matter of what a politician under the influence ‘does’, it’s that they can each do nothing, knowing there’s little to no paper trail to a ‘not doing’ (patent policy-wise), particularly when each politician looks around them surmising, “I see, mostly, that none of my colleagues are speaking up to heal the U.S. patent system, so I too, following their example, simply chose to do the same. Oh…, and a regular six-figure infusion reduced campaigning-trail doesn’t hurt either.”

    Apparently an ‘As you do, you will be done by’ rebound-effect has also resulted, wherein each of the tech elites, often now — in contrast to one new Chinese company or another — is shown to be naked of a ‘Next Big Thing’ (wrought by innovation lethargy, or incapacity) and China pricing and swiftly-advancing tech improvements eating their lunch. Apple’s answer (following a half-trillion dollar stock devaluation): ‘services’ — good luck maintaining here or abroad, an effective barrier-to-entry there.

    Contrary to our current, prevailing short-sighted handling of U.S. patent policy, China has a long history of being able to see the long-run. China now is not, merely filing more patents internationally than any other country, their goal in less than a couple years is to be filing 3X more. An excellent counter-measure to (antithetical to) lethargy. While we fumble, and remain mired down in IP ambiguities and hair-splitting, China (and other countries, internationally) take note, moving ahead full-steam.

  • [Avatar for Anon]
    May 8, 2019 09:55 am

    See post 1 at: https://ipwatchdog.com/2019/01/28/director-iancu-training-101-guidance/id=105649/

    (this is on top of the fact that the courts have outright rejected Office examples of patent eligibility – See Cleveland Clinic)

  • [Avatar for Anon]
    May 8, 2019 08:49 am

    While perhaps laudable (for several reasons), Director Iancu is in all kinds of “Wrong” here.

    Unless we acknowledge that the scoreboard is broken, the scoreboard will never be repaired.

  • [Avatar for Concerned]
    May 8, 2019 02:40 am

    I thank the Director and IP Watchdog for their patroitic efforts.

    I will see if PTAB honors the new 101 guidelines, we are arguing as much. PTAB is supposedly bound by such as part of the USPTO.

    Patent Tech Unit 3600 is already swallowed by Alice @ 3% allowance approval, why is SCOTUS not stepping in to correct? (Rhetorical)

  • [Avatar for IPdude]
    May 7, 2019 09:54 pm

    I applaud Director Iancu for all his efforts. Unfortunately, money controls Congress, and Google (and the tech cabal) have much more than big pharma and all other pro-patent companies. It seems like Google is trying to take advantage of the current 101 legislative initiative to once and for all make software patents ineligible. With that in mind, I’m hoping the pharma lobby has enough pull to at least keep new legislation from passing. I have zero confidence in legislative reform in favor of the patent community. Perhaps scotus with the two new appointees can reverse course. Not holding my breath.

  • [Avatar for Pro Say]
    Pro Say
    May 7, 2019 09:45 pm

    The year is 2030.

    Welcome to Chinamerica.