“The new guidance affirms that the USPTO is no longer taking the case-comparison approach to determining whether a claim recites a judicial exception and instead uses enumerated groupings of abstract ideas, [since] Article III cases on patent eligibility have become both inconsistent and too numerous to be manageable.”
On Thursday, October 17, the USPTO issued new patent eligibility guidance. The new guidance discusses and elaborates on the 2019 Revised Patent Subject Matter Eligibility Guidance (PEG) that was issued on January 7, 2019.
The new guidance begins by stating that “all USPTO personnel are expected to follow the [PEG].” This statement is somewhat helpful given that some eligibility rejections still do not apply the PEG.
Step 2A, Prong One – Whether the claim recites a judicial exception
After making the statement above, the guidance begins clarifying certain items from the PEG. In terms of Step 2A, Prong One regarding whether a claim “recites” a judicial exception, the guidance notes that a claim can recite more than one judicial exception. The judicial exceptions may be distinct in that there might be separate judicial exceptions in different claim elements. In other instances, there might be two judicial exceptions at play throughout the claim, in which case the examiner should identify the claim as reciting both and make the analysis clear on the record.
The new guidance also affirms that the USPTO is no longer taking the case-comparison approach to determining whether a claim recites a judicial exception and instead uses enumerated groupings of abstract ideas. This is based on the rationalization that Article III cases on patent eligibility have become both inconsistent and too numerous to be manageable, and that “the enumerated groupings are firmly rooted in Supreme Court precedent as well as Federal Circuit decisions interpreting that precedent.”
To review, the groupings themselves are (1) mathematical concepts, (2) certain methods of organizing human activity, and (3) mental processes. The guidance notes that these groupings are not mutually exclusive and then endeavors to provide additional information about each one.
i. Mathematical concepts
Regarding mathematical concepts, the guidance indicates that courts have declined to distinguish between different types of math—namely, mathematical relationships, mathematical formulas or equations, and mathematical calculations. However, “[w]hen determining whether a claim recites a mathematical concept…examiners should consider whether the claim recites a mathematical concept or merely includes limitations that are based on or involve a mathematical concept. A claim does not recite a mathematical concept…if it is only based on or involves a mathematical concept. For example, a limitation that is merely based on or involves a mathematical concept described in the specification may not be sufficient to fall into this grouping, provided the mathematical concept itself is not recited in the claim.”
The guidance then defines each of the mathematical categories themselves, beginning with mathematical relationships: “A mathematical relationship is a relationship between variables or numbers. A mathematical relationship may be expressed in words or using mathematical symbols.”
For mathematical formulas or equations, the guidance indicates that “[a] claim that recites a numerical formula or equation will be considered as falling within the ‘mathematical concepts’ grouping. In addition, there are instances where a formula or equation is written in text format that should also be considered as falling within this grouping.”
For mathematical calculations, “[a] mathematical calculation is a mathematical operation (such as multiplication) or an act of calculating using mathematical methods to determine a variable or number, e.g., performing an arithmetic operation such as exponentiation.”
ii. Certain methods of organizing human activity
Turning to the second class of abstract ideas – certain methods of organizing human activity – the guidance indicates that the term “certain” qualifies the grouping: “First, not all methods of organizing human activity are abstract ideas…Second, this grouping is limited to activity that falls within the enumerated sub-groupings of fundamental economic principles or practices, commercial or legal interactions, managing personal behavior, and relationships or interactions between people, and is not to be expanded beyond these enumerated sub-groupings except in rare circumstances…Finally, the sub-groupings encompass both activity of a single person…and activity that involves multiple people (such as a commercial interaction), and thus, certain activity between a person and a computer…may fall within the ‘certain methods of organizing human activity’ grouping.”
As for fundamental economic practices in particular, the new guidance notes that under the PEG, fundamental economic principles or practices are considered to be a certain method of organizing human activity where they describe subject matter relating to the economy and commerce.
The guidance then turns to the human activity of commercial interactions and legal interactions, indicating that they include subject matter relating to agreements in the form of contracts, legal obligations, advertising, marketing or sales activities or behaviors, and business relations.
Next, the guidance considers managing personal behavior or relationships or interactions between people, noting that those concepts include social activities, teaching, and following rules or instructions.
iii. Mental processes
As for the third grouping of abstract ideas—mental processes—the guidance unsurprisingly remarks that both product and process claims can recite a mental process. It then defines mental processes as “concepts performed in the human mind, and examples of mental processes include observations, evaluations, judgments, and opinions.”
The guidance then notes that “[c]laims do not recite a mental process when they do not contain limitations that can practically be performed in the human mind, for instance when the human mind is not equipped to perform the claim limitations.” According to the guidance, this might include a claim to detecting suspicious activity by using network monitors and analyzing network packets, or a claim to a specific data encryption method for computer communication involving a several-step manipulation of data.
iv. Additional abstract ideas
As many of you might know, the PEG also provides another path for patent eligibility rejections. Specifically, it allows for rare circumstances where a claim is rejected as reciting an abstract idea beyond one of the enumerated classes above. However, Tech Center Director (TCD) approval must be received to make such a rejection.
The new guidance calls these other potential abstract ideas “tentative abstract ideas” and sets forth basic procedure for the TCD and examiner to follow. In doing so, the guidance also notes that once an Office Action issues with such a rejection, the public will be notified, possibly via publication on the USPTO’s website.
Additionally, the guidance also indicates that an interview with a TCD that authorized such a rejection is not necessary because “the examiner retains the authority to withdraw or maintain rejection upon consideration of applicant’s reply. The examiner is not required to obtain TC Director approval to withdraw or maintain such a § 101 subject matter eligibility rejection.”
Step 2A, Prong Two – Whether the claim recites a practical application for the judicial exception
Next, the guidance turns to “Prong Two” of Step 2A—evaluating whether any judicial exception found in a claim is integrated into a practical application and therefore makes the claim patent-eligible. Step 2A, Prong Two is a newer portion of the patent eligibility analysis that was initially advanced by the USPTO in the PEG itself:
“According to the 2019 PEG, the question of whether a claim is ‘directed to’ a judicial exception in Step 2A is now evaluated using a two-prong inquiry. Prong One…asks if the claim ‘recites’ an abstract idea, law of nature, or natural phenomenon…However, mere recitation of a judicial exception does not mean that the claim is ‘directed to’ that judicial exception under Step 2A Prong Two. Instead, under Prong Two, a claim that recites a judicial exception is not directed to that judicial exception if the claim as a whole ‘integrates the recited judicial exception into a practical application of that exception.’ Prong Two thus distinguishes claims that are ‘directed to’ the recited judicial exception from claims that are not ‘directed to’ the recited judicial exception.”
In affirming Federal Circuit case law, the guidance then notes that “if the additional limitations reflect an improvement in the functioning of a computer, or an improvement to another technology or technical field, the claim integrates the judicial exception into a practical application and thus imposes a meaningful limit on the judicial exception. No further analysis is required. The claim is eligible at Step 2A.”
This highlights the importance of drafting a background section and detailed description to highlight the applicant’s improvement to the underlying technology. Courts often look at these sections for deciphering such improvements, and indeed the guidance itself indicates that the specification should be evaluated for such purposes while also commenting that the improvement should not be set forth in mere conclusory fashion. Also of note to practitioners is the guidance’s comment that if the specification sets forth an improvement in technology, the claim must be evaluated to ensure that the claim itself actually reflects the disclosed improvement.
The guidance also indicates that the examiner need not make a qualitative judgment on the merits of the asserted improvement. However, if the examiner alleges that there is no improvement at all then an applicant may then submit a declaration providing testimony on how the skilled artisan would interpret the disclosed invention as improving technology.
Appeals to the Patent Trial and Appeal Board
One final item of note is that the guidance indicates that when appealing a patent ineligibility rejection to the Patent Trial and Appeal Board, an applicant may rely on the PEG in support of his or her argument against the rejection even though the PEG itself does not constitute substantive rulemaking and does not have the force of law. Thus, the appeal should still be directed to the rejection under Section 101 itself rather than any failure to follow the PEG, but the PEG may still be used as argument against assertions of patent ineligibility.
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