“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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21 comments so far.
EllaresNovember 3, 2019 11:57 am
I recently had a USPTO examiner state, point blank during a telephone interview, that examiners do not need to follow the USPTO’s patent eligibility guidelines because the guidelines do not actually have the force of law behind them. This examiner has repeatedly disregarded claims that are plainly patent eligible based on multiple versions of the guidelines – and nothing will shift the behavior of such examiners unless Congress acts accordingly. USPTO examiners themselves are a major reason why I see an ever-increasing number of clients focusing on obtaining patents in non-US jurisdictions rather than the US. Many clients have simply lost interest in going down the US patent rabbit hole…
ConcernedOctober 23, 2019 05:07 pm
So noted. Thank you!
BOctober 23, 2019 02:34 pm
@ concerned “Looking down the road, do you or any of your friends litigate infringement on a contingency basis?”
I know some people with some money that do this sort of stuff
Mark NowotarskiOctober 23, 2019 12:37 pm
I’ve been reading through the guidelines and as far as I can tell, any claim that recites a calculation (e.g. “determining a ratio of A to B”) is directed to an abstract concept. Am I missing something?
ConcernedOctober 22, 2019 05:43 pm
Thank you. We will add the above in our response to the examiner’s reply of our PTAB appeal.
Looking down the road, do you or any of your friends litigate infringement on a contingency basis? We have been in front of some real important people, feel the patent is holding up progress. Got in front of principles of Healthcare.gov in 3 days (Accenture).
Yet when the patent issues, I expect some attacks by the efficient infringers. I look like a cheap shot.
The ROI multiple is the sky even from one state and proving the infringement would be a matter of public record.
Thank you for assistance!
BOctober 22, 2019 04:43 pm
@ curious “Just an incredible story that has come a long way. And as bizarre as my story seems, a noticeable footnote is my patent attorney’s last name is Miracle, Bryce Miracle.”
Tell Mr. Miracle that I think he’s done a spectacular job as your attorney. s you know I’ve reviewed his work.
Anyway should you want to go to the CAFC I would intend that you appear at the CAFC in the front row. Using phrases like “Every single state and territorial administration has provided evidence on the record that they’ve never perform steps A, B, and/or C.” “There is an uncontroverted advantage of . . . ” “The USPTO did not address the claims as a whole”
Then state that it would take an outrageous and unethical lie to state otherwise.
CuriousOctober 22, 2019 01:06 pm
The PTO is not a policy maker. The courts are not policy makers. Neither are elected by the people. Congress is the policy maker and law as it is written should reign.
I wholeheartedly agree with this sentiment, and I have written nearly the same many times over the years. The Courts have long treated ‘interpreting the law’ as carte blanche to rewriting the laws as they see fit so as to obtain what they believe to be the “right result.” The whole judicial ‘exceptions to statutory subject matter’ is an explicit admission that the Courts believe themselves to be superior to Congress. As Anon frequently points out, the role of writing the patent laws was given, by the Constitution, to Congress — not the Courts. The Courts are not resolving any type of ambiguity in the law. As Paul M. points out, “any” unambiguously means “any” — not “some.”
The Court’s intrusion into Patent Law has left everybody with a HUGE MESS. The lower Court’s are not sure how to implement the judicial exceptions. The USPTO is not sure how to implement the increasing conflicting Federal Circuit decisions on the matter.
The upshot of all of this is that the patent system rarely works for the small inventor. Computers and the life sciences are the dominant technologies of the 21st century, yet it is nearly impossible for a small inventor to obtain and enforce a patent on valuable technology in either of these fields. The lucky ones get their patents killed quickly before they spend too much money on them. The unlucky ones get their patents attacked so many times (and in a variety of different ways) that bankruptcy is a far likelier result than actual enforcement of the patent.
This mess is what happens when the law of unintended consequences takes over after the Courts have continued to remake the law in order to obtain what they believe to be is the “right result.”
JamOctober 22, 2019 01:05 pm
From the article: “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.”
This assumes a reviewer (court or examiner) that is not biased against your application. The risk is that the examiner or court will look to the improvement that the applicant so carefully highlighted, call that the abstract idea, and reject the claims until the applicant runs out of money. Nothing is safe from the tyranny of the court’s unlimited imagination for what can be an abstract idea or natural law.
Furthermore, the cynic may argue that the only reason the courts have identified such sections as being helpful is because the applications were drafted prior to knowledge that such sections would be helpful. Should applicants begin providing such sections purposefully as draftsmans’ tricks, the Federal Circuit and PTAB may likely distance themselves from assigning any patentable weight to such sections so as to prevent such sections from fooling the courts into validating claims that “clearly” were meant to be directed to an abstract idea or natural law.
Paul MorinvilleOctober 22, 2019 12:06 pm
This guidance is an affront to the constitutional framework. There are 3 coequal branches of government. Congress say “any” process, machine, etc is patent eligible subject matter. The courts encroaching on the power of Congress created exceptions to “any”, thus rewriting law for their own political beliefs. Now the administrative branch bows to the court ignoring Congress apparently to craft their own policy based on their own political beliefs.
The PTO is not a policy maker. The courts are not policy makers. Neither are elected by the people. Congress is the policy maker and law as it is written should reign.
Congress remains silent while its power is taken leaving our innovation engine in shambles.
The PTO has a constitutional duty to define “any” as “any”. The problem is then isolated to the courts where is can be disrobed.
CuriousOctober 22, 2019 11:57 am
As I’m going through the October 2019 updates, it is again clear that the USPTO doesn’t understand the case law. It gives guidance as to whether claim language “recites” an abstract idea. However, the phrase used in Alice is “directed to.” The USPTO’s interpretation of “recites” appears to be much closer to “involves an abstract idea,” which SCOTUS stated in Alice is not enough to render an invention patent ineligible.
There is this little statement that I also find interesting:
As further explained in the 2019 PEG, the Office has shifted its approach from the case-comparison approach in determining whether a claim recites an abstract idea and instead uses enumerated groupings of abstract ideas.
Instead of being confined to specific cases, the USPTO is using the “groupings of abstract idea” — which are very poorly defined and are (unsurprisingly) applied extremely broadly in certain art units (I’m looking at you TC3600).
Regarding the phrase “fundamental economic practice,” they have essentially read the term “fundamental” out that phrase while mis-citing In re Smith and OIP Techs in Footnote 24.
The discussion of “Certain Methods of Organizing Human Activity” includes incredibly sweeping definitions that would encompass anything that could possibly be described as a business method.
That being said, the discussion of the whether the invention is an “improvement” includes language I can use. I highly recommend to any practitioner that is preparing a patent application to have a portion of the specification that: (i) clearly describes the invention as an improvement over prior technology and (ii) explains why the claim language provides that that improvement. Enfish has been around for 3 1/2 years now. It is inexcusable why any patent application drafted in the meantime would not describe their invention as an improvement (while providing details as to that improvement).
ConcernedOctober 22, 2019 12:16 am
Those are not very good odds from a worldly standpoint.
This invention and its journey started 43 years ago. I received a call for employment on a Monday night and was not seeking any employment. I was personally chauffeured to the interviewed the next day and started my career the following day. I started on a Wednesday within 36 hours of the phone call. This was a government job. Frankly I do not even think the Governor could hire his son in 36 hours and start him on a Wednesday.
My career soared even though I had no formal training. I was forced into retirement 29 years later due to political reasons. My pension was saved only due to the fact of my lightening fast hire put me within the retirement window. Then this idea and its solution popped in my head.
There is a higher authority in play that is greater than any court in this land. I have faith this idea will serve people with disabilities and their caregivers despite the long worldly odds.
Just an incredible story that has come a long way. And as bizarre as my story seems, a noticeable footnote is my patent attorney’s last name is Miracle, Bryce Miracle.
It has been my privilege to be a part of this effort, albeit the nonsense of the United States patent system. The necessary doors shall be opened. I am just a average person whose steps were ordered many years ago on an idea way beyond myself.
Thank you for your support!
BOctober 21, 2019 07:27 pm
Our PTAB brief was filed, the examiner responded, now we are re-responding. Then off to PTAB.
There is a 1-in-6 chance the PTAB will do the right thing unless you get certain APJs who are criminally stupid and affirm all rejections.
There’s about a 4% chance the CAFC will give you a fair shot. You’ll need to get Judge Moore and one other sane judge on the panel.
ConcernedOctober 21, 2019 06:00 pm
Thank you for your offer. You are on my mind if we go to the CAFC.
Our PTAB brief was filed, the examiner responded, now we are re-responding. Then off to PTAB.
I will keep in touch. Thank you.
BOctober 21, 2019 01:10 pm
@ concerned “My application had one examiner, who apparently was frustrated by my arguments, so the USPTO switched examiners and brought in their closer. The closer throws up new arguments and dodges the rebuttal arguments.”
Tell me if you want to go to the CAFC. I’ll make it cheaper for you than going to the PTAB.
The only way you can lose is if the CAFC lies about the factual record and ignores 75% of your claim language.
concernedOctober 21, 2019 11:31 am
I see no change. The examining core will not follow these guidelines either.
My application had one examiner, who apparently was frustrated by my arguments, so the USPTO switched examiners and brought in their closer. The closer throws up new arguments and dodges the rebuttal arguments.
Our good friend Benny responses to my following questions on a different article which I posed to the USPTO:
Question #1: If the tracking of the parent of an adult (my inventive step) is so routine, so well understood and so conventional, please name at least one situation in commerce where the tracking of a parent of adults occurs? Any field of commerce to include a field of commerce outside my field.
Question #2: The Examiner admits in writing on page #5 that the process solves a business problem. How can a process solve a business problem, beyond of reach of hundreds of thousands of working professionals and experts for decades as the official record has been documented, and not be a new and useful process (or have a practical application?) The examiner tried to answer the preceding question by simply stating it is abstract, which is insulting to most people’s intelligence. The 101 statute (silent), and SCOTUS in Benson and the USPTO Director state verbatim that a new and useful process can be abstract if it is new and useful process with a practical application.
Benny’s response in part:
“That’s my opinion, it may not be in line with US patent law, but you have a weak case.” Benny also did not directly address the two questions.
Like Benny, the USPTO opinions may not be in line with US patent law (no kidding) so they reject, reject and reject and fight, fight and fight.
Frankly, I am using their own criteria and buzz phrases to establish my “alleged” weak case, yet get nowhere fast as there is no Rule of Law, only a Rule of Opinions. Apparently my solution is not “wow” enough even though it is the long sought solution. Symbolism over substance is the order of the day.
Here comes another official USPTO memo, that only serves in an official capacity, and will not have any “practical application” during prosecution.
AnonOctober 21, 2019 08:56 am
You are absolutely correct (just think Cleveland Clinic even before the 2019 protocol and the latest update).
These gyrations need action by Congress.
And I would posit not just the Tillis resets, but that extra step of non-original jurisdiction stripping to remove the Supreme Court as well as a reset of an innovation minded Article III court to replace the fire-hose trainer CAFC.
Lost In NorwayOctober 21, 2019 05:22 am
Thank you for the article, I just wish that I could feel any optimism. Even if both the USPTO examiners and the PTAB followed these guidelines, the fact is that the higher courts will simply keep plodding along business as usual; invalidating patents under 101 and Alice/Mayo.
BOctober 21, 2019 12:07 am
“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 too numerous to be manageable.”
It’s not that the cases are too numerous. The problem is that the cases contradict one another.
Example: McRO v Bandai: Math plus abstract idea that leads to improvement = patent eligible.
RecogniCorp v. Nintendo: Math plus abstract idea that leads to advantage = not patent eligible.
Judges Reyna and Stoll on both panels.
This is a well-written article, but I doubt that the PTAB will follow the guidelines
BOctober 20, 2019 11:46 pm
@ Pro Say: “Patent Office leadership is to be thanked for their almost herculean repeated efforts to make sense out of the senseless — and unconstitutional — Section 101 / eligibility morass that American innovation has been drowning in for years now.”
I think you’d appreciate this!
Earlier this month, Bhagat doubled down on her bid for review, pointing to a New York Times op-ed stating that “improving American nutrition would make the biggest impact on our health care.” But the government has nonetheless stopped Bhagat from putting out her patented solution by “mutilating” patent law, making certiorari “unquestionably warranted,” she said.
However, the justices were unpersuaded, and denied her petition for rehearing Tuesday.
Bhagat’s attorney, Burman Y. Mathis, told Law360 in an email that he was both “disappointed and not surprised” by the high court’s decision not to take up her appeal.
“Disappointed because the Supreme Court once again refused to address the unconstitutional and lawless nature of the Alice/Mayo test. Not surprised because the Supreme Court has refused to address the unconstitutionality and lawlessness of Alice/Mayo for the better part of a decade,” Mathis said. “It’s as if the courts magically forgot that they lack the constitutional authority to rewrite statutes from the bench.”
A USPTO spokesman declined to comment Tuesday.
Pro SayOctober 20, 2019 09:06 pm
Patent Office leadership is to be thanked for their almost herculean repeated efforts to make sense out of the senseless — and unconstitutional — Section 101 / eligibility morass that American innovation has been drowning in for years now.
That said, the Office’s contention that a claim can contain more than one judicial exception is foundationally infirm.
As the Supreme Court clearly, explicitly, and unambiguously repeatedly instructs in Alice, Mayo, and Bilski (note just one stated idea / concept in each seminal Court decision with said one idea / concept being directed to all the claims at issue):
“We hold that the claims at issue are drawn to THE abstract IDEA of intermediated settlement …” Alice at 2352
“First, we determine whether the claims at issue are directed to ONE of those patent-ineligible concepts.” Alice at 2355
“We must first determine whether the claims at issue are directed to A patent-ineligible concept.” Alice at 2355
“The claims at issue in Bilski described A method for hedging against the financial risk of price fluctuations.” Alice at 2355
“It follows from our prior cases, and Bilski in particular, that the claims at issue here are directed to AN abstract idea.” Alice at 2356
“Because the claims at issue are directed to THE abstract IDEA of intermediated settlement …”Alice at 2357
“First, we determine whether the claims at issue are directed to ONE of those patent-ineligible concepts.” Mayo at 1296-1297
Moreover — and in sharp contrast to the contentions of many Board and Court decisions — there is not a word in any Supreme Court decision about abstract ideas being characterized at different levels of abstraction being acceptable in the eligibility analysis.
Nothing explicit. Nothing implicit.
No room in any of their decisions for different levels of abstraction being acceptable.
In each case the Supreme Court stated one concept and stood by that one concept.
Start to finish.
Beginning to end.
Never wavering in their rulings.
The Patent Office and our Courts are legally required to do the same:
State one concept and stand by it.
Meaning; and with all due respect to the CAFC; Apple, Inc. v. Amaranth, Inc. and their progeny — including the widespread reliance thereon — is also foundationally infirm.
SCOTUS never intended for patent applicants and patent owners to be placed in the legally and factually untenable position of having to play “abstract idea whack-a-mole.”
Once concept. All the claims.
Had SCOTUS had wanted it to be otherwise, they would have said so.
They. Did. Not.
AnonOctober 20, 2019 03:12 pm
“become too numerous to be manageable.”
Sometimes — as here — politeness is not only misleading, it becomes a part of the problem.
The REAL problem is NOT that the cases are “too numerous” to be manageable.
That LIE serves no one.
There are (and remain) countless multipliers of other cases NOT “too numerous” to be manageable.
What IS not “manageable” is the Gordian Knot of conflicting and thus incomprehensible “Common Law” of patent law eligibility.
We should NOT “sugar-coat” what SHOULD be emphasized as the problem.