IP Practice Vlogs: Delving into Some USPTO Examples on Patent Eligibility and Whether PERA Will Eliminate the Technological Improvement Test

The technological improvement test is used by the U.S. Patent and Trademark Office (USPTO) and the U.S. Court of Appeals for the Federal Circuit to determine the issue of subject matter eligibility. Of all the tests for a showing of something more or practical application – machine transformation, machine implementation, data transformation – technological improvement is probably the most popular and oft-used by applicants because it has the clearest standards. As you probably already know, the technological improvement test used by the USPTO looks for a technological problem for which there is a technological solution and the claims recite a technological improvement therefor. Further, the prongs of the technological improvement test require framing the issues in terms of how a computer or a machine functions. In contrast, the machine transformation and the machine implementation tests are less clear as to the sufficiency of machine transformation or implementation to meet practical application. There is a great deal of nuance to the technological improvement test. Why are some computer-implemented inventions found to have technological improvement but others don’t?

In the latest IP Practice Vlogs video, I will asses technological improvement, specifically in the context of software patents, as this test greatly impacts the patentability of software and AI applications. We will go through some of the USPTO’s examples accompanying the Patent Eligibility Guidance (PEG) where technological improvement is preeminently featured, namely some exemplary claims in examples 45, 46 along with the designated informative Patent Trial and Appeal Board (PTAB) decision, Ex Parte Kimizuka. These examples were issued after 2019, which is after the Berkheimer v. HP memo.

Caution with Using Technological Improvement

After going through the examples, you will see that if you as the applicant are really trying to meet the steps of the technological improvement analysis, you also have to get into technological problems in order to meet the USPTO’s framework of tying technological improvement to a specific technological problem and technological solution. However, if your invention has anything to do with safety or has any kind of safety implications with respect to its use or implementation, you need to be very wary of talking about problems or improvements. Improvements imply preexisting knowledge of defects. And in product liability, the plaintiff and their attorneys are all about establishing that you knew about said defects.

I’m not a big fan of the technological improvement test because I believe it will ultimately prove to discourage innovative disclosures. And, as you will see from the examples discussed, technological improvement is really a Section 102/103 question no matter how much the USPTO tries to shove the matter into practical application.

Will the Patent Eligibility Restoration Act (PERA) of 2023 Undo Technological Improvement?

Will the newly proposed Section 101 bill change technological improvement? Probably, at the Federal Circuit. In fact, the proposed bill may even eliminate the test altogether at the judicial level. But how the bill affects technological improvement at the USPTO is debatable. As discussed in the accompanying vlog, the USPTO moved technological improvement to a practical application analysis, strictly away from the well-understood, routine and conventional analysis used by the Federal Circuit. This creates an interesting scenario.

In particular, the proposed bill in its current form attempts to fix 101 by means of eliminating judicial exceptions under Step 2A, and eliminating Alice’s well-understood, routine and conventional test under Step 2B. Two things are notable about the bill’s method of clarifying subject matter eligibility:

1. The bill eliminates all court-created judicial exceptions under Section 2 Part A, yet mathematical formulas and mental processes are still designated as being explicitly excluded from categories of inventions eligible for patent protection under Section 2 Part D.
2. The bill negates the well-understood, routine and conventional test to determine what is “significantly more” than an abstract idea, yet the proposal remains silent on the USPTO’s practical application analysis implemented in the 2019 Guidance that is followed by the PTAB.

The combination of these factors will likely significantly impact the Federal Circuit’s approach towards subject matter eligibility.  However, by failing to address the practical application analysis of the USPTO’s Step 2A Prong 2, the proposed bill will still leave the PTAB’s current approach of subject matter eligibility mainly intact. Therefore, the 2019 PEG may possibly shield technological improvement from the bill’s elimination of the well-understood, conventional test because it’s question of practical application under the PEG when the test ought to be eliminated entirely as being a progeny of the well-understood, routine and conventional analysis.

As much as the technological improvement test gets analogized to the technical application test in Europe, these tests are not the same. Europe implements a problem/solution framework for assessing subject matter eligibility. The USPTO adopts a problem/solution AND improvement approach. Europe does NOT require technical progress for determining patentability. But the technological improvement test does, making the U.S. test for subject matter eligibility far more different from Europe’s than many have suggested in the past.

These factors underscore the problematic nature of the continuing use of the technological improvement test and, should the newly proposed Section 101 bill pass, I hope the USPTO will update its subject matter eligibility guidance in accordance with Congress’s intent to eliminate any tests having to do with conventionality as a means of determining subject matter eligibility.