Clarity and Progress at the USPTO: The USPTO Publishes Revised Guidance on Patent Eligible Subject Matter
On Monday, January 7, 2019, a revised guidance for subject matter eligibility (USPTO Section 101 Revised Guidance) will take effect at the USPTO. With the newly revised guidance, the USPTO aims to clarify and standardize the patent eligibility analysis under the Alice/Mayo framework. Of greatest significance, the revised guidance focuses on the first step of the Alice/Mayo test and presents two main changes in the examination procedures. First, it requires examiners to categorize the recited abstract idea into a specific grouping enumerated in the guidance. Second, the revised guidance requires examiners to determine whether claims recite a practical application of a judicial exception and thus are not “directed to” an abstract idea.
At a minimum, the USPTO’s revised guidance provides a more defined framework and methodology by which patent applicants, patent practitioners and examiners can discuss patent subject matter eligibility. The revised guidance is designed to improve consistency in how claims directed to similar subject matter are evaluated for subject matter eligibility, but does so by introducing new logic to be implemented at the USPTO. Finally, the revised guidance seems poised to be a foundation for more compact prosecution and may signal additional opportunities for establishing patent eligible subject matter, especially for software inventions.
How Did We Get Here?
Historically, the USPTO analysis of pending claims for patent eligible subject matter under 35 U.S.C. § 101, or Section 101, was limited to a review of the claims of a patent application against the statutorily defined classes of eligible subject matter. With the seminal cases Alice and Mayo in 2014, however, the Supreme Court ushered in the era of a more rigorous review and analysis under Section 101 by building on its previous precedent and establishing a two-step framework to evaluate patent eligibility. The first step of the Alice/Mayo test asks whether the claim is “directed to” a judicial exception. If it is determined that the claims are directed to a judicial exception, the second step asks whether the claim recites “something more” than a well-understood, routine, conventional activity.
Over the course of five years since the Alice/Mayo test began to be applied, various district courts and the Federal Circuit have created a body of precedent as to how the two‑step framework should be applied in general and have provided specific examples of patent eligible and patent ineligible subject matter. As acknowledged by the USPTO in the revised guidance, however, “[t]he growing body of precedent has become increasingly more difficult for examiners to apply in a predictable manner, and concerns have been raised that different examiners within and between technology centers may reach inconsistent results.” The USPTO and patent practitioners expressed a need for clarity and predictability in analysis of patent subject matter eligibility during patent application prosecution. Thus, the newly revised guidance was necessary to improve consistency and predictability of Section 101 analysis.
While the revised guidance touches on multiple aspects of the Alice/Mayo test, the fundamental changes to USPTO procedure relate to the identification and grouping of subject matter considered to be abstract and how the USPTO determines whether claims are directed to such abstract subject matter.
Do The Claims Recite Matter Falling Within an Enumerated Grouping of Abstract Ideas?
To achieve the goal of increased consistency and predictability, the revised guidance states that “[c]laims that do not recite matter that falls within these enumerated groupings of abstract ideas should not be treated as reciting abstract ideas....” In that regard, the revised guidance “extracts and synthesizes key concepts” identified by the courts as abstract subject matter by enumerating three subject matter groupings that have been held to be abstract subject matter, namely, mathematical concepts, certain methods of organizing human activity, and mental processes.
Practically, each of the enumerated groupings is based on established case law, and the groupings do not appear intended to substantively expand or contract the scope of subject matter considered to fall into one of the enumerated abstract categories. However, the revised guidance appears to be poised to limit the ability for pending claims to be characterized as simply “abstract” without a clear connection to the enumerated groupings. From the revised guidance, it is still unknown whether claims that may have been characterized as abstract under the previous USPTO guidance, such as claims characterized as relating to "data manipulation" or "an idea of itself," will fall into one of the enumerated groupings of the revised guidance.
If the Claim Recites a Judicial Exception, Is the Judicial Exception Integrated Into a Practical Application?
By far the most significant impact of the revised guidance relates to requiring examiners to distinguish between claims reciting a judicial exception and claims directed to a judicial exception. More specifically, the revised guidance states that even if a claim recites a judicial exception (as defined in the enumerated groupings), “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” and is thus patent eligible.
The revised guidance seems to be rooted in the recent string of Federal Circuit cases that found patent subject matter eligibility for claims that previously would have been characterized as directed to an abstract idea. The revised guidance specifically provides a new two-step review to determine whether a claim recites additional elements beyond a judicial exception and whether such elements “integrate the exception into a practical application.” Similar to the enumeration of the grouping of abstract ideas, the revised guidance has defined “integrated into a practical application” by the body of precedent and does not substantively expand or limit the scope of patent eligible subject matter. The revised guidance lists well‑accepted examples of patent eligible subject matter, and includes a catchall instance when an “additional element applies or uses the judicial exception in some other meaningful way beyond generally linking the use of the judicial exception to a particular technological environment, such that the claim as a whole is more than a drafting effort designed to monopolize the exception.”
With the enumeration of the “practical application” test, however, this portion of the revised guidance likely represents the greatest opportunity for patent practitioners to argue for patent subject matter eligibility. Some considerations for the practical application test are taken from prior guidance regarding Step Two of the Alice/Mayo test, which is aimed at "promot[ing] early and efficient resolution of patent eligibility, and increasing certainty and reliability." Notably, the revised guidance states that examiners should not look at whether the "additional elements" recited in the claim (those extending beyond the abstract idea) are well-known, routine, or conventional. Thus, it now may be possible to show patent eligibility by showing that the recited abstract idea (e.g., a mathematical formula) is integrated into a well-known practical application (e.g., data caching or data encryption).
What about Step Two of Alice/Mayo?
Although the revised guidance does not explicitly change the analysis of Step Two of Alice/Mayo, the revised guidance suggests that the USPTO aims to remove any redundancy previously implemented at the USPTO in evaluating case law related to both Step One and Step Two of the Alice/Mayo framework. To simplify and remove such redundancies, the revised guidance reiterates that the Step Two analysis focuses on whether there are additional limitations that are not well-understood, routine, or conventional activity in the field. The revised guidance, however, does not clarify or further suggest how claims should be evaluated under Step Two.
The USPTO’s revised guidance does not explicitly introduce any new rules regarding patent eligibility or appear to otherwise establish patent eligible or ineligible subject matter outside of the scope of the statutes and relevant and applicable case law. Rather, the USPTO’s revised guidance takes the existing body of precedent and more clearly defines how the arguments arising from those cases should be considered by examiners applying the Alice/Mayo two-step framework. With a focus on breaking down and clarifying the two‑step framework, the USPTO’s revised guidance allows examiners or applicants to organize the arguments more clearly and consistently. Such clarification in turn may result in more compact prosecution at the USPTO and instill greater confidence that patent subject matter eligibility can be evaluated consistently.
From the perspective of practitioners before the USPTO, the revised guidance seems to lower the burden for applicants to establish patent subject matter eligibility, particularly by creating a new way of establishing eligibility by showing a recited abstract idea is integrated into a practical application.