In April, Senators Coons and Tillis proposed a draft framework for legislation reformulating the standards for determining patent eligibility under § 101 of the Patent Act. The framework largely codified the Patent Office’s latest internal eligibility standards that went into place in January 2019, formulating a closed list of categories excluded from patent eligibility and creating a “practical exception” test to ensure that such categories are construed narrowly.

On May 22, Senators Coons and Tillis were joined by Representatives Collins, Johnson and Stivers in proposing a bicameral draft bill containing—among other things—new text for § 101, as well as new supporting definitions in § 100.

It should be noted that the draft bill is still very much open to discussion, with hearings of the Senate Judiciary Subcommittee on Intellectual Property to be held on June 4, 5 and 11. That said, I’ve summarized some of the draft language’s key points below:

Continue Reading Patent Eligibility Reform in Congress: Updates on the Coons/Tillis Proposal

In January, the USPTO announced it would seek comments on the new Guidance it had published on patent subject matter eligibility. We have previously discussed this Guidance and won’t repeat ourselves here. Instead, this post will highlight the wide range of views expressed by the thousands of comments that the USPTO received. Although the comment period ended on March 8, the USPTO cautioned that its web page posting the comments might not be complete for a couple of weeks thereafter. By now, all the submitted comments likely have been posted so it’s time to take a look at them.

Continue Reading No Shortage of Viewpoints on New USPTO Patent Eligibility Guidelines

As my prior post on the 2019 Revised Patent Subject Matter Eligibility Guidance indicated, I initially anticipated only a modest uptick in allowability rates as a result of the new guidance.  After analyzing the accompanying examples, however, I concluded that the effect would likely be markedly more profound.  Subsequent conversations with examiners—many of whom have now agreed to drop their long-standing eligibility rejections—have only confirmed that belief.

The examples provide analyses of 10 claims as part of six new hypothetical inventions.  Significantly, of the 10 claims analyzed, only three are held to be ineligible, and those three are notable for their conspicuous brevity and breadth (44 words / two elements; 71 words / two elements; and 81 words / three elements, respectively).  Each of the inventions for which a claim is held ineligible—namely, Examples 37, 40 and 42—also includes an example of an eligible claim, thereby perhaps implying that most inventions should be able to be made eligible as long as the applicant is willing to claim them with sufficient specificity.  If so, this would be in marked contrast to earlier post-Alice PTO practice, in which examiners—perhaps due to uncomfortable uncertainty about what was eligible and what was not and fear of being reprimanded for granting a patent on something that might subsequently be found ineligible, perhaps due to the ease of making rejections by broadly applying the holdings of particular Federal Circuit cases—were frequently committed to their § 101 rejections, maintaining the rejections despite all applicant attempts at claim amendments.

Continue Reading The 2019 Eligibility Guidance by Example

[This post was updated on Jan. 17, 2019]

On Jan. 4, the Patent Office released the long-awaited 2019 Revised Patent Subject Matter Eligibility Guidance, which governs the Office’s examination procedure for evaluation of patent subject matter eligibility under 35 U.S.C. § 101.

The new guidance distinctly changes the tone of § 101 discourse to one more in favor of eligibility than in years past.  In the same way that the tone of prior Office guidance in the wake of Alice v. CLS Bank appeared to lean in favor of findings of ineligibility, despite a lack of concrete legal standards compelling this result, the more pro-patent feel of the new guidance will likely by itself lead to an uptick in allowance rates.  Tone aside, however, beyond signaling an increase in the perceived permissibility of examiners finding patents eligible, there appears to be little additional substance in the new guidance that could be used to compel a skeptical examiner to find a given claimed invention to be patent-eligible.

Continue Reading The 2019 Eligibility Guidance: A Change in Tone, if Not in Substance

Much ink has been spilled in recent times on the standards for, and outcomes of, patent eligibility questions under § 101.  Consider, for example, USPTO Director Andrei Iancu’s remarks in September about providing additional guidance to Patent Office examiners, and various analyses of invalidation rates in the federal courts. (We touched on invalidation rates ourselves in our Bilski Blog update in August, at which time the Federal Circuit’s cumulative invalidation rate since July 2014 was hovering north of 88 percent.)

One topic has received little attention, however: The rulings of the Patent Trial and Appeal Board on pre-grant § 101 examiner rejections appealed by applicants.  In my opinion, this constitutes the proverbial elephant in the room for patent prosecutors.

Continue Reading Still No Path Out of the 101 Swamp?

Since our last update in June 2017, all the invalidation averages for decisions finding lack of subject matter eligibility have trended slightly downward in the federal courts. Specifically:

  • The overall percentage of decisions invalidating patents under § 101 since we started tracking statistics in July 2014 has fallen slightly—from 67.5% to 66.0%—year over year.
  • The 12-month and three-month average invalidation rates have likewise fallen (from 64.7% to 61.9%, and from 72.1% to 48.4%, respectively).
  • The three-month average recently hit its lowest rate—48.4%—falling below 50% for the first time.

Presumably Berkheimer and its progeny (Aatrix and Exergen)—which held that the “well-understood, routine and conventional” inquiry of Step 2B is a question of fact—have contributed to the declining rates by making courts less inclined to invalidate patents at early stages of litigation. (Of course, as subsequent cases such as Voter Verified v. Election Systems, SAP v. Investpic, and Interval Licensing v. AOL, make plain, successfully establishing the genuine issue of material fact needed for a patentee to survive early dismissal is by no means as simple as it may appear.) Of the 70 post-Berkheimer decisions through the end of June 2018, there were 25 decisions containing at least one citation to Berkheimer; 20 decisions containing at least one citation to Aatrix; and five decisions containing at least one citation to Exergen. Ironically, however, of the 25 decisions citing Berkheimer, 15 found invalidity, with only 10 finding validity, a higher invalidation rate than that of the recent cases not citing Berkheimer. Apparently courts primarily cite Berkheimer in order to acknowledge it before distinguishing it! On the Federal Circuit-watching front, Judge Moore now has the sole distinction of being part of the greatest number of Section 101 decisions (35), as well as the greatest number of pro-eligibility decisions (7). Judges Clevenger, Mayer and Schall, in contrast, have yet to join a pro-eligibility decision in any of the cases that we’ve analyzed.

If the focus on fact finding in Aatrix, Berkheimer, and Exergen from earlier this year helped provide additional clarity on the analysis of “something more,” the SAP America decision, at least to my mind, failed to clarify, and possibly further muddied, the analysis.

Reaching This Result Could Have Been Easy

First, a representative claim:

1. A method for calculating, analyzing and displaying investment data comprising the steps of:

(a) selecting a sample space, wherein the sample space includes at least one investment data sample;

(b) generating a distribution function using a re-sampled statistical method and a bias parameter, wherein the bias parameter determines a degree of randomness in a resampling process; and,

(c) generating a plot of the distribution function.

The other independent claims differ a bit from claim 1, but like claim 1 recite “resampling” of the data set and, in claim 11, doing so with a “bias parameter.” According to the patent, this resampling of investment data permits analysis that doesn’t assume a normal distribution of the data.

On a judgment on the pleadings, the district court found all claims ineligible and the Federal Circuit affirmed.

Continue Reading Two Steps Forward, One Step Back

My last post focused on definitions for the terms “well-understood,” “routine,” and “conventional”—or W-URC—from the subject matter eligibility test set forth in Mayo and further described in Alice. Those terms relate to one part of the current test only. It seems fair to consider another important term in the test, one that’s considered before even reaching the W-URC issue: Whether the claim is “directed to” patent-ineligible subject matter, e.g., a law of nature.

I was particularly reminded of the need to address this when reading last week’s Federal Circuit opinions in Vanda Pharmaceuticals v. West-Ward Pharmaceuticals. Not only did Judge Prost pen a stark dissent from Judge Lourie’s opinion for the court, but both the majority and dissenting opinions focused on this phrase over and over. The opinion of the court referenced “directed to” 17 times and the dissent used it 10 times. Further, the phrase was used either in italics or quotes five times, emphasizing the importance of the term. So it’s worthwhile to give a look to what “directed to” means.

Continue Reading Our Attention is Now Directed To: “Directed To”

The Federal Circuit has now had enough opportunity to address Mayo’s “well-understood, routine, conventional” test that we should have a good understanding of it. We don’t (or at least I don’t).

To begin with, the Federal Circuit cases don’t seem to differentiate among these terms. The cases also universally connect the three terms with “and” rather than “or,” but curiously most of the cases don’t seem to actually require all three to be explicitly met for a determination of ineligibility. See, e.g., Content Extraction, where the Federal Circuit noted only that the patent owner had conceded one function as being “routine.” Finally, there seems to be real disagreement about the extent to which these terms address facts as opposed to legal standards. In this post, I’m not going to comprehensively analyze all these issues, but instead will focus primarily on what these common terms mean.

Continue Reading How Well-Understood is the Meaning of “Well-Understood”?

With counterpoint by Gregory Hopewell

In reading post-Mayo/Alice decisions, some seem more comfortable than others. I’ve been having a tough time getting my head and heart around a recent decision from Judge Leonard Stark of the District of Delaware.  The case is American Axle & Manufacturing v. Neapco Holdings and Neapco Drivelines.  From the party names alone, this does not appear to be a likely candidate for Section 101 invalidity.

The claims that the court found representative for Section 101 analysis confirm that we’re not talking about social media applications or financial methods here, but instead “a method for manufacturing a shaft assembly of a driveline system.”  Classic auto industry innovation dispute between two Detroit area companies, with a bonus that the judge also hails from Detroit.  Spoiler Alert: To my surprise, the first sentence of the opinion’s discussion section said, “As explained below, the Court has determined that the Asserted Claims are not directed to patentable subject matter.”

Continue Reading Good Vibrations, Bad Vibrations: American Axle v. Neapco Ruling