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
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.
[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.
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.
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.
After Alice, the USPTO’s various guidance memoranda included references to non-precedential Federal Circuit decisions, particularly Smartgene, Cyberfone, and Planet Bingo, as examples of patent-ineligible subject matter. Naturally, examiners cited these decisions in support of their Section 101 rejections. Smartgene was the most frequently cited because the USPTO glossed it simply as “comparing new and stored information and using rules to identify options,” a characterization that allowed examiners to apply the case to just about any computer-implemented method. I and others expressed our concerns to the USPTO about the examiners’ reliance on Smartgene and other non-precedential cases in comments on the Interim and subsequent guidance memos. Full disclosure: I was counsel to ABL, the patentee in Smartgene. On November 2, 2016, the Office issued the “McRO” memo, explaining how examiners should interpret the Federal Circuit’s decision in McRO v. Bandai. The memo ended with an instruction that examiners should limit their reliance on non-precedential cases:
The guidance seemed clear: unless the application before the examiner “uniquely matched” the facts of a non-precedential decision, the decision should not be relied upon–there was an “ever-increasing” number of precedential cases that could be used instead. …
On April 17, Mozilla and Stanford Law held a panel to discuss the role of the First Amendment in the patent law, and specifically the impact on the patent eligibility of software and genes sequences.
Joining me on the panel were Dan Burk, a professor at the UC Irvine School of Law; Sandra Park, senior …
On April 12th, the Federal Circuit, in a per curiam order, denied SHzoom’s motion to make the Trading Technologies opinion precedential. The order of course gave no reasons for the decision. Even so, the underlying decision is still a good one for patentees and applicants. While not binding on the USPTO, it can nonetheless be argued as persuasive authority to examiners where the facts in the application “uniquely match” those in the case. Prosecutors should consider arguing this case to examiners where they have specifically claimed graphical elements that provide specific functionality. The case is noteworthy because it is the first true “business method” patent that the Federal Circuit has upheld. The claims of the patents specifically recited steps for placing trade orders in electronic exchanges. Claim 1 of Trading Technologies’ US 6,766,304 is shown here as example: …
On January 18, 2017 the Federal Circuit issued an opinion in Trading Technologies Int’l., Inc. v. CQG, Inc., its first decision finding a user interface to be patent eligible subject matter. The court designated the opinion as non-precedential. On Monday SHzoom LLC filed a motion under Federal Circuit Rule 32.1(e), which allows any person to request that the court reissue a decision as precedential. The text of the motion is set forth below. Fenwick represented SHzoom.
Third party SHzoom LLC (“SHzoom”) hereby moves this court to reissue its January 18, 2017 decision (Dkt. No. 73), in Trading Technologies Int’l., Inc. v. CQG, Inc., No. 2017 U.S. App. LEXIS 834 (Fed. Cir. Jan. 18, 2017) (“Trading Technologies”) as precedential, pursuant to Federal Circuit Rule 32.1(e). As the appellant CQG, Inc. (“CQG”) has filed a petition for Rehearing En Banc, Shzoom’s request is filed to meet the stated deadline of Rule 32.1(e), and as such need only be considered if CQG’s request is denied. The parties to the case have been notified of this request.
Like the odd aunt whose holiday gifts can range from the wonderful to the recyclable, in 2016 Alice brought both good and bad tidings. Let’s start with the nice ones. The numbers here are through December 22, 2016. The big picture is that the overall rate of district court ineligibility decisions* has declined each year since Alice, while the total number of decisions has increased each year. This may be an indication of several factors. First, plaintiffs are being more careful in selecting which patents to assert. Thus, clear losers do not get picked for litigation. On the other hand, defendants continue to push the envelope on what they can challenge under Section 101, and in doing so, have overreached. As a result, the overall invalidity rate has fallen. …