Patent Office Releases Interim Guidelines on Subject Matter Eligibility

Craig R. Smith Matthew H. Grady William Seymour

In response to the Supreme Court’s decision in Alice Corp. Pty. Ltd. v. CLS Bank Int’l, No. 13-298, 134 S. Ct. 2347 (June 19, 2014), the U.S. Patent Office has released interim guidelines on examining patent applications for subject matter eligibility. See 2014 Interim Guidance on Subject Matter Eligibility, available here. The Patent Office is soliciting feedback on the new guidelines, which are scheduled for publication in the Federal Register on December 16, 2014.

Section 101 of the Patent Statute states that “[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor …” 35 U.S.C 101.

The Patent Office’s interim guidelines focus on the two-part test enumerated by the Supreme Court in Alice Corp. for subject matter eligibility. In the first part of the test, the Patent Office asks whether the claim is “directed to” an ineligible concept, such as a law of nature, an abstract idea, natural phenomenon, or mathematical equation. If so, the court or Examiner must then determine whether the claim, as a whole, includes something more, making it a claim for significantly more than the abstract idea, itself.

For claims meeting one of the four categories of §101 the Patent Office must still determine if the “claim as a whole is directed to a judicial exception.” (Interim Guidance at 10). If no exception applies, then the analysis ends because the claim is directed to patentable subject matter. However, a claim directed to any judicial exception requires closer scrutiny.

The guidelines explain that “[a] claim is directed to a judicial exception when a law of nature, a natural phenomenon, or an abstract idea is recited (i.e., set forth or described) in the claim.” “It is sufficient for this analysis to identify that the claimed concept aligns with at least one judicial exception.” (Id. At 12). The guidelines do not explain what it means to “align” with a judicial exception, but provides several case examples for practitioners to consult.

The case examples include natural phenomena and abstract ideas:

• Natural phenomena: isolated DNA, correlations on metabolism, electromagnetism to transmit signals, chemical principle underlying union of fatty elements and water;
• Abstract ideas: mitigating settlement risk, hedging, creating a contractual relationship, advertising as a currency, processing information through a clearing house, using categories to organize, store and transmit information, organizing information through mathematical correlations, managing a game of bingo, Arrhenius equation for cure time of rubber, formula/procedure for alarm limits, standing wave phenomena, or converting numerical representations.

The guidelines only treat the Federal Circuit’s first decision to uphold a software patent on 101 by example, but it is beneficial to have a post Alice Corp decision in the list (Id. at 55, ex. 5). See also DDR Holdings,LLC. v. Hotels.com.

The guidelines outline two potential ways for meeting eligibility during prosecution. First, a natural product with “markedly different characteristics” from a naturally occurring counterpart will be eligible. Second, applicants will be entitled to a “streamlined eligibility analysis” if their claims, “when viewed as a whole, clearly do[] not seek to tie up any judicial exception such that others cannot practice it.” (Id. at 19 and 24). The examples provided in the guidelines include a robotic arm assembly and control system that “would not require full analysis to determine eligibility” and an “artificial hip prosthesis coated with a naturally occurring mineral,” which is not an attempt to preempt all uses of the material. (Id. at 25)

Part two of the Alice test is applied to “ensure that the claim as a whole amounts to significantly more that the exception itself.” The guidelines provide case law examples of both eligible and ineligible subject matter. Factors that may render a patent claim subject matter-eligible include:

• improvements to another technology or field;
• improvements to the functioning of the computer itself;
• use of a particular machine;
• transformation to a different state or thing;
• specific limitation other than what is well-understood, routine and conventional in the field; or
• other meaningful limitations.

On the other hand, reciting well-understood, routine and conventional activities at a high level of generality, while adding the words “apply it,” will not be sufficient for eligibility. In addition, insignificant extra-solution activity and generally linking the use of the judicial exception to a particular technology environment or field of use will not be sufficient.

Ultimately, the guidelines suggest, by example, that further review and elaboration of the test for subject matter eligibility is needed. Although the test should not be used to categorically exclude software, business methods, or natural phenomena, more examples of subject matter eligible claims are clearly needed to provide a fuller picture. As indicated by the USPTO, further abstract idea examples are forthcoming.