New Patent Examination Guidelines for Subject Matter Eligibility in the U.S.

The U.S. Patent and Trademark Office (PTO) has issued its 2019 Revised Patent Subject Matter Eligibility Guidance (PTO Guidance) on subject matter eligibility for patent applications.¹ This guidance took effect on January 7 and aims to provide clarity for patent examiners on the framework for assessing whether claimed subject matter is patent eligible.²

What You Need To Know

• The PTO Guidance does not have the force of law, but it has the practical effect of guiding PTO examination and administrative patent proceedings when assessing patent eligibility.
• The purpose of the PTO Guidance is to ensure that there are “reasonably consistent and predictable results” in the patent examination process.
• The PTO is seeking public comment on the PTO Guidance, which can be submitted to [email protected] by March 8, 2019.

Background

In Alice v. CLS Bank (Alice), the U.S. Supreme Court (the Court) adopted a two-part test for determining patent-eligible subject matter, commonly referred to as the Alice test (see our analysis of the framework here).

The first stage of the Alice test provides that a claim should be evaluated to determine if it is directed to one of the judicially defined patent-ineligible exceptions (i.e. a law of nature, a natural phenomenon or an abstract idea). If the claim is directed to an exception, then in the second stage, the elements of the claim are considered both individually and as “an ordered combination” to determine if the additional elements “transform the nature of the claim” into patent-eligible subject matter.

Since Alice was decided in 2014, there has been a great deal of uncertainty as to how the Alice test should be applied by patent examiners and the courts, including what constitutes an “abstract idea.” According to the PTO, this lack of clarity has made it difficult for inventors, businesses and other patent stakeholders to reliably predict what subject matter is patent-eligible.

PTO Guidance

The PTO Guidance introduces the following two changes to how U.S. patent examiners should apply the first step of the Alice test.

Abstract Ideas

The PTO Guidance defines three groups of subject matter that are considered “abstract ideas”:

1. Mathematical concepts. This category includes mathematical relationships, formulas, equations and calculations.
2. Certain methods of organizing human activity. This category includes fundamental economic principles or practices (including hedging, insurance or mitigating risk), commercial or legal interactions (including: agreements in the form of contracts; legal obligations; advertising, marketing or sales behaviors; or business relations), managing personal behavior or relationships or interactions between people (including social activities, teaching and following rules or instructions).
3. Mental processes. This category includes concepts performed in the human mind, such as an observation, evaluation, judgment or opinion.

These three groupings are based on the key concepts identified by the courts as abstract ideas. The PTO Guidance notes that these groupings are not exhaustive, and that there may be a “rare circumstance” in which an abstract idea may fall outside of these three categories.

Two-Pronged Approach

The PTO Guidance sets out a two-pronged approach for applying the first stage of the Alice test, which assesses whether a claim is “directed to” a judicial exception:

1. In the first prong, an examiner should evaluate whether the claim recites a judicial exception to subject matter eligibility (i.e., whether it is directed to a law of nature, natural phenomenon or abstract idea)—if so, the examiner should proceed with the second prong.
2. In the second prong, an examiner should evaluate whether the recited judicial exception is “integrated into a practical application of that exception.” In other words, examiners must consider whether the claim as a whole uses the subject matter in a way that “imposes a meaningful limit on the judicial exception, such that the claim is more than a drafting effort designed to monopolize the judicial exception.” For example, if an additional element in the claim reflects an improvement in the functioning of a computer, then it is likely that the judicial exception has been integrated into a practical application.

If the claim both recites a judicial exception and does not integrate the exception into a practical application, then the claim is “directed to” a judicial exception, under the first stage of the Alice test. In such a situation, the examiner would then proceed to the second stage of the Alice test.

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¹ 2019 Revised Patent Subject Matter Eligibility Guidance: https://www.federalregister.gov/documents/2019/01/07/2018-28282/2019-revised-patent-subject-matter-eligibility-guidance.

² Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208, 217-28 (2014 (citing Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66 (2012)).

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