By Michael Borella --
On November 2nd, the U.S. Patent and Trademark Office published an update to its guidance regarding the examination of claims with respect to the patent-eligibility requirements of 35 U.S.C. § 101 (see Memorandum entitled "Recent Subject Matter Eligibility Decisions"). Notably, this update addresses the recent McRO v. Bandai Namco Games America and BASCOM Global Internet Services v. AT&T Mobility Federal Circuit cases, both of which found challenged claims to be eligible. The update does not, however, discuss the November 1st Amdocs (Israel) v. Openet Telecom Federal Circuit decision (another finding of eligible claims), though the USPTO indicated that a further update would tackle that case.
A claimed invention is eligible for patenting if it meets the requirements of the two-step test set forth by the Supreme Court in Alice Corp. v. CLS Bank Int'l. According to the test, one must first determine whether the claim at hand is directed to a judicially-excluded law of nature, a natural phenomenon, or an abstract idea. If so, then one must further determine whether any element, or combination of elements, in the claim is sufficient to ensure that the claim amounts to significantly more than the judicial exclusion. But generic computer implementation of an otherwise abstract process does not qualify as "significantly more." A goal of this test is to prevent one from patenting judicial exclusions, and thereby preempting others from using these basic scientific tools.
Starting with McRO, the USPTO stated that "the claims were directed to an improvement in computer-related technology (allowing computers to produce 'accurate and realistic lip synchronization and facial expressions in animated characters' that previously could only be produced by human animators), and thus did not recite a concept similar to previously identified abstract ideas." Further, the USPTO acknowledged that the Federal Circuit emphasized the patent's specification in doing so, particularly that the Court relied on "the specification's explanation of how the claimed rules enabled the automation of specific animation tasks that previously could not be automated when determining that the claims were directed to improvements in computer animation instead of an abstract idea."
Additionally, "the claims at issue described a specific way (use of particular rules to set morph weights and transitions through phonemes) to solve the problem of producing accurate and realistic lip synchronization and facial expressions in animated characters, rather than merely claiming the idea of a solution or outcome." As a consequence, the McRO invention "improved the existing technological process, unlike cases such as Alice where a computer was merely used as a tool to perform an existing process."
Turning to BASCOM, the USPTO characterized that case as standing for the principle that "an inventive concept may be found in the non-conventional and non-generic arrangement of [known] elements."
Based on McRO and BASCOM, the USPTO made the following recommendations to its examining corps:
• When applying step one of Alice, "[e]xaminers should consider the claim as a whole . . . and should not overgeneralize the claim or simplify it into its 'gist' or core principles, when identifying a concept as a judicial exception;"
• When applying step two of Alice, "examiners should consider the additional elements in combination, as well as individually, when determining whether a claim as a whole amounts to significantly more, as this may be found in the nonconventional and non-generic arrangement of known, conventional elements;"
• "An improvement in computer-related technology . . . may also be claimed as a set of 'rules' (basically mathematical relationships) that improve computer-related technology by allowing computer performance of a function not previously performable by a computer;"
• Indications that a claim is directed to such an improvement include "a teaching in the specification about how the claimed invention improves a computer or other technology," as well as claiming "a particular solution to a problem or a particular way to achieve a desired outcome defined by the claimed invention, as opposed to merely claiming the idea of a solution or outcome."
The USPTO also considered preemption. In Alice, the Supreme Court noted its concern about preemption, but did not explicitly make preemption analysis a factor in the two-part test. The Federal Circuit has not been a paragon of consistency on preemption, with the USPTO noting that "some recent [Federal Circuit] decisions discuss the absence of preemption as confirming the analysis that the claimed invention is not directed to a judicial exception . . . or includes an inventive step." But others "do not consider the absence of preemption as conferring patent eligibility." The USPTO's guidance to examiners was equally abstruse, essentially instructing the corps to reconsider each of the two steps of Alice if an applicant argues that its claim does not preempt all applications of a judicial exclusion. Nonetheless, the USPTO did promise it will address preemption further in a forthcoming update to the guidance.
Finally, the USPTO indicated that examiners should avoid relying on non-precedential Federal Circuit § 101 decisions "unless the facts of the application under examination uniquely match the facts at issue in the non-precedential decision."
Aside from its nebulous approach to preemption, the USPTO should be commended for publishing this guidance. Its reading of the case law is accurate and reasonable. But more importantly, it has clarified the burden of the examiner in providing a proper § 101 analysis -- claims should not be subjected to a 10,000-foot view during step one, and innovative combinations of elements should be considered during step two. Also, the USPTO has provided a road map for applicants to (i) avoid eligibility disputes during prosecution, and (ii) if that fails, to amend or argue their claims in light of the recent case law.
In particular, the McRO case should be at the top of every software and business method practitioner's handbook. The USPTO has taken the position that using a computer to perform a task that produces an otherwise-unobtainable result can be eligible if the steps to perform that task are well-specified. Given the prevalence of machine learning and big data across wide swathes of technologies, many applicants who have struggled to protect their inventions may now be seeing the light at the end of the tunnel.