Comments on the USPTO's Subject Matter Eligibility Guidance -- The ABA

By Michael Borella --

On July 30, 2015, the U.S. Patent and Trademark Office updated its subject matter eligibility guidance ("July Update").  The update provided recommendations and resources for examiners in addition to those in the Office's 2014 Interim Guidance on Subject Matter Eligibility.  In particular, the Office provided procedural and substantive guidelines regarding the examination of inventions that may include subject matter that does not meet the requirements of 35 U.S.C. § 101.  For a more detailed overview of the July Update, see our review thereof.

The Office requested public comments on the July Update, the comment period of which ended on October 28, 2015.  The Office recently published the comments it received from a number of organizations, law firms, companies, and individuals.  This is the first in a series of articles regarding the comments, and covers those provided by the American Bar Association Section of Intellectual Property Law (the Section).

The Section begins by commending the Office for providing extensive examples of patent-eligible and patent-ineligible claims, as "[t]hese examples help both examiners and stakeholders to reach a common understanding and advance prosecution."  But, the Section is quick to point out that uncertainty regarding the examination of patents under § 101 remains.

Importantly, the Section took the position that there are three distinct tests for patent-eligibility, the "machine or transformation test," the "law of nature" and "natural phenomenon" test used prior to Mayo v. Prometheus, and the two-prong Alice v. CLS Bank test.  The Section views the first two tests as incompatible because "it would have been unthinkable to observe that one part of a claim was performed in the human mind, and another part operated by natural principles."  (It would not be surprising if there is a DNA analysis claim out there somewhere that is a counterexample to this notion.)  The Section further views the Alice test as being limited to review of long-standing concepts (it isn't).  As a result, the Section recommended that "[w]here the three tests diverge, the Eligibility Update should be separated into three separate sections to make the distinctions clear."

In Alice, the Court clearly stated that the two-prong Mayo test was universal, in that it applied to all judicial exceptions to patent-eligibility, as well as all statutory classes of claim.  The Court wrote that:

[W]e set forth a framework for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts . . . first, we determine whether the claims at issue are directed to one of those patent-ineligible concepts [then] we consider the elements of each claim both individually and as an ordered combination to determine whether the additional elements transform the nature of the claim into a patent-eligible application.

To the extent that they are still applicable, the pre-Alice tests serve to further inform this analysis.  Moreover, whether a claim is novel has little bearing on the eligibility thereof.  This is reflected by the Court's position in Assoc. for Molecular Pathology v. Myriad Genetics ("[g]roundbreaking, innovative, or even brilliant discovery does not by itself satisfy the §101 inquiry"), as well as that of the Federal Circuit in Ultramercial Inc. v. Hulu ("[t]hat some of the [claimed] steps were not previously employed in this art is not enough -- standing alone -- to confer patent eligibility").  Unfortunately, the Section's misunderstanding of the law here detracts from the credibility of its positions as a whole.

Nonetheless, the Section went on to make an astute observation about how examiners are applying the Office's § 101 framework.  Responding to the Office's statement that the July Update will "ensure that a claimed concept is not identified as an abstract idea unless it is similar to at least one concept that the courts have identified as an abstract idea," the Section wrote that "[i]t is not clear that examiners are following this instruction, but appear to use their creativity in an attempt to identify an abstract idea from the claim, which is a guilty until proven innocent mindset."  Indeed, many patent-eligibility rejections seem to be based on knee-jerk, conclusory reactions, rather than actual analyses of claims.  Some examiners have stated that they are under pressure from their supervisors to reject claims under § 101 unless those claims are clearly eligible.

The Section also raised the issue that "[u]sing broad, categorizing words to describe a claim, e.g., an advertising method or system . . . will only lead the examiner to label a claim as directed to an abstract idea, since it can be reduced to a few generic words."  Many others have complained about such over-generalization of claimed inventions by the Office.  As the Section noted, "labeling a claimed concept in as few words as possible is certainly not the test."

The Section further took issue with the Office's statement about official notice.  Namely, in the July Update, the Office stated that "[c]ourts have not identified a situation in which evidence was required to support a finding that the additional [claim] elements were well-understood, routine or conventional, but rather treat the issue as a matter appropriate for judicial notice."  In the Section's view, the Administrative Procedure Act (APA) "requires agencies to support any adverse decision by substantial evidence."  The Section reminded the Office that it is not an Article III court, and noted that the Supreme Court did provide evidence for its reasoning that some claim elements were well known in Alice and Bilski v. Kappos.  Ultimately, the Section recommended that the Office's reference to official notice be completely removed.

Another Section recommendation is that examiners help applicants draft patent-eligible claims.  For example, applications that "describe and claim specific hardware to accomplish a particular task should be patent eligible, and examiners should help applicants to amend claims to be patent eligible."  This is a commendable notion.  Although many examiners will work actively with applicants to find pathways to allowance, others take an "it's not my problem" approach, which is not productive for either the applicant or the Office.

And finally, the Section expressed concern that the Office may be in violation of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement due to the Office's "practically excluding certain subject matter as per se patent ineligible."  The Section pointed to application rejection rates of nearly 100% in many art units of Technical Center 3600 as an example.

Comments

[EG]

"The Section further took issue with the Office's statement about official notice. Namely, in the July Update, the Office stated that '[c]ourts have not identified a situation in which evidence was required to support a finding that the additional [claim] elements were well-understood, routine or conventional, but rather treat the issue as a matter appropriate for judicial notice.'"

Michael,

Sigh. That nonsensical statement by the USPTO about how it can take Official Notice in patent-eligibility determination shows just how bad and out of control the situation has gotten with respect to the broken Alice test. Also, the USPTO's view that Official Notice may be taken without any evidence of such is not a new one, but how the USPTO can say, with a straight face, that its view of Official Notice complies with the provisions of the APA completely escapes me.

[Mike Borella]

My question about the Office's use of official notice (for 101, 102, or 103) is this - if something is so well-understood why can't the examiner take 5 minutes to come up with a reference?

In my experience, some examiners use official notice to "fill the gap" in an obviousness rejection where they cannot find a reference that discloses a particular claim element, so they just conclude that the element is well known. The same thing is now happening with eligibility rejections.

[David Boundy]

Hi Mike --

I think your criticism of the 3-separate-tests part of the ABA letter reflects a little bit of hasty writing (for which I will take blame), and a little hasty reading (on yours).

All three tests fit under the Alice two-part "framework." However, the three tests are distinct in this sense --

If step one identifies a "law of nature" or "natural phenomenon," then step two must proceed on "law of nature" grounds, not machine-or-transformation or Alice grounds.

If step one identifies an "abstract idea" in the machine-or-transformation mental steps sense, then step two must proceed on machine-or-transformation grounds, not law of nature grounds or Alice "wholly obvious, conventional" grounds.

If step one identifies an "abstract idea" in the Alice "long prevalent," "fundamental, or building block" sense, then step two must proceed on Alice "wholly obvious, conventional" grounds, not "law of nature" or "mental steps" grounds.

One framework, two steps, three distinct paths through those steps.

Does that clarify?

David Boundy

[David Boundy]

And to further clarify, I recognize that the 2014 rerun of Ultramercial mixes up the three tests -- step one uses machine-or-transformation reasoning, step two uses Alice reasoning.

But Alice is really clear that machine-or-transformation reasoning is "beside the point" when applying the Alice test.

So I (and a consensus of ABA IP section) think that Ultramercial 2014 is wrongly decided, even within the Mayo/Alice framework of gibberish.

[Mike Borella]

David,

Thanks for the note. I will agree that the Mayo/Alice is not a good way of determining patent eligibility, and that Ultramercial went the wrong way.

But the only test we have is the Alice test. And as I mentioned in the post, it is not just a "long-prevalent" test.

In any case, I do not see how viewing patent eligibility as three distinct tests adds any clarity to the process.

Mike

[skeptical]

To me, this all smacks of substantive law WRITING, in an area of statutory law.

Should even the Court (or courts) - much less the ABA be "writing" this type of law?