USPTO Issues Update to Subject Matter Eligibility Guidance

By Donald Zuhn –-

In a notice published in the Federal Register (88 Fed. Reg. 27381) on Friday, the U.S. Patent and Trademark Office issued further guidance for determining subject matter eligibility under 35 U.S.C. § 101.  The notice, entitled "May 2016 Subject Matter Eligibility Update," discusses a memorandum on subject matter eligibility determinations that was issued to the patent examining corps, additional life sciences examples that are intended to assist examiners in making eligibility determinations, an updated index of eligibility examples, and an updated list of court decisions (Supreme Court and Federal Circuit) addressing subject matter eligibility, each of which has been made available on the Office's subject matter eligibility webpage.

The notice begins by reminding stakeholders about the July 2015 Update on Subject Matter Eligibility, which provided further guidance to examiners on making subject matter eligibility determinations and sought public comment regarding the Office's prior guidance on subject matter eligibility.  In response to public feedback regarding the July 2015 Update -- a total of 37 submissions were submitted -- the Office issued a memorandum on eligibility determinations to the examining corps on May 4, 2016.  In particular, the memorandum, entitled "Formulating a Subject Matter Eligibility Rejection and Evaluating the Applicant's Response to a Subject Matter Eligibility Rejection," provides guidance to examiners on formulating subject matter eligibility rejections and evaluating responses to subject matter eligibility rejections.

The memorandum to the patent examining corps, which runs just over six pages in length and is signed by Robert Bahr, Deputy Commissioner for Patent Examination Policy, provides examiners with additional guidance for applying the analytic framework set forth in the 2014 Interim Guidance on Patent Subject Matter Eligibility (see "USPTO Issues Interim Guidance on Subject Matter Eligibility").  As noted in the 2014 Interim Guidance, the two-step analysis for determining subject matter eligibility under 35 U.S.C. § 101 that is set forth in MPEP § 2106, consists of: (1) determining whether the claimed invention is "directed to one of the four statutory categories" (i.e., process, machine, manufacture, or composition of matter), and (2) determining whether the claimed invention is "wholly directed to subject matter encompassing a judicially recognized exception."  In the 2014 Interim Guidance, the first step of the above analysis was labeled "Step 1," and the second step of the analysis was divided into a "Step 2A" and a "Step 2B," to correspond with the two-step (or two-part) analysis from Alice Corp. v. CLS Bank Int'l (which was set forth earlier in Mayo Collaborative Services v. Prometheus Laboratories, Inc.).

In discussing Step 2A of the above analysis, the memorandum states that when an examiner makes a subject matter eligibility rejection and determines that a claim is directed to an abstract idea, "the rejection should identify the abstract idea as it is recited (i.e., set forth or described) in the claim and explain why it corresponds to a concept that the courts have identified as an abstract idea," and similarly, when an examiner makes a subject matter eligibility rejection and determines that a claim is directed to a law of nature or a natural phenomenon, "the rejection should identify the law of nature or natural phenomenon as it is recited (i.e., set forth or described) in the claim and explain using a reasoned rationale why it is considered a law of nature or natural phenomenon."  As for Step 2B of the analysis, the memorandum states that an examiner's rejection "should identify the additional elements in the claim and explain why the elements taken individually and in combination do not amount to a claim as a whole that is significantly more than the exception identified" in carrying out Step 2A of the analysis (emphasis in original).

More specifically, the memorandum states that a subject matter rejection under Step 2 of the analysis outlined in the 2014 Interim Guidance should:

• identify the judicial exception by referring to what is recited (i.e., set forth or described) in the claim and explain why it is considered an exception;

• identify any additional elements (specifically point to claim features/limitations/steps) recited in the claim beyond the identified judicial exception; and

• explain the reason(s) that the additional elements taken individually, and also taken as a combination, do not result in the claim as a whole amounting to significantly more than the judicial exception [emphasis in original].

For judicial exceptions constituting an abstract idea, law of nature, natural phenomena, or product of nature, the memorandum provides sample explanations for satisfying the first point above:

Sample explanation: The claim recites the steps of sorting information by X, which is an abstract idea similar to the concepts that have been identified as abstract by the courts, such as organizing information through mathematical correlations in Digitech or data recognition and storage in Content Extraction.

Sample explanation: The claim recites the correlation of X, and X is a law of nature because it describes a consequence of natural processes in the human body, e.g., the naturally-occurring relationship between the presence of Y and the manifestation of Z.

Sample explanation: The claim recites X, which is a natural phenomenon because it occurs in nature and exists in principle apart from any human action.

Sample explanation: The claim recites X, which as explained in the specification was isolated from naturally occurring Y. X is a nature-based product, so it is compared to its closest naturally occurring counterpart (X in its natural state) to determine if it has markedly different characteristics. Because there is no indication in the record that isolation of X has resulted in a marked difference in structure, function, or other properties as compared to its counterpart, X is a product of nature exception.

With respect to abstract ideas, the memorandum also indicates that "[e]xaminers should not go beyond those concepts that are similar to what the courts have identified as abstract ideas."

With regard to examining the claim as a whole, the memorandum states that:

It is important to remember that a new combination of steps in a process may be patent eligible even though all the steps of the combination were individually well known and in common use before the combination was made (Diehr).  Thus, it is particularly critical to address the combination of additional elements, because while individually-viewed elements may not appear to add significantly more, those additional elements when viewed in combination may amount to significantly more than the exception by meaningfully limiting the judicial exception [emphasis in original].

As for an examiner's determination that particular claim limitations are well-understood, routine, or conventional, the memorandum points out that a rejection "should explain why the courts have recognized, or those in the relevant field of art would recognize, those claim limitations as being well-understood, routine, conventional activities," but notes that "even if a particular laboratory technique was discussed in several widely-read scientific journals or used by a few scientists, mere knowledge of the particular laboratory technique or use of the particular laboratory technique by a few scientists is not sufficient to make the use of the particular laboratory technique routine or conventional in the relevant field."

As for the evaluation of an applicant's response to a subject matter eligibility rejection, the memorandum indicates that claim amendments adding an additional element "may be enough to qualify as 'significantly more' if [the additional element] meaningfully limits the judicial exception, improves another technology or technical field, improves the functioning of a computer itself, or adds a specific limitation other than what is well-understood, routine, conventional activity in the field or unconventional steps that confine the claim to a particular useful application."  Moreover, the memorandum states that "even if an element does not amount to significantly more on its own . . . , it can still amount to significantly more when considered in combination with the other elements of the claim."

Finally, for responses in which an applicant argues that a claim does not preempt all applications of the judicial exception, the memorandum states that "an appropriate response would be to explain that preemption is not a standalone test for eligibility."  The memorandum indicates that "[q]uestions of preemption are inherent in and resolved by the two-part framework from Alice Corp. and Mayo, as explained by the Federal Circuit in OIP and Sequenom," adding that "while a preemptive claim may be ineligible, the absence of complete preemption does not demonstrate that a claim is eligible."

In addition to providing additional life sciences examples (some of which should prove to be of significant interest to life sciences practitioners and applicants), the May 2016 Update also provides an updated index of eligibility examples. An index of examples was previously provided with the July 2015 Update as Appendix 2.  The index provided with the latest update divides the examples into the following five categories:

• Nature-Based Products (NBP) -- ten examples released on December 16, 2014
• Abstract Ideas (AI) -- eight examples released on January 27, 2015
• Computer Based Training & CBT Slides (CBT) -- two examples released on March 6, 2015
• July 2015 Update Appendix 1 -- seven examples released on July 30, 2015
• Life Sciences (LS) -- six examples released with the May 2016 Update

With respect to the new life sciences examples, the Office notes that they provide exemplary subject matter eligibility analyses of hypothetical claims and claims drawn from case law, and that the examples are intended as a teaching tool to assist examiners and the public in understanding how the Office would apply the eligibility guidance in certain fact-specific situations.  (The May 4 memorandum reminds examiners that the examples "are intended to show exemplary analyses only and should not be used as a basis for a subject matter eligibility rejection or relied upon in the same manner as a decision from a court," and adds that "while it would be acceptable for applicants to cite an example in support of an argument for finding eligibility in an appropriate factual situation, applicants should not be required to model their claims or responses after the examples to attain eligibility.")  The new life sciences examples, which are numbered 28-33 (33 being the total number of examples that the Office has issued to date), cover vaccines (ex. 28), diagnosing and treating julitis (ex. 29), dietary sweeteners (ex. 30), screening for gene alterations (ex. 31), a Fourdrinier (paper-making) machine (ex. 32), and a process of hydrolyzing fat (ex. 33).  Patent Docs will provide summaries of the additional life sciences examples in subsequent posts.

The final document released with the May 2016 Update is an updated version of the Appendix of Supreme Court and Federal Circuit decisions that was previously provided with the July 2015 Update (i.e., Appendix 3).  The list of subject matter eligibility court decisions (formerly Appendix 3) can be found here.  The Office notes that the list of court decisions will continue to be updated to include Federal Circuit decisions without opinion (Fed. Cir. R. 36) on appeals originating from the Patent Trial and Appeal Board (PTAB), but will not be updated to include Federal Circuit decisions without opinion affirming a district court decision as the latter "provide little benefit to examiners or the public."

The Office also notes that the documents released with the May 2016 Update "were developed as a matter of internal Office management and are not intended to create any right or benefit, substantive or procedural, enforceable by any party against the Office."  As such, the notice indicates that the failure of Office personnel to follow any of the guidance materials does not form a proper basis for either an appeal or a petition.

Finally, in the May 2016 Update, the Office indicates that it continues to seek public comment on subject matter eligibility and that the "[t]he comment period is open-ended, and comments will be accepted on an ongoing basis."  In view of the Office's commitment to enhancing the quality of examination, the notice also indicates that the Office is particularly interested in obtaining comments addressing any progress the Office is making with respect to the quality of correspondence regarding subject matter eligibility rejections. Comments can be sent by e-mail to:  [email protected].  Because comments will be made available for public inspection, those submitting comments should not include information (e.g., addresses or phone numbers) that submitters do not wish to make public.

In future posts, Patent Docs intends to discuss selected life sciences examples that were released with the May 2016 Update.

Comments

[EG]

Hey Don,

These updated patent subject matter guidelines are merely a façade to cover up a nonsensical a Mayo/Alice framework that is "out of control." Example 29 is the poster child for why this framework is so bad, as created by SCOTUS and as implemented by the USPTO and the lower courts.

[Examiner]

Read example 29 carefully, especially eligibility analysis of claims 1 and 6. It's a step in the right direction. Awkward, but a step nonetheless.

[Paul Cole]

I am inclined to think that the life sciences examples are slightly less toxic than what we have seen on other occasions. This is only a first impression though.

[The Memory Motel]

Example 29 is nonsensical and illustrates the PTO's apparent intent to cause as much damage and confusion to as many practitioners as possible. This is because the PTO, apparently, has still not come to terms with the role that the prior art plays in subject matter eligibility.

Claim 2 recites *the exact same steps* as claim 1, plus one additional step ("diagnosing") that is ineligible on its own terms. The PTO deems claim 2 to be ineligible because the steps recited in claim 1 are insufficient to carry "diagnosis" across the eligibility bar. But the PTO has already stated that the steps in claim 1 are eligible.

The correct analysis is that claim 1 is ineligible due to a Sequenom problem. You can't discover a phenomenon and broadly claim "detect the phenomenon", nor can you broadly claim "detect the phenomenon using prior art detection methods known to be useful for that purpose", nor can you broadly claim "detect the phenomenon using this prior art detection method known to be useful for that purpose."

That's why claim 1 is ineligible. Claim 2 is ineligible because it adds only an ineligible step "correlate this!" to the ineligible method of claim 1.

This really isn't difficult stuff but the PTO makes it difficult by completely muffing the claim 1 analysis.

[The Memory Motel]

Examiner" "Read example 29 carefully, especially eligibility analysis of claims 1 and 6"

The "analysis" of claim 1 completely misses the issue!

At the very least, when the PTO presents hypotheticals like these it needs to be crystal clear about other serious statutory problems with the claims.

Why is that? Because a claim that has a serious statutory problem other than eligibility (e.g., anticipation, obviousness, written description, enablement) is, in pretty much every case, not going to rescuable by the recitation of subject matter that is ineligible for patenting on its own terms (e.g., "correlate it!", "display it!", etc).

[Bockus]

I totally agree with The Memory Motel that Example 29 claim 1 vs. claim 2 makes no sense. There's also no comment about the different preambles, which would make sense in that I don't think they would usually be considered limiting (and thus would be ignored during examination), but perhaps the preambles help drive the different outcome, even though they should not and are not included in the stated reasoning? But even just following the rationale put forth by the PTO, it makes no sense for a method comprising the steps in claim 1 to become ineligible because a mental step is added (in claim 2).

[The Memory Motel]

Bockus: "it makes no sense for a method comprising the steps in claim 1 to become ineligible because a mental step is added (in claim 2)."

Just to be clear, "adding mental steps" to non-mental steps can create eligibility problems (or fail to fix an existing one) in at least two distinct claiming situations.

The first situation is where the recited non-mental step(s) are already in the prior art, as recited. In that case, the addition of a mental step impermissibily protects that mental step, at least from the viewpoint of practitioners of the prior art. That is the exact fact pattern addressed by the Supreme Court in Mayo. Note that whether or not the non-mental steps are deemed "eligible" or merely "anticipated" makes no practical difference (the statute is consistent with the view that non-inventive methods are both anticipated and ineligible). The bottom line is those old non-mental steps can't be patented, and the addition of the ineligible mental step can not confer patentability (or eligibility). Simple example of an ineligible claim falling into this first category: "A method comprising [performing old measurement] and determining [i.e., thinking about] [new" correlation] based on said measurement.

The second situation is where the recited non-mental steps are "new" but nevertheless ineligible because they don't add enough to an ineligible "newly discovered" natural phenomenon. This is where the PTO stumbled in its analysis of claim 1 in Example 29 (but somehow managed to regain its footing when considering the *same* subject matter in the context of claim 2!). The quintessential example is a claim reciting the detection of a "new" phenomenon (e.g, "an asteroid is here!"; "an antigen is here") using prior art tools known to be useful for that purpose (aka "conventional tools", e.g., a "telescope" or "antibody"). Adding a further mental step (e.g., "diagnosing" or "thinking about what it means") isn't going to save the claim. This is the Sequenom problem.

[GrzeszDeL]

"I am inclined to think that the life sciences examples are slightly less toxic than what we have seen on other occasions."

Sure, "slightly less toxic" seems a fair characterization, although this is a low bar to clear. Basically, Mayo v Prometheus got §101 about as completely wrong as is possible, and the PTO is trying to confine the Mayo holding to a very narrow set of circumstances to minimize the damage.

I am not sure, however, how much this really helps. Sure, you can get your claims allowed now, but there is no guarantee that the courts will be as inclined to cabin Mayo narrowly as the PTO appears to be. In fact, quite the opposite. The CAFC has made clear that it feels compelled to give Mayo a very broad reading (see Judge Linn's dissent from the panel decision in Sequenom, or Judge Lourie's concurrence in the denial of en banc review).

I think that anyone who relies on these new examples when advising their clients has an ethical duty to tell them "making an amendment to track Ex. 29, Claim 1 may help us get to allowance, but there is a non-trivial likelihood that the claim that is allowed will be totally unenforceable in court."

I do not really trust that the analysis that the PTO presents is anything like how a court would think about most of these claims.

[The Memory Motel]

"I think that anyone who relies on these new examples when advising their clients has an ethical duty to tell them "making an amendment to track Ex. 29, Claim 1 may help us get to allowance, but there is a non-trivial likelihood that the claim that is allowed will be totally unenforceable in court.""

Whether or not you rely on the Examples or not, to advise a client otherwise (or fail to advise at all) would be incompetence. Sequenom is controlling law.

[GrzeszDeL]

"[T]o advise a client otherwise (or fail to advise at all) would be incompetence."

Right. And one of your ethical duties as a lawyer is a duty of competence (ABA Rule 1.1), so as I said above, you have an ethical duty to offer such advice. We are agreeing here.