On the Nature of Prior Art in the 35 U.S.C. § 101 Inquiry

    By Michael Borella and Ashley Hatzenbihler[1]--

Introduction

Diamond v. Diehr, decided by the Supreme Court in 1981, seemed to establish a bedrock principle of statutory construction for patent law.  The Court stated that "[t]he 'novelty' of any element or steps in a process, or even of the process itself, is of no relevance in determining whether the subject matter of a claim falls within the 35 U.S.C. § 101 categories of possibly patentable subject matter."  That proclamation appeared to slam the door shut on any consideration of novelty, or by extension non-obviousness, as part of the subject matter eligibility calculus.  Indeed, this tenet held for over 30 years.

Then, in 2012, Justice Breyer wrote in Mayo v. Prometheus, "[w]e recognize that, in evaluating the significance of additional steps, the § 101 patent-eligibility inquiry and, say, the § 102 novelty inquiry might sometimes overlap."  This statement, if made in isolation, might have been considered misguided dicta in an opinion that otherwise relied on the reasoning of Diehr.  Yet Mayo went further, as Justice Breyer analyzed the claim language in question:

[T]he claims inform a relevant audience about certain laws of nature; any additional steps consist of well-understood, routine, conventional activity already engaged in by the scientific community; and those steps, when viewed as a whole, add nothing significant beyond the sum of their parts taken separately.  For these reasons we believe that the steps are not sufficient to transform unpatentable natural correlations into patentable applications of those regularities.

As a consequence of concluding that this claim was ineligible under § 101, the Court implicitly approved integrating a form of prior art consideration into the eligibly analysis.  A claim element that is "well-understood, routine, conventional" is by definition in the prior art.  In fact, such an element is indisputably and clearly in the prior art.[2]

In 2014, the Court spoke again on § 101, with Alice v. CLS Bank.  Alice did not explicitly overrule Diehr -- and in fact went to lengths trying to justify how its holding was consistent with the principles of Diehr.  But the justices left the rest of us scratching our collective heads, because Mayo and Alice sure do seem to contradict Diehr in rather impactful ways, including whether and how to consider prior art when evaluating eligibility.

To that point, since 2018, the Federal Circuit's Berkheimer v. HP decision has stood for the notion that whether additional elements are well-understood, routine, or conventional can be determined as a factual inquiry if such an answer is not apparent.  This further ties together patent-eligibility with obviousness, both being decided as a matter of law with underlying issues of fact.

But Berkheimer is just one example.  Indeed, comparisons between claimed inventions and prior art are found in a vast number of post-Alice Federal Circuit § 101 decisions including Koninklijke KPN N.V. v. Gemalto M2M GmbH, The Chamberlain Group, Inc. v. Techtronic Industries Co., Enfish v. Microsoft, McRO, Inc. v. Bandai Namco Games America Inc., Cellspin Soft, Inc. v. Fitbit, Inc., Data Engine Technologies LLC v. Google LLC, Core Wireless Licensing S.A.R.L. v. LG Electronics, Inc., and Internet Patents Corp. v. Active Network, Inc., just to name a few.

It is now indisputable that prior art is part of the § 101 test.  But the contours of the prior art analysis within a patent-eligibility inquiry remain surprisingly difficult to nail down.  The Federal Circuit has never specifically clarified how prior art influences the § 101 inquiry, giving the test an amoeba-like property that changes subtly from opinion to opinion.  With so much at stake -- for patent applicants, patent holders, accused infringers, and potential licensees -- at least a modicum of lucidity would be desirable.

Our goal is to explore this space through the words of the Federal Circuit that appear in numerous decisions over the last seven years.  We do so by aligning our investigation with the two prongs of the Alice test,[3] as an assertion of eligibility can be supported by distinguishing a claimed invention over the prior art in either prong.[4]  In doing so, we hope to provide a degree of illumination on this otherwise murky area of patent law.

Prior Art Under Prong One

A common definition of the prong one analysis in Federal Circuit jurisprudence is that it requires one to "look at the focus of the claimed advance over the prior art to determine if the claim's character as a whole is directed to excluded subject matter."  While this exact text is from Chamberlain, variations of it appear in approximately 20 decisions since 2016.  The earliest seems to be from Genetic Techs. Limited v. Merial, where Judge Dyk interpreted Mayo as considering that "the focus of the claimed advance over the prior art was allegedly newly discovered information about human biology."

But how does one determine such a "focus"?  In Yu v. Apple, for example, it is based on "the language of the asserted claims themselves, considered in light of the specification."  Chamberlain and a number of other cases also refer to the specification as a way of shining light on the "true focus" of a claim.  Mortgage Application Techs. v. Meridianlink also considered the prosecution history in this process.

With this in mind, it appears that there should be some form of advance over the prior art in the claims themselves or as explained by the specification in order to meet the hurdle of prong one.  But are there any constraints on the advance such that certain types of advances are less likely to be directed to judicial exceptions (and therefore more likely to render claims eligible) than others?  It turns out that there are.

The advance should be claimed specifically.  In Dropbox v. Synchross Techs., the claimed advance was "nothing but a functional abstraction" and the specification did not "define this abstraction as a technological solution."  In Chamberlain, the specification described the difference between the claimed invention and the prior art as "the broad concept of communicating information wirelessly," which also lacked specificity.  This implies that the claimed advance should involve how something is done, and go beyond just stating what is being done.  On the other hand, the claimed focus in Enfish was a "specific type of data structure" for which the specification describes its virtues over the prior art.  These claims were found to be non-abstract.

The advance should also truly be . . . an advance.  In Solutran v. Elavon, the specification established that all of the claimed steps were conventional despite also describing these steps as capturing the advance over the prior art.  As a result, the claims were found to be directed to an abstract idea.  Similarly, the focus of the claimed advance was found abstract in Intellectual Ventures v. Erie Indemnity Co. because it was drawn to computerizing "longstanding conduct that existed well before the advent of computers and the Internet."  In contrast, the claims of McRO recited a computerized process that had not been previously performed by humans, and were therefore non-abstract.

Certain types of advances are also given little or no weight under prong one.  In Trading Techs. Int'l v. IBG, the advance was that the claimed invention provided "information to traders in a way that helps them process information more quickly, not on improving computers or technology."  Such an advance, while potentially quite innovative, is often viewed as non-technical and therefore abstract.  Indeed, many claims to financial transactions are determined to be abstract regardless of whether they represent an improvement over the prior art.

Based on these observations, the focus of the claimed advance over the prior art should be presented in a specific manner that defines how the advance is achieved rather than in an outcome-oriented fashion.  But such a purported advance can be discounted if there is evidence that it is not truly an improvement over the prior art, or if it is non-technical in nature.

Additionally, in Cardionet v. InfoBionic, the Federal Circuit described at length that the prior art inquiry under § 101 need not include a search for references that read on the claim language.  Instead, "[i]n determining whether [the claims] are directed to an abstract idea, a court may well consult the plain claim language, written description, and prosecution history and, from these sources, conclude that the claims are directed to automating a longstanding or fundamental practice."  Nonetheless, it is not "impermissible for courts to look outside the intrinsic evidence as part of their Alice step one inquiry."

Put another way, the § 101 prior art determination under prong one can be made based on the four corners of the patent document and its file history rather than the search and comparison one would undertake when applying §§ 102 and 103.  But such a search and comparison is not prohibited.

Prior Art Under Prong Two

Prong two of Alice was characterized by the Supreme Court as "examin[ing] the elements of the claim to determine whether it contains an inventive concept sufficient to transform the claimed abstract idea into a patent-eligible application."  As noted above, these additional elements must be more than just well-understood, routine, conventional activities or features previously known in the industry.  For instance, the Court held in Alice that generic computer components alone do not rise to the level of an inventive concept.

In view of the holding in Berkheimer, prong two can have a procedural impact that is typically absent from prong one.  In Aatrix Software v. Green Shades Software, the Federal Circuit fleshed out Berkheimer by stating that patent eligibility under § 101 can be determined on the pleadings, but "[t]his is true only when there are no factual allegations that, taken as true, prevent resolving the eligibility question as a matter of law."  On the other hand, "[i]f there are claim construction disputes . . . either the court must proceed by adopting the non-moving party's constructions . . . or the court must resolve the disputes to whatever extent is needed to conduct the § 101 analysis, which may well be less than a full, formal claim construction."  As a consequence, plaintiffs now front-load their complaints with factual allegations relating to the claimed advances over the prior art if they believe that their asserted patents are vulnerable to an Alice challenge.

Substantively, Dropbox provides the clearest statement setting forth the character of the prior art analysis under prong two.  In that case, the Federal Circuit states "an inventive concept exists when a claim recites a specific discrete implementation of an abstract idea where the particular arrangement of elements is a technical improvement over the prior art."  Right there, we have the same three factors that dominate the prong one analysis -- specificity, technical character, and improvement over the prior art.  Nonetheless, in the world of patent-eligibility, nothing is that simple.  Dropbox get us most of the way home, but not all of the way.

The nuances are subtle.  To provide an inventive concept, the additional elements themselves must not be directed to judicial exceptions.  This was the case in Recognicorp, LLC v. Nintendo Co., where additional elements directed to image encoding procedures were deemed to be merely mathematical in nature, and thus also abstract.  Put succinctly in Synopsys, Inc. v. Mentor Graphics Corp., "a claim for a new abstract idea is still an abstract idea."  The Federal Circuit was more forceful on this point in SAP America, Inc. v. InvestPic, LLC, stating that, for an invention directed to mathematical techniques in finance, "patent law does not protect such claims, without more, no matter how groundbreaking the advance."[5]

Further, Mayo established that adding extra-solution activities to a claim does not provide an inventive concept.  Such activities involve those that are both pre-solution and post-solution, including simple gathering of data, high-level data processing, and generic displaying of data.  This was made clear in Electric Power Group, LLC v. Alstom S.A., when the Federal Circuit stated "selecting information, by content or source, for collection, analysis, and display does nothing significant to differentiate a process from ordinary mental processes, whose implicit exclusion from § 101 undergirds the information-based category of abstract ideas."  This falls under the specificity factor -- a non-specific or outcome-oriented element has little or no impact on patent-eligibility even if it is arguably not in the prior art.

Also, limiting the claims to a particular technological environment or solution space does not provide an inventive concept.  As an example, the claims in Electric Power Group were limited to power-grid monitoring, but this alone was not enough.  Putting this in the context of prior art, if it is known to carry out the claimed invention in one environment, doing so in another environment without more is not sufficient.

Notably, prong two also requires consideration of whether an inventive concept lies in the additional elements as an ordered combination.  Alice gave this aspect of the analysis short shrift, merely stating that "[c]onsidered as an ordered combination, the computer components of petitioner's method add nothing that is not already present when the steps are considered separately."  This conclusory language has apparently given the Federal Circuit and District Courts the understanding that they can also proceed in a conclusory fashion with prong two.  A large number of opinions effectively ignore or are dismissive of ordered combinations of additional elements, particularly when the Court finds the patentees' allegations of inventive concepts therein to be lacking.

Having said that, the Federal Circuit has added some color to the inquiry, stating in Chamberlain that:

The appropriate question is not whether the entire claim as a whole was well-understood, routine and conventional to a skilled artisan (i.e., whether it lacks novelty), but rather, there are two distinct questions: (1) whether each of the elements in the claimed product (apart from the natural laws themselves) involve well-understood, routine, conventional activity previously engaged in by researchers in the field, and (2) whether all of the steps as an ordered combination add nothing to the laws of nature that is not already present when the steps are considered separately.

An example of the ordered combination saving the day for a patentee is in BASCOM Global Internet Services, Inc. v. AT&T Mobility LLC.  There, the additional elements, taken individually, provided only generic computer, network, and Internet components, none of which rose to the level of an inventive concept on its own.  However, the Court found that the ordered combination of these elements afforded a technical solution that provided the benefits of two different prior art arrangements that were previously available only individually.  Thus, this beneficial ordered combination was an inventive concept.  Amdocs (Israel) Limited v. Openet Telecom, Inc. drove this point home with the Court stating "[w]hile some individual limitations arguably may be generic, others are unconventional and the ordered combination of these limitations yields an inventive concept sufficient to confer eligibility."  In short, the improvement over the prior art can be found in a combination of elements.

Finally, Recognicorp also held that "[t]o save a patent at step two, an inventive concept must be evident in the claims."  However, this does not imply that one cannot look to the specification to obtain an understanding of improvements over the prior art -- Berkheimer clearly supports such an undertaking.  Instead, the improvements as alleged in the specification or elsewhere must be recited -- at least in some fashion -- by the claims.

To summarize, an inventive concept can be found in the claim language of one or more additional elements and/or the combination thereof.  The inventive concept should be a specific, technical advance over the prior art that is not an extra-solution activity or a field of use limitation.

Conclusion

So where do these observations get us?  Last year we provided empirical evidence that the eligibility of claimed inventions is highly correlated with the claims' specificity, technical nature, and novelty.  We further argued that this evidence suggests more than just a correlational relationship -- that these three factors play a causational role in determining patent eligibility.  But in that study we did not attempt to break down how the three factors influence each of the two prongs of Alice.

After digging into the precise character of the relationship between eligibility and prior art, we find that specificity, technical nature, and prior art can be considered in both prong one and prong two of Alice.  While our initial focus was on how prior art considerations can sway the § 101 inquiry, specificity and technical nature are part of this equation and cannot be ignored.  To truly understand the link between a § 101 outcome and prior art, one at least needs to keep these other factors in mind.

Consequently, one could argue that the two prongs of the Alice test have been, in practice, unceremoniously yet effectively collapsed into a single prong.  Indeed, such anecdotal arguments have been made in the past, and the investigation herein supports such a notion.  Further, in accordance with our previous study, the three factors remain significant influencers of the eligibility outcome.

[1] Ashley Hatzenbihler is a student at Loyola University Chicago School of Law where she is focusing her studies on Intellectual Property.  Ashley is an associate editor of the Loyola University Chicago International Law Review and was a staff member of the Loyola University Chicago Law Review (vol. 52).  Currently, she is a Summer Associate at McDonnell Boehnen Hulbert & Berghoff.  Prior to law school, Ashley received her Bachelors in Mechanical Engineering with a minor in Mathematics from Marquette University.  Ashley also completed her Masters of Science in Mechanical Engineering from Marquette University, with her research focusing on the optimal conditions for auto-ignition testing of diesel fuels and surrogates.

[2] In contrast, an element lacking novelty or non-obviousness is not automatically well-understood, routine, or conventional.  For example, a practice that is disclosed in only in an obscure journal article that is known to just few experts in the relevant field is not well-understood, routine, or conventional, whereas a practice that is carried out daily in multiple laboratories would fall into this category.  See Berkheimer v. HP ("Whether something is well-understood, routine, and conventional to a skilled artisan at the time of the patent is a factual determination and goes beyond what was simply known in the prior art.").

[3] Prong one determines whether the claim is directed to a judicial exception (such as an abstract idea, law of nature or natural phenomenon).  If this is the case, prong two determines whether the claim recites significantly more than just the exception.

[4] Berkheimer addressed prior art under prong two, but many other cases do so under prong one.

[5] As a result, a claim can be found to be unpatentably abstract because the recited invention is too close to prior art, but just because a claim includes some features not in the prior art does not automatically render it non-abstract. 

Comments

[moondog]

How does this analysis apply to American Axle or Apple v Yu?

[Mike Borella]

They both lacked specificity and enough distinction from the prior art. Or at least that is what the panels decided. Both outcomes are debatable. The point of the article is to try to explain what the courts are looking for. That doesn't necessarily mean that the outcomes from the Courts' processes are ideal.

[skeptical]

Excellent article (of which, I am not yet done digesting) -- but there is one augmentation that I would add:

The Bahr Step Zero Memorandum of May 4, 2016.

That Bahr Step Zero Memorandum dictates just how the use of facts asserted by the Office in evaluating the Graham Factors have a carry-over effect on the eligibility examination protocol.

It is worth noting that factual assertions by the Office are binding on the Office as matters of fact (regardless as to what further legal arguments these admissions may be applied to).

So, in regards to the use of Graham Factors for a 101 point of law, per that Step Zero Memorandum, the Office procedure for examining for subject matter eligibility starts with a “Step Zero” and a factual assertion made by the Office in its application of the Graham Factors is binding on the Office regardless of any differing legal arguments to which the factual assertion may be applied, to quote:

“After determining what the applicant invented and establishing the broadest reasonable interpretation of the claimed invention, the eligibility of each claim should be evaluated as a whole using the two-step analysis detailed in the Interim Eligibility Guidance.”

Whenever the Office starts into a "broadest reasonable interpretation," one MUST remember just what controls the 'reasoning' of what is reasonable.

[Profesor Joshua Sarnoff]

Mike and Ashley, nice writeup. But you failed to mention that Diehr implicitly overruled Flook 3 years later with a change to the Court's membership, and that it is not at all clear that Diehr rather than Flook is the correct way to analyze 101 issues after the 1952 Act (not really changed by the AIA). And of course, Diehr isn't the correct approach under the current Bilski/Myriad/Mayo/Alice framework. If people would just recognize that the "other inventive concept" (Flook's language) is to be determined by reference to an even novel discovered but excluded subject (science, nature, abstract ideas), the law would become much clearer (and its application less inconsistent). But they keep trying to resurrect Diehr notwithstanding its implied repeal by Bilski, Mayo and Alice. They (and it appears that you) need to get over it, or convince SCOTUS or Congress to do so. :-) Best, Josh

[skeptical]

The idea that Diehr has been over-ruled was EXPRESSLY rejected by the members of the Court that were doing as Pro. Sarnoff implies.

And this follows the EXPRESED fact that Bilski reinforced that Diehr had cabined Flook and Benson.

The real view is that the Court chose NOT to state that ANY of their rulings are in conflict with any other of their rulings - which is a falsehood.

We are left with a Gordian Knot in which plainly contradictory views are each left 'intact'

We ALL need a pair of Kavanaugh Scissors to cut that knot.

[Kevin E Noonan]

What we all need to get over is any notion that the Court cares at all about doctrinal considerations in patent law. Due in part to their (relative) lack of experience (compared with almost any other substantive area of the law how many Supreme Court patent law decisions have there been?) and because their decisions are always outcome-determinative, bending the law to reach the "right" outcome, unless Congress takes patent law jurisdiction from the Court we will always be in this situation. We all need to remember the Court is very fond of "totality of the circumstances" tests, which provide the most judicial (and subjective) flexibility to almost any analysis. Members of the Court (for example, Justice Stephens) have not only more experience with but a greater affinity to antitrust law (it isn't a coincidence that the Court always speaks of the patent "monopoly") so restricting patent rights comes naturally.

The real problem is that the Federal Circuit has not challenged the Court's decisions by distinguishing them (something we ask law students to learn to do), which would force the Court to address the consequences of their decisions (as in Sequenom). Until they do expect no change.

[Greg DeLassus]

"[T]he two prongs of the Alice test have been, in practice, unceremoniously yet effectively collapsed into a single prong."

Definitely. One could imagine a legal regime in which the two prongs speak to different issues, but in the CAFC's hands the two have definitely collapsed into one.

[skeptical]

Sadly (oh so sadly), I concur with Dr. Noonan.

The CAFC's last attempt to push back we to ridicule the dicta of Justice Breyer.

The firehosing of the caged simians of the CAFC has been brutal and severe.

[Patent Scum Watchdog (TM)]

Sarnoff: "they keep trying to resurrect Diehr notwithstanding its implied repeal by Bilski, Mayo and Alice. They (and it appears that you) need to get over it"

Narrator voice: "They will never get over it."

Seriously, people far more thoughtful than Kevin Noonan have been telling him and his cronies even before the Supreme Court's Mayo decision to "get over" the fact that Diehr made no sense when interpreted as broadly as they would like. But Kevin actually believes that it would be a GOOD thing if people could patent methods of looking at old data and thinking new thoughts about it. Or he used to (maybe he actually grew up a little bit since then? I doubt it).