Abstract idea integrated into a practical application will be treated by the USPTO as patent-eligible under §101

On Friday, January 4, 2019, new USPTO Director Andrei Iancu finally issued his long-awaited guidelines on subject matter eligibility under §101.

The new ‘2019 Revised Patent Subject Matter Eligibility Guidance’ aims to significantly increase the predictability of the §101 analysis conducted by both examiners and administrative patent judges at the PTAB (Patent Trials and Appeals Board):

"Properly applying the Alice/Mayo test in a consistent manner has proven to be difficult, and has caused uncertainty in this area of the law … Many stakeholders, judges, inventors, and practitioners across the spectrum have argued that something needs to be done to increase clarity and consistency in how Section 101 is currently applied … To address these and other concerns, the USPTO is revising its examination procedure with respect to the first step of the Alice/Mayo test."

I believe that these guidelines will indeed lower the disturbingly high bar of what the USPTO considers as an eligible invention under §101. I am also hopeful that the guidelines will prevent frivolous and frustrating rejections of claims directed to real technological improvements.

The lengthy guidelines, extending over 27 pages, survey and clarify the manner in which examiners should conduct their §101 examination in accordance with Federal Court precedents and past USPTO guidance.

The main novelty in these guidelines, however, is the complete overhaul of how the main investigation of the §101 analysis (often called ‘Step 2A’ of the Alice/Mayo framework) is conducted: According to the new guidelines, claims which recite an abstract idea (e.g., a mathematical concept, a method of organizing human activity, or a mental process) but integrate that abstract idea into a practical application – are patent-eligible under §101:

"[T]his guidance explains that a patent claim or patent application claim that recites a judicial exception is not ‘directed to’ the judicial exception if the judicial exception is integrated into a practical application of the judicial exception."

If the abstract idea is integrated into a practical application, the investigation is concluded, and the examiner will not proceed to the next step (‘Step 2B’) of weighing whether the claim includes additional elements which are not ‘well-understood, routine, and conventional’. That next step was where many inventions found their fate as patent-ineligible. I believe that now, in the majority of cases, the claims will be found patent-eligible already in Step 2A, and will be spared the perplexing discussion of what is ‘well-understood, routine, and conventional’.

To understand why this amounts to a tectonic shift in the USPTO’s §101 policy, it is beneficial to recall how USPTO examiners and administrative patent judges handled the 2014 Supreme Court Alice precedent over the past four years. Until today, examiners and administrative patent judges tended to decide the fate of claims fairly hastily: once they found a hint of an abstract idea (e.g., one of the ‘usual suspects’: a mathematical concept, a method of organizing human activity, or a mental process) in the wording of a claim, they superficially went through what is known as the two-step Alice/Mayo framework, and rushed to conclude that the claims are ineligible under §101. Only in rare cases did examiners become persuaded that, even though the claims include one of those ‘usual suspects’, they amount to significantly more than the abstract idea, and are therefore eligible under §101.

The new guidelines force a more structured examination of whether the claim, as a whole, (and not just a portion of it) is ‘directed to’ a judicial exception to patentability. Examiners must now look at the claims to locate elements that have integrated the exception into a practical application. The guidelines provide the following useful examples of elements that make the claim patent-eligible:

"[1] an additional element reflects an improvement in the functioning of a computer, or an improvement to other technology or technical field;

[2] an additional element that applies or uses a judicial exception to effect a particular treatment or prophylaxis for a disease or medical condition;

[3] an additional element implements a judicial exception with, or uses a judicial exception in conjunction with, a particular machine or manufacture that is integral to the claim;

[4] an additional element effects a transformation or reduction of a particular article to a different state or thing; and

[5] an additional element applies or uses the judicial exception in some other meaningful way beyond generally linking the use of the judicial exception to a particular technological environment, such that the claim as a whole is more than a drafting effort designed to monopolize the exception."

It is important to note that some of these examples have been known to examiners for a while, whether from Federal Court precedents or from past USPTO memoranda. So far, these have not been applied consistently by the examiners, who often preferred to err on the side of determining the claims to be ineligible rather than eligible. I am optimistic, however, that examiners will now realize that the pendulum at the USPTO leadership has shifted, and will tread more carefully as they compare claims to the above examples.

For instance, I believe that the third example (“an additional element implements a judicial exception with … a particular machine or manufacture that is integral to the claim”) will greatly decrease or even eliminate the number of rejections of claims directed to physical machines (industrial machines, medical devices, toys, etc.) just because the claims recite some mathematical calculation. This will prevent absurdities such as the infamous determination by the PTAB in 2017 that an MRI machine is an ‘abstract idea’.

Similarly, it is likely that the first example (“improvement in the functioning of a computer, or an improvement to other technology or technical field”) will be taken more seriously by examiners, who, until today, refused to admit that an invention is an improvement to a technology unless confronted with a court precedent directed to an identical invention (a very rare occurrence).

Finally, I estimate that the second example (“an additional element that applies or uses a judicial exception to effect a particular treatment or prophylaxis for a disease or medical condition”) will ease the §101 threshold which examiners apply to biotechnology and pharmaceutical inventions. For instance, claims that recite the use of algorithmics, mathematical calculations, or machine learning models to aid in the treatment or prevention of disease – are likely to be less prone to rejection under the new guidelines. However, since the focus of the guidelines is the judicial exception of ‘abstract ideas’ and not ‘natural phenomena’ or ‘laws of nature’, it is too early to predict whether they will also affect how genome technology inventions will be dealt with by the USPTO. Since the advent of the Supreme Court decisions in Mayo and Myriad, many improvements in genetic engineering remained unpatentable, because examiners were quick to conclude that the claims are ‘directed to’ the judicial exception, even if the claims explicitly recited human involvement. Only time will tell whether the requirement in the new guidelines, to check if the judicial exception is integrated into a practical application, will have an effect in the genetic engineering field.

Concurrently with the issuance of the new guidelines, the USPTO also issued guidance on “Examining Computer-Implemented Functional Claim Limitations for Compliance with 35 U.S.C. §112”. That §112 guidance emphasizes various issues with means-plus-function principles under §112(f), definiteness under §112(b), and written description and enablement under §112(a). I reviewed this second set of guidance and did not identify any substantive deviations from past USPTO policy.

According to the USPTO, “these guidance documents have been issued concurrently to ensure consistent, predictable, and correct application of these principles across the agency.” The USPTO promises to provide training to examiners and administrative patent judges on both documents to ensure that guidance is being properly administered.

In conclusion, the much-awaited 2019 Revised Patent Subject Matter Eligibility Guidance brings great news to inventors and attorneys, by removing much of the unpredictability with which §101 examination had been conducted by the USPTO since 2014.