Patent Eligibility Under 35 U.S.C. § 101: USPTO’s Interim Guidance Continues To Encourage Improper Rejections
By Brent E. Matthias - June 30, 2014
On December 16, 2014, the USPTO published Interim Eligibility Guidance (“IEG”) for reviewing claims for compliance with 35 U.S.C. § 101.
As stated by the USPTO, the IEG supplements the Preliminary Instructions to Examiners that were published on June 25, 2014, and supersedes the March 14, 2014, publication regarding the analysis of claims reciting laws of nature, natural phenomena, and/or natural products.Unfortunately, the IEG is largely consistent with the Preliminary Instructions in focusing on how Examiners can reject claims instead of providing perspective on when such a rejection is proper, and therefore we expect the current gridlock to continue in certain art units until the USPTO adopts a more restrained approach to asserting § 101 rejections.
The IEG articulates a two-step analysis for subject matter eligibility under 35 U.S.C. § 101, as summarized in the following flowchart:
The first inquiry, referred to in the IEG as “Step 1,” is to determine whether the claimed invention is directed to one of the four statutory categories, namely a process, a machine, a manufacture, or a composition of matter. This inquiry is based on the language of § 101 itself, and jurisprudence in this area remains relatively well-settled. If the claim does not fall within one of these four categories, it is not eligible for patent protection under 35 U.S.C. § 101. If, however, the claimed invention falls under one of the statutory categories, then the IEG advise the Examiner to continue analyzing the patent eligibility of the claimed subject under “Step 2” of the flowchart.
The IEG asserts that Step 2 of the subject matter eligibility test is the two-part “Mayo1 test.” Under Part 1 of the Mayo test, the Examiner is asked to determine if the claim is directed to one of the judicially recognized exceptions to patent eligibility. The IEG identifies the judicially recognized exceptions as laws of nature, natural phenomena, and abstract ideas.
If the claimed subject matter falls outside the judicial exceptions, the analysis ends and the claim is considered to qualify as eligible subject matter under 35 U.S.C. § 101. On the other hand, if the claimed subject matter is directed to one of the judicial exceptions, then Part 2 of the Mayo test is applied to determine if the claim recites additional elements that amount to “significantly more” than the judicial exception. If the claim recites “significantly more” than the judicial exception, the IEG directs the Examiner to find it eligible for patenting. If, however, the Examiner determines that the claim does not recite “significantly more,” then the Examiner is to reject the claim as ineligible under 35 U.S.C. §101.
Within the general framework set forth by the above flowchart, the USPTO has provided further guidance with respect to a subset of claimed subject matter known as “nature-based products.” Specifically, the IEG advises that nature-based products having “markedly different” characteristics from its naturally occurring counterpart in its natural state would qualify as patent eligible subject matter without further scrutiny under Part 2 of the Mayo test.
The IEG also provides for a streamlined eligibility analysis for a claims that may or may not recite a judicial exception but clearly does not tie up any judicial exception such that others cannot practice it. The IEG notes that the eligibility of these claims should be self-evident, and therefore the full analysis is not needed.
The USPTO’s approach to § 101 issues, as articulated most recently by the IEG, is troublesome in that it continues to present as settled issues that are still being developed by the courts and therefore subject rapid change. For example, the IEG presents the “Mayo test” in definitive terms, when it is still subject to interpretation and not at all clear that it set forth the test attributed to it by Alice Corp2. Furthermore, many of the concepts applied by these tests are undefined, such as what is considered to be sufficiently “abstract” to be a judicial exception, or what additional claim recitation is needed to qualify as “something more” under Part 2 of the Mayo test. The IEG does not reflect this ambiguity in the case law, and therefore will lead Examiners to believe that these concepts are well-defined when in reality they are still being developed and open to challenge.
The format of the IEG also raises concern that Examiners will be overly encouraged to assert § 101 rejections. Specifically, the most readily accessible part of the IEG is the flowchart, which appears to consist of simple and straightforward steps that use terms that, on their face, appear to be readily understood. It is a much more difficult task, however, to dig into the accompanying text that explains how to apply those steps and interpret those terms. The flowchart itself includes no indication that courts in general have narrowly construed judicial exceptions, nor does it point out that the Examiner must provide factual evidence and reasoning on the record to support rejections under 35 U.S.C. § 101. To an Examiner that possesses the hammer of a § 101 rejection, the fear is that the IEG will encourage her to find nails. Thus, examining guidelines are needed that place greater emphasis on restraint to avoid rejecting on § 101 grounds subject matter that is in fact patent-eligible.
A more balanced treatment of the patent-eligible subject matter issue might begin with the language of the statute, which is entirely ignored in the IEG. More specifically, 35 U.S.C. § 101 suggests a broad interpretation of what subject matter is eligible for patenting by defining it as “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” While Step 1 of the IEG flowchart presumably incorporates this definition, the omission of the term “any” arguably deemphasizes the broad range of subject matter that was intended to be covered by the statute.
Additionally, the guidelines should place more emphasis on the issue of preemption as it relates to the judicial exceptions, rather than relegate it to a secondary consideration as does the IEG. In Alice, the Court described the purpose behind the judicial exceptions as addressing concerns of preemption and ensuring that future discovery is not inhibited by improperly tying up the use of laws of nature and the like by granting patents on laws and principles that are “the basic tools of scientific and technological work.”3
The IEG transforms this concept into the “significantly more” step, which is hopelessly indefinite and easily subject to abuse. The “significantly more” step asks whether the claim recites “additional elements that amount to significantly more than the judicial exception.” To assist with this inquiry, the IEG provides a list of limitations that “may be enough to qualify as „significantly more‟” as well as a list of limitations “that were found not to be enough to qualify as „significantly more.‟” The IEG fails to articulate a rationale to use when the limitation under consideration does not fall within either of these lists, but the manner in which these lists are presented (the limitations recited in the former list “may be enough to qualify” while the limitations in the latter list “were found not to be enough to qualify”) certainly skews the Examiner toward asserting a § 101 rejection.By pushing the Examiner down the “significantly more” rabbit hole, the IEG diverts attention from the central issue behind the judicial exceptions, which is whether or not is claimed in a manner that prevents others from using fundamental practices or ideas, thereby encouraging improper analysis of the subject matter eligibility issue.
Under the IEG, the quality of § 101 rejections will continue suffer because it to emphasize the Examiner‟s duty to provide on the record factual evidence and reasoning in support of the rejection. The IEG flowchart uses steps and terms that are, without further guidance from the courts, open to subjective interpretation. Office actions applying the Preliminary Instructions typically included conclusory statements asserting that the claim was directed to a judicial exception and failed to recite “something more.” The IEG not only fails to address this problem but potentially exacerbates the issue by failing to provide any mention of the need for Examiners to properly support § 101 rejections with evidence and reasoning. This has an extremely chilling effect on prosecution, as applicants are not afforded an opportunity to fully assess and respond the USPTO‟s position as articulated by the Examiner. The lack of any discussion in the IEG regarding the Examiner‟s duties to provide factual evidence and reasoning in support of § 101 rejections will encourage further gridlock between applicants and Examiners.
The failure of the IEG to provide proper perspective is not merely academic; it is leading to significant practical issues within the USPTO. In certain Technology Centers, the allowance and issue rate has dropped precipitously post-Alice. Applicants wishing to dispute § 101 rejections have scant precedent to rely on and are given few options for doing so. In many cases, the only viable option is to appeal the rejection, which typically lengthens prosecution by a matter of years.
Despite the problems with the current approach, there is still a chance that the USPTO may arrive at a 101 framework that more accurately applies the case law and is more practical for Examiners and applicants to follow. The Supplementary Information section of the IEG notes that the USPTO appear to be open to modifying its position, by noting that the guidance on this issue “will be an iterative process continuing with periodic supplements based on developments in patent subject eligibility jurisprudence and public feedback.” Until the guidelines are modified as suggested above, however, we anticipate an elevated number of improper rejections under 35 U.S.C. § 101 and applicants must continue to demand application of the proper standards.
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1 Mayo Collaborative Serv. v. Prometheus Labs., Inc., 566 U.S. __, 132 S. Ct. 1289 (2012).
2 Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. __, 134 S. Ct. 2347 (2014).
3 Alice, 134 S. Ct. at 2354 (citing Bilski v. Kappos, 130 S. Ct. 3218, 3231 (2010), stating “upholding the patent „would pre-empt use of this approach in all fields, and would effectively grant a monopoly over an abstract idea.‟”)