By Michael S. Borella –

It has been over a decade since the Supreme Court blessed us with the two-step framework for patent eligibility under 35 U.S.C. § 101 in Alice Corp. v. CLS Bank. First, one must determine whether the claim at issue is “directed to” a judicial exception, and if so, one must then decide whether the claim adds “significantly more” than the alleged exception itself.

The ambiguities of this test are legion. But beyond its shortcomings, the Federal Circuit and the U.S. Patent and Trademark Office (USPTO) have both modified it in substantive fashions. So now we have three “Alice tests” that share a name but can be applied differently in practice.

At surface level, the original Alice decision was about abstract ideas implemented in software, and whether reciting generic computer hardware in a claim made the overall claims any less abstract. But the Court’s language in the opinion made it clear that their actual concern was one of preemption.

We have described the concern that drives this exclusionary principle as one of pre-emption. Laws of nature, natural phenomena, and abstract ideas are the basic tools of scientific and technological work. Monopolization of those tools through the grant of a patent might tend to impede innovation more than it would tend to promote it, thereby thwarting the primary object of the patent laws. We have repeatedly emphasized this concern that patent law not inhibit further discovery by improperly tying up the future use of these building blocks of human ingenuity.

The Court’s stated rationale was straightforward – to not allow monopolization of the “building blocks of human ingenuity.”[1] In this light, the Alice test was supposed to ask whether a claim effectively preempted use of such a building block in the form of an abstract idea (whatever that means this month), law of nature, or natural phenomenon.

Further, this preemption-centric logic at least ties § 101 to a policy rationale. If a claim does not preempt others from using the “basic tools of scientific and technological work” it is eligible. Unfortunately, the Court left out the small matter of how one is supposed to measure preemption. Is it claim breadth? Use of functional language? Market impact? Who knows. How much and what does one need to add to an abstract idea in order to make it “significantly more?” Again, who knows? The Court shrugged and walked away, leaving the Federal Circuit to fill in the blanks. This was a mistake.

The Federal Circuit looked at Alice, nodded politely, and proceeded to ignore its core premise. Instead, the appellate court has stripped preemption from the test. In Ariosa Diagnostics, Inc. v. Sequenom, Inc., the Federal Circuit wrote:

The Supreme Court has made clear that the principle of preemption is the basis for the judicial exceptions to patentability. For this reason, questions on preemption are inherent in and resolved by the § 101 analysis . . . . While preemption may signal patent ineligible subject matter, the absence of complete preemption does not demonstrate patent eligibility . . . . Where a patent’s claims are deemed only to disclose patent ineligible subject matter under the [Alice] framework, as they are in this case, preemption concerns are fully addressed and made moot.

In the span of three sentences, the Federal Circuit both acknowledged that preemption is the basis of the Alice test and then declared that preemption is irrelevant when one applies the Alice test. This is the jurisprudential equivalent of agreeing that a solid foundation is essential, then building a house on sand anyway. The Supreme Court’s § 101 decisions do not treat preemption as an incidental consequence of the analysis; they treat it as the reason the analysis exists. By declaring that preemption concerns are “moot” once the claim fails the Alice test, the Federal Circuit inverted the structure of the doctrine. Ariosa instead treats the test as self-justifying, in that preemption begins and ends with whatever conclusion the court reaches. Through this doctrinal sleight of hand, the Alice test as applied by the Federal Circuit does not ask whether a patent blocks others from using one of the basic tools of scientific and technological work.

This has resulted in many remarkably narrow claims that recite far more than basic building blocks to be ruled too abstract for patenting in a highly conclusory manner. This shift also means that § 101 is doing the job of § 102, § 103, and § 112 all at once, but without the pesky constraints of evidence or claim construction.

So, preemption has gone from the cornerstone of the analysis to an irrelevant footnote. Which brings us to the third version of the test – the USPTO’s bureaucratic remix.

Never one to miss a chance to turn doctrine into paperwork, the USPTO took Alice and did what federal agencies do best: they added complexity. The 2019 Revised Patent Subject Matter Eligibility Guidance broke the first step of the Federal Circuit test into two parts, each with its own long list of relevant considerations.

Particularly, the two substeps of the judicial exception inquiry are: does the claim recite a judicial exception,[2] and if so does it integrate that exception into a practical application? Examiners must then run through a list of factors, such as improvements to technology, meaningful limitations, specific machine use, etc., each of which can support eligibility. Only then do we reach Step 2B, where the “inventive concept” analysis lives, chained to the unhelpful “well-understood, routine, and conventional” mantra.

The USPTO’s 2019 guidance was supposed to improve consistency, but it mainly made § 101 rejections and rebuttals longer and more convoluted. Worse, none of this is binding on the courts, so an applicant who finally navigates the Office’s Alice labyrinth may find their patent declared ineligible on the pleadings by a district court judge.

The USPTO’s Alice test is thus a triumph of administrative structure over substance. It replaces two vague steps with three vague steps, aimed at creating the illusion of objectivity. Kafka would be proud.

So we have three distinct versions of the same test. The Supreme Court’s Alice test is fundamentally based on preemption, the Federal Circuit’s Alice test ignores preemption, and the USPTO is too busy drawing flowcharts to care either way. Each of these tests speaks its own language, none of which is intelligible. A claim that passes the USPTO may fail in court. A claim that would survive under the Supreme Court’s stated rationale might never make it past an examiner or the Federal Circuit. The only common thread is uncertainty.

If Congress or the Supreme Court ever decides to clean this up, here is a two-step process they could use that is actually workable in practice. Step one: admit the obvious – the Alice test is an incomprehensible mess. Step two: go back to a pre-Alice regime and focus on § 102, § 103, and § 112.

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[1] Some would argue that, ironically, Alice has strengthened the monopoly power of large companies by weakening patent law so that these companies can “efficiently infringe” competitors’ patents given that invalidating such patents was made dramatically easier.

[2] The USPTO goes to pains when trying to explain the difference between the language “directed to” and “recites.” One of the more bizarre outcomes of the USPTO’s version of the test is that an eligible independent claim that does not recite a judicial exception can have an ineligible dependent claim that does.