By Michael Borella —

On July 30, 2015, the U.S. Patent and Trademark Office updated its subject matter eligibility guidance ("July Update").  In the July Update, the Office provided recommendations and resources for examiners in addition to those in the Office's 2014 Interim Guidance on Subject Matter Eligibility.  In particular, the Office provided procedural and substantive guidelines regarding the examination of inventions that may include subject matter that does not meet the requirements of 35 U.S.C. § 101.  For a more detailed overview of the July Update, see our review thereof.

The Office requested public comments on the July Update, the comment period of which ended on October 28, 2015.  The Office recently published the comments it received from a number of organizations, law firms, companies, and individuals.  This is the second in a series of articles regarding the comments, and covers those provided by BSA – The Software Alliance.

BSA is a software industry advocacy group, counting Apple, Dell, IBM, Microsoft, Oracle, Salesforce, and Symantec among its members.  The companies represented by BSA collectively hold more than 100,000 U.S. patents, and invest billions of dollars into technology research and development.  The vast majority of these patents and R&D activities are directed to software; thus, BSA has a vested interest in the Office's interpretation and application of the Alice v. CLS Bank test.

BSA begins by making an observation made by many others — that the Office has been applying the Alice test in an inconsistent fashion, "with dramatic differences between examiners' interpretation of Alice and the PTO Subject Matter Eligibility guidelines."  The resulting uncertainty "creates apprehension in the software field, which, in turn, discourages investment in important technologies."  But BSA members also would like to rely on Alice and its progeny to help in "weeding out truly abstract patents and patent applications that can be asserted in an abusive manner."  Overall, BSA wants a "consistent and predictable intellectual property framework" that provides a foundation for member investment in new technologies.

To achieve these goals, BSA made two specific recommendations:  that examiners provide a clear rationale for patent-eligibility rejections, and the Office publish more examples of patent-eligible claims involving methods of organizing human activity.

Regarding the first recommendation, the July Update does state that examiners have the burden to provide a prima facie case of patent-ineligibility.  BSA advocates that for the prima facie case to be made out, examiners must "clearly articulate their reasons for a subject matter eligibility rejection."  BSA notes that its members have recently received "many types of boiler plate rejections" that are insufficient in this regard.  Particularly, these rejections have included "characterizations of the abstract idea akin to a field of the invention rather than tied to the specific invention embodied in the claims."  Such rejections, according to the BSA, fail to "provide the applicant with any guidance as to how to address the examiner's concerns."  BSA would prefer the rejections to "include the underlying reasoning in support of a conclusion that individual elements (or the ordered combination of elements) of a claim fail to provide an inventive concept," and that this reasoning is tailored to the language of the claims.

Indeed, this point hits at the core of the many practical difficulties with implementing the Alice test.  Unless the examiner provides a detailed rationale for rejecting claims under § 101, the applicant is left with little with which to work.  All too often, examiners reject claims in a terse and conclusory fashion, without fully applying both prongs of Alice.  Consequently, it is difficult or impossible to determine whether the examiner has proper grounds for the rejection, or if the applicant should rebut the examiner.  And such rejections are unnecessarily difficult to rebut when the examiner has not taken a clear position.

BSA recommends that § 101 rejections should be made using a similar level of detail as § 103 rejections.  From the Supreme Court's KSR v. Teleflex decision, it is now well understood that "rejections on obviousness cannot be sustained with mere conclusory statements; instead, there must be some articulated reasoning with some rational underpinning to support the legal conclusion of obviousness."  BSA suggests that the Office instruct examiners to provide specific evidence in patent-eligibility rejections, and that the Office's quality assurance procedures identify when such rejections lack clear articulation.

Regarding the second recommendation, in the July Update the Office stated that abstract methods of organizing human activity include (i) managing relationships or transactions between people, (ii) satisfying or avoiding a legal obligation, (iii) advertising, marketing and sales activities or behaviors, and (iv) certain types of mental processes and planning.  BSA is concerned that "some examiners may improperly look to extend the scope of abstract ideas to any software invention which has an end effect of improving organization of human activities."  This would be improper because not all inventions that improve the organization of human activities are fatally abstract.  As examples, BSA states that "a process by which Global Positioning Satellites use data to redirect traffic patterns, a system that automatically reorders a task list of a user based on context, or a new type of board game" are methods of organizing human activity that could be claimed in a fashion that meets the Alice requirements.  Consequently, BSA recommends that the Office provide more patent-eligible examples of this nature.

To put this another way, a claim directed to a disembodied process for managing a task list might be patent-ineligible under Alice, but this might not be the case for another claim directed to a software invention for automatically updating, re-prioritizing, and displaying a task list.  The Office has already provided useful examples of patent-eligible methods for distribution of stock quote and graphical user interface features in the July Update.  More of these examples for methods of organizing human activity would be welcome.

By Michael Borella —

On July 30, 2015, the U.S. Patent and Trademark Office updated its subject matter eligibility guidance ("July Update").  The update provided recommendations and resources for examiners in addition to those in the Office's 2014 Interim Guidance on Subject Matter Eligibility.  In particular, the Office provided procedural and substantive guidelines regarding the examination of inventions that may include subject matter that does not meet the requirements of 35 U.S.C. § 101.  For a more detailed overview of the July Update, see our review thereof.

The Office requested public comments on the July Update, the comment period of which ended on October 28, 2015.  The Office recently published the comments it received from a number of organizations, law firms, companies, and individuals.  This is the first in a series of articles regarding the comments, and covers those provided by the American Bar Association Section of Intellectual Property Law (the Section).

The Section begins by commending the Office for providing extensive examples of patent-eligible and patent-ineligible claims, as "[t]hese examples help both examiners and stakeholders to reach a common understanding and advance prosecution."  But, the Section is quick to point out that uncertainty regarding the examination of patents under § 101 remains.

Importantly, the Section took the position that there are three distinct tests for patent-eligibility, the "machine or transformation test," the "law of nature" and "natural phenomenon" test used prior to Mayo v. Prometheus, and the two-prong Alice v. CLS Bank test.  The Section views the first two tests as incompatible because "it would have been unthinkable to observe that one part of a claim was performed in the human mind, and another part operated by natural principles."  (It would not be surprising if there is a DNA analysis claim out there somewhere that is a counterexample to this notion.)  The Section further views the Alice test as being limited to review of long-standing concepts (it isn't).  As a result, the Section recommended that "[w]here the three tests diverge, the Eligibility Update should be separated into three separate sections to make the distinctions clear."

In Alice, the Court clearly stated that the two-prong Mayo test was universal, in that it applied to all judicial exceptions to patent-eligibility, as well as all statutory classes of claim.  The Court wrote that:

[W]e set forth a framework for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts . . . first, we determine whether the claims at issue are directed to one of those patent-ineligible concepts [then] we consider the elements of each claim both individually and as an ordered combination to determine whether the additional elements transform the nature of the claim into a patent-eligible application.

To the extent that they are still applicable, the pre-Alice tests serve to further inform this analysis.  Moreover, whether a claim is novel has little bearing on the eligibility thereof.  This is reflected by the Court's position in Assoc. for Molecular Pathology v. Myriad Genetics ("[g]roundbreaking, innovative, or even brilliant discovery does not by itself satisfy the §101 inquiry"), as well as that of the Federal Circuit in Ultramercial Inc. v. Hulu ("[t]hat some of the [claimed] steps were not previously employed in this art is not enough — standing alone — to confer patent eligibility").  Unfortunately, the Section's misunderstanding of the law here detracts from the credibility of its positions as a whole.

Nonetheless, the Section went on to make an astute observation about how examiners are applying the Office's § 101 framework.  Responding to the Office's statement that the July Update will "ensure that a claimed concept is not identified as an abstract idea unless it is similar to at least one concept that the courts have identified as an abstract idea," the Section wrote that "[i]t is not clear that examiners are following this instruction, but appear to use their creativity in an attempt to identify an abstract idea from the claim, which is a guilty until proven innocent mindset."  Indeed, many patent-eligibility rejections seem to be based on knee-jerk, conclusory reactions, rather than actual analyses of claims.  Some examiners have stated that they are under pressure from their supervisors to reject claims under § 101 unless those claims are clearly eligible.

The Section also raised the issue that "[u]sing broad, categorizing words to describe a claim, e.g., an advertising method or system . . . will only lead the examiner to label a claim as directed to an abstract idea, since it can be reduced to a few generic words."  Many others have complained about such over-generalization of claimed inventions by the Office.  As the Section noted, "labeling a claimed concept in as few words as possible is certainly not the test."

The Section further took issue with the Office's statement about official notice.  Namely, in the July Update, the Office stated that "[c]ourts have not identified a situation in which evidence was required to support a finding that the additional [claim] elements were well-understood, routine or conventional, but rather treat the issue as a matter appropriate for judicial notice."  In the Section's view, the Administrative Procedure Act (APA) "requires agencies to support any adverse decision by substantial evidence."  The Section reminded the Office that it is not an Article III court, and noted that the Supreme Court did provide evidence for its reasoning that some claim elements were well known in Alice and Bilski v. Kappos.  Ultimately, the Section recommended that the Office's reference to official notice be completely removed.

Another Section recommendation is that examiners help applicants draft patent-eligible claims.  For example, applications that "describe and claim specific hardware to accomplish a particular task should be patent eligible, and examiners should help applicants to amend claims to be patent eligible."  This is a commendable notion.  Although many examiners will work actively with applicants to find pathways to allowance, others take an "it's not my problem" approach, which is not productive for either the applicant or the Office.

And finally, the Section expressed concern that the Office may be in violation of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement due to the Office's "practically excluding certain subject matter as per se patent ineligible."  The Section pointed to application rejection rates of nearly 100% in many art units of Technical Center 3600 as an example.