United States: USPTO Issues "2014 Interim Guidance On Patent Subject Matter Eligibility"

On December 15, 2014, the USPTO published a document titled "2014 Interim Guidance on Patent Subject Matter Eligibility" (Interim Guidance). The new Interim Guidance follows the previous preliminary examination instructions issued on June 25, 2014, in view of CLS v. Alice (2014), and was published as a notice for comments and may therefore be updated depending on public feedback.1 The new Interim Guidance combines the earlier guidance for claims reciting abstract ideas with the March 4, 2014, guidance for claims reciting natural phenomena and laws of nature.2

Under the new Interim Guidance, examiners are instructed to first determine whether the claim is directed to one of the four statutory categories of 35 USC §101 (i.e., process, machine, manufacture, or composition of matter). If so, the examiner is instructed to apply a two-part patent-eligibility analysis, as articulated by the Supreme Court in Alice. In sum, examiners are instructed to apply the two-part analysis to the broadest reasonable interpretation of the claims when analyzed as a whole. A flowchart titled "Subject Matter Eligibility Test for Products and Processes" is provided for examiners, and a copy is set forth below.

According to the Interim Guidance, the flowchart illustrates the subject matter eligibility analysis for products and processes to be used during examination for evaluating whether a claim is drawn to patent-eligible subject matter. The Interim Guidance states that the analysis set forth "promotes examination efficiency and consistency across all technologies."3 In sum, according to the Interim Guidance, the claimed invention (Step 1) "must be directed to one of the four statutory categories" and (Step 2) "must not be wholly directed to subject matter encompassing a judicially recognized exception." Referring to the flowchart, Step 1 is represented in diamond (1), which is explained in MPEP 2106(I). Step 2 is represented in diamonds (2A) and (2B) and is the subject of the Interim Guidance. Step 2 is the two-part analysis from Alice for claims directed to laws of nature, natural phenomena, and abstract ideas (the judicially recognized exceptions).

Laws of Nature/Natural Phenomena

Laws of nature and natural phenomena are described as including naturally occurring principles/substances and substances that do not have markedly different characteristics compared with what occurs in nature. According to the Interim Guidance, the types of concepts courts have found to be laws of nature and natural phenomena include the following non-limiting examples:

  • an isolated DNA (Myriad);
  • a correlation that is the consequence of how a certain compound is metabolized by the body (Mayo);
  • electromagnetism to transmit signals (Morse); and
  • the chemical principle underlying the union between fatty elements and water (Tilghman).

Abstract Ideas

According to the Interim Guidance, abstract ideas have been identified by the courts as including fundamental economic practices, certain methods of organizing human activities, an idea "of itself," and mathematical relationships/formulas. Citing previous cases, the Interim Guidance provides examiners with specific examples of abstract ideas:

  • mitigating settlement risk (Alice);
  • hedging (Bilski);
  • creating a contractual relationship (buySAFE);
  • using advertising as an exchange of currency (Ultramercial);
  • processing information through a clearinghouse (Dealertrack);
  • comparing new and stored information and using rules to identify options (SmartGene);
  • using categories to organize, store, and transmit information (Cyberfone);
  • organizing information through mathematical correlations (Digitech);
  • managing a game of bingo (Planet Bingo);
  • the Arrhenius equation for calculating the cure time of rubber (Diehr);
  • a formula for updating alarm limits (Flook);
  • a mathematical formula relating to standing wave phenomena (Mackay Radio); and
  • a mathematical procedure for converting one form of numerical representation to another (Benson).


On a positive note, there is nothing in the Interim Guidance to suggest that the USPTO is taking the position that business methods or software are per se ineligible for patent protection. This is good, in our opinion. Moreover, the USPTO's summary of case law as set forth in the Interim Guidance seems to be generally acceptable (although some have commented that the case law summary is not entirely accurate).

The real problem, however, is that the case law itself may not be amenable to clearly defined guidelines. In our view, the reality is that the court decisions themselves are inconsistent, and so there remains considerable uncertainty in how the law will be applied. It is therefore unclear whether the new Interim Guidance will help examiners or applicants tell the difference between what is and what is not patent-eligible.

For emerging companies with software-related innovations, the question remains: "Should we seek patent protection?" As a practical matter, this question can be answered only on a case-by-case basis. At a high level, applicants should consider whether the invention can be described in such a way as to avoid the characterization that it is no more than an "abstract idea," or whether it can be described as including an "inventive concept sufficient to transform the abstract idea into a patent-eligible application." These are inherently vague concepts that require careful patent drafting in view of the relevant case law. For example, a category of software that clearly remains patent-eligible is software that improves the operation of a computer itself — e.g., software that improves the speed or security of a computer. If the invention can be described in this way, patent eligibility under §101 should not be a significant barrier to obtaining patent protection. Finally, it should be noted that, assuming there is no clear, absolute bar to patentability, the decision whether to file will involve financial considerations.4

On the other hand, the USPTO has recently been rejecting business method patent applications, and examination of applications in the business method area has all but stalled at the USPTO. This may change after the USPTO implements the Interim Guidance and the case law is further developed. For now, it may be best for applicants to delay prosecution on the merits by filing provisional patent applications directed to inventions in the "business method" area. A provisional application can provide the company with a cost-effective way to keep its options open while the USPTO settles on more permanent guidelines.

Other strategies to consider when developing a company's patent portfolio include bringing already issued patents into compliance with the more recent guidelines via a reissue application (see Addressing Section 101 Issues Through Reissue), and Don't Miss the Window for Post-Grant Review: Monitor Your Competitors by Creating Alert Systems.



1 See our previous articles here and here.

2 The Interim Guidance is described as supplementing the June 25, 2014, Preliminary Examination Instructions in view of the Supreme Court decision in Alice (June 2014 Preliminary Instructions), and superseding the March 4, 2014, Procedure For Subject Matter Eligibility Analysis of Claims Reciting or Involving Laws of Nature/Natural Principles, Natural Phenomena, and/or Natural Products (March 2014 Procedure) issued in view of the Supreme Court decisions in Myriad and Mayo.

3 Interim Guidance, p. 8.

4 The mere pendency of a patent application may have business value. If worse comes to worse, the application can be abandoned. The question is whether the company is willing to risk $X knowing there is less than a Y% chance that the application will be deemed patent-eligible.

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