United States: Alice Uncertainty: Curiouser And Curiouser

Last Updated: July 31 2019
Article by Carrie L. Williamson and Saori Kaji

The USPTO, Federal Circuit and Congress each have taken recent steps to resolve uncertainty on subject matter eligibility under 35 U.S.C. § 101.

The USPTO has published guidance to provide more consistency during patent prosecution in assessing subject matter eligibility, but its effectiveness depends on whether the courts uphold patents issued in view of the guidance. The Federal Circuit recently declined to follow USPTO guidance, instead following its own precedent to invalidate patent claims. In light of this tension, support has been growing for a legislative solution, which may arrive soon.

Significantly, on May 22, 2019, Senators Thom Tillis (R-NC) and Chris Coons (D-DE) and Representatives Doug Collins (R-GA), Hank Johnson (D-GA) and Steve Stivers (R-OH) released a draft bill that would reform Section 101.

In response to Alice and Mayo, the USPTO released subject matter eligibility guidance under Section 101 in 2014; it has been revised several times.

In January 2019, the USPTO released further revised guidelines to ensure application of the two-step Alice/Mayo test in "a manner that produces reasonably consistent and predictable results."1 The revised guidance clarified in two ways the first step of the Alice/Mayo test to determine whether a patent claim is directed to a judicial exception (laws of nature, natural phenomena, and abstract ideas).2

First, the revised guidance provides groupings of abstract ideas – "mathematical concepts, certain methods of organizing human activity, and mental processes" – and clarifies that except in rare circumstances, claims falling outside these groupings should not be treated as reciting abstract ideas.3

Second, the revised guidance clarified that a claim reciting a judicial exception is not "directed to" the exception if the exception "is integrated into a practical application of the judicial exception."4 Only when a claim recites a judicial exception and fails to integrate the exception into a practical application is the claim considered "directed to" a judicial exception, thereby triggering further analysis via the second step of the Alice/Mayo test, the inventive concept.

The Federal Circuit's treatment of USPTO guidance

In Cleveland Clinic Foundation v. True Health Diagnostics LLC,5 the Federal Circuit rejected USPTO guidance in favor of its own precedent, stating, "While we greatly respect the PTO's expertise on all matters relating to patentability, including patent eligibility, we are not bound by its guidance," noting "the need for consistent application of our case law." Id. at *6. The court found plaintiffs' claim was "strikingly similar" to a claim considered in a prior Federal Circuit case where the court found the claim at issue patent ineligible. The court declined to follow the PTO example and instead followed its precedent.

Although non-precedential, the holding suggests a patent may be found ineligible by courts even if the patent was issued as the result of the PTO's published guidance on subject matter eligibility. Given the tension between the PTO's guidance and the Federal Circuit's precedent, there may be greater urgency for a legislative resolution.

Proposed legislative action regarding 35 U.S.C. § 101

The proposed reform is viewed as strongly pro-patentee, wiping away all judicially created exceptions to subject matter eligibility and abrogating all cases establishing or interpreting those exceptions.

The Senate Judiciary Committee's Subcommittee on Intellectual Property held hearings with 45 scheduled witnesses on June 4, 5 and 11 to discuss this proposed reform. During his June 4 testimony, Former Federal Circuit Chief Judge Paul Michel noted the "present, intolerable chaos" in the law of patent eligibility and urged adoption of legislation "generally modeled" on the draft bill, including the elimination of the judicially created exceptions.6

In contrast, Professor Mark Lemley from Stanford Law School testified that a more conservative approach that did not "eliminate two hundred years of legal doctrine" might provide more success in addressing problems in patent eligibility in life sciences while protecting against patent abuse in other areas.7

Should this draft become law, there would likely be significant uncertainty as to how challenges to patent eligibility would be decided, and challenges may focus on the new definition of the term "useful." That is, the bill may fail to offer certainty, at least in the short term, regarding patent eligibility and may propel us further into wonderland.



Draft bill revising Section 101

Revision to Section 112

Section 100

Additional Legislative Provisions

(k) The term "useful" means any invention or discovery that provides specific and practical utility in any field of technology through human intervention.

Section 101

(a) Whoever invents or discovers any useful process, machine, manufacture, or composition of matter, or any useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

(b) Eligibility under this section shall be determined only while considering the claimed invention as a whole, without discounting or disregarding any claim limitation.

  • The provisions of section 101 shall be construed in favor of eligibility.
  • No implicit or other judicially created exceptions to subject matter eligibility, including "abstract ideas," "laws of nature," or "natural phenomena," shall be used to determine patent eligibility under section 101, and all cases establishing or interpreting those exceptions to eligibility are hereby abrogated.
  • The eligibility of a claimed invention under section 101 shall be determined without regard to: the manner in which the claimed invention was made; whether individual limitations of a claim are well known, conventional or routine; the state of the art at the time of the invention; or any other considerations relating to sections 102, 103, or 112 of this title.



 

Back to IPT News Q2 2019

Footnotes

1 The U.S. Patent & Trademark Office 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019).

2  Id. at 50, 54-55.

3  Id. at 53.

4  Id. at 50, 53.

5  2019 WL 1452697 (Fed. Cir. Apr. 1, 2019) (Panel of Circuit Judges Lourie, Moore and Wallach).  

https://www.judiciary.senate.gov/imo/media/doc/Michel_Testimony.pdf

7 https://www.judiciary.senate.give/imo/media/doc/Lemley_Testimony.pdf

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