2019 was a busy year for § 101, with decisions covering a wide range of issues including diagnostic methods, covered business methods, abstract ideas and even mechanical claims.
The USPTO's Patent Eligibility Guidance update in January 2019 caused quite a stir among practitioners when they split Step 2A of the Alice/Mayo test into two prongs. After a lengthy comment period (and an increase in allowance of patents facing § 101 issues), the Office released an update to its 2019 PEG, clearing up five areas of confusion ( IP Update Vol. 22, No. 11). First, the Office clarified that a claim may impliedly "recite" a judicial exception without explicitly reciting the exception (as was the case in the patent claims in Alice). Second, the 2019 PEG distilled the previous case law-based grouping of abstract ideas into three general categories: mathematical concepts, methods of organizing human activity and mental processes. The October Update provided detailed descriptions of each of the three new categories. In the third section, the update included a new mini-flowchart to depict the two-prong analysis that is performed in Step 2A: differentiating between claims that are "directed to" a judicial exception and those that instead "integrate a judicial exception into a practical application." The latter case applies when the claim exhibits improvements to the functioning of a computer, effects prophylaxis for a disease, is implemented on a particular machine, effects a transformation of an article or contains additional features that place a "meaningful limit" on the judicial exception. In section four, the update details the analysis an examiner should provide in order to establish a prima facie case when making a subject matter eligibility rejection. Finally, section five describes the efforts made by the Office to educate examiners on the application of the 2019 PEG.
The Life Sciences – § 101 Issues Abound
Diagnostic methods, biomarker detection, genotyping and method-of-treatment claims all had their days in court in 2019—with mixed results. In Athena Diagnostics, Inc. v. Mayo Collaborative Servs, LLC the US Court of Appeals for the Federal Circuit (CAFC) held that methods for diagnosing neurological disorders by detecting protein antibodies were directed to patent ineligible laws of nature ( IP Update Vol. 22, No. 2). Although Athena's methods were new and the radioactive testing compounds were manmade, the Court applied Mayo v. Prometheus in holding that Athena merely discovered a natural law. In a 7-5 decision denying Athena's petition for rehearing en benc, the judges (in varying levels of concurrence and dissent) submitted eight separate opinions, with many citing to their previously-recorded concerns over the current "troubling" precedent set by Mayo ( IP Update, Vol. 22, No. 8). The final nail in the coffin for hopes of judicial clarification came in January 2020 when the Supreme Court denied certiorari on a swath of §101-related cases, including Athena v. Mayo. Similarly, the CAFC found Cleveland Clinic's biomarker detection patent to be directed to ineligible natural law. This was the patent owner Cleveland Clinic's second attempt at obtaining protection of their invention, but the appellate court agreed that the "rephrasing of the claims [did] not make them less directed to a natural law." The court also reiterated that they are not bound by the USPTO guidance (discussed above) which was attempting to clarify patent eligibility.
In separate March 2019 decisions reversing the lower courts, the CAFC found two method-of-treatment claims patent eligible. In Natural Alternatives Int'l, Inc. v. Creative Compounds, LLC the CAFC reversed, finding that claims related to beta-alanine consumption for increased muscle working capacity were patent eligible by "using a natural product in unnatural quantities to alter a patient's natural state" ( IP Update Vol. 22, No. 4). The Court acknowledged that while the method claims rely on natural relationships, "the method claims require specific steps be taken in order to bring about a change in a subject, altering the subject's natural state." The fact that beta-alanine exists in nature and is consumed as part of the human diet did not alter the Court's analysis. In a similar opinion, the CAFC reversed a lower court's finding of patent ineligibility in Endo Pharmaceuticals v. Teva Pharmaceuticals ( IP Update Vol. 22, No. 4). Endo's patent was directed to a method of treating pain in patients with impaired kidney. Despite Teva's argument that the claims were simply directed to the natural reaction of a renally-impaired person's body to oxymorphone, the Court found that the claims were "directed to a specific method of treatment for specific patients using a specific compound at specific doses to achieve a specific outcome function."
Finally, the CAFC addressed the patent eligibility of genotyping in Genetic Veterinary Sciences, Inc. v. LABOKLIN GmbH & Co., KG ( IP Update Vol. 22 No. 9). The claims at issue related to in vitro methods for genotyping Labrador retrievers to identify a recessive disease. Under step one of the Mayo/Alice framework, the Federal Circuit found that the claims were directed to a natural phenomenon, noting that claim 1 was "nothing more than 'observing or identifying' the natural phenomenon of a mutation." Under step 2, the Court concluded that the claims did not recite an inventive concept that transformed the observation of a natural phenomenon into a patentable invention.
Abstract Ideas – An Ineligibility Hat Trick for the CAFC in 2019
- ChargePoint, Inc. v. SemaConnect,
Inc. (March 2019) (
IP Update 22, No. 4)
- Note: The Supreme Court denied cert on January 27, 2020.
- Technology: Electric vehicle chargers
- Holding: Affirmed – The claims are directed to the abstract idea of "communicating over a network for device interaction." "A claimed invention's use of the ineligible concept to which it is directed cannot supply the inventive concept that renders the invention 'significantly more' that that ineligible concept."
- Takeaway: The specification is "helpful in illuminating what a claim is 'directed to' [but] reliance on the specification must always yield to the claim language in identifying [the] focus."
- Solutran, Inc. v. Elavon,
Inc. (July 30, 2019) (
IP Update 22, No. 8)
- Technology: Quick paper check processing
- Holding: Reversed – The claims are directed to the abstract idea of "crediting a merchant's account as early as possible while electronically processing a check." The claims did not amount to an inventive concept because they used "a general purpose computer and scanner to perform conventional activities in the way they always have."
- Takeaway: "Crediting the merchant's account before the paper check is scanned" may be an advancement, but is still an abstract idea.
- The Chamberlain Group, Inc. v.
Techtronic Industries Co. Ltd. (August 21, 2019) (
IP Update 22, No. 9)
- Technology: Wireless garage door
- Holding: Affirmed – "The only described difference between the prior art . . . and the claimed [garage door] is that the status information about the system is communicated wirelessly, in order to overcome certain undesirable disadvantages of systems using physical signal paths." "The specification . . . makes clear that transmitting information wirelessly was conventional at the time the patent was filed . . . yet wireless transmission is the only aspect of the claims that CGI points to as allegedly inventive."
- Takeaway: The Court can rely heavily on the patent specification in finding an invention directed to an abstract idea.
Mechanical Claims – Subject to § 101 Like All of the Rest
In a pair of cases, the CAFC confirmed that claims covering physical products can in fact be ineligible subject matter under § 101. In In re: Marco Guldenaar Holding B.V., the CAFC affirmed the holding that claims covering a dice game with certain unmarked dice faces was directed to the abstract idea of "rules for playing a game" ( IP Update Vol. 22, No. 7). Each die's markings (or lack thereof) communicated information to the players, but did not functionally relate to the substrate of the die itself—i.e., the markings did not provide the die itself with new functionality.
In American Axle & Manufacturing, Inc. v. Neapco Holdings LLC the CAFC highlighted that even mechanical inventions may fall under the judicial exceptions to § 101 ( IP Update Vol. 22, No. 11). American Axle's patent was directed to a method of manufacturing propeller shafts in a way that attenuated different types of vibration. The majority found that the claimed invention was nothing more than a recitation of Hooke's law and therefore was undoubtedly a law of nature. In an argument akin to one used to reject a patent under § 112, the majority noted that "this case might well be significantly different, if, for example, specific [finite element analysis] models were included in the claims."
§ 101 in IPR – A Potential Ground for Denying Amended Claims
The PTAB designated as precedential Amazon.com, Inc. v. Uniloc Luxembourg S.A., finding that 35 USC § 101 is a potential ground for denying proposed amended claims in an IPR( IP Update Vol. 22, No. 4). 35 USC § 316(d) provides a patent owner the right to file a motion to amend, but does not prevent the PTAB from considering unpatentability under sections other than § 102 and § 103 with respect to substitute claims.
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