Introduction
For over a decade since the Supreme Court's Alice decision, questions of patent eligibility have plagued the US patent system. The Federal Circuit has been burdened with development of subject matter eligibility law, due to the inability of Congress to pass legislature, and the refusal of the Supreme Court to address subject matter eligibility since Alice.
Subject matter eligibility is foundationally concerned with preemption: preemption animates the Supreme Court's subject matter eligibility decisions but recent Federal Circuit decisions either do not address preemption, or address preemption in an ad-hoc, piecemeal manner.
Early Federal Circuit decisions considered and analyzed preemption by comparing the claimed scope to all applications of the abstract idea. But recent Federal Circuit decisions have minimized the role of preemption.
This minimization suggests that the test for subject matter eligibility has become abstract, expanding far beyond the intended scope of the "abstract idea" judicial exception, and yielding erratic and unpredictable eligibility results.
Indeed, there is no longer any "north star" to guide patent eligibility analyses at the Federal Circuit, and the expansive appellate decisions trickle down to the district courts and to the USPTO. § 101 must get back to basics, and that starts with the preemption inquiry.
Supreme Court § 101 decisions addressed preemption
An individual is entitled to a patent for any new and useful process, machine, manufacture, composition of matter, or improvements thereof, subject to certain judicial exceptions. These judicial exceptions bar any invention "directed to" a law of nature, natural phenomena, or abstract idea. On the occasions that the Supreme Court has addressed §101 head-on, preemption has always been at the forefront of the analysis.
For example, in 1981 the Supreme Court considered claims based on the Arrhenius equation, a well-known mathematical equation, in Diamond v Diehr. The claims were held patent-eligible, because they did not preempt the use of the equation, and in view of additional non-abstract elements that transformed the process into an inventive application of the equation.1
Just eight years earlier, the Supreme Court analyzed the effects of preemption in Gottschalk v. Benson, finding that the claims in Benson did "wholly pre-empt the mathematical formula" underlying the claims.2
The advent and rise in computer software technologies, however, led to further complications for patent eligibility. In 2010, the Supreme Court tackled subject matter eligibility once again in Bilski v. Kappos, cautioning against permitting claims that would "pre-empt the use of [an] approach in all fields, [that] would effectively grant a monopoly over an abstract idea."3
Just four years later, in the Alice decision, the Supreme Court restated that pre-emption is the concern that underscored this issue, stating "the concern that drives this exclusionary principle is one of pre-emption."4
Claims for mitigating settlement risk were classified as an abstract idea due to involving a fundamental economic practice. Only after identifying the abstract idea in Alice did the Court proceed to specify that the underlying concern that monopolizing the basic tools of scientific and technological work "might tend to impede innovation more than it would tend to promote it."
The additional non-abstract elements in Alice could not amount to something more because the tangible steps simply instructed a practitioner to implement the abstract idea of intermediated settlement on a generic computer.
Analyzing preemption has supported § 101's purpose as a coarse filter
In 2014, only shortly after Alice was handed down, an objective and formulaic approach was applied for § 101 disputes. In DDR Holdings v. Hotels.com, the court uncharacteristically stated that "identifying the precise nature of the abstract idea" was not straightforward.5
Not settling on a single description for the abstract idea, the claimed invention is described as providing website visitors the ability to purchase products from a third-party advertisement on a host's website without actually entering the third-party's website.
Critically, the court held that the claims at issue did not attempt to preempt every application of the abstract idea of increasing sales by making two web pages look the same. Instead, the claims recited a specific way to automate the creation of a composite web page that incorporates elements from multiple sources in order to solve a problem faced by websites on the internet.
Later, in BASCOM, despite the claims being directed to the abstract idea of filtering content at a high level, the claims did not "preempt all ways of filtering content on the Internet."6 As such, the claims were deemed patent eligible.
In Versata, despite finding the claims ineligible, the court stayed true to considerations of preemption in its analysis. There, the claims were directed to the abstract idea of a method of determining a price using organizational and product group hierarchies.7 The abstract idea here is characteristically a "building block" similar to the abstract idea of intermediated settlement in Alice.
Viewing each of the additional limitations, it was clear that they were either inherent to the abstract idea itself or generally applied the abstract idea to a generic computer. As such, upholding the patent would effectively monopolize the abstract idea of determining a price using organizational and product group hierarchies.
In these cases, the court applied a similar comparative test, where § 101 functions as a "coarse eligibility filter." First, the abstract idea was identified with appropriate specificity in light of the claims. Next, the abstract idea was measured up against the ways in which it could be applied based on additional claim elements both individually and as an ordered combination.
In this way, the basis for the test is designed to prevent monopolization of the scientific or technological basic building blocks that underpin nearly every invention.
The Federal Circuit retreats from preemption
But over time, Federal Circuit decisions have evolved from focusing on preemption to mostly disregarding it in the substantive analysis, thereby distorting the lodestar for determining patent eligibility. In these opinions, a lack of preemption does not otherwise save the claims from being patent ineligible.
For instance, in OIP, the circuit panel held claims to a "method of pricing a product for sale" "do not preempt all price optimization or may be limited to price optimization in the e-commerce setting."8 Nevertheless, the lack of preemption did not make the claims any less "abstract," in contrast to the favorable effect of a lack of preemption in DDR and Bascom.
The Federal Circuit in Ariosa similarly held that since the patent claims were only directed to patent ineligible subject matter, "preemption concerns are addressed and made moot."9 The fact that patentee could show alternative uses of the cffDNA outside the claimed scope did not disturb the court's conclusion that the claims were ineligible.
Similarly, in Return Mail the panel crystallized a rule that "claims that are otherwise directed to patent-ineligible subject matter cannot be saved by arguing the absence of complete preemption."10
Thus, despite preemption being the foundation of the judicial exceptions according to the Supreme Court, the circuit panel repeatedly held that preemption merely signals patent ineligible subject matter, but an absence of complete preemption does not demonstrate patent eligibility.
In some cases, the Federal Circuit cites precedent mentioning "preemption," but declines to analyze preemption in the decision.
The panels in In re Killian and In re Bd. of Trustees of Leland Stanford Junior University do mention that, for example, claims that recite a specific, discrete implementation of the abstract idea rather than preempting all ways of achieving an abstract idea using a computer may include an inventive concept.11 However, after citing to the precedent, the Court disregards the effects of preemption to the facts at hand, as a factor for evaluating patent-eligibility.
The trouble with many of the more recent approaches is that they run afoul of Supreme Court precedent. Lower courts "must distinguish" between inventions claiming basic building blocks of human ingenuity and those which do not.12
OIP, Ariosa, and Return Mail, each admit the claimed inventions preempt some, but not all applications of the judicial exception, but the inquiry ends there. For the In re Killian and In re Bd. of Trustees of Leland Stanford Junior University decisions, there is simply nothing to latch onto.
Absent in each of these decisions is why, despite preemption not being a factor, the claimed inventions would constitute the basic building blocks of human ingenuity thereby stifling innovation.
For context and consistency, preemption must be prominently analyzed by courts. Perhaps, in OIP, rather than stating each additional element is "well-understood, routine, and conventional," the court could have explained why the additional elements were simply an application of the abstract idea of offer-based pricing.
From here, the court could then explain how the claims effectively monopolize all applications of this specific offer-based pricing, even when confined to the context of an e-commerce setting.
Intra-panel inconsistencies
Too frequently, questions of eligibility turn on the level of generality the panel chooses to describe the claimed invention with. In American Axle, the majority describes the claimed invention as "directed to" nothing more than Hooke's law whereas Judge Stoll's dissent construed them as a method for manufacturing a drive shaft assembly for a car.13
Claim 22 of the disputed patent, illustrates the absurdity of distilling the claimed invention to Hooke's law:
- A method for manufacturing a shaft assembly of a driveline system, the driveline system further including a first driveline component and a second driveline component, the shaft assembly being adapted to transmit torque between the first driveline component and the second driveline component, the method comprising: providing a hollow shaft member; tuning a mass and a stiffness of at least one liner; and inserting the at least one liner into the shaft member; wherein the at least one liner is a tuned resistive absorber for attenuating shell mode vibrations and wherein the at least one liner is a tuned reactive absorber for attenuating bending mode vibrations.
The result reached by the majority should give practitioners and innovators pause. A cursory review of the preamble suggests the invention is from a class of inventions that have been historically patent eligible. Indeed, the majority's analysis in American Axle extends judicial exceptions well beyond claims that simply apply an abstract idea using a generic computer.
Once again, preemption considerations would clarify courts' reasoning. Here, even when using the majority's abstract idea of Hooke's law, it should be apparent that the additional elements fail to apply Hooke's law at a general level.
Instead, the claims are applying Hooke's law to manufacture a shaft assembly. Countless other applications of Hooke's law exist. Thus, the additional elements in the claim would not stifle innovation by monopolizing the abstract idea of Hooke's law.
American Axle and similar cases have trickled down, tainting lower courts' § 101 eligibility analysis. With American Axle as the Commission's guide, the ITC vehemently argued "the claims are directed to the abstract idea of [polycrystalline diamond compacts] that achieves desired magnetic results, which ... may be derived from enhanced diamond-to-diamond bonding."14
The trouble was a polycrystalline diamond compact, despite being defined by its properties, is not an abstract idea. This was the basis for the Federal Circuit's reversal in US Synthetic v. ITC, where the appellate court managed to rein in the damage done by American Axle.
A call to reintroduce preemption as a core factor in patent eligibility analyses
All corners of the US patent system have struggled with patent eligibility for a decade now, because there is no predictable test. The current framework is applied inconsistently, with outcomes that are highly fact-specific and arbiter-specific, virtually eliminating any consistent analysis that can be used as a north star.
Section 101 was intended to be a basic filter for patent-eligibility, and the § 101 analysis itself needs to get back to basics. The most logical starting point for fixing § 101 is by looking to the Supreme Court's decisions — nearly each of which address the issue of preemption.
Focusing the § 101 analysis on preemption would provide consistency to the patent-eligibility test, as originally intended in Alice. In many cases, the lack of preemption would end the § 101 analysis for patent-eligibility, consistent with its purpose as a course filter.
The current two-step framework can be enhanced to require considerations of preemption, as preemption forms the foundation of the analysis. Courts should apply a comparative analysis, evaluating claim scope against a class defined by the asserted abstract idea. If there is no effective preemption of this comparative class, then the claims are eligible.
Effective preemption can depend on whether the claims recite features that are routine and conventional, routine and conventional, either individually or in combination, relative to the comparative class defined by the abstract idea.
For example, while opening a mold may be routine and conventional in the technical field of molding rubber, opening a mold would not be routine and conventional in the general context of the Arrhenius equation, the alleged abstract idea in Diehr.
Conclusion
Recent trends at the Federal Circuit demonstrate the unquestionable uncertainty associated with the current landscape of § 101. Patent holders are now pushing back too — in February 2025, Impact Engine petitioned for the Supreme Court to opine on preemption's role within § 101.15 The disputed claims there are directed to a multimedia communication system including a "project viewer" that the Federal Circuit held ineligible.
Similar cases should be decided alike. But the outcomes of subject matter eligibility cases are routinely in tension, as conceptually similar claims are analyzed at different levels of abstraction, with little regard for their respective preemptive potential.
Restoring preemption as the lodestar for the Supreme Court's two-step framework would rein in the ever-expanding judicial exceptions to the statutory categories of § 101 and give lower courts, the USPTO, practitioners, and inventors some much needed consistency and clarity.
Footnotes
1. Diamond v. Diehr, 450 U.S. 175 (1981).
2. Gottschalk v. Benson, 409 U.S. 63, 71-72 (1972).
3. Bilski v. Kappos, 561 U.S. 593, 611 (2010).
4. Alice Corp. v. CLS Bank Int'l, 573 U.S. 208, 216-17 (2014).
5. DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1257-59 (Fed. Cir. 2014).
6. BASCOM Global Internet Services v. AT&T Mobility LLC, 827 F.3d 1341, 1344 (Fed. Cir. 2016).
7. Versata Dev. Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306, 1331–35 (Fed. Cir. 2015).
8. OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362–63 (Fed. Cir. 2015).
9. Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1378-79 (Fed. Cir. 2015).
10. Return Mail, Inc. v. United States Postal Serv., 868 F.3d 1350, 1369-70 (Fed. Cir. 2017).
11. In re Killian, 45 F.4th 1373, 1382 (Fed. Cir. 2022); In re Bd. of Trustees of Leland Stanford Junior Univ., 989 F.3d 1367, 1373 (Fed. Cir. 2021).
12. Alice Corp., 573 U.S. at 216-17.
13. Am. Axle & Mfg., Inc. v. Neapco Holdings LLC, 966 F.3d 1347, 1361, 63–64 (Fed. Cir. 2020).
14. US Synthetic v. ITC, 128 F.4th 1272, slip op. at 11* (Fed. Cir. 2025) (citing Certain Polycrystalline Diamond Compacts & Articles Containing Same, Inv. No. 337-TA-1236, , at 16* (Oct. 26, 2022)).
15. Impact Engine, Inc. v. Google LLC, No. 22-2291 (Fed. Cir. 2024), cert. denied, No. 24-836, (Mar. 3, 2025).
Originally Published by Westlaw Today
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