The Software IP Report

New Patent Prosecution Standard? USPTO Provides Preliminary Post-Alice Corp. Guidelines for Evaluating Patent-Eligibility

By Charles Bieneman

Categories: Patent Eligibility, Software Patents, The Software IP Report

In the wake of Alice Corp. v. CLS Bank Int’l., the U.S. Patent and Trademark Office has issued “preliminary instructions effective today to the Patent Examining Corps relating to subject matter eligibility of claims involving abstract ideas, particularly computer-implemented abstract ideas, under 35 U.S.c. § 101.”  At the same time, the USPTO is clearly struggling with a challenge noted by many: “Alice Corp. neither creates a per se excluded category of subject matter, such as software or business methods, nor imposes any special requirements for eligibility of software or business methods.”  The one clear conclusion from Alice Corp. is that the two-part analysis of Mayo Collaborative Services v. Prometheus Laboratories, Inc., is the analysis to be applied to Section 101 questions, regardless of whether the claims are drawn to a law of nature, abstract idea, process, and/or apparatus.  So in light of single analysis that is now to be applied, and in light of the inherent vagueness that remains in that analysis, how should applicants and prosecutors pursuing software and business method claims before the USPTO proceed?

The two-part analysis for patent-eligibility mandated by the Supreme Court, and immediately adopted by the USPTO is, on its face, simple.  First, “[d]etermine whether the claim is directed to an abstract idea.”  Second:

If an abstract idea is present in the claim, determine whether any element, or combination of elements, in the claim is sufficient to ensure that the claim amounts to significantly more than the abstract idea itself. In other words, are there other limitations in the claim that show a patent-eligible application of the abstract idea, e.g., more than a mere instruction to apply the abstract idea? Consider the claim as a whole by considering all claim elements, both individually and in combination.

The USPTO’s memorandum goes on to give examples of what might qualify as an “abstract idea” triggering the second part of the analysis.  The memorandum also provides examples of various items that do and do not qualify as “significantly more.”

Unfortunately, but almost certainly unavoidably, these examples, like the Section 101 test itself, are themselves abstract, albeit based on prior Supreme Court cases.  For example, “[i]mprovements to another technology or technical field” and “[m]eaningful limitations beyond generally linking the use of an abstract idea to a particular technological environment” add “significantly more.”  Further, claim elements are to be considered “both individually and in combination.”  All of which says that the USPTO and patent applicants are stuck with a highly subjective test.

Is it at all realistic to expect consistent or predictable application of this test?  What is a patent applicant to do?  Well, first of all, I believe that this is a case where the honest expert has to admit to not having a complete answer to these questions.  Our best hope is that a few years of patent-eligibility litigation in the federal courts and the Patent Trial and Appeals Board will do what four years of litigation since Bilski v. Kappos has not done, and make patent-eligibility predictable in individual cases.  In the meantime, patent applicants need to know how to proceed now in view of Alice Corp. and the USPTO’s current interpretation of that case.

After giving this question a lot of thought, I wish I felt some special insight was possible.  But even given the vagueness of the current situation, here are some guidelines for potential and current patent applicants in view of the USPTO’s preliminary Alice Corp. guidelines.

  • Narrower claims are more likely to be patent-eligible than broader claims.  If your business method is a very specific process, but includes an “abstract idea,” yet you can point to claim limitations that are not at all obvious in view of the alleged abstract idea, then perhaps you have the “significantly more” that is a basis for arguing for patent-eligibility.
  • Claims should emphasize hardware and physical materials. The so-called machine-or-transformation test was damned with the faint praise of being a “tool” and “useful clue” by the Supreme Court in Bilski, and by itself will never persuade a court or the USPTO of a claim’s patent-eligibility.  Nonetheless, the role of a machine or materials in your claims may provide some gauge of the likelihood that a claim will be patent-eligible.  For example, the USPTO noted the Alice Corp. Court’s citation to Diamond v. Diehr holding a method for curing rubber patent eligible, as well as to Gottschalk v. Benson, holding that method of converting binary coded decimals was not patent eligible.  The Diamond method could not be practiced without a machine, nor could it be practiced without transforming matter.  The Gottschalk claims, on the other hand, could be practiced all in the human mind, or at least with pencil and paper.
  • As a corollary to emphasizing hardware or materials, if your invention is directed to a “pure” business method, think hard about what is the “significantly more” making your claim patent-eligible before proceeding with a patent application.  Here, I use the term business method relatively narrowly, i.e., a process related to finance, inventory management, conducting a transaction, etc., that could be explained and implemented without a computer, even if a computer makes the process more efficient, or would be practically necessary for the specific claimed implementation.  To date, courts have been invalidating such claims even as the USPTO continues to allow them.  Setting aside the fact that a claim allowed by the USPTO has at best impaired value if a court is likely to invalidate it, one likely result of Alice Corp. is that the USPTO will, starting with this new preliminary guidance, become more aggressive in rejecting business method claims.
  • And as a corollary to being cautious in filing a patent application for a “pure” business method, place more emphasis on trade secret protection.  Often, proposed business method and/or software patent applications include subject matter that is currently a trade secret, and could be maintained as such.  Thus, if you are torn about whether to file a patent application of try to maintain a trade secret, I would suggest that the balance should now tip in favor of trade secret protection.
  • Claims directed to data displays have little value.  If you are claiming the data content of the display, e.g., content of a report, the fact that the claim includes displaying the data will be deemed the classic “post-solution activity” that fails to make the claim patent-eligible.  On the other hand, if the claim is directed to a specific layout or workflow in which data is displayed, even if such claim is patent-eligible, it is unlikely to be broad enough to prevent would-be infringers from designing around the claim.  Think about more aggressive use of copyright and possibly design patents.