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USPTO Guidance on Alice v. CLS – Software Still Patentable


Written by Gene Quinn
President & Founder of IPWatchdog, Inc.
Patent Attorney, Reg. No. 44,294
Zies, Widerman & Malek
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Posted: June 25, 2014 @ 3:18 pm
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Earlier today the Deputy Commissioner for Patent Examination Policy, Andrew Hirshfeld, sent a memorandum to the patent examining corps with the preliminary examination instructions in view of the Supreme Court’s recent decision in Alice Corp. v. CLS Bank International.

At least initially, the USPTO instructions to examiners seems extremely patentee friendly, which I must say comes as a surprise given the largely anti-patent rhetoric that has come from the White House over the last 16 months. Indeed, the USPTO has told examiners that the reason Alice’s claims were determined to be patent ineligible was because “the generically-recited computers in the claims add nothing of substance to the underlying abstract idea.”

The USPTO then went on to point out to patent examiners that there is no new category of innovation that is patent ineligible, nor is there any new or special requirements for the eligibility of either software or business methods. Hirshfeld explained: “Notably, 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.”

Hirshfeld also explained that there is now a slight change in the way applications are to be examined when claims involve abstract ideas. Essentially, Alice stands for the proposition that the same analysis should be used for all types of judicial exceptions and the same analysis should be used for all categories of invention. Still, even recognizing this shift in analysis, Hirshfeld told examiners: “[T]he basic inquiries to determine subject matter eligibility remain the same as explained in MPEP 2106(I).” (emphasis added). Therefore, nothing has changed as far as the USPTO is concerned.

While most patent examiners can be expected to implement the desired USPTO interpretation, a significant question remains with respect to how the Patent Trial and Appeal Board (PTAB) will interpret the Supreme Court’s decision in Alice. The PTAB as a quasi-judicial body is not bound by the interpretations of the agency, and as a body the PTAB has been invalidating claims at an alarming rate in post-grant proceedings newly available as the result of the America Inventors Act (AIA). Further still, there is no telling how the district courts will interpret the decision in Alice, but for the time being the USPTO does seem to be moderating the decision. A significant question also remains regarding whether all patent examiners in all Art Units will follow this guidance. Over the years certain examiners have proudly proclaimed to patent attorneys that they do not follow the instructions given by agency leadership and will only issue patents if ordered to do so by the Board, a fact that seems to be corroborated to some extent by extremely low allowance rates in certain Art Units. Recalcitrant examiners will likely still be a problem, as they have always been, but they should hopefully be a minority.

 

The Analytical Framework

According to the USPTO guidance for patent examiners, they should implement a two-part analysis for abstract ideas, which was set forth in Mayo v. Prometheus. First, examiners must “determine whether the claim is directed to an abstract idea. Second, if an abstract idea is present examiners must 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.” (emphasis in the original).

In terms of what is an abstract idea, no definition is provided, which will continue to be the achilles heel of the Supreme Court’s “doctrine,” and which will all but guarantee a subject interpretation prevails. Notwithstanding, the USPTO explained bract ideas include fundamental economic practices, some methods of organizing human activities, an idea itself and mathematical relationships and formulas. While I commend that USPTO for a thoughtful interpretation of the Alice decision I can’t help but comment that an abstract idea is in part defined as an idea, which isn’t the USPTO’s fault, but this circular definition is the type of thing we must deal with given the Supreme Court’s refusal to provide a coherent, thoughtful and certain test.

In terms of what constitutes a sufficient limitation to render a claim drawn to an abstract idea (whatever that is) to be still nevertheless patent eligible, the USPTO explains that the following “may be enough to qualify as ‘significantly more’ when recited in a claim with an abstract idea”: improvements to technology or technical field, improvements to the functioning of a computer itself, limitations that link the abstract idea to a particular technical environment. The USPTO specifically identified that “apply it” or similar words would not be considered to be limiting enough. Similarly, it is insufficient when a claim merely recites “no more than a generic computer to perform generic computer functions that are well-understood, routine and conventional activities previously known to the industry.”

 

Conclusion

It seems clear based on the two-part analytical framework explained by the USPTO that at least some claims that cover “abstract ideas” will remain patent eligible. I’m not sure whether this is what the Supreme Court had in mind, and such an interpretation will only further muddle whatever the “abstract idea doctrine” really is.

Essentially, the USPTO is interpreting the Supreme Court decision to say that even if a claim covers an abstract idea it can still be patent eligible if the claim itself is sufficiently limited so that the claim covers “significantly more” than the abstract idea itself. That being the case, nothing changes.  Under the previous test if there were limitations within the claim there was no abstract idea. Saying that limitations within the claim makes a claim to an abstract idea a patent eligible abstract idea is analytically no different than saying a limitation that tethers the claim to a specific machine implementation or environment is patent eligible because it is not an abstract idea.

Of course, it will be essential to avoid general purpose computers. The Supreme Court phobia of general purpose computers likely means the fact that your software is operable across platforms means that the software is patent ineligible; a truly ironic and moronic result.

This initial guidance to examiners seems particularly helpful to patent applicants seeking patents in the software and business method space. The USPTO seems poised to narrowly interpret the Supreme Court decision, and has given applicants a roadmap on what to include in patent applications and what to argue. Of course, examiner cooperation and attention to this guidance will be uncertain until we see how examiners engage with applicants.

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Posted in: Gene Quinn, Government, IP News, IPWatchdog.com Articles, Patentability, Patents, Software, Technology & Innovation, USPTO

About the Author

is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.

 

14 comments
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  1. thanks but no thanks

  2. Gene, you tell us, of the “significantly more” conundrum, that:

    the USPTO explains that the following “may be enough to qualify as ‘significantly more’ when recited in a claim with an abstract idea”: improvements to technology or technical field, improvements to the functioning of a computer itself, limitations that link the abstract idea to a particular technical environment.

    This set me wondering whether the USPTO is poised to segregate the claim’s “more” into that “more” that is “technical” and that “more” that is not technical, just like the EPO. Could it be that, from now on, based on Alice, the USPTO will judge patentability (both novelty and non-obviousness) on such “more” as is “technical” and disregard the rest as having a contribution to novelty or non-obviousness? You already have a printed matter doctrine. Is that Doctrine now set to be beefed-up, into a “non-technical doctrine”? Heads up!

  3. governments must allow software to be protected by IP for the sake of economic growth and job creation.

  4. “the USPTO explained abstract ideas include fundamental economic practices, some methods of organizing human activities, an idea itself and mathematical relationships and formulas” – I have never seen a business method patent include a technical innovation which would satisfy satisfy prong 2 (if anyone has one, please share it). So business method patents (in the very least) are effectively dead. Stevens got his wish after all.

  5. this may not be good news for small businesses that need to use their IP to protect their products but seems like its good news for thieves

  6. I’m still waiting for that just-around-the-corner moment when SCOTUS
    instructs the USPTO to ….

    (Come on yea all, help me expand the list)

    1. Never challenge the fact that the Earth is only 6,000 years old,
    2. Require every claim to include the word “gobbledygook”,
    3. ….

  7. Mr. Justice Thomas noted that as some level all inventions embody, use, reflect, rest upon, or apply laws of nature, natural phenomena or abstract ideas. See Alice’s slip… opinion at 6.

    So does that mean that examiners must apply the Mayo two-step for every application they examine?
    “According to the USPTO guidance for patent examiners, they should implement a two-part analysis for abstract ideas, which was set forth in Mayo v. Prometheus. First, examiners must “determine whether the claim is directed to an abstract idea.”

  8. “… and mathematical relationships and formulas”

    Does it mean that all those patents on audio/video coding algorithms are dead ?

    (e.g. speech coding standards for cell phones, MP3 audio compression, H.264/MPEG video compression etc etc)

    They are pretty much “just math formulas” embodied in algorithms (which took decades of work by many many PhDs)

    Hey, USPTO, how about providing an explicit guidance on those things ?

  9. They interpreted this correctly and as everyone else has interpreted it. Though as a bio guy it was fun to see the software people go through a conniption fit and get all worried like the bio people have had to for the past years I am glad they interpreted it correctly here. The courts holding was certainly not that software wasn’t patentable but that there was an abstract idea here that they then didn’t add anything to. Which really wasn’t anything we didn’t know before….

  10. Step 1. Whether before an examiner, PTAB, or court, always contest any attempt to characterize your invention as being abstract. Always. Use SCOTUS’ own language, examples, cites, etc to support your position.

    Step 2. State, “Furthermore, even if (your/the invention) was abstract; which I/is vehemently contest/ed is the case; under Alice, its claims would still easily meet section 101, at least because …” (again use SCOTUS’ own language, examples, cites, etc to support your position).

    Step 3. If you don’t prevail, appeal.

    While for the reasons Gene’s enumerated, SCOTUS got it wrong (indeed, properly applied, even their own 101 analysis framework actually proves Alice’s claims ARE 101 compliant — at least because Alice IMPROVED the existing technological process of intermediated settlement), all is not lost for at least a large segment of inventions. Abstract or not.

    As I’m not an attorney, this is of course not legal advice. Contact Gene for that.

  11. “I must say comes as a surprise given the largely anti-patent rhetoric that has come from the White House over the last 16 months”.
    The White House? I haven’t noticed this. SCOTUS, yes – some members seem to be openly contemptuous of the very existence of patent law, which I find bizarre in a generally business-friendly SCOTUS, but I don’t recall anything particularly anti from 1600 Pennsylvania Avenue.

  12. New Anon,

    You have not noticed?

    Have you been paying attention?

    Think back to the beginning of last summer and the propaganda-drenched White Paper.

  13. Thanks, Anon, but I can’t say that the White Paper looked particularly drenched to me. Slightly over-the-top, as is typical of all Administrations who want to bang their drum (and don’t they all?), but hardly drenched.

  14. Well then, I believe that we will have to agree to disagree, as a more blatant example can hardly be found.

    I am left wondering what exactly would satisfy your view of what constitutes anti-patent rhetoric.