The Patent Office should establish a more systematic approach to Alice-based 101 examination

By Louis Hoffman
February 14, 2016

uspto_madison_buildingThe Patent Office can and should address the problem of over-application of Alice-type rejections in the abstract-ideas area by establishing a more systematic approach to examiner review of Alice questions. Addressing the problem of excessive rejections would help avoid damage to the economically critical fields of e-commerce, software, and finance, which I outlined in a recent guest post. I practice heavily in the Internet and computer arts, both in patent prosecution and patent enforcement, so I have seen first-hand the difficulty both in advising clients to apply for patents and in getting buyers and infringers to respect issued patents in these fields.

Addressing the problem would be responsive to the overwhelming bulk of commenters who expressed opinions on the PTO’s most recent July 2015 Update on Subject Matter Eligibility (Section 101), who have agreed that the PTO has been applying Alice too vigorously and has been making more rejections than warranted, and that the excess rejections are reflected in the statistics. Examiners would welcome such efforts, because they would better know whether and when to make Alice-type abstract idea rejections under Section 101, in contrast with current guidance, which allow them to find reasons to make such rejections in virtually all cases.

I recognize the difficulty of addressing this problem, because my win in DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014), represents the only time that an appellate court has been convinced to reject a Section 101 defense post-Alice. It would be easier for the Patent Office to develop balanced rules if there were more appellate decisions favoring eligibility. Nevertheless, the PTO can do more.

A more systematic approach to consideration of such rejections might look like this:

Step 2A: Identifying abstract ideas

Examiners must identify the idea, before moving to the step of determining whether the idea is abstract.

As many others have observed, the decision on Step 2A often depends on how the “idea” is defined. Yet, little to no instruction is given to examiners for how to define the idea. The Updated Guidance has not even told examiners that defining the idea is important, much less how to do such definition properly. Rather, the Updated Guidance essentially assumes that the examiner has defined the idea already or that the claim’s idea is pre-established. Examiners should be given the following instructions on how to define the idea:

The purpose of Step 2A is to allow the examiner to decide whether the idea expressed by a claim is or is not abstract. The first step is to identify the “idea” of the claim, i.e., the overall purpose of the claim. To do this, the examiner should evaluate the question by taking into account the following points:

  1. A review of the preamble of the claim, or the “output” of the claim, could be useful in deciding what the overall purpose is.
  2. As indicated in the original December 2014 Guidance, the “idea” defined must be one to which the claim is “directed,” not an idea merely “contained in” the claim.
  3. In deciding what the “idea” of the claim is, the examiner should not simply summarize all of the elements of the claimed invention into a brief sentence. To do so would create a circular analysis, because under such an analysis, any claim would be “abstract.”
  4. For example, a claim directed to “Doing X by a process involving steps A, B, and C” should be reviewed as directed to idea X, not the idea of doing A, B, and C. (The examiners can be given examples of how to decide on the “idea” to which a claim is directed, and given counterexamples of claims improperly abstracted into an idea.)

Judicial support for this approach can be found in California Inst. of Techn. v. Hughes Comm’ns Inc., No. 2:13-cv-07245-MRP-JEM, 2014 U.S. Dist. LEXIS 156763, 2014 WL 5661290, *24 (C.D. Cal. 2014), which contains a thorough and scholarly review of the Supreme Court jurisprudence and says: “The characterization of the claim is essential to the § 101 inquiry…. [T]he correct approach [is] asking what the claim was trying to achieve …. Courts should recite a claim’s purpose at a reasonably high level of generality. Step one is a sort of ‘quick look’ test, the object of which is to identify a risk of preemption and ineligibility. If a claim’s purpose is abstract, the court looks with more care at specific claim elements at step two. After determining the claim’s purpose, the court then asks whether this purpose is abstract.”

Examiners must know how to determine whether the idea is abstract.

Once the idea is defined, the examiner must decide whether or not the “idea” is “abstract.” All patent claims are directed to an “idea,” but not all claimed “ideas” are “abstract.” In determining whether an idea, properly identified, is abstract, the examiner should take into account the following points:

  1. According to the dictionary, the word “abstract” means theoretical, conceptual, or academic; opposites of the word “abstract” include concrete or physical. (I recognize that the Supreme Court famously declined to “labor” to define the word “abstract,” but that does not mean that examiners should be given no guidance on the word’s meaning. The Supreme Court selected the word “abstract,” as opposed to some other English word, and the word has meaning.)
  2. The PTO has told examiners that the courts have not defined abstract ideas with specificity, so examiners should consider one or more cases most closely analogous to the idea to which the claim is directed. (See the July 2015 Update.) To follow this instruction, the examiner should explicitly cite the most-analogous case in the rejection.
  3. The examiner should also consider whether the idea falls within one or more of the “judicial descriptors” of categories of abstract subject matter. I plan to write more on this topic.

Step 2B: Identifying ‘significantly more’

The Update contains virtually no explanation of the “significantly more” half of the analysis (except a few added examples and a useful discussion of the burden). Various examiners have expressed to me understandable frustration with judging the ‘significantly more’ test set forth in the Guidance (79 Fed. Reg. at 74624). Examiner training slides on the Update, just released by the PTO, help somewhat, by breaking down the “significantly more” test into a more systematic set of questions. But more is needed. Some ideas follow.

Examiners should understand the purpose of the ‘significantly more’ inquiry.

The Guidance uses the phrase “significantly more than a judicial exception.” In the field of abstract ideas, some examiners do not seem to understand that “judicial exception” refers to “abstract idea,” and many examiners do not seem to realize that this refers more particularly to the specific idea that the examiner has already judged as “abstract” in Step 2A. More plain language would help.

The PTO should say that the purpose of a Step 2B analysis is to decide whether any added element (alone or with all others) is significantly more than the identified abstract idea per se. See Alice, 134 S. Ct. at 2355 (the second step is to consider the claim elements “both individually and as an ordered combination” and “search for an inventive concept, i.e., an element or combination of elements that is sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [abstract idea] itself.”). The new slides contain such statements, which is welcome. See slides 14, 16 (characterizing Step 2B as questioning “Does the claim as a whole amount to significantly more than the abstract idea,” which can be ascertained by first asking, “Are there any additional elements (features/limitations/steps) recited in the claim beyond the abstract idea?” and then “Evaluat[ing] the significance of the additional elements”).

But even though the Slides based on the Update helped somewhat, it is not enough, because the test for Step 2B ultimately simply replaces “significantly more” with the synonymous term “significance.”

A more extensive process flow that could be given to examiners is as follows:

  1. Identify each limitation of the claim that is not simply directly repeating the abstract idea identified in Step 2A.
  2. Discuss whether the added element is required by the identified abstract idea.
  3. Evaluate the non-exclusive list of “considerations” (see below) and any other relevant considerations, to determine if the added element is “significant.”
  4. Even if all claim elements are not significantly more than the abstract idea individually, consider the claim as a whole to determine if it recites an “inventive concept” that is significantly more than the abstract idea itself.
  5. Repeat the process for each claim being rejected, including dependent claims.

An array of examples of select added elements and why they were or were not ‘significantly more’ would help.

Examiners should be told how to use the two lists of ‘significantly more’ considerations.

The December 2014 Guidance gives two lists of “considerations,” which are repeated at slides 21-22 of the Training Materials from February 2015 (CBT Slides). A problem is that the introduction to the list of factors is not clear. The Guidance says that the “Supreme Court has identified a number of considerations” for making the determination (but the list is non-exclusive) and concludes, “Limitations that may be enough to qualify as ‘significantly more’ when recited in a claim with the [abstract idea] include” a first list. Then, the Guidance continues, “Limitations that were found not to be enough to qualify as ‘significantly more’ when recited in a claim with [an abstract idea] include” a second list.

The Guidance is unclear as to the interplay between the two lists and as to whether the examiners must consider all listed “considerations” or just one. Examiners often choose one “consideration” on the second (“negative”) list and focus myopically on that factor, without consideration of other factors. This practice increases the odds of uncertain outcomes.

The PTO should tell examiners how to use the lists. For example, if the examiner evaluates a particular “additional element” and concludes that it meets ANY of the “considerations” in the first list, is that enough to causes the claim to “qualify as ‘significantly more’,” all by itself? The Guidance’s use of a “weasel word” (“may be enough”) worsens the problem.

What if an element meets one of the “positive” considerations in the first list AND a “negative” considerations in the second list? Suppose an element relates to a computer function that is “well-understood, routine and conventional” (one of the negative factors), but it also “effects a transformation … of a particular article” (one of the positive factors)? Shouldn’t the element nevertheless be “significantly more”? If so, the PTO should say so.

Should the examiner be allowed to reject an argument about one of the positive factors by saying that the other listed considerations do not apply? I assume not, but again the PTO should say so.

The newer slides, on the Update, seemingly replace the positive and negative considerations with the question: “Do the additional elements, considered individually or in combination, provide an “inventive concept.” See slide 17. some explanation of what is meant by an “inventive concept” could help. Is this the same as whether the added element makes the claim “novel” under §§ 102/103, for example?

The newer slides also give an example where the “additional elements” do not provide an “inventive concept” because they contain only computer equipment “recited at a high level of generality” that “simply perform the generic computer functions of receiving, manipulating and transmitting information to a computer” elsewhere; the slide comments “Generic computers performing generic computer functions, alone, do not amount to significantly more than the abstract idea.” Slide 17. Also, the same slide remarks, “The Internet limitation is simply a field of use and does not add a meaningful limit on the abstract idea.” Id.

As a result, the status of the “considerations” is now unclear – the PTO should say whether examiners should use them or not. Also, the PTO should consider more closely what it means to include a “generic computer” and when a computer is “simply” performing “generic computer functions.” The examining corps is all too ready to characterize ANY computer function as simply “generic” because it involves “receiving, manipulating [or] transmitting information.” After all, everything done by a computer could be considered to fall in one of those three categories.

The examining corps’ over-use of Section 101 rejections can be reined in via a more disciplined and structured set of instructions. Examiners would like it; applicants would find examination outcome more predictable and know how to respond to rejections better; and reduced rejections represents good patent policy and will benefit the U.S. economy.

The Author

Louis Hoffman

Louis Hoffman is a patent attorney licensed to practice law in California and Arizona, before numerous U.S. District Courts, before the Federal Circuit and Ninth Circuit Courts of Appeals and in the U.S. Patent Office. Since 1991, Louis has advised independent inventors, small and mid-sized companies, and start-ups on protecting patents, copyrights, and trademarks through the law firm of Louis J. Hoffman, P.C., now known as the Hoffman Patent Firm. Please CLICK HERE to visit Louis' firm profile page.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 10 Comments comments. Join the discussion.

  1. Appearance of ... February 14, 2016 10:49 am

    (Sarcastic) Proposed streamlined “Alice” test: Does the claim as a whole read on a recognized Google business interest? If so, it is abstract.

  2. Anon February 14, 2016 12:24 pm

    As much as the desired ends of a clear and consistent law may be all well and good, this is not a role that I want the executive agency undertaking.

  3. Fish Sticks February 14, 2016 7:37 pm

    “To follow this instruction, the examiner should explicitly cite the most-analogous case in the rejection.” I like that idea.

  4. Easwaran February 14, 2016 11:49 pm

    Very nice article. I especially like the part explaining why examiners should be told how to use the two “significantly more” lists in conjunction.

    One thing I would further expand on: examiners should be instructed to actually compare the “idea” of a claim to the most-analogous case and document the similarities leading to the finding of abstractness, rather than to simply cite the case without analysis, or to simply cite the case and merely reference the USPTO’s caption of that case (e.g., SmartGene’s infamous “comparing new and stored information and using rules to identify options”).

  5. Ron Hilton February 15, 2016 12:24 pm

    I guess there’s no hope that the courts would ever realign the “abstract idea” criteria with the utility prong of 101 where it belongs, instead of the subject matter prong, viewing software algorithms as being inherently “too abstract” to qualify as patentable processes, even when tied to a computer. Software is by defining a useful process, and totally eligible under 101. The bad software patents are all 102/103 issues, but that’s too hard for the courts and PTO to prove.

  6. Ron Hilton February 15, 2016 12:26 pm

    I meant “software is _by definition_ a useful process” – excuse the typo

  7. Anon February 15, 2016 12:43 pm

    Ron,

    You are close and here I join in your call to place the proper emphasis on the utility portion of 101.

    I will make one adamant objection to your post though. Software is not a process. Executing software may be a process. Software is a manufacture in and of itself, and a machine component**. Yes, the use of the English language to describe the invention of software is somewhat limited, and has evolved in this particular art to using language of action.

    But that does not mean that software IS action. It only means that the best, and common to this particular art, way of describing the ITEM is in words of action.

    I know that I have disagreed with Mr. Quinn on this as he likewise tends to write as if there was no difference between the execution of software and software itself.

    But in this day and age of those who would purposefully obfuscate the legal issues and cloud the issues, being precise as to the difference between what software IS and what software may DO becomes an important difference to keep in mind.

    **Further, being clear in this distinction raises the parallel distinction that there is a very real difference between the thought of software and software itself. Understanding and accepting this difference would definitely add clarity to any discussion of “ideas” (abstract and otherwise) and those items so claimed as to NOT be ideas – and this would help avoid the tendency of the Court (and courts following the Court’s lead) to play fast and loose with claims and speak to some ethereal “gist” instead of looking at the claim – as a whole – and as wholly written.

  8. IPdude February 15, 2016 1:04 pm

    The Alice decision was a dream come true for Google and M. Lee. It’s a perfect justification to kill software patents so that the Google Empire will continue to grow. M. Lee has no interest in finding a solution to allow for more patents to be allowed. That would go against what Google has lobbied for through AIA, etc.

  9. Night Writer February 16, 2016 1:32 pm

    I think there is little doubt @8 IPdude that Lee is obviously a shill for Google. She is clever and undoubtably uses Google IP counsel to help her figure out how to undermine the patent system. Obama is just such a disaster. Appointing Google judges to the Fed. Cir. will be a gift that will keep giving for another 30 years. That lot he appointed will never figure out what is going on as they don’t understand science and never cared to even try to understand science. There is no hope that they will figure it out at this point when they are heaped with praise for their ignorance now.

  10. Night Writer February 16, 2016 8:02 pm

    Tania Simoncelli has a TED talk (Jan 2016) about the ACLU bringing the Myriad case. Lots of things in it to object to, but worth watching.

Post a Comment

Respectfully add to the discussion.

Name *
Email *
Website