USPTO handling of patent eligibility sparks substantive discussion at PPAC meeting

Wayne Sobon

Last week the Patent Public Advisory Committee (PPAC) held its quarterly meeting at the United States Patent and Trademark Office (USPTO). These quarterly meetings give those on PPAC an opportunity to be brought up to speed about what is going on inside the USPTO, and to ask questions of various senior officials.

One particularly interesting back and forth took place between Wayne Sobon, an IP attorney and strategist who is also a former President of the American Intellectual Property Law Association (AIPLA), and Robert Bahr, the Deputy Commissioner for Patent Examination Policy. The exchange related to patent eligibility and 101.

Leading up to this exchange Bahr had explained a number of things, including the reason the USPTO has not updated patent eligibility guidance to address the pro-patent decision of the Federal Circuit in BASCOM v. AT&T. Many in the industry have been critical of the fact that the USPTO, which has been otherwise quick to provide guidance with respect to important precedential decisions, did not provide examiners with guidance in this case which found the software claims at issue patent eligible. Bahr explained that the USPTO did not think the case changed anything they had previously told patent examiners, which is why no further guidance had been issued.

With so few examples of patent eligible software in the wake of the Alice debacle this decision seems imprudent to me personal, and also troubled Sobon, who explained:

Obviously this area is still one that’s deeply of concerned. I think all the major intellectual property organizations are focusing on this and evaluating and have teams looking at how to address in a variety of ways these issues. I think it’s commendable what you have been working on doing and with the revised guidance. I would be one to say the more you can actually revise your guidance and include things like the BASCOM case and include those as further tonics to the fact that the cases that were decided especially by the Supreme Court were very focused on the facts of those cases. And like any legal opinion you can vastly take the general things they state out of context and then it becomes again an acid that eats through things.

Sobon then moved forward to address the many “anecdotes that seem credible of the examiner core not yet fully… following the spirit” of USPTO guidance. Recounting these credible anecdotes, Sobon continued:

In practice examiners are continuing in a sense, if I can sort short hand it, sort of short circuit the analysis, the two-step analysis and basically define the problem away by just saying the things that you’ve claimed in your claim steps, whatever those might be these are the most important parts of your claim, and those things taken together are the abstract idea. You are patenting an abstract idea. You, therefore lose.

Sobon is exactly correct, and pretty much any review of Alice rejections from Technology Center 3600 will demonstrate just this type of circular reasoning.

Sobon then pivoted to one of the several unforeseen problems created by Alice, which is that it is being applied outside of the business method and financial patent sector. Indeed, Alice is being used to reject revolutionary medical software that relate to the treatment of cancer, which seems to directly and inexplicably fly in the face of the President’s so-called Cancer Moon Shot initiative. Sobon explained:

Another that’s been brought to my attention, you probably saw it in Bob Sachs’ Bilski Blog … Director Lee was focusing on the patents for patient program as part of the overall administration’s Cancer Moon Shot. That’s all great except that [Sachs] notes that there is at least 50 or more applications for cancer treatments that have been completely abandoned by applicants because of final 101 rejections for their cancer treatments when there’s not actually final 102 or 103 rejections. So this is actually affecting even the potential for protectable medical treatments directly related to a current program of Administration.

Sobon also brought up the issue of whether a method of playing a game should be patent eligible, as was the issue in In re Smith. See Would Monopoly® be patent ineligible under Alice? Sobon said:

I think the solicitor for the Patent Office admitted in oral argument if there were new cards or there were new material or things being used for that method of card play then that might be protectable. And I think having those kinds of examples made public and made part of your instruction to examiners can help balance this system, which I think in certain areas has really gone out of whack. And again card playing sounds trivial but games is a huge, huge industry for America… [t]he Monopoly® game was patented in the Depression by this very Office… [W]hat happens is those things spread out and get analogized to things, other things that are extraordinarily important for various industries. So I think this still remains a very, it’s obviously a very, very concerning issue. And it’s an acid that continues to just sort of leach out and is harming a number of areas of innovation and the applicant community that is especially affected by this remains distraught.

Bahr, who waited patiently for Sobon to conclude his thoughts and for his opportunity to respond, began by acknowledging that he read Sachs’ blog about the Cancer Moon Shot and has concerns. “I certainly hope we tread carefully in that area,” Bahr said. “I’ve tried to take pains in our guidance to do that.” And to be perfectly fair to the Patent Office, and to Bahr, the guidance that he has offered is not the problem. What he has been instructing patent examiners seems perfectly fair and reasonable. Unfortunately, there are patent examiners who routinely announce to patent attorneys and applicants that they are not following the guidance, or that they are not allowed to follow the guidance by their direct supervisors. So while I have no doubt that Bahr and others in the Commissioner’s Office do want to tread carefully, that message is simply not filtering down in any meaningful or actionable way to Art Units and ultimately to examiners.

The one aspect of Bahr’s response to Sobon that I took issue with was respect to patent and patent applications relating to playing games. Bahr explained:

I think it was the court that said that if the cards were different that it might be a different result but that here we were just talking about how the game was played with conventional cards. But certainly I would appreciate that you can’t analogize that to wipe out everything. I don’t know about the Monopoly game. Obviously if you claimed different types of pieces you would have a different game. It’s not a conventional game anymore. And I don’t think there were games like that before Monopoly®.

Once again, my issue is not with Bahr, who I think is being perfectly reasonable in his interpretation of the binding precedent on the Office. My problem is with the Courts, particularly the Federal Circuit decision in In re Smith. To say that a method of playing a game would be patentable if there were something non-conventional physical attribute associated with the method of playing is simply NOT the law.

The Supreme Court expressly overruled the Machine-or-Transformation test in Bilski v. Kappos, and left open the possibility that a method could be patent eligible even if it were not somehow tethered to a unique physical, tangible device. Furthermore, methods are a patent eligible and specifically enumerated category of invention identified in 35 U.S.C. 101. A separate and distinct category of invention also identified in 101 is devices. To suggest that there must be a new device or tangible apparatus present in order to make a method patent eligible simply cannot be correct under any reasonable reading of 35 U.S.C. 101.

Another interesting exchange between Sobon and Bahr occurred relative to compact prosecution. “If it’s truly just conventional cards or conventional software or conventional things and nothing new has happened then kill it under 102 and 103 and leave 101 till the last,” Sobon explained. “It finally clicked to me that compact prosecution plus 101 is really potentially problematic and it maybe where things have gone the rails.”

“I agree with you that … many times your 102, 103 will take care of your 101, but I would not really want examiners to hold off on 101 till the end and, in fact, I think in Mayo the government argued that this really isn’t a 101 issue, it’s a 102, 103 issue and that got rejected pretty hard by the Supreme Court.”

Again, I don’t like Bahr’s answer, Sobon is correct, but so too is Bahr. The Supreme Court the is to blame for being wrong in Mayo. The conflating of 101 with 102, 103 and 112 is the root of all the problems facing the software and biotechnology industries. While what the Supreme Court did was objectively incorrect under any statutory construction, they are the Supreme Court. Unless and until Congress overrules Mayo the Patent Office is largely stuck, at least to some degree.

Could the Patent Office address this differently? Yes. Is the way Patent Office senior officials are addressing 101 in the guidance incorrect or outside of the envelope of reasonableness? No. Is the way examiners are applying 101 in keeping with the guidance? Absolutely not. Is this one big mess? You bet!