Posts Tagged: "101 rejections"

A conflict exists between the incentive to invent and the breadth of patent-eligible subject matter. It has become difficult to recognize the line between patentable subject matter and non-patentable products of nature. The Supreme Court has made conflicting statements regarding that line in its rulings in Funk Bros. and Myriad Genetics. It is time for the Supreme Court to resolve the inconsistencies in their rulings on 35 U.S.C. § 101… This case is an ideal vehicle for providing the clarification the patent and investment community require.  At issue is how to determine whether something is a product of nature under 35 U.S.C. § 101.

Yesterday the USPTO issued subject matter eligibility guidance to its examining corps in a memorandum that changes how examiners approach their Alice Step 2B analysis. Specifically, the memo recognizes the Federal Circuit’s recent decision in Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018) and instructs examiners to abide by its holding. Berkheimer itself held that the question of whether certain claim limitations represent well-understood, routine, or conventional activity under Alice Step 2B is a factual issue, with Berkheimer precluding summary judgment that all of the claims at issue were not patent eligible. This principle was then reaffirmed by the Federal Circuit a week later in Aatrix Software, Inc. v. Green Shades Software, Inc., 882 F.3d 1121 (Fed. Cir. 2018) in the context of a judgment on the pleadings and judgment as a matter of law.

One promising approach is to argue that the claims are directed to a specific technological solution to a specific technological problem, as has been successful in the courts. But, even this may not be convincing, if argued in the abstract, because, after all, we are dealing with abstract ideas to begin with, and it is all too easy for an examiner to dismiss an abstract argument as “not convincing”. A concrete, bright line test can be constructed, which may sway an examiner (or appeal board, if the rejection is appealed). Articulate a specific technological problem that the claims solve or are directed to solving. Analyze the claim and cite some of the important claim limitations that are not present in the alleged abstract idea, and explain the significance of these claim limitations in terms of the technological problem and technological solution.

The Federal Circuit held that the claim was directed to the abstract idea of encoding and decoding image data. According to the panel, the claim recited “a method whereby a user displays images on a first display, assigns image codes to the images through an interface using a mathematical formula, and then reproduces the image based on the codes… This method reflects standard encoding and decoding, an abstract concept long utilized to transmit information.” The Federal Circuit went on to note under step one that RecogniCorp’s Claim 1 differed from the invention in Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016) because, unlike Enfish’s invention, Claim 1 did not recite a software method that improved the functioning of a computer but instead recited a process “for which computers are invoked merely as a tool.”

On December 15, 2016, the USPTO published three subject matter eligibility examples focusing on business method claims. The purpose of these examples is to give guidance on how claims should be analyzed using the 2014 Interim Guidance on Subject Matter Eligibility, recent Supreme Court and Federal Circuit decisions, and recent Memorandums published by the USPTO. These examples seem to indicate that the power of §101 to restrict patentability has been whittled down since Alice and that the USPTO would like to reduce the number of §101 rejections for technological claims in light of court decisions post-Alice. Below, we describe each example provided by the USPTO, explain the USPTO guidance for each example, and provide practical practice tips that practitioners can use to help reduce or overcome §101 rejections.

The § 101 rejection rate for patent applications in the e-commerce work groups approaches 100%, then drops precipitously for the remaining seven of the top ten work groups with the greatest percentage of § 101 rejections. Before Bilski, the § 101 rejection rate in the e-commerce work groups hovered around around the 30% mark, but has now tripled. The remaining work groups have also seen their § 101 rejection rates rise by 200-300%, although they make up a significantly smaller proportion of total rejections than in the e-commerce art units. While it did not surprise us that these work groups were at the very top of the list for § 101 rejections, we also wanted to know what other technologies are particularly prone to § 101 rejections.

Mathematics has long been accepted as a tool to model the physical reality. For many it is hard to grasp that math actually “does something.” The reality is that mathematics based instructions in computers generate signals that are useful and used. This type of mathematics may be called “operational mathematics.” Operational math already replaces devices that used to be made from valves and gears or from electronic components. Operational mathematics also enables new devices that were previously unimaginable.

Unlike certain rejections one faces in life, a rejection from a patent examiner is never the end of the story, and definitely not final – even when the rejection is called a final rejection all hope is not lost and there are things that can be done to continue to attempt to persuade and ultimately convince the patent examiner you are entitled to a patent… Generally speaking, what you will want to do after you get a final rejection will not be the type of thing you will have the right to do. In that likely situation, the most common thing to do is file what is called a Request for Continued Examination (RCE), which is allowed under 37 CFR 1.114. An applicant request continued examination of an application at any time after prosecution in the application is closed.

In 2016, the ITC had its busiest year since 2011–which was the peak of the “smartphone wars”–in terms of new investigations instituted. In 2016, 55 complaints were filed, notably, 16 of these complaints were filed by foreign companies. The ITC had an above average settlement rate of 60%; normally the settlement rate is approximately 50%. Last year also had a slight growth in nonpatent investigations which includes antitrust, trade secret, copyright and Lanham Act violations. Despite the increased workload, the average target date was 15.8 months from institution date to final Commission opinion.

In what can be described only as an utterly ridiculous, intellectually insulting, and idiotic decision, the Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO) has done the truly absurd. In Ex parte Hiroyuki Itagaki the PTAB has ruled a magnetic resonance imaging (MRI) machine to be patent ineligible because it is an abstract idea, citing the United States Supreme Court’s decision in Alice v. CLS Bank for support.

Since the Supreme Court’s decisions in Mayo Collaborative Services v. Prometheus Laboratories (2012) and Alice Corp. v. CLS Bank Int’l (2014), patent practitioners have struggled in overcoming the newly imposed hurdle of patent eligibility. Uber is no stranger to this struggle. Of the 53 patent applications that Uber has filed since 2012, 27 of these applications have been examined, wherein Uber has received 13 final rejections based on §101. Uber has fought against many of the §101 rejections. However, Uber has thus far been unsuccessful in most of its attempts.

There are several major statutory rejections that an applicant can receive during the course of patent prosecution at the USPTO, each one corresponding to the relevant section of the Patent Act: § 101 (subject matter), § 102 (novelty), § 103 (non-obviousness), § 112(a) (specification), and§ 112(b) (definiteness). Any application can receive any one of these rejections, but some are more common than others, especially when considering technology center and the type of technology involved. For example, § 101 rejections are very common in TC 3600 due to the presence of the§ 112(a) Alice-heavy e-commerce art units, while fairly simple inventions are more likely to receive § 102 rejections. In addition to prevalence based on technology type, the type of rejection an applicant can receive can also depend upon where their application is in the prosecution process. When it comes to first final rejections, § 103 rejections are the most common.

U.S. Patent No. 9378491, entitled Payment Transfer by Sending E-mail. This discloses a computer-implemented method which enables the seamless initiation of a payment transfer through e-mail from one mobile device to another without creating an account or logging into a service. The innovative system is designed for both simplicity of use as well as security and authentication in online financial transactions. A final rejection issued by a patent examiner on the ‘491 patent dated December 8th, 2014, doesn’t specifically mention Alice v. CLS, but the case’s effect on the examiner’s decision seemed evident. In arguments made in response to the final rejection, Square’s prosecution team on the ‘491 patent noted that it had amended the claims to make the patentable features of those claims more explicit.

Robert Bahr, the Deputy Commissioner for Patent Examination Policy, responded that “hindsight is great,” and went on to explain that they thought that the rejections that were being appealed to the Board would stand and there would not be a need to bring the cases back and issue Alice rejections. “These are sort of judgments calls you have to make,” Bahr explained. “Sometimes it works out for you and sometimes it doesn’t.”