A Look At The USPTO Patent Eligible Subject Matter Report

by Foley & Lardner LLP
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On July 24, 2017, the USPTO issued a 48-page report on Patent Eligible Subject Matter. The report summarizes key court decisions interpreting and applying 35 USC § 101, international views on eligible subject matter, and public comments and recommendations for addressing recent changes in this foundational issue of U.S. patent jurisprudence. While some have criticized the USPTO Patent Eligible Subject Matter report for failing to take a position on the issues or suggest any solutions, others have commended the concise summary of where things stand today.

Overview of the USPTO Patent Eligible Subject Matter Report

As set forth in the “Overview,” the purpose behind the report is “to provide a comprehensive review of patent eligibility law and a record of public views on the impact of the recent Supreme Court patent eligibility jurisprudence and public recommendations for a path forward.” Thus, the report makes clear from the outset that it is not going to propose or promote a specific policy.

The report acknowledges that the Supreme Court decisions in Bilski, Mayo, Myriad, and Alice “shifted the dividing line between eligible and ineligible subject matter.” While that characterization may strike many as an understatement, the report does give specific attention to the impact on “life sciences” and “computer-related” technologies. However, true to its purpose, the report summarizes comments from stakeholders in these fields rather than taking a position on whether the “dividing line” has shifted too far.

Even the “Conclusion” of the report focuses on public views:

Members of the public who expressed their views either at the roundtable or in written submissions generally agreed that the Supreme Court’s recent jurisprudence altered the landscape of patent eligibility law. ….

Members of the public were split in their views on how best to respond to the Supreme Court’s recent jurisprudence. In general, supporters of the decisions, many of whom were from the software industry, recommended that the judiciary be given time to develop the case law further. …. Some commentators recommended administrative actions to address the impact of the Court’s decisions, for example, that the USPTO take steps to increase consistency between examiners and clarity of § 101 rejections in office actions. Several asked for additional guidance, examples, or revisions to the Manual of Patent Examining Procedure (MPEP). A majority, however, recommended legislative change. …. Finally, in addition to addressing the statutory requirements for eligibility, some recommended including a research exception to infringement to address the Court’s preemption concerns.

International Approaches To Subject Matter Eligibility

The section of the report summarizing international approaches to subject matter eligibility is well worth a read by anyone whose practice does not bring the stark differences to light. While the report doesn’t directly compare subject matter that can be patented in Europe, Japan, South Korea and China with that no longer eligible for patenting in the U.S., the summary of the types of diagnostic methods that can be patented in those countries reveals that the U.S. stands alone in its broad restrictions on the patent-eligibility of in vitro diagnostic tests. The contrast with regard to “products of nature” is even more striking:

As in most jurisdictions, naturally occurring products existing in their natural form generally are not patent eligible subject matter in Europe, Japan, Korea, and China. However, all of these jurisdictions allow the patenting of certain naturally occurring products that have been isolated from their natural environment. For example, in Japan and Korea, if naturally occurring substances are artificially isolated from their environment, they can be patent eligible.

That used to be the case in the U.S. as well, until the Supreme Court ruled otherwise in Myriad.

Public Support For Legislative Reform

As noted above, the USPTO Patent Eligible Subject Matter report recognizes a “push” for legislative reform:

While some commentators recommended either allowing the judiciary to develop the case law or taking administrative measures, many other commenters pressed for legislative change. Representatives from law firms, legal associations, industry groups, and life sciences companies agreed that the legislature is the appropriate body to recalibrate the proper scope of patent eligibility.

According to the report, many in the life sciences industry stopped hoping for a judicial correction after the Supreme Court denied certiorari in Sequenom, and since then have focused their efforts on “a legislative solution.”

The report reviews several specific legislative proposals:

  • replace the two-part Mayo/Alice test with a “technological” or “useful arts” requirement
  • eliminate “new” from § 101, to focus on the “useful” requirement
    For example, IPO proposed the following language to replace § 101:
    “Whoever invents or discovers, and claims as an invention, any useful process, machine, manufacture, composition of matter, or any useful improvement thereto, shall be entitled to a patent for a claimed invention thereof, subject only to the exceptions, conditions, and requirements set forth in this Title.”
  • focus on “practical utility” or expressly permit patents on “practical applications” of laws of nature, abstract ideas, and natural phenomena
  • expressly define limited categories of exceptions
    The AIPLA proposal on this point would provide that “[a] claimed invention is ineligible . . . only if the claimed invention as a whole exists in nature independent and prior to any human activity, or can be performed solely in the human mind.”
  • expressly distinguish the eligibility requirement from the other statutory requirements
    The IPO and AIPLA both proposed the following:
    “The eligibility of a claimed invention . . . shall be determined without regard as to the requirements or conditions of sections 102, 103, and 112 of this Title, the manner in which the claimed invention was made or discovered, or the claimed invention’s inventive concept.”

The report also acknowledges comments proposing a statutory “research exemption from patent infringement for experimentation conducted to better understand or improve a claimed invention,” which proponents suggested might “address the Supreme Court’s preemption concerns.”

Where Do We Go From Here?

Having lived through the long process that led to the America Invents Act, I know that legislative reform will not provide immediate relief to the patent eligibility hurdles facing the life science industry. Having followed the various judicial interpretations of the Biologics Price Competition and Innovation Act, I am wary of unintended consequences (and unintended interpretations) of any new statutory language. However, I count myself among those who lost hope for a judicial correction after Sequenom, and this report confirms that the USPTO is not inclined to take a stand on these issues. Thus, the long and winding road through Congress may be the industry’s best chance of redrawing the patent eligibility line to include more important diagnostic and personalized medicine technologies.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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