Interim Guidance Status Check

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USPTO SealAs of Tuesday, June 16th, we have been living with the U.S. Patent and Trademark Office's "2014 Interim Guidance on Patent Subject Matter Eligibility" ("Guidance") for six months.  Although the USPTO subsequently issued some examples and sought public comment, it started training examiners on the new Guidance almost immediately.  And, of course, the PTAB has started implementing these standards as well.  So the question stands, where are we now?

Several organizations and individuals, including the IPO, the ABA,  and AIPLA, submitted comments that were directed to perceived shortcomings in the Guidance.  These comments can be found here.  Persistent themes throughout many of these comments include the hope that the USPTO and Examiners should tread lightly when applying a judicial exception, concerns over the application of the "significantly more" test, the need for greater emphasis by the USPTO on preemption, and clarifying the evidentiary burden on the USPTO to establish the bases for a prima facie 101 rejection.  Six months later, these concerns remain.

Reportedly, the application of the Guidance has varied on a Technology Center-by-Technology Center basis, fueled, perhaps, by the lack of examples in many technology areas.  Although it is difficult to quantitatively assess the application of the Guidance on a center-by-center basis, implementation of § 101 principles by the PTAB provide some indication of the USPTO's approach in implementing the Guidance.  In all, the PTAB has addressed § 101 in about 40 separate decisions since the implementation of the Guidance.  In more than 20 other decisions, although it didn't address the § 101 issues itself, it suggested that the Examiner consider the Guidance in further review of the claims sent back on other grounds.

USPTO's Evidentiary Burden:

The Guidance was silent, for example, on the USPTO's evidentiary burden in examination in establishing such grounds for unpatentability as whether a claim recites "a law of nature, natural phenomenon, or an abstract idea" under step 2A of the analysis, or whether the claim adds "significantly more" or simply "routine or conventional" under step 2B of the analysis.  On rejections on other grounds, the USPTO bears the initial burden of presenting a prima facie case supported by substantial evidence; an "assessment of basic knowledge and common sense not based on any evidence in the record" fails to meet this standard.  See In Re Oetiker, 977 F.2d 1443, 1445 (Fed. Cir. 1992); In re Zurko, 258 F.3d 1379, 1385 (Fed. Cir. 2001).  That is, "the PTO [must] stat[e] the reasons for [its] rejection, or objection or requirement, together with such information and references as may be useful in judging of the propriety of continuing the prosecution of [the] application."  In re Jung, 637 F. 3d 1356, 1362 (Fed. Cir. 2011) (citing 35 U.S.C. § 132 and Chester v. Miller, 906 F.2d 1574, 1578 (Fed. Cir. 1990)).

The PTAB has itself found that this same burden applies to § 101 decisions under the two-step analysis required by Alice:

The PTO bears the initial burden of establishing a prima facie case of patent-ineligible subject matter under 35 U.S.C. § 101.  Because the facts and evidence do not support the finding that claim 1 is "an attempt to claim a new set of rules for playing a card game" and therefore, necessarily, is an abstract idea, a prima facie case of patent-ineligible subject matter under 35 U.S.C. § 101 has not been established in the first instance by a preponderance of the evidence.

In re Renald Poisson, Appeal 2012-011084 (Feb. 27, 2015).  See also Ex parte Martin (Appeal 2012-001578) (March 24, 2015) (reversing rejection where Examiner failed to address factors other than the "machine-or-transformation" analysis in support of its prima facie rejection);

Application of the "significantly more" test:

The PTAB has addressed issues involving the "significantly more" test in a number of decisions.  In one, it grappled with the difference, if any, between the novel and nonobvious standards on the one hand and "conventional and routine" on the other.  The PTAB has tried to differentiate these standards, finding, for example that a step can be a "routine and conventional" implementation of an abstract idea, even though the step itself may be both novel and nonobvious:

Appellant appears to argue that, because the claimed subject matter is novel, the game cannot be "conventional."  We find this argument unpersuasive as it misapplies the law governing compliance with 35 U.S.C. § 101.  The Supreme Court has made clear that the analysis of whether claims satisfy the requirements of 35 U.S.C. § 101 is independent of whether those claims satisfy the other requirements for patentability under the patent statute -- indeed, the § 101 analysis is a threshold inquiry.  See Bilski v. Kappos, 561 U.S. 593, 594 (2010).  In other words, whether the subject matter of the claims under appeal are novel and non-obvious is immaterial to the § 101 inquiry.

More significantly, the Decision did not determine that the steps of the claimed invention were "conventional" in the sense that they are not novel or are obvious.  Instead, the test under Alice is whether the elements of the claim, alone or in combination, amounts to significantly more than a patent upon the [ineligible concept] itself -- in this case, the abstract rules of playing and wagering on a type of card game.  See Alice, 134 S. Ct. at 2355.  In other words, "[i]f, to implement the abstract concept" -- play Blackjack under then claimed set of rules -- "one must perform the additional step, or the step is a routine and conventional aspect of the abstract idea, then the step merely restates an element of the abstract idea, and thus does not further limit the abstract concept to a practical application."  Ultramerical, Inc. v. Hulu, LLC, 722 F.3d 1335, 1348 (Fed. Cir. 2013).

Ex parte Christian A. Schlumbrecht, Appeal 2012-012597 (May 13, 2015).

Although claims to games are typically deemed patent ineligible, a couple of cases showcase how providing something more -- whether or not it complies with the machine-or-transformation test -- can render even a game patentable.  In Ex Parte Kuester, Appeal  2013-001127 (May 6, 2015), the PTAB reversed a § 101 rejection for a claim to a card game that required a base that includes compartments "sized and shaped to receive and retain each card in place for the duration of a game after said cards have been arranged in one of a plurality of different configurations" and "retaining each card in place for the duration of a game."  The added specific structural components -- which would meet the machine-or-transformation test -- added a degree of particularity so as to transform the claimed abstract idea into patent eligible subject matter.

In Ex parte Jimick, Appeal 2012-009601 (February 2, 2015), by contrast, the PTAB found that a claim to a game was patentable under § 101 that had steps involving setting up markers on a specific board and requiring specific jumping arrangements based in part on the lack of preemption.  Although this game did not meet the machine-or-transformation test, this is not the only test.

Importance of Preemption:

Like the Ex parte Jimick case noted above, the PTAB has found that the lack of preemption was grounds for finding a claim patentable in several other cases as well.  In Ex parte Schmid et al., Appeal 2012-002155 (December 26, 2014) (reversing § 101 rejection of claims for "communicating information concerning the sleep position of an infant to the infant's caregiver" that were limited to "use of an infant sleep garment"), for example, it found that limiting the use of an abstract idea to a specific structure provided the "additional features" that ensure the claims are "more than a drafting effort designed to monopolize the [abstract idea]."

Preemption also figures heavily in several of the other cases discussed elsewhere in this note.

Machine-or-transformation test:

In Ex Parte Nguyen, Appeal 2012-006173 (Jan. 9, 2015), the PTAB found that a claim directed to a web "portal" ('a transaction management portal engine, a management database, and a user interface") is a physical entity, i.e., a machine, and as such, it falls within one of the four statutory categories of patentable subject matter.  Although the claim also called for the portal engine to execute a "business rule" and was coupled to a "management database," the PTAB found the focus of the claim on the portal was sufficient to confer patentability.

In Ex Parte Hyde, Appeal 2012-009430 (April 29, 2015), the PTAB found that claims broad enough to read on software per se were unpatentable under section 101, but that claims with means-plus-function limitations, which necessarily required the specific structure (circuitry) disclosed in the patent or equivalent, were patentable.

On the other hand, where the claims are not directed to the machine itself, the mere recitation of a machine (even other than a computer) is not enough.  In Ex parte Huynh, Appeal 2013-006708 (May 26, 2015), the PTAB found that a method for designing a machine (in this case, an integrated circuit) was itself not patentable under § 101.  The PTAB found a method for generating a physical layout for an integrated circuit using modular tiles was unpatentable where the claimed method was not tied to a particular machine or apparatus, did not transform an article to a different state or thing, and did not require the manufacture of the integrated circuit itself.  Moreover, such tile modules used to specify and form the IC involved "a standard IC fabrication process," and thus were themselves routine and conventional.

In conclusion, the PTAB has worked to implement these principles and its decisions provide a blueprint for argument that may help in prosecution.  Although many of these decisions are simply "informative" and not "precedential," they still provide an important bellwether of the USPTO's views on these 101 issues and application of the Guidance.

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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