USPTO’s Interim Guidance on Patent Eligibility Relaxes Limitations
By Brian P. O'Shaughnessy & Kenneth N. Nigon
 
The U.S. Patent and Trademark Office (USPTO) has issued revised guidelines for determining patent eligible subject matter following recent groundbreaking precedent, including Alice Corp., Mayo, and Myriad.  The guidance substantially alters the USPTO’s earlier, more restrictive examination procedures and instructions to examiners, and address the implications of those recent decisions in a more nuanced and sophisticated fashion.  Patent applicants now have a better basis on which to structure and prosecute patent applications in a manner that better aligns the public interest, recent precedent, and USPTO practice. 
 
The Guidance
 
These new guidelines (“Interim Eligibility Guidance”), which were published  in the Federal Register, on December 16, 2014, supplement the earlier Preliminary Examination Instructions (June 2014 Memorandum), under which the USPTO has been examining applications since Alice Corp., and supersedes the Procedure For Subject Matter Eligibility Analysis Of Claims Reciting Or Involving Laws Of Nature/Natural Principles, Natural Phenomena, And/Or Natural Products (March 2014 Memorandum) following Myriad and Mayo.   The Guidance describes how those Instructions and Procedures have been implemented under existing practices as set forth in the MPEP, including explanation as to how the various provisions of the MPEP are affected, and which provisions are superseded by the Guidance. 
 
The Guidance presents a new decision-making flow chart for assessing patent eligible subject matter in light of Supreme Court and Federal Circuit decisions, provides examples of the implementation of that decision-making under new guidelines, using historical examples and case histories, and concludes with a summary of relevant precedent, including summary analyses based on the most recent Supreme Court decisions, Federal Circuit decisions, and other decisions of historical significance. 
 
The Guidance does not constitute substantive rulemaking, and does not have the force and effect of law.  It merely sets forth the USPTO’s interpretation of relevant precedent, and explains how that interpretation will affect patent eligibility determinations under existing examination rules and practices.  As such, it is interim guidance, at least until the review and comment period have elapsed, and more formal guidance or rules are put in place. 
 
The USPTO requests written comments on the Guidance, as well as additional
suggestions for claim examples to use for examiner training.  The USPTO plans to hold a public forum mid-January 2015 to discuss the Guidance, and to receive user input.
 
Products of Nature – Chemical, Pharmaceutical and Biotechnological Inventions
 
Among other things, the USPTO states that the Guidance will promote examination efficiency and consistency across all technologies.  Nonetheless, the guidelines peculiar to products of nature will have special relevance to those practicing in the chemical, pharmaceutical, and biotechnological arts. 
 
The Guidance provides that proper analysis of patent eligibility begins with confirmation that statutory subject matter is recited.  To implement this step, one must then determine whether the claim is directed to subject matter regarded as an exception to patent eligible subject matter, e.g., a law of nature, a natural phenomenon, or an abstract idea.  If so, further analysis is required. 
 
The most notable change from earlier instructions is that the test for determining whether a claim is directed to a “product of nature” exception is now separated from the analysis of whether the claim includes significantly more than the exception. This permits a more detailed and relevant analysis that separates those distinct issues. 
 
Additionally, the analysis focuses on claims directed to judicial exceptions, rather than claims merely “involving” an exception. Thus, process claims merely using a nature-based product are not necessarily subject to an analysis for markedly different characteristics.  The markedly different analysis focuses on characteristics such as structure, function, and/or other properties as compared to “its naturally occurring counterpart in its natural state.”  Guidance, p. 3, fn. 2. 
 
The Guidance notes precedent holding that products – natural or man-made - which are made from or no different than a naturally occurring product may be ineligible as “products of nature.”  Claims directed to such products require application of the “markedly different characteristics” analysis to evaluate the nature-based product limitation. “A claim that recites a nature-based product limitation that does not exhibit markedly different characteristics from its naturally occurring counterpart in its natural state is directed to a ‘product of nature’ exception.”  Guidance, p. 15. 
 
The upshot of this more detailed analysis is that the markedly different characteristics test is applied only to the nature-based product recited in the claim, and the focus is on whether the claimed subject matter possesses properties distinct from the nature-based product itself and as found in nature.  In contrast to prior examination guidelines, a combination of nature-based products that yield identifiable, materially distinct properties may be sufficient to overcome the exception, and confer patent eligibility.  Guidance, p. 16 (“When the nature-based product is produced by combining multiple components, the markedly different characteristics analysis should be applied to the resultant nature-based combination, rather than its component parts.”).  Thus, for example, the suggestion found in prior guidelines (March 2014 Memorandum) that claimed subject matter containing multiple nature-based products (e.g., gunpowder), might be deemed ineligible as being merely a mixture of known products found in nature, regardless of the profoundly different characteristics of the resultant combination. 
 
The Guidance further notes that “[M]arkedly different characteristics can be expressed as the product’s structure, function, and/or other properties, and will be evaluated based on what is recited in the claim on a case-by-case basis.”  Guidance, p. 18.  It is further noted that even a small change can result in markedly different characteristics from the product’s naturally occurring counterpart.  Moreover, it is quite likely that where such small changes do in fact result in markedly different characteristics, the likelihood of patent eligibility increases.  Thus, it will be prudent to consider carefully, and discuss thoroughly in the patent specification, how claimed subject matter differs from the properties of each of the corresponding nature-based products that might be found in a claim. 
 
A subsequent step in the analysis is to determine “whether any element, or combination of elements, in the claim is sufficient to ensure that the claim amounts to significantly more than the judicial exception.” Guidance, p. 20.  The Guidance refers to this step as the Mayo step, or the “search for an inventive step.”  Here, the focus is on ensuring that the claimed subject matter, or series of steps, applies the exception in a meaningful way, and is not merely a drafting technique directed to a means of exploiting the exception, without adding an inventive aspect.  Thus, the Guidance notes that precedent has focused on whether a “claim with additional elements amounts to significantly more than the judicial exception itself.”  If not, the exception prevails, and the claimed subject matter is patent ineligible.
 
Abstract Ideas
 
The flow-chart presented in the Guidance attempts to combine the analysis for all of the judicially recognized exceptions (abstract ideas, mathematical formulae, laws of nature, natural phenomena, and natural products).  The difference between the analysis of abstract ideas and mathematical formulae on the one hand and laws of nature, natural phenomena and natural products on the other hand is in the step of the flow-chart that asks whether the claim recites additional elements that amount to significantly more than the judicial exception. 
 
Similar to the product of nature analysis, The first step in analyzing a claim that may include an abstract idea is to determine whether the claim is “directed to” the abstract idea.  The guidelines do not provide specific guidance on how a claim is determined to be “directed to” an abstract idea as opposed to merely reciting the abstract idea.  The guidance, however, does state that claims reciting judicial exceptions, but directed to inventions that “clearly do not seek to tie up the judicial exception” should be analyzed using a streamlined eligibility analysis, described below. 
 
The Guidance does not provide a definition of “Abstract Idea,” deferring, instead, to the examples provided in the Supreme Court and Federal Circuit cases.  As such, it identifies a non-exclusive list of abstract ideas, including: fundamental economic practices, certain methods of organizing human activities, an idea “of itself,” and mathematical relationships/formulas. 
 
Once the examiner determines that a claim is directed to an abstract idea or other exception, the Guidance instructs the examiner to “determine whether the elements of the claim considered both individually and as an ordered combination are sufficient to ensure that the claim as a whole amounts to significantly more than the exception itself.”  In order to make this determination, The Guidance states, “[t]o be patent-eligible, a claim that is directed to a judicial exception must include additional features to ensure that the claim describes a process or product that applies the exception in a meaningful way, such that it is more than a drafting effort designed to monopolize the exception.  It is important to consider the claim as a whole.”  Guidance, pp. 20-21
 
The Guidance then lists two sets of limitations: those that have been found to qualify as “significantly more” and those that have not.  Among the limitations that have been found to qualify are:
• Improvements to another technology or technical field;
• Improvements to the functioning of the computer itself;
• Applying the judicial exception with, or by use of, a particular machine;
• Effecting a transformation or reduction of a particular article to a different state or thing;
• Adding a specific limitation other than what is well-understood, routine and conventional in the field, or adding unconventional steps that confine the claim to a particular useful application; and
• Other meaningful limitations beyond generally linking the use of the judicial exception to a particular technological environment.
Guidance pp. 21-22
 
The fourth and fifth items in this list were not in the June 2014 Memorandum.  With regard to the fourth item, note that the Guidance also indicates that MPEP § 2106 is not modified by the Guidance.  This section of the MPEP states that data representing something physical (e.g. electrocardiogram signals) can be considered an “article.”  Thus, an invention that meaningfully transforms such data qualifies as patent-eligible subject matter.
 
The items that do not represent “significantly more” include:
• Adding the words “apply it” (or an equivalent) with the judicial exception, or mere instructions to implement an abstract idea on a computer;
• Simply appending well-understood, routine and conventional activities previously known to the industry, specified at a high level of generality, to the judicial exception, e.g., a claim to an abstract idea requiring no more than a generic computer to perform generic computer functions that are well-understood, routine and conventional activities previously known to the industry;
• Adding insignificant extrasolution activity to the judicial exception, e.g., mere data gathering in conjunction with a law of nature or abstract idea; and
• Generally linking the use of the judicial exception to a particular technological environment or field of use.
Guidance pp. 22-23
 
When making the rejection, the Guidance instructs the examiner to: ”identify the exception by referring to where it is recited (i.e., set forth or described) in the claim and explain why it is considered an exception. Then, if the claim includes additional elements, identify the elements in the rejection and explain why they do not add significantly more to the exception.”  Guidance pp. 23-24
 
Streamlined Eligibility Analysis
 
As noted above, the Guidance provides a streamlined eligibility analysis for inventions where a claim recites a judicial exception but the claim as a whole is clearly not directed to the judicial exception.  In the examples presented, the judicial exception is ancillary to the claimed invention.  This streamlined eligibility analysis represents a safe harbor when the claims, viewed as a whole, clearly do not “tie up” the judicial exception.  Guidance p. 23.
 
The Guidance concludes with example applications of the eligibility analyses and examples taken from Supreme Court and Federal Circuit cases from O’Reilly v. Morse, which was decided in 1853 to DDR Holdings v. Hotels.com decided in 2014.
 
Practice Tip:
 
The USPTO’s new Guidance offers a more nuanced tool for assessing whether claimed subject matter runs afoul of the product of nature or law of nature exception to patent eligibility, and is generally a more accurate interpretation of precedent.  As such, the Guidance may result in examination more consistent with the Constitutional mandate of promoting the progress of the useful arts.  However, the Guidance remains subject to change following the comment period.  Further, the manner in which the Guidance will be deployed in practice remains to be seen.  The division between patent eligible subject matter and the various judicially created exceptions is often quite difficult to assess, and will continue to complicate prosecution of applications for some time to come.  In the meantime, prudent applicants will focus on those features of a claimed invention that emphasize markedly distinct characteristics over corresponding natural products. 
 


 
 
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