U.S. Patent and Trademark Office Issues Revised Subject Matter Eligibility Guidance

The United States Patent and Trademark Office (“USPTO”) recently issued revised guidance for use by USPTO personnel in evaluating subject matter eligibility for patents.

In order for an invention to be patentable, the subject matter of the invention must fall within one of four statutory classes: process, machine, manufacture, or composition of matter.  Courts have recognized three judicial exceptions to patentable subject matter: laws of nature, natural phenomena, and abstract ideas.

The Supreme Court set forth a framework for evaluating subject matter eligibility in the so-called Alice/Mayo test.  That framework requires a determination of whether the claim is directed to one of the three judicial exceptions.  If the claim is found not to be directed to one of the judicial exceptions, the claim qualifies as eligible subject matter.  If the claim is found to be directed to one of the judicial exceptions, the claim could still be patentable if it recites additional elements that amount to significantly more than the judicial exception.

Properly applying the Alice/Mayo test has proven to be difficult.  One problem is the failure of the Supreme Court, or any other court, to properly define “abstract idea”.  In order to determine if subject matter is directed to an abstract idea, the subject matter is compared to concepts previously identified as abstract ideas by the courts to determine if it is similar subject matter, and therefore also abstract.  This approach has become impractical due to the large number of decisions and the inconsistency of those decisions.

In response to this problem, the new USPTO guidelines provide a two-prong analysis to determine whether subject matter is directed to an abstract idea.  First, it is determined whether the claim recites an abstract idea by comparing the claim to three enumerated categories of abstract ideas:  1) mathematical concepts; 2) certain methods of organizing human activity; and 3) mental processes.  Only if the claim recites concepts identified in those categories will it be considered an abstract idea.  As such, under the new guidelines, a claim is compared to the identified categories instead of comparing the subject matter to concepts previously analyzed in prior cases.

If the claim is determined to not recite an abstract idea at the first prong, then the claim is patent eligible. If the claim is determined to recite an abstract idea, then the test proceeds to the second prong in which the USPTO has implemented a “practical application” test. That is, if the claim recites an abstract idea as enumerated in one of the three categories, it is then determined if the claim is “directed to” the identified abstract idea. The claim is only directed to the abstract idea, and therefore not patentable, if the abstract idea is not integrated into a practical application. If the recited exception is found to be integrated into a practical application, then the claim is patent eligible.

The new guidelines do not constitute substantive rulemaking and do not have the force and effect of law. The new guidelines set out agency policy with respect to the USPTO’s interpretation of the subject matter eligibility requirements in view of decisions by the Supreme Court and the Federal Circuit.

According to the USPTO guidelines, the revised patent examination procedures are designed to more accurately and consistently identify claims that recite a practical application of a judicial exception, thereby increasing predictability and consistency in the patent eligibility analysis.