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January 21 PTO Forum Helps Clarify the Interim Eligibility Guidance
Overview
Comparing the December 16 Interim Eligibility Guidance to Prior Pronouncements
In its continuing effort to harmonize PTO handling of patentable subject matter issues with recent Supreme Court and Federal Circuit rulings, and to quell industry concerns about overly restrictive guidelines, on December 16, 2014, the PTO published an Interim Guidance on Patent Subject Matter Eligibility ("Interim Eligibility Guidance"). This article will discuss the Guidance and the analysis provided by the PTO at a January 21 Eligibility Forum.
The Interim Eligibility Guidance is in some respects a response to the life sciences industry's criticism of the PTO's March 2014 Procedure, which was seen as being overly restrictive in the application of Myriad. But, as explained by Raul Tamayo at the January 21 Forum, the principal difference between the latest guidance and earlier versions is that the PTO now combines the life sciences analysis with that for software and business method patents. Thus, as shown in the flow chart included in the Interim Eligibility Guidance, the same two-step Alice process is applied, whether dealing with a biological process claim that might be considered being directed to laws of nature or natural phenomena, or arguably directed to a business method within the abstract idea exception, whether implemented on a computer or not.
Initially, it needs to be understood that examiners are to use the broadest reasonable interpretation of the claim, analyze the claim as a whole, and practice "compact prosecution" covering all of the issues under sections 101, 102, 103 and 112. With these ground rules, Step 1 of the flow chart can be considered. There is nothing new in this first step of the flow chart. It simply asks if the claim is directed to one of the categories set forth in section 101.
Step 2A
Step 2 A is different from the March 2014 Procedure in that it presents a comprehensive test for all claims, whether they be to a product or a process, or involve the abstract idea, law of nature or a product of nature exception. If the answer is no, the examination proceeds to 102, 103 and 112 issues. If the answer is yes, the examiner proceeds to 2B. But before moving down to 2B, consideration must be given to the fact that nature-based products derived from natural sources require closer scrutiny to determine if they fall within a judicial exception. Whether something is an eligible nature-based product or whether there is an issue with a judicial exception is going to come down to the "markedly different" analysis. As explained at the Forum, eligible nature-based products are those that exhibit markedly different characteristics based on structure, function, and/or properties. As to these products, Step 2B can be skipped, and the claim qualifies as eligible subject matter under section 101. Ineligible nature-based products that are either naturally occurring or have characteristics that are not markedly different from a natural category, are going to give rise to an exception, and the analysis has to pass down to Step 2B. This is a change from the March 2014 Procedure; that is, the "markedly different characteristics" path to eligibility no longer requires the "significantly more" analysis of last March.
As explained at the Forum, PTO staff looked at the examples of characteristics that the Supreme Court and the Federal Circuit consider when they determine whether there is a marked difference. Based upon recent and historic patentable subject matter case law, there are four different groups of characteristics that have been considered: biological or pharmacological functions or activities; chemical and physical properties; phenotype, including functional and structural characteristics; and structure and form, whether chemical, genetic or physical.
If the claim includes a nature-based product that has markedly different characteristics based on the above tests, the claim does not recite a "product of nature" exception and is eligible (so the answer in Step 2A is NO). If the claim includes a product having no markedly different characteristics from the product's naturally occurring counterpart in its natural state, the claim is directed to an exception; Step 2A is YES, and the eligibility analysis must proceed to Step 2B.
In the event 2A potentially relates to an abstract idea, Mr. Tamayo referred to the examples of abstract ideas noted in Alice: fundamental economic practices, methods of organizing human activities, ideas in and of themselves, and mathematical relationships and formulas. The Interim Eligibility Guidance actually refers to thirteen examples of instances involving the judicially recognized exception of abstract ideas: mitigating settlement risk, [1] hedging, [2] creating a contractual relationship, [3] using advertising as an exchange or currency, [4] processing information through a clearinghouse, [5] comparing new and stored information and using rules to identify options, [6] using categories to organize, store, and transmit information, [7] organizing information through mathematical correlations, [8] managing a game of bingo, [9] the Arrhenius equation for calculating the cure time of rubber, [10] a formula for updating alarm limits, [11] a mathematical formula relating to standing wave phenomena, [12] and a mathematical procedure for converting one form of numerical representation to another.[13]
Step 2B
Step 2B asks whether the claim recites "significantly more than the judicial exception." Mr. Tamayo explained that this analysis needs to ask whether the limitations of the claim as a whole do enough to render this claim something more than simply the judicial exception. The PTO went to the case law to determine the types of limitations that courts have said are enough to bring the claim into the realm of eligibility.
Echoing the Supreme Court in Alice, Mr. Tamayo first cited to the Diamond v. Diehr Supreme Court case as an example of an improvement to another technology or technical field. The claim recites an equation that on its own might have been an abstract idea, but the subject matter as a whole was an improved process of controlling the operation of a rubber mold. The PTO also looked to see what the courts considered not to constitute "significantly more." For example, appending a well understood, conventional activity, previously known to the industry at a high level of generality, comes directly from Mayo v. Prometheus. In Mayo v. Prometheus, the Court said that the step of telling the doctor to measure the metabolite level in the blood using any known process was simply appending something routine or conventional. [14]
"Significantly More" than an Abstract Idea
The Interim Eligibility Guidance resorts to examples to demarcate "significantly more." Thus, in addition to the Diamond v. Diehr example, a claim directed to an abstract idea may be found to have significantly more if the claim recites improvements to the functioning of the computer itself, [15] applying the judicial exception with, or by use of, a particular machine, [16] effecting a transformation or reduction of a particular article to a different state or thing, [17] 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, [18] or other meaningful limitations beyond generally linking the use of the judicial exception to a particular technological environment. [19]
In addition to the Mayo example, the Interim Eligibility Guidance identifies other recitations that are not enough to satisfy the "significantly more" threshold: adding the words "apply it" with the judicial exception or mere instructions to implement an abstract idea on a computer; [20] 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 in the industry); [21] adding insignificant extrasolution activity to the judicial exception (e.g., mere data gathering in conjunction with a law of nature or abstract idea); [22] or generally linking the use of the judicial exception to a particular technological environment or field of use. [23] Presumably, this list of examples is to "prevent patent eligibility [from] depend[ing] simply on the draftsman's art, thereby eviscerating the rule that laws of nature, natural phenomena, and abstract ideas are not patentable." [24]
DDR Provides Additional Guidance
Because the Interim Eligibility Guidance primarily relies on situation-specific examples to explain patentability when a claim is directed to an abstract idea, claim drafting in the field of software remains a subtle art to avoid crossing the nebulous line into an abstract idea lacking substantially more. Currently, practitioners only have DDR Holdings, LLC v. Hotels.com et al. to rely upon for positive direction. [25]
In DDR, a representative claim addresses the problem of retaining website visitors that, if adhering to the routine, conventional functioning of Internet hyperlink protocol, would be instantly transported away from a host's website after clicking an advertisement and activating a hyperlink. [26] Upon the click of an advertisement for a third-party product displayed on a host's website, the visitor is no longer transported to the third party's website. Instead, the representative claim calls for an "outsource provider" having a web server that directs the visitor to an automatically generated hybrid web page that combines visual "look and feel" elements from the host website and product information from the third-party merchant's website related to the clicked advertisement. In this way, rather than instantly losing visitors to the third-party's website, the host website can instead send its visitors to a web page on the outsource provider's server that 1) incorporates "look and feel" elements from the host website, and 2) provides visitors with the opportunity to purchase products from the third-party merchant without actually entering that merchant's website.
In DDR, the Federal Circuit finds the representative claim eligible because it does not merely recite the performance of some business practice known from the pre-Internet world along with the requirement to perform it on the Internet. Instead, the claimed solution is rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks. Accordingly, practitioners may choose to draft claims that emphasize the technical solution, for example, using functional language. In effect, this trend may somewhat harmonize practice before the USPTO with EPC practice, which already focuses on identifying a claimed solution to a technical problem.
Streamlined Pathway to Eligibility
In summary, Step 1 is the same as the prior guidelines, and simply looks to see if the claim as a whole falls into one of the four categories. Then, Step 2A asks if the claim is directed to an exception. If so, Step 2B presents the "significantly more" analysis. If the answer to Step 2B is "Yes," then you have an eligible claim and the examiners are going to move on to the other statutory requirements. If it is "No," that is where you have an eligibility problem but the examiners are still going to move on to the other statutory requirements, practicing "compact prosecution."
The PTO speakers at the Forum noted one final change presented in the Interim Eligibility Guidance; that is, the streamlined pathway to eligibility. Under this practice, it is possible for an examiner to conclude that the claim clearly does not seek to tie up a judicial exception. For example, the Interim Eligibility Guidance talks about a prosthesis covered with what appears to be a naturally occurring mineral. Depending on the way the invention is claimed, it is possible that the applicant is not trying to tie up the naturally occurring mineral. In that case, the examiner can proceed without doing the full analysis as long as there is no doubt in the examiner's mind that the applicant is not seeking coverage for the judicial exception itself.
Conclusion
Given the frequency of Supreme Court and Circuit rulings on patentable subject matter, it is critical that the PTO continues its efforts to stay abreast of what is going on in the courts. In that respect the Interim Eligibility Guidance reflects a good effort. The document offers a comprehensive view of subject matter eligibility in line with Supreme Court and Federal Circuit pronouncements, and attempts to be responsive to comments received from industry. Additional thoughts that were offered by industry representatives at the January 21 Forum, and written critiques of the Interim Eligibility Guidance presented by the March 16 deadline, will hopefully also be considered in future guidance publications.
It has been noted that the Interim Eligibility Guidance provides no examples relating to medical diagnostic technology, but the PTO staff at the Forum promised additional examples in the future. The case of University of Utah Research Foundation, Myriad Genetics, Inc., et al. v. Ambry Genetics Corporation [27] was decided December 17, the day after publication of the Interim Eligibility Guidance. In that case the Circuit found that neither naturally occurring compositions of matter, nor synthetically created compositions that are structurally identical, are patent eligible. We are also awaiting the Circuit's ruling in another medical diagnostics case–Ariosa Diagnostics, Inc. v. Sequenom, Inc. [28]–in which the Northern District of California granted summary judgment of invalidity because the claims did not "add enough" to the natural phenomenon to render the claims patent eligible. The Ariosa claims are directed to a non-invasive method of detecting birth defects by testing cell-free fetal DNA in a mother's blood. These, and future rulings by the Supreme Court and the Circuit will, we are sure, be considered by the PTO as well.
All of us practitioners appreciate whatever guidance the PTO can provide to its examiners and to those of us attempting to draft compliant claims as the case law attempts to sort out this ever-evolving area. Written guidance based on PTO evaluation of the case law, while considering input from industry at events like the January 21 Forum, will help provide the assistance we need to protect our client's technologies and avoid costly court challenges.
1 Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 573 U.S. ___, 134 S.Ct. 2347 (2014).
2 Bilski v. Kappos, 561 U.S. 593 (2010).
3 buySafe, Inc. v. Google, Inc., 765 F.3d 1350, 112 USPQ2d 1093 (Fed. Cir. 2014).
4 Ultramercial, LLC v. Hulu, LLC and WildTangent, 772 F.3d 709, 112 USPQ2d 1750 (Fed. Cir. 2014).
5 Dealertrack Inc. v. Huber, 674 F.3d 1315 (Fed. Cir. 2012).
6 SmartGene, Inc. v. Advanced Biological Labs., SA, 555 Fed. Appx. 950 (Fed. Cir. 2014) (not precedential).
7 Cyberfone Sys. v. CNN Interactive Grp., 558 Fed. Appx. 988 (Fed. Cir. 2014) (not precedential).
8 Digitech Image Tech., LLC v. Electronics for Imaging, Inc., 758 F.3d 1344 (Fed. Cir. 2014).
9 Planet Bingo, LLC v. VKGS LLC, 576 Fed. Appx. 1005, 2014 U.S. App. LEXIS 16412 (Fed. Cir. 2014) (not precedential).
10 Diamond v. Diehr, 450 U.S. 175 (1981).
11 Parker v. Flook, 437 U.S. 584 (1978).
12 Mackay Radio & Tel. Co. v. Radio Corp. of Am., 306 U.S. 86 (1939).
13 Gottschalk v. Benson, 409 U.S. 63 (1972).
14 Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. ___, 132 S.Ct. 1289 (2012).
15 Alice Corp., 134 S. Ct. at 2359.
16 Bilski, 130 S.Ct. at 3227.
17 Diehr, 450 U.S. at 184.
18 Mayo, 132 S. Ct. at 1299, 1302.
19 Alice Corp., 134 S. Ct. at 2360.
20 Id., at 2358.
21 Id., at 2359.
22 Mayo, 132 S. Ct. at 1297-98.
23 Id., at 1300-01.
24 Alice Corp., 134 S. Ct. at 2359.
25 DDR Holdings, LLC v. Hotels.com, National Leisure Group, Inc, Digital River, Inc., et al., Fed. Cir. Case No. 2013-1505 (December 5, 2014).
26 U.S. Patent No. 6,993,572 (filed on June 11, 2003); see also, U.S. Patent No. 7,818, 399 (filed on Jan. 30, 2006).
27 University of Utah Research Foundation, Myriad Genetics, Inc., et al. v. Ambry Genetics Corporation, 2014 U.S. App. LEXIS 23692 (Fed. Cir. Dec. 17, 2014).
28 Ariosa Diagnostics, Inc. v. Sequenom, Inc., Fed. Cir. Case No. 2014-1139.
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