The View Ahead for Software Patent Applications: USPTO Releases

The View Ahead for Software Patent Applications: USPTO Releases
Update to Guidance on Patent Subject Matter Eligibility
août 14, 2015
The United States Patent and Trademarks Office (USPTO) has released an updated set of Eligibility Examination Guidelines to
provide guidance to examiners on when to reject claimed inventions as ineligible abstract ideas. These guidelines give a sense of
what computer-implemented subject matter the USPTO considers to be ineligible for patent protection.
Developing guidelines was difficult for the USPTO as the courts have provided little explanation of when patent claims are invalid for
defining ineligible abstract ideas, or even what abstract idea means, and the USPTO lacks the authority to craft its own definitions.
The USPTO is largely limited to telling examiners that patent claims cover abstract ideas if they cover subject matter that is similar to
what the courts have determined to be abstract ideas. Given the absence of general concepts or principles for identifying the kinds of
abstract ideas that are not eligible for patent protection, practitioners and applicants need to be aware of all of the Federal Circuit and
Supreme Court case law on patent subject matter eligibility, and to craft patent claims with arguments in mind as to why the subject
matter covered by the claims is materially different from subject matter determined to be ineligible in any of this case law.
The original 2014 Interim Guidance on Patent Subject Matter Eligibility1 document (“the Guidance”) defines steps to be taken by an
Examiner to assess subject matter eligibility. Steps 2A and 2B apply the two-part analysis from Alice 2 and Mayo3. In step 2A the
Examiner determines whether the claim is directed to a statutory exception to patent protection: a law of nature, natural phenomenon
or an abstract idea. If not, then the claim is eligible for protection (although the Examiner must still determine whether the claim meets
the other requirements for patentability, such as novelty and non-obviousness). If the claim is directed to a law of nature, natural
phenomenon or an abstract idea, then step 2B applies and the Examiner determines whether the claim as a whole represents
“significantly more”. Claims that do not cover significantly more than a law of nature, natural phenomenon or abstract idea are
ineligible for patent protection and are to be rejected under 35 U.S.C. § 101.
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The posting of the Guidance in 2014 provoked much comment and criticism, some critics alleging that under the Guidance virtually
nothing was eligible for patent protection. The July 2015 Update on Subject Matter Eligibility 4, (“the Update”) responds to these
comments and criticism.
The Update provides an updated set of subject matter examples, and also divides the case law into different categories of abstract
ideas, which are useful both as a credible attempt to organize the case law, and to provide insight into the USPTO’s perspective on
this case law and arguments they may find persuasive. It also provides reassurance that the USPTO is addressing criticism that
under the current rules postAlice 5 there is not a clear path forward for software patent applications because of the difficulties
encountered with subject matter objections. The Update makes it clear that examiners should not determine a claimed concept to be
an abstract idea unless the claimed concept is similar to at least one concept that either the Federal Circuit or the Supreme Court
have identified as an abstract idea. In other words, applicants should be able to avoid having their claims rejected, at least in the
USPTO, on subject matter eligibility grounds by defining concepts in the claims that differ sufficiently from claim concepts invalidated
on these grounds by the Federal Circuit or the Supreme Court.
Of course, much will depend on how aggressive and creative examiners are in determining that claimed concepts they are
considering are similar to a concept determined to be an abstract idea by the courts. Further, the Update makes it clear that this
determination of similarity does not require evidence: examiners can ground such a rejection by merely explaining, clearly and
specifically, why the claimed concepts are similar to concepts determined to be abstract ideas by the courts, and are thus ineligible
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specifically, why the claimed concepts are similar to concepts determined to be abstract ideas by the courts, and are thus ineligible
for patent protection.
New Examples
In the Update, several new examples are provided in addition to those found in the original Guidance document and include:
21. Transmission of Stock Quote Data – modeled after the claims at issue in Google Inc. v. Simpleair, Inc.6, (Claim 1
ineligible, Claim 2 eligible).
22. Graphical User Interface for Meal Planning – based on Dietgoal Innovations LLC v. Bravo Media LLC7 (Claim 2
ineligible).
23. Graphical User Interface for Relocating Obscured Textual Information (Claims 1,4 eligible, Claims 2-3 ineligible).
24. Alerting System for a Catalytic Chemical Process -- based on Parker v. Flook 8 (Claim 1 ineligible).
25. Temperature Control of Rubber Molding -- based on Diamond v. Diehr 9 (Claims 1-2 eligible). Claim 1 is the actual
claim 1 from Diamond v. Diehr, Claim 2 is a hypothetical claim in the form of computerized instructions.
26. Exhaust Gas Recirculation in an Internal Combustion Engine – based on technology from U.S. Pat. 5,533,489 (Claim 1
eligible).
27. A method of loading System Software (BIOS) into a computer – based on technology from U.S. Pat. 5,230,052 (Claim 15
eligible).
In each example, the Update evaluates the hypothetical claims based on steps 2A and 2B, and discusses how an Examiner might
determine patent eligibility for patent claims covering an analogous technology.
Example #25 –
Diamond v Diehr
An interesting example in the Update is #25, since it introduces hypothetical claims modeled after the technology in the 1981 case
Diamond v. Diehr, 450 U.S. 175 (1981). This case dealt with a patent involving a computerized process controlling a rubber molding
press. The invention offered significant advantages over the prior art at the time, as it enabled in situ temperature monitoring and
automatic recalculation of the optimal cure time. This calculation involved using the temperature inputs and the Arrhenius equation,
long used to calculate the cure time of rubber molding processes.
The reasoning in the Update for Diamond v Diehr differs from the reasoning provided by the Supreme Court. In the 1981 decision, the
Supreme Court obliquely refers to the machine or transformation test in determining subject matter eligibility:
“A mathematical formula, as such, is not accorded the protection of our patent laws, Gottschalk v. Benson, 409 U. S. 63 (1972), and
this principle cannot be circumvented by attempting to limit the use of the formula to a particular technological environment. Parker v.
Flook, 437 U. S. 584 (1978). Similarly, insignificant post-solution activity will not transform an unpatentable principle into a patentable
process. To hold otherwise would allow a competent draftsman to evade the recognized limitations on the type of subject matter
eligible for patent protection. On the other hand, when a claim containing a mathematical formula implements or applies that formula
in a structure or process which, when considered as a whole, is performing a function which the patent laws were designed to protect
(e.g., transforming or reducing an article to a different state or thing), then the claim satisfies the requirements of § 101. Because we
do not view respondents' claims as an attempt to patent a mathematical formula, but rather to be drawn to an industrial process for
10
the molding of rubber products, we affirm the judgment of the Court of Customs and Patent Appeals.”
In example #25, according to the Update, Claim 1 from Diamond v. Diehr involves a repeated calculation of the Arrhenius equation, a
mathematical relationship held to be representative of a law of nature, and therefore Step 2A is met. Next, analyzing the claim as a
whole using the Guidelines, the combination of steps taken together amount to significantly more than just the abstract idea of the
Arrhenius equation (Step 2B). Thus, claim 1 in Diamond v Diehr is patent eligible, satisfying the “significantly more” step of the test.
The USPTO may have seen fit to rewrite the justification for this case to bring it into accord with the Alice framework. The Court in
Diamond v Diehr determined that the structure claimed, considered as a whole, was the kind of structure and performed the kind of
function the patent laws were designed to protect. In making this determination, the Court refers to the machine or transformation test
to establish the patentability of the claimed invention. However, after the decision of the Supreme Court in Bilski, the machine or
transformation test is no longer the definitive test, although it remains a helpful indicator of subject matter eligibility.
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Categories of abstract ideas outside the scope of patentable subject matter
The US courts have provided little explanation of when and why patent claims are invalid for covering abstract ideas. Since the
USPTO lacks the authority to create its own definitions, and it is difficult, perhaps impossible, to discern principles from the case law,
the USPTO has instead focused its efforts on helping examiners to determine if the concepts defined in claims are similar to what the
courts have determined to be abstract ideas, and are thus invalid. The Guidelines and Update construct several different categories
of ineligible abstract ideas based on the case law. Each category covers many different examples, taken from the case law, of
concepts defined in patent claims that have been invalidated by either the Federal Circuit or the Supreme Court as abstract ideas.
Clearly, patent applicants should do whatever they can to define their inventions using claim language and concepts that fall outside
these categories.
These categories are the closest the USPTO gets to general concepts or principles for subject matter eligibility. These categories
include the set of “judicial descriptors” associated with software based subject matter that has been identified by precedent in the
Federal Circuit and the Supreme Court as patent ineligible, including
1. “Fundamental economic practices” including concepts dealing with the economy and commerce including contracts, legal
obligations and business relations.
a. Mitigating settlement risk -- Alice 11 .
b. Mitigating hedging risk -- Bilski12.
2. “Certain methods of organizing human activity” including concepts dealing with personal and intrapersonal activities
including relationships, transactions involving people, social activities and behaviour.
a. Managing human behaviour, specifically meal planning -- Dietgoal13 .
b. Advertising, marketing and sales – Ultramercial 14 .
3. “An idea ‘of itself’” i.e. an idea standing on its own including a bare concept, plan or scheme, and
a. Methods of comparing data that could be done mentally -- Cybersource15 .
b. Concepts relating to organizing, storing, and transmitting information – Cyberfone 16.
4. “Mathematical relationships/formulas” including algorithms, mathematical relationships, formulae and calculations.
a. Converting binary coded decimal values to pure binary values -- Benson 17 .
b. A mathematical formula for hedging – Bilski18 .
It is difficult to find recent cases where software related patents have survived subject matter eligibility analysis by the Federal Circuit
or the Supreme Court. Given the numerous examples of ineligible subject matter in the Update and Guidelines combined with the
19 from the USPTO and invalidation statistics 20 at the Federal Circuit, it is reasonable to ask whether any claims
rejection statistics
have recently survived challenge on subject matter eligibility grounds. One example outside of the scope of software subject matter is
Myriad21, where the Supreme Court allowed claims for complementary DNA.
While the Supreme Court invalidated all of the claims in both Bilski and Alice; there is one case related to software subject matter
that has survived scrutiny, at least at the level of the Federal Circuit: DDR Holdings v Hotels.com 22.
DDR Holdings v Hotels.com23
The Guidelines discuss this case . This is the first Court of Appeal for the Federal Circuit case to uphold the validity of a software
subject matter patent since Alice. In this patent, the claims were directed to managing the look and feel of an e-commerce website to
provide “store within a store” functionality.
The claims in DDR covered a software solution to a problem, which, according to the judgment but not the dissent, was unique to the
internet. The claims dealt with the problem of retaining website visitors at an ecommerce site and offered a solution anchored in
software that addressed a challenge unique to the web. Specifically, in the prior art a user clicking on an advertisement would be
taken away from the host website to the advertising merchant. The claimed invention involves presenting a hybrid page generated by
the host website to include a composite of the host website and advertising merchant’s product information. The decision was based,
at least in part, on the grounds that the claimed concept lacked a non-technological analog.
Takeaways
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When drafting new applications for software-based inventions, it is important to keep in mind the judicial descriptors of ineligible
subject matter, and to draft the claims to avoid categorization under any of these judicial descriptors if at all possible. However, it is
also important to keep in mind that this area of law is in flux, and will almost certainly see significant change over the next few
years. In particular, the categories of ineligible subject matter constructed by the USPTO may evolve or grow in number over the next
few years as more cases are decided. Eventually, as the courts grapple with more and more cases, clear principles may start to
emerge from the present chaos. One day, it may again be possible to rely on general principles to distinguish patent eligible subject
matter from ineligible subject matter. At present, that day seems far distant, and for the foreseeable future it will be even more
important to keep up-to-date on the latest Federal Circuit and Supreme Court precedent, mostly to know what kinds of subject matter
to avoid claiming, but also to keep an eye out for the occasional beacons of hope, such as a DDR.
1 2014 Interim Guidance on Patent Subject Matter Eligibility, 79 Fed. Reg. 74618 (Dec. 16, 2014).
2 Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S.Ct. 2347, 110 U.S.P.Q.2D 1976 (2014) [ Alice].
3 Mayo Collaborative Serv. v. Prometheus Labs., Inc., 132 S.Ct. 1289, 101 U.S.P.Q.2D 1961 (2012) [ Mayo].
4 July 2015 Update on Subject Matter Eligibility, 80 Fed. Reg. 45429 (July 30, 2015).
5 Alice, supra.
6 Google Inc. v. Simpleair, Inc., Covered Business Method Case No. CBM 2014?00170 (Jan. 22, 2015).
7 Dietgoal Innovations LLC v. Bravo Media LLC, 599 Fed. Appx. 956 (Fed. Cir. Apr. 8, 2015) [ Dietgoal]
8 Parker v. Flook, 437 U.S. 584, 98 S. Ct. 2522 (1978).
9 Diamond v. Diehr, 450 U.S. 175, 101 S. Ct. 1048 (1981) [ Diamond v Diehr].
10 Diamond v. Diehr supra at 191.
11 Alice, supra.
12 Bilski v. Kappos, 561 U.S. 593, 130 S. Ct. 3218 (2010) [ Bilski].
13 Dietgoal, supra.
14 Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed. Cir. 2014) [ Ultramercial].
15 Cybersource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1372 (Fed. Cir. 2011) [ Cybersource].
16 Cyberfone Systems, LLC v. CNN Interactive Group, Inc., 558 Fed. Appx. 988, 993 (Fed. Cir. 2014) [ Cyberfone].
17 Gottschalk v. Benson, 409 U.S. 63, 93 S. Ct. 253 (1972) [ Benson].
18 Bilski, supra.
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19 Robert Sachs. “Bilski Blog: Business Methods” (2015), BilskiBlog (blog), online: http://www.bilskiblog.com/blog/business-methods/.
20 Ibid.
21 Association for Molecular Pathology v Myriad Genetics, Inc., 569 U.S. __, 133 S. Ct.2107 (2013) [ Myriad].
22 DDR Holdings v. Hotels.com, 773 F.3d 1245, 113 U.S.P.Q.2D 1097 (Fed. Cir. 2014) [ DDR Holdings].
23 Ibid.
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