On November 2, 2016, the United States Patent and Trademark Office (USPTO) issued an important and forward-looking memo on Recent Subject Matter Eligibility Decisions for patent applications that offered guidance for drafting claims that may have previously been rendered ineligible under the two-step Alice test for determining patent eligibility. The USPTO signaled that this is a further step in a longer and more detailed conversation on patent subject matter eligibility (SME) that will continue in the near future. We expect this conversation to inform areas ranging from software and computer-implemented inventions to biotechnology.

The memo and subsequent guidance were fueled by two recent decisions issued by the Federal Circuit: the McRO decision and the BASCOM decision. In the McRO decision, the Federal Circuit held that lip synchronization methods were not directed towards an abstract idea, but instead were directed towards an improvement in already existing technology. As a result, the methods were ruled to be patent eligible under 35 U.S.C. §101. In the BASCOM decision, the Federal Circuit vacated an earlier District Court decision that held a computer network filtering system was patent ineligible as a result of incorrectly applying the second step of the two-step Alice test. Although both cases lie in the software and computing realm, the actions taken by the USPTO in issuing this memo are promising for SME-related issues in various other fields, particularly, biotechnology. In fact, the memo cites another Federal Circuit decision, Rapid Litigation Management which provided promising guidance for biotechnology inventions and which was the subject of a previous USPTO memo.

Bolstered by these decisions, the USPTO has continued to update and emphasize the importance of its SME court case guidance chart. The case chart addresses an important and encouraging aspect of SME-related guidance: that of precedential decisions vs. non-precedential decisions. The direct guidance provided by the USPTO through this memo and chart signals a desire to more clearly and effectively unify the resources required to develop novel patent claims with the end goal of achieving eligible claims where they may not have previously existed. In particular, the USPTO clearly articulates that non-precedential decisions should only be used as justification for the patent eligibility of an application or claim when there exists a particularly unique match between the two that extends beyond simply and generally using the non-precedential case as a means of supporting the eligibility of the claim.

In addition to providing case guidance on the use of precedential vs. non-precedential decisions in drafting claims, the memo also focuses on particular guidance that has emerged from the recent cases mentioned above. In the past, claims that may have been deemed ineligible as abstractions, natural phenomena, or laws of nature can now, if they do indeed encompass significantly more than the SME exceptions and are also appropriately drafted, be patent eligible claims. In particular, the memo focuses on the concept of not oversimplifying a claim and instead focusing on the eligibility of the claim as a whole, rather than on its constituent parts alone. In the McRO decision, this approach allowed for the patent eligibility of lip-synch technologies because they provided technological improvements and were not mere patent ineligible abstractions.

Although the McRO and BASCOM decisions focus on the concept of SME in software and computing, the information provided in the USPTO memo and the case chart provide important guidance for SME in biotechnology as well. This memo provides sound advice that can also be applied to inventions that are arguably directed to laws of nature or natural phenomena (i.e. the first step of the Alice test), which are many times at the heart of inventions in the life sciences. Furthermore, the Rapid Litigation Management case issued by the Federal Circuit earlier this year is also one of the precedential cases listed in the USPTO case chart. Similar to the McRO case, the Rapid Litigation Management decision stated that the claims are not directed toward a patent ineligible law of nature, but rather a novel laboratory technique.

Moving forward, we expect the USPTO memo and chart-based guidance to help in crafting claims that would be more likely to pass the two-step Alice test. In combination with the future guidance that the USPTO has signaled it will issue, we remain positive with regards to the future of patent eligibility of claims that include individual aspects of abstractions, laws of nature, and natural phenomena. There is indeed a path forward for the discerning patent practioner.