On September 24, 2018, USPTO Director Andrei Iancu told the Intellectual Property Owners Association (IPO) that examiners, applicants, patent owners, and judges are struggling to understand what patentable subject matter is. Citing recent Federal Circuit opinions, Director Iancu noted how blending conditions for patentability with subject matter eligibility has resulted in incoherent doctrine. He also applauded IPO’s joint effort with the American Intellectual Property Law Association (AIPLA) to propose new statutory language for § 101, but opined that the USPTO cannot wait for the slow pace of legislation. Director Iancu indicated that the USPTO is contemplating revised guidance to help categorize the exceptions and provide additional instructions to examiners on how to apply them.
The Director generally outlined the contemplated guidance with emphasis on staying within the confines of the jurisprudence:
- Is the patent directed to one of the four categories of patentable subject matter: process, machine, manufacture, or composition of nature? This part of the test is old. If the invention does not fall under one of the four categories, it is not patentable.
- If the invention is within one of the four categories, do any of the claims recite a judicial exception? The exceptions include laws of nature, natural phenomena, and abstract ideas. If it does not, the invention is eligible for a patent. Director Iancu notes that while laws of nature like gravity and natural phenomena such as DNA are often easy to spot, abstract ideas require more guidance to define. In his eyes, abstract ideas fall into three categories a. Mathematical concepts, such as formulas and calculations. b. Certain methods of organizing human interactions, managing relationships, and advertising, marketing, and sales activities. c. Mental processes, like forming an observation, evaluation, or opinion.
- If any claim is directed to a judicial exception, is the exception integrated into a practical application? This step aims to separate foundational principles from practical applications of those principles. If the claim is directed to a practical application, the inquiry is complete.
- If there is no practical application claimed, then the examiner would proceed to the second Alice step, which is to determine whether the claim’s elements, both individually and as an ordered combination, transform the nature of the claims into a patent-eligible application.
Admitting that this new guidance may not resolve all of the complex subject matter issues at the USPTO, Director Iancu believes that it will resolve many of the cases “in the big middle.” Most importantly, he believes that it will simplify the § 101 inquiry and help separate subject matter eligibility from other conditions for patentability. The Director’s full remarks can be found on the USPTO’s website here.