The U.S. Patent and Trademark Office recently issued a 22-page update (October PEG update) to its 2019 Revised Patent Subject Matter Eligibility Guidance (2019 PEG). The 2019 PEG, released in January, marked a shift in the USPTO’s review process, generally leading to increased allowance of patent applications facing scrutiny under 35 U.S.C §101 (subject matter eligibility) in view of the U.S. Supreme Court’s decision in Alice Corp. Pty. Ltd. v. CLS Bank Int ‘l.
The October PEG update does not change the 2019 PEG. Instead, it provides additional clarification as to its application and scope.
The October PEG update does provide, however, at least three noteworthy clarifications as follows.
1. Avoid ‘Reciting’ a Judicial Exception
Under Step 2A, prong one of the 2019 PEG, an examiner is required to determine whether a claim “recites” a judicial exception (i.e., an abstract idea, a law of nature or a natural phenomenon). The October PEG update clarifies that a claim “recites” a judicial exception when the judicial exception is “set forth” or “described” within the claim. The October PEG update provided two examples as to the meaning of these terms:
- “Set forth”: Generally, a judicial exception is “set forth” in a claim if the judicial exception is expressly found in the claim. For example, the claims in Diamond v. Diehr, 450 U.S. 175 (1981), clearly stated a mathematical equation in a repetitively calculating step, such that the claims “set forth” an identifiable judicial exception (i.e., a mathematical concept).
- “Described”: Generally, a judicial exception is “described” in a claim where the judicial exception is not necessarily found in the claim, but is nonetheless implied. For example, the patent claims in Alice “described” the concept of intermediated settlement without ever explicitly using the words “intermediated” or “settlement.”
Thus, according to the October PEG update, a judicial exception that is “described” in a claim would have broader implication than one that is “set forth.”
Practice Tip 1:
Going forward, to demonstrate subject matter eligibility under Step 2A, prong one, patent applicants should not only avoid expressly using (i.e., “setting forth”) the terms exemplified in the 2019 PEG (e.g., for “mathematical concepts,” “mental processes,” and “certain methods of organizing human activity”), but they should also prepare claims in a manner that avoids “describing” such terms in a general manner. Typically, this can be achieved by focusing on the technical and/or hardware related features of an invention.
2. Demonstrate an “Improvement” to the Claimed Invention
If a claim “recites” a judicial exception (e.g., an abstract idea), then under Step 2A, prong two, an examiner must next determine whether the claim is nonetheless eligible because the claim “integrates” the judicial exception into a “Practical Application.” If it does, then the claim is not abstract.
A best practice for meeting this standard includes demonstrating that the invention, as claimed, reflects an “improvement” in the functioning of a computer, or an improvement to another technology or technical field. See MPEP 2106.04(a) and 2106.05(a).
The October PEG update clarifies several useful aspects to claiming an “improvement.” First, the specification need not explicitly set forth the improvement, but it must describe the invention such that the improvement would be apparent to one of ordinary skill in the art.
Second, while the claim itself must reflect the improvement (e.g., the components or steps of the invention that provide the improvement described in the specification), the claim itself does not need to explicitly recite the improvement described in the specification (e.g., “thereby increasing the bandwidth of the channel”).
Third, the improvement analysis under the 2019 PEG differs somewhat from prior guidance. Previously, a patentee needed to demonstrate an improvement over conventional technology. The October PEG update clarifies however, that a patentee may show subject matter eligibility demonstrating that an invention improves the relevant existing technology although it may not be an improvement over well-understood, routine, conventional activity.
Finally, the improvement must be to the technology itself, i.e., to the functioning of a computer or an improvement to other technology or technical field. Arguments directed to an “improvement” in a user experience or a business process are not enough.
For example, the October PEG update provided Trading Technologies Int’l v. IBG LLC as an example, where the Federal Circuit determined that the claim-at-issue simply provided a trader with more information to facilitate market trades, which improved the business process of market trading but did not improve computers or technology, and, therefore lacked subject matter eligibility.
Practice Tip 2:
Patent applicants should describe an improvement in the specification that is specific to the functioning of a computer or an improvement to another technology or technical field. The improvement need not be an improvement over conventional technology. Rather an improvement regarding performance or memory usage of conventional computer is sufficient.
The improvement should be described in a manner apparent to one skill in the art. Some aspect of the claims should reflect the improvement.
3. Determine Whether the Examiner Sufficiently Established a Prima Facie case
To reject a claim for lacking subject matter eligibility, the 2019 PEG requires an examiner to establish a prima facie case.
The October PEG update clarifies the examiner’s burden, where the examiner must consider a claim as a whole for Steps 2A, prong two, and Step 2B, and must provide analysis and evidence under each step (i.e., Step 1, Step 2A, prongs one and two, and Step 2B) of the 2019 PEG. For example, under Step 2A, prong one, an examiner must identify “what is recited” (i.e., “set forth” or “described”) in the claim and “explain why” it is considered to be an exception.
Practice Tip 3:
For any subject matter eligibility rejection, patent applicants should check whether an examiner has sufficiently established a prima face case under each step of the 2019 PEG as clarified by the October PEG update.
This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.
Ryan Phelan is a partner at Marshall, Gerstein & Borun LLP in Chicago. He is a registered patent attorney who focuses on results for his clients in legal areas such as patent protection and procurement, patent portfolio development and management, infringement and invalidity opinions, IP litigation and post-grant proceedings at the USPTO, including inter partes reviews and covered business method petitions.