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A New Year's Gift for Patent Applicants?

USPTO Clarifies Subject Matter Eligibility with New Guidance

08 Jan 2019

The USPTO rang in the new year by releasing new Examiner Guidance that could potentially benefit patent applicants who have previously encountered difficulty acquiring patents under the Office’s procedures for determining patent subject matter eligibility under 35 U.S.C. § 101. Supreme Court decisions regarding § 101 from 2012 to 2014 have made patents related to software and certain biotechnology related subject matter more difficult to obtain. As detailed below, the new guidance seems to indicate a major shift in how the USPTO will examine patent applications under § 101. This shift appears to swing the pendulum back toward patent holders by allowing many more applications to meet the patentability requirements of § 101.

Specifically, the guidance sets forth two major changes to examination procedures for determining whether a patent application is directed to a judicial exception to patent eligibility (laws of nature, natural phenomena, or an abstract idea). First, the guidance clarifies the concepts that may constitute an abstract idea by narrowing to only three groups the subject matter included in the abstract idea exception. Second, even if a patent claim is found to recite a judicial exception, the guidance explains that the claim is still patent-eligible if it integrates the judicial exception into a “practical application” of the judicial exception.

Clarifying the Abstract Idea

Since the Supreme Court’s opinion in Alice Corp. v. CLS Bank International[1], the USPTO has adopted a two-step framework for analyzing patents for subject-matter eligibility under § 101. At Alice Step One (known as Step 2A under the USPTO’s examination procedures), the examiner must determine whether a claim is “directed to” a judicial exception to patent eligibility. At Alice Step Two (known as Step 2B under the USPTO’s examination procedures), if the claim is directed to a judicial exception, the examiner must determine whether the elements of the claim are sufficient to transform the nature of the claim into a patent-eligible application of the judicial exception. The guidance modifies the examination procedure for Alice Step One, leaving the examination procedure for Alice Step Two unchanged.

To determine whether a claim recites an abstract idea at Alice Step One, prior versions of the examination guidelines instructed patent examiners to compare the claims under consideration to concepts previously identified as abstract ideas by the courts.: [2] Previously, there was no restriction on the types of concepts examiners could identify as an abstract idea. However, the guidance now simplifies the process by identifying only three categories of concepts considered to be abstract. The guidance recognizes the following groups of abstract ideas:

  • Mathematical concepts: mathematical relationships, mathematical formulas or equations, mathematical calculations.
  • Methods of organizing human activity: fundamental economic principles or practices (including hedging, insurance, and mitigating risk); commercial or legal interactions (including agreements in the form of contracts; legal obligations; advertising, marketing or sales activities or behaviors; and business relations); managing personal behavior or relationships or interactions between people (including social activities, teaching, and following rules or instructions).
  • Mental processes: concepts performed in the human mind (including an observation, evaluation, judgment, or opinion).

While these categories are not exhaustive, the guidance states that claims reciting subject matter falling outside of the above groupings should not be treated as reciting abstract ideas except in rare circumstances and with approval from management. Thus, the guidance potentially constrains examiners’ ability to declare that a claim recites an abstract idea.

Whether a Claim Is “Directed to” a Judicial Exception

Even if a claim is found to recite a judicial exception, the claim may still be patentable if the judicial exception is integrated into a practical application. If the claim integrates the judicial exception into a practical application, then the claim is not “directed to” a judicial exception and is patent-eligible.

According to the guidance, a claim integrates a judicial exception into a practical application if it applies, relies on, or uses the judicial exception in a manner that “imposes a meaningful limit on the judicial exception, such that the claim is more than a drafting effort designed to monopolize the judicial exception.” The guidance gives five exemplary considerations that indicate that a claim may have integrated a judicial exception into a practical application:

  • An additional element reflects an improvement in the functioning of a computer or an improvement to other technology or technical field
  • An additional element applies or uses a judicial exception to effect a particular treatment or prophylaxis for a disease or medical condition
  • An additional element implements a judicial exception with, or uses a judicial exception in conjunction with, a particular machine or manufacture that is integral to the claims
  • An additional element effects a transformation or reduction of a particular article to a different state or thing
  • An additional element applies or uses the judicial exception in some other meaningful way beyond generally linking the use of the judicial exception to a particular technological environment, such that the claim as a whole is more than a drafting effort designed to monopolize the exception

As recognized by the guidance, this new “practical application” consideration may relate to the “inventive concept” consideration of existing Alice Step Two. However, unlike Alice Step Two, the guidance explains that in determining whether a claim integrates a judicial exception into a practical application, examiners should not consider whether the additional claimed elements are well-understood, routine, or conventional. While the practical effects of the new guidance on examination are yet to be seen, the guidance should restrain examiners from discounting features of a claim as being directed to well-understood, routine, or conventional elements.

Impact on Applicants

While the guidance purports to merely summarize existing judicial precedent regarding § 101, some patent applicants may nonetheless find that the guidance effectively eases the eligibility requirements for certain categories of subject matter.

Implications for Software Inventions

Software-based patent applications should see a benefit from the guidance both because of the guidance’s clarification of what constitutes an abstract idea and because of the new “practical application” prong of Alice Step One. The guidance’s clarification of what concepts constitute an abstract idea may afford greater predictability to applicants as to what claims examiners may consider as reciting an abstract idea. Further, because the guidance seeks to limit the application of the abstract idea exception to the three groups articulated in the revised guidance, software-based applications may see fewer § 101 rejections as examiners feel less latitude in declaring that a particular claim is directed to an abstract idea. Additionally, the requirement for examiners to consider well-understood, routine, or conventional steps in determining whether a claim incorporates an abstract idea into a practical application of the abstract idea should favor software claims, which generally include steps that can be considered well-understood, routine, or conventional in isolation.

Implications for Life Science Inventions

The new guidance is also encouraging for life sciences companies. As discussed above, claims are patent-eligible if the claim as a whole integrates a law of nature, a natural phenomenon or an abstract idea into a practical application, regardless of whether the claim includes elements that are deemed to be conventional, routine, or well-known. Because the foundation of biotechnology is the application of natural products, processes, and relationships, this guidance offers some clarity that should yield improved examination outcomes for life sciences companies. For instance, claims that include “an additional element that applies or uses a judicial exception to effect a particular treatment or prophylaxis for a disease or medical condition” are highlighted by the guidance as being patent-eligible, citing the decision by the Federal Circuit in Vanda Pharm Inc. v. West-Ward Pharm. Int’l Ltd.: [3] Other exemplary considerations espoused by the USPTO for analyzing if a claim integrates a practical application also may open the door in the life sciences to eligible patent claims beyond merely method claims requiring a treatment step.  The guidance suggests that the USPTO may recognize broader patent eligibility for patent claims in the life sciences, including diagnostic methods, biomarkers, and correlations of drug product and disease outcome.

While the effects of the guidance on the examination of patents is left to be seen, patent applicants should be encouraged by the Office’s efforts to rein in the § 101 examination process. The guidance is an implicit recognition by the Office that, to date, § 101 examination has left patent applicants facing unpredictable hurdles to patenting and that this state of affairs needs to change.



[1] 573 U.S. 208 (2014).

[2] See Manual of Patent Examining Procedure § 2106, Ninth Edition, R-08.2017.

[3] Vanda Pharm. Inc. v. West-Ward Pharm. Int’l Ltd., 887 F.3d 1117, 1135 (Fed. Cir. 2018). In Vanda, the Federal Circuit held that method of treatment claims based on a relationship between the drug iloperidone, metabolism by CYP2D6, and the effect on QTc prolongation were patent-eligible because they recited a specific application of administering a particular dose of the drug iloperidone to patients having schizophrenia based on the particular genotype of CYP2D6 in the patient.

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