The USPTO Brings New Guidance to the Section 101 Quandary

Around the time that Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66 (2012), was working its way up through the federal courts, the U.S. Congress was engaged in sustained legislative debate and activity about the current workings and future direction of the U.S. patent system. See, CRS Report R41638, Patent Reform in the 112th Congress: Innovation Issues, by Wendy H. Schacht and John R. Thomas; CRS Report R40481, Patent Reform in the 111th Congress: Innovation Issues, by Wendy H. Schacht and John R. Thomas; CRS Report RL33996, Patent Reform in the 110th Congress: Innovation Issues, by John R. Thomas and Wendy H. Schacht; and CRS Report RL32996, Patent Reform: Innovation Issues, by John R. Thomas and Wendy H. Schacht. Although the discussion was wide ranging, several points of concern were frequently mentioned. One was the recognition that differences between U.S. patent laws and global patent norms might increase the difficulty of domestic inventors in obtaining rights abroad. Another was the poor patent quality and high costs of litigating patent disputes might encourage speculation, or “trolling,” by entrepreneurs that acquire and enforce patents. These and other concerns led to the enactment of the Leahy-Smith America Invents Act of 2011 (AIA) on Sept. 16, 2011, which was the first major overhaul of the U.S. patent system since the U.S. Patent Act of 1952. While the AIA did not change the language of Section 101, it created several new U.S. Patent and Trademark Office (USPTO) procedures for challenging U.S. patents, including post-grant review (PGR) and a transitional program for covered business method patents (CBM), which are the first agency proceedings to permit challenges to claims based on Section 101.

In the immediate aftermath of the U.S. Supreme Court's 2013 decision in Association for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576 (2013), the USPTO released a set of guidance documents in March 2014 (2014 Interim Guidance on Patent Subject Matter Eligibility) explaining how it planned to apply the new Section 101 precedents. The USPTO responded to criticism by soliciting comments in July 2014, and then releasing a new set of guidance documents in December 2014 that superseded the March 2014 documents, and followed the Supreme Court's two-step test laid out in Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 134 S. Ct. 2347 (2014). In Step 1, the examiner determines whether the claim is directed to a process, machine, manufacture, or composition of matter. In Step 2, which is based on the two-part analysis from the Alice decision, the examiner first determines whether the claim is directed to a law of nature, a natural phenomenon, or an abstract idea — judicial exceptions (Step 2A), and if so, whether any element, or combination of elements, in the claim is sufficient to ensure that the claim as a whole amounts to significantly more than the judicial exception (Step 2B). If yes, the claim is eligible.