U.S.C. §101: Patent Subject Matter Eligibility
While drafting a patent application, it goes through the scrutiny of whether it falls under the legal requirements for patentability or not. The description of an invention must be so clear that anyone could copy or make the invention by reading the patent application and/or issued patent. Therefore, an experienced patent practitioner who is familiar with the law and technological area of the invention will provide great value-added to a patent project.
Rules for Patent Eligibility
There are four basic rules that can be outlined for the eligibility process. The first being only one patent can be guaranteed per invention. Second, the utility guidelines express that the invention needs to have a specific, credible, and substantial utility. The third refers to subject matter eligibility. There are defined matters such as process, machine, manufacture, or composition of matter that are eligible for patenting. Fourth talks about whom the patent can be awarded to. The patent can be signed to “Whoever invents or discovers” implying persons involved in the act of inventing.
A very important aspect of the process is recognizing the application under 35 U.S.C. § 101 of the patent act for the right subject matter. The USPTO saw 90% rejections due to subject matter eligibility after the decision on Alice was issued, making this statute one of the most important to focus on.
35 U.S.C. § 101
“Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefore, subject to the conditions and requirements of this title.”
However, as “nulla regula sine exceptione”, the court has recognized a few exceptions or exclusions to the statute. The 101 statutes have been interpreted to exclude laws of nature, natural phenomena, and abstract ideas, and judicial exceptions. Talking about the judicial exceptions, courts have found those outside the sphere of the four statutory classifications of inventions. The same has been limited to nature, natural phenomena (including products of nature), and abstract ideas. The reasoning for these exceptions is that they "are the basic tools of scientific and technological work". The supreme court expresses that granting patents in these realms may hinder innovation rather than promote it.
Timeline of Cases Starting in 2010 and Forward that have Shaped the Eligibility
2010, Bilski v. Kappos, (561 U.S. 593) - The claimed invention was related to a hedging process for the energy market. It was categorized as an abstract phenomenon where according to the court an inventive concept was not found. The supreme court rejected the Federal Circuit's decision in re Bilski deciding that the machine-or-transformation test was the sole method to ascertain any process constitutes subject matter that is eligible for a patent. The court suggested that the test be held as a clue to the analysis and not the result itself. The majority held that the invention was not in the sphere of patentable subject matter as it was an attempt to avoid an abstract idea. The supreme court agreed that the claim in relation to the concept of hedging was a "fundamental economic practice long prevalent in our system of commerce and taught in any introductory finance class." However, it was not made evident which test to administer henceforth to point out processes that were merely abstract ideas.
2012, Mayo Collaborative Services v. Prometheus Laboratories, Inc., (132 S.CT. 1289) - The claimed invention was related to metabolite correlation. It was categorized as a natural phenomenon where the court could not find the inventive concept. The case becomes a very large landmark for section 101 of the patent act. Even though the decision unanimously ruled that a medical testing patent was not patentable as it was non-statutory under 101, the case reiterated the rule that laws of nature, like natural phenomena and abstract ideas, are not patentable but outlined an exception. The court acknowledged that claims containing the laws of nature can be patentable as long as the concerned law of nature is applied in it. A detailed procedure to explain the decision was also given by the court. Importance was given to the additional elements added to the claim beyond the natural law must hold importance and cannot merely be steps that are conventional or routine. For Mayo, the court found that the claim was preempting the law of nature.
2013, Association for Molecular Pathology v. Myriad Genetics, Inc., (132 S.Ct. 1794) - The claimed invention was related to gene sequencing. It was categorized under a natural phenomenon where the court did not accept the proposed invention claim but underlined another one. The supreme court held that isolating naturally occurring gene fragments could not be declared as an invention of something that is not found in nature. This was held true even with the exception of "isolating DNA from the human genome severs chemical bonds and thereby creates a non-naturally occurring molecule." Therefore, the invention claim was rejected under 101. However, the creation of a cDNA sequence from the mRNA exons-only molecule (which was naturally non-occurring) was announced as a patentable subject matter.
2014, Alice Corp. Pty. Ltd. v. CLS Bank Int'l, (134 S. CT. 2347) - The claimed invention was related to an intermediated settlement and was categorized as an abstract phenomenon. This came momentous as it laid out a two-step process to rule out whether a claim is unpatentable for claiming an abstract idea. The Supreme court relying on the decisions ruled in Mayo v. Prometheus and Bilski v. Kappos unanimously held that the claims made in this case were not patentable under 101. The two-step test needs to determine whether the claim is ‘directed to’ an abstract idea in its initial process. Second, it needs to be questioned whether the claim contains an inventive concept outside the abstract idea. The supreme court went as far as to describe the inventive concept as "an element or combination of elements that is 'sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.'"
The flow chart below explains the two-step process in order to understand whether a claim is eligible under 35 U.S.C. § 101 or not. The beginning of the subject matter eligibility test for products and processes is establishing the most reasonable and broadest interpretation of the claim in question as a whole.
Two-step Process: U.S.C. §101
The first concept that will be questioned under the statutory category is whether the claim is to a process, machine, manufacture, or composition of matter?
If the response indicates no, there can be two outcomes. First, the claim will be a non-eligible subject matter under 35 U.S.C. § 101.
Second, if the claim can be amended to fall within a statutory category then the test can proceed to the next step.
Can analysis be streamlined? If yes, is the eligibility of the claim self-evident when looked at as a whole? If yes, then the claim is eligible subject under 35 U.S.C. § 101.
2A) The next step under judicial exceptions; is the claim directly to a law of nature, natural phenomenon (product of nature), or an abstract concept?
If the response indicates no, then the claim is eligible subject matter under 35 U.S.C. § 101.
If the response indicates yes, then the claim needs to be evaluated in the next step of the test.
2B) The next step 2B is in regard to the inventive concept. Does the claim recite additional elements that amount to significantly more than the judicial exception?
If the response indicates yes, then the claim is eligible subject matter under 35 U.S.C. § 101.
If the response indicates no, the claim will be a non-eligible subject matter under 35 U.S.C. § 101.
To conclude, here is the use of an example to iterate how these cases helped draw a framework for Section 101 of the patent act to help it reach the stage it is at today. 2014, DDR Holdings, LLC v. Hotels.com, (773 F.3d 1245 Fed. Cir). The case was in relation to web page manipulation based on an abstract phenomenon. The federal circuit examined whether a software-related invention was patentable. This appellate decision was based on the rulings of Alice’s two-step test. While there was no recognition of the abstract concert via step one, the court identified an inventive concept in step two directly. Extending from the results of the case, the court stated that the claims made in this case "do not merely recite the performance of some business practice known from the pre-Internet world along with the requirement to perform it on the Internet." Instead, the claims are "necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of the computer network."
Copperpod provides portfolio analysis services that help clients to make strategic decisions such as In-licensing/Out-Licensing of patents, new R&D investments, or pruning out less critical patents. Our qualified and dedicated team of patent engineers provides strength parameters for each patent in a portfolio based on their technical quality, enforceability, offensive/defensive strengths & business value. Please contact us at email@example.com to know more about our services.
Rahul is a seasoned IP Professional with 10 years of experience working closely with senior litigators on patent infringement and trade secret misappropriation. Rahul has a Bachelor's degree in Electrical Engineering from the Indian Institute of Technology (IIT) Delhi and is a certified Project Management Professional (PMP).
He has advised clients on more than 100 technology cases cumulatively resulting in over $1 billion in settlements and verdicts, including cases where he has testified at deposition or through expert reports.