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Alice's Adventures in the PTO Wonderland...or, will the 2019 PEG Fill in the Rabbit Hole?

By: William Frommer

November 20, 2019

Background

Since the Supreme Court ruling in Alice Corporation v. CLS Bank International, 573 U.S. 208, 134 S.Ct. 2347 (2014), the Court of Appeals for the Federal Circuit has considered the question of patent eligibility in more than one hundred cases. Invoking the Supreme Court’s Alice/Mayo two-part test, the CAFC has answered “NO” in the vast majority of these cases. But the CAFC admits difficulty in applying Alice/Mayo and welcomes either the Supreme Court to refine the Alice/Mayo test, or Congress to clarify this issue. See Athena Diagnostics v. Mayo Collaborative Services, 927 F.3d 1333 (Fed. Cir. 2019).

Of course, Congress identified in the 1952 patent statute the subject matter that can be patented:

  • 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 therefor… 35 USC 101.

Although this statute was intended to protect by patent “anything under the sun” (see the Committee Reports accompanying the 1952 Patents Act, cited in Diamond v. Chakrabarty, 447 U.S. 303, 309) the courts have found exceptions to this sweeping intent. As now well known, these judicial exceptions are a law of nature, a natural phenomenon or an abstract idea, collectively known as the building blocks of human ingenuity whose use cannot be pre-empted. Alice, 134 S. Ct. at 2354.

Of course, it is up to the U.S. Patent and Trademark Office to grant patents on new, useful and unobvious inventions, within the framework established by the patent statute and the courts. Thus, the PTO is the gatekeeper that first decides whether an invention is eligible for a patent, or falls within one of the judicial exceptions. Recognizing the need to provide patent examiners and the public with a consistent, reliable and predictable application of the law, the PTO has issued Guidance in the form of Patent Subject Matter Eligibility Guidance (PEG) in an effort to apply the Alice/Mayo test in a manner that produces reasonably consistent and predictable results across applications, art units and technology fields. (Federal Register, vol. 84, no. 4, January 7, 2019). This 2019 PEG was updated on October 17, 2019 and incorporated into the MPEP to provide additional guidance on the “abstract idea” exception. This article focuses on one practitioner’s expectation of PTO examiners use of the updated 2019 PEG when examining claims that arguably recite an abstract idea.

The 2019 PEG

Although the 2019 PEG does not have the force of law (Intellectual Ventures v. Erie Indemnity, 711 F. App’x 102 (Fed. Cir. 2017); Cleveland Clinic Foundation v. True Health Diagnostics, 2018-1218 (Fed. Cir. April 1, 2019)), nevertheless it is expected the PTO examiners will adhere to and apply the 2019 PEG when examining patent applications. This article looks at a small sample of patents having claimed subject matter deemed by the Federal Circuit as not being patent eligible, and asks: Would a PTO examiner apply the 2019 PEG to reject those claims under 35 USC 101?

To begin, the 2019 PEG focuses on “step 2” of the Alice/Mayo analysis. In step 1, the claim is analyzed to determine if the claim is directed to a judicial exception, such as an abstract idea. If so, the analysis proceeds to step 2 to determine whether the claim has additional elements that transform the claim into a patent-eligible application, i.e. whether the additional elements constitute an inventive concept that is significantly more than the ineligible concept itself. Alice 134 S.Ct. at 2355. As demonstrated by the several examples set out in the appendices that accompanied the 2019 PEG, a relatively simple step 1 test for examiners when considering whether the claim is directed to a judicial exception is to focus initially on the preamble. Many of the preambles of the claims deemed ineligible by the CAFC nevertheless recite “a method for…” or “a system configured to…” or “a computer readable medium…” which the 2019 PEG considers to be categories identified in 35 USC 101 (“any new and useful process, machine, manufacture”) and not a judicial exception. Of course, the PEG analysis does not end here.

Abstract Ideas

Examiners must analyze the claim beyond the preamble to determine if the claim recites a judicial exception. For the sake of consistency, the 2019 PEG provides a simple tool (perhaps too simple) for evaluating whether a claim recites an abstract idea. The 2019 PEG groups abstract ideas into 3 groupings. If a claim element recites any one or more of these 3 groupings, that element is construed as an abstract idea. But, if the claim does not recite matter that falls within these enumerated groupings, then the claim does not recite a judicial exception.1

The 3 Groups of Abstract Ideas
The 2019 PEG lists the following apparently exclusive groups of abstract ideas:
(a) Mathematical concepts.
(b) Certain methods of organizing human activity.
(c) Mental processes.

What features or attributes constitute each group?
(a) Mathematical concepts are identified as:

  • (i) mathematical relationships;
  • (ii) mathematical formulas or equations; and
  • (iii) mathematical calculations.

(b) Certain methods of organizing human activity are identified as:

  • (i) fundamental economic principles or practices;
  • (ii) commercial or legal interactions, including contracts, legal obligations, advertising, marketing or sales, and business relations; and
  • (iii) managing personal behavior or relationships or interactions, including social activities, teaching, following rules or instructions.

(c) Mental processes are identified as concepts performed in the human mind, including observation, evaluation, judgment, opinion.

  • (i) if the claim limitation can be performed with pen and paper, that limitation is construed as a mental process;
  • (ii) claim limitations that recite no more than collecting and analyzing data or information, and displaying the results of such analysis are construed as a mental process;
  • (iii) if a claim limitation cannot practically be performed in the human mind, the limitation does not recite a mental process.

How is the claim analyzed to determine if it “recites” limitations that fall within one of these 3 groupings of abstract ideas?

(a) If the words of the specific limitation as set forth in the claim read on one or more of these 3 groupings, that limitation is construed as an abstract idea.

(b) If the words set forth in the claim do not read on one of these groupings, nevertheless the claim “describes” matter that falls within one of these groupings, if:

  • (i) the words of the claim, when read in light of the specification and given its broadest reasonable interpretation describes one of these groupings; or
  • (ii) the claim “as a whole” recites one of these groupings.

Step 2 of Alice: Does the Claim Recite Additional Elements that Constitute an Inventive Concept?

How is the claim evaluated to determine if it recites additional elements that constitute an inventive concept that is significantly more than the ineligible concept itself? That is, how should the examiner determine if the judicial exception (e.g. abstract idea) is integrated into a practical application? The 2019 PEG instructs to review the claim to determine if the claim recites any element(s) in addition to those elements that constitute the judicial exception. That is, are there any elements in addition to those elements that were determined to recite an abstract idea? If the claim recites additional elements, those additional elements are analyzed, without regard to whether they are well-understood, routine or conventional, to determine if they are a practical application of the judicial exception. The following are non-exclusive examples in the 2019 PEG of what constitutes a practical application:

(a) The additional elements result in an improvement in computer functionality or in other technology. Here, the specification is analyzed to determine if there is a description of what the improvement is and how the improvement is attained.

(b) The judicial exception is used in a particular machine or manufacture “that is integral to the claim.” This example is sufficiently vague as to encourage disagreements between practitioners and examiners regarding whether a particular machine is “integral to the claim.”

(c) The additional element effects a transformation of a particular article to a different state or thing.

(d) The additional element uses the judicial exception in other than a particular technological environment:

  • (i) it is not a practical application of the judicial exception to implement the judicial exception on a computer without reciting how that judicial exception is implemented.
  • (ii) it is not a practical application of the judicial exception if the additional element is insignificant activity. For example, gathering data for further analysis is insignificant activity.

If the additional elements are well-known, routine, conventional

If, by this stage in the examiner’s analysis of the claim, s/he finds the claim recites a judicial exception, but there is an additional element(s) that is a practical application of that judicial exception, there is one more analysis to determine if that additional element constitutes an inventive concept that renders the claim eligible under 35 USC 101. Is the additional element well-understood, routine, conventional? The previous analysis that determined whether there are, in fact, additional element(s), did not take this into account. Now, however, each additional element is evaluated to determine if it is well-understood, routine, conventional. If so, the additional element(s) does not constitute an inventive concept sufficient for a practical application of the judicial exception.

It is not relevant that the additional element is a physical or tangible object, such as a computer. More is needed. However, if the additional element constitutes insignificant activity, but is unconventional or is more than well-understood, routine, this additional element is a practical application of the judicial exception, constitutes an inventive concept and renders the claim eligible under 35 USC 101.

2019 PEG Analysis of Claims Found Ineligible

The following are examples of claims deemed by the CAFC as ineligible. Would those same claims be rejected under 35 USC 101 by examiners using the 2019 PEG to analyze those claims?

Thunder Power Patent 9,547,373

This patent is directed to a safety feature in a vehicle, namely an automobile, that minimizes driver distraction. The patent was ruled invalid under 35 USC 101 by the district court (Thunder Power v. Byton N.A., 340 F. Supp. 3d 922 (N.D. Cal. 2018)), affirmed by the CAFC. Claim 1 of the Thunder Power patent is typical; and the chart set out in Appendix A analyzes the claim recitations in accordance with the 2019 PEG.

This claim satisfies Step 1 of the Alice/Mayo analysis because it is directed to a machine (“a vehicle operating system”).

In addition to the elements that are characterized as abstract ideas (“control the camera devices to… convert the captured gesture action images into corresponding operating signals,” “determine whether the first operation signal is consistent with the second operation signal”), the claim recites “additional elements” (camera devices, storage device, processing device, execution devices).

Since the claim recites “additional elements,” the 2019 PEG requires all of the additional elements to be considered, whether or not they are well-understood, routine, conventional. Here, the additional elements are used in a particular machine (the vehicle operating system) that is integral to the claim. Since the claim is directed to a vehicle operating system, the machine in which the additional elements are used is, by definition, integral to the claim.

Finally, the additional elements must be analyzed to determine if they amount to significantly more than the abstract idea recited in the claim. To determine if these additional elements are indicative of an inventive concept, they must not be well-understood, routine, conventional. Camera devices, storage devices, processing devices and execution devices are well-understood, routine, conventional. The functions performed by the processing device likewise are well-understood, routine, conventional.

The PTO would invoke the 2019 PEG to find this claim ineligible under 35 USC 101.

Florida Research Foundation Pat. 7,062,251

This patent is directed to collecting physiologic patient data from two or more bedside machines (or monitors) and consolidating that data for display on a common monitor. The patent was ruled ineligible under 35 USC 101 by the CAFC in University of Florida Research Foundation v. General Electric Co., 916 F.3d 1363 (Fed. Cir. 2019).

Claim 1 of this patent is representative; and the claim elements are analyzed in accordance with the 2019 PEG in the chart of Appendix B:

The claim recites a method, which is a patent-eligible category under 35 USC 101. However, all of the claim elements recite an abstract idea (“receiving physiologic treatment data,” “converting” the format of the data, “performing at least one programmatic action” and “presenting results… upon a bedside graphical user interface”) – a judicial exception. The 2019 PEG requires further analysis to determine if at least one of the elements is a practical application of the abstract idea.

None of the elements constitutes an improvement in a computer or is used in a particular machine that is integral to the claim.2 And, the claim does not recite how the abstract idea is implemented. Moreover, the broad recitation of the claimed elements leads to the conclusion that each element is well-understood, routine, conventional.

Based on the 2019 PEG, the PTO would find this claim ineligible if presented for examination today.

Ameranth Pat. 8,146,077

This patent is directed to a system for creating digital menus for use in the hospitality industry, primarily restaurants. The patent was ruled invalid as being directed to ineligible subject matter in Ameranth, Inc. v. Domino’s Pizza, LLC, 2019-1141 (Fed. Cir. Nov. 1, 2019).

Claim 1 of this patent is representative; and the claim elements are analyzed in accordance with the 2019 PEG in the chart of Appendix C.

The claim is directed to a machine (“an information management and real time synchronous communications system”) and, thus, satisfies Step 1 of the Alice/Mayo analysis.

The claim recites elements that the 2019 PEG identifies as abstract ideas because they are directed to organizing human activities or mental processes (“a master menu,” “configured for display to facilitate user operations… of said first graphical user interface,” “menu configuration comprising at least menu categories, menu items and modifiers,” “software is enabled to generate said programmed handheld menu configuration by utilizing parameters… defining at least the menu categories, menu items and modifiers of the master menu,” “synchronized in real time with analogous information comprising the master menu,” “software … enabled to generate the programmed handheld menu configuration in conformity with a customized display layout… to facilitate… display of the programmed handheld menu configuration,” “a cascaded set of linked graphical user interface screens… includes a different number of user interface screens from at least one other wireless handheld computing device”).

However, the claim also recites elements in addition to the recited judicial exception (“a central processing unit,” “a data storage device,” “an operating system including a first graphical user interface,” “menu configuration software enabled to generate a programmed handheld menu configuration,” “menu configuration software for display as programmed cascaded sets of linked graphical user interface screens,” “cascaded sets of linked graphical user interface screens for display of the handheld menu configuration are configured differently from the cascaded sets of linked graphical user interface screens for display of the master menu,” “real time synchronous communications to and from the wireless handheld computing device,” “automatically format the programmed handheld menu configuration… for a customized display layout of at least two different wireless handheld computing device display sizes”). At this stage in the analysis according to the 2019 PEG, it is immaterial whether any of these additional elements are well-understood, routine, conventional. Rather, the presence of additional elements conditions the next stage of the PEG analysis.

Each of the identified additional elements considered in this next stage of the PEG analysis is well-understood, routine, conventional. Central processing units, data storage devices, GUIs and software that generate menus all have been well-understood and conventional for many years. Software that displays cascaded linked GUI screens, and particularly, different sets of cascaded linked GUI screens for different menus, likewise has been well-understood and conventional. Synchronous communication among devices has been well-understood and routine. Formatting display layouts of different sizes to be compatible with the particular device on which the layout is displayed is well-understood, routine, conventional. Accordingly, even though the claim recites “additional elements,” the analysis of these additional elements pursuant to the 2019 PEG identifies these additional elements as well-understood, routine, conventional.

Accordingly, these additional elements do not amount to significantly more than the judicial exceptions (the abstract ideas) recited in the claim. Analysis of the claim in accordance with the 2019 PEG finds the claim ineligible for patent protection.

Chamberlain Pat. 7,227,275

This patent is directed to an improvement in garage door openers, broadly described as “movable barriers.” Remote control devices generally are limited in the functions that can be performed, such as opening or closing a garage door, turning on or turning off lights, etc. The claimed device (the “movable barrier operator”) can be programmed to expand the functions that it controls. The patent was ruled invalid under 35 USC 101 in Chamberlain Group v. Techtronic Industries, 2018-2103 (Fed. Cir. Aug. 21, 2019). Claim 1 is representative and is analyzed in accordance with 2019 PEG, as demonstrated by the chart set out in Appendix D.

This claim satisfies Step 1 of the Alice/Mayo analysis because it is directed to a machine (“a movable barrier operator” is a machine that operates a barrier, such as a garage door).

The limitation of the “status condition signal” that corresponds to an operational status condition is an element that the 2019 PEG identifies as an abstract idea – it is construed as a mental process.

Accordingly, since the claim recites at least one judicial exception (the mental process of the “status condition signal”), the 2019 PEG requires further analysis of the claim to determine if the claim recites elements in addition to the judicial exception (in addition to the abstract idea). Here, the recitation of the controller, the movable barrier interface and the wireless data transmitter are additional elements because they do not fall within the 3 groupings defined by the 2019 PEG (they are not mathematical concepts, they are not methods of organizing human activity, and they are not mental processes). According to the patent specification, the claimed “operator” will remain compatible with evolving features and requirements, thus having a longer useful service life. This improvement in technology is one of the 2019 PEG examples of a practical application of the judicial exception (the abstract idea).

Although these additional elements integrate the abstract idea into a practical application (e.g. a remote garage door controller), each of the identified additional elements is well-understood, routine, conventional. Controllers, interfaces (i.e. the mechanism that moves the barrier), wireless transmitters and the use of identifiers for pairing (“identifier that is at least relatively unique to the movable barrier operator”) are well-understood and conventional. As such, they demonstrate the absence of an inventive concept. The PTO would invoke the 2019 PEG to find claim 1 ineligible.

ChargePoint Pat. 7,956,570

This patent is directed to charging electric vehicles and addresses the problem of controlling charging stations to regulate the charging of vehicles during periods of peak demand; and also permits drivers to identify the appropriate charging stations to be used. The solution to these problems is based on networking the power grid, the charging stations and the drivers to permit communication among all. The patent was ruled invalid under 35 USC 101 by the CAFC in Chargepoint, Inc. v. SemaConnect, Inc., 920 F.3d 759 (Fed. Cir. 2019). Claim 31 is representative and is analyzed in the chart of Appendix E, consistent with the 2019 PEG.

This claim satisfies Step 1 of the Alice/Mayo analysis because it is directed to a machine (“a network-controlled charge transfer system”).

The claim does not recite elements that the 2019 PEG identifies as abstract ideas. The claim does not recite an element that constitutes a mathematical concept. The claim does not recite an element that constitutes certain a method of organizing human activity, namely, fundamental economic principles or practices, commercial or legal interactions, or managing personal behavior or relationships. The claim does not recite an element that constitutes mental processes. Therefore, according to the 2019 PEG, the claim analysis under 35 USC 101 is complete and there is no need to determine if any of the additional elements of the claim provide an inventive concept.

The question of whether any of the additional elements are well-understood, routine, conventional is material regarding patentability under 35 USC 102, 103; but should not be material to the analysis of subject matter eligibility of the claim. Under the 2019 PEG, this question is considered when analyzing whether the additional elements provide an inventive concept to a claim that contains an abstract idea. But the ChargePoint claim does not recite (it neither sets out nor describes) an abstract idea. The claim does not recite a mathematical concept or a method of organizing human activity or a mental process.

The PTO would invoke the 2019 PEG to find this claim eligible under 35 USC 101, whereas the CAFC found the claim to be ineligible.

American Axle Pat. 7,774,911

This patent is directed to a method of manufacturing a shaft assembly of a driveline system, such as the drive shaft for a propeller, having minimal shaft vibration. The patent solves the problem of two types of vibration (shell mode and bending mode) by using a liner that is “tuned” to damp, or counteract, both types of vibration. The CAFC invalidated this claim on the ground it recited nothing more than a law of nature. American Axle & Mfg. v. NEAPCO Holdings, Fed. Cir., Appeal 2018-1763, (October 3, 2019).

The claim analysis set out in Appendix F follows the 2019 PEG.

To begin, according to the 2019 PEG, the claim is directed to a method, which is a patent-eligible category under 35 USC 101.

All of the elements recited in the claim are “additional elements” because they all are in addition to elements that could be characterized as abstract ideas or as a law of nature – there are no elements that an examiner would point to as being nothing more than abstract ideas or a law of nature. The claim does not recite a mathematical concept or a method of organizing human activity or a mental process.

Although claim 22 would not be rejected as being directed to an “abstract idea,” the claim nevertheless was deemed invalid by the CAFC on the ground it recited nothing more than a law of nature and, thus, was directed to ineligible subject matter. The CAFC ruled that the patent did not disclose what is done to “tune” the liner. “Tuning” was deemed to be an application of Hooke’s Law, a law of nature. But, the specification does not even mention Hooke’s Law. Moreover, the specification states that various characteristics of the liner can be controlled to tune its damping properties in both the shell mode and in the bending or torsion mode. Such characteristics are described as mass, length and outer diameter of the liner, diameter and wall thickness of a structural portion of the liner, material of which the liner is fabricated, geometry of the liner and other elements used in the construction of the liner.

It would seem then, the specification describes how the “tuning” is accomplished. That the claims do not do so would seem not to be an issue of whether the claims recite an inventive concept. The “tuning” of the liner, and particularly the manner in which the liner is tuned, would be a practical application of Hooke’s Law. The claim recites more than merely “apply Hooke’s law” to the problem

The PTO would invoke the 2019 PEG to find this claim eligible under 35 USC 101.

Conclusion

In an effort to provide consistency, reliability and predictability in evaluating patent applications under 35 USC 101, the 2019 PEG is a good attempt to give examiners the basic tools to evaluate a claim by parsing that claim into its recited elements and then comparing each element to bright-line criteria. While invoking the 2019 PEG analysis is expected to minimize an examiner’s subjectivity while using that criteria, the foregoing discussion is intended to demonstrate there will be instances in which an examiner’s bright-line analysis differs from a court’s analysis. Alice will continue to find adventures in wonderland, until Congress fills in the rabbit hole.

1 The PEG refers to the “rare circumstance” that an examiner nevertheless “believes a claim limitation that does not fall within the enumerated groupings” nevertheless recites an abstract idea. In that case, a specific procedure is provided for such an examiner-initiated exception. Practitioners can reasonably expect rare occurrences of such “rare circumstances.”

2These are examples listed in the 2019 PEG of a practical application of the judicial exception (i.e. the abstract idea).