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It’s Official: Berkheimer and USPTO’s January 2019 Guidance Have Reduced Alice Rejections

According to a recent report by the USPTO’s Chief Economist, the Federal Circuit’s 2018 Berkheimer decision and the USPTO’s January 2019 patent-eligibility guidance have reduced both the frequency and uncertainty of examiners’ patent-eligibility rejections under and 35 U.S.C. § 101 and the Alice/Mayo test. Anecdotally, for a number of months it has seemed that examiners were making fewer patent-eligibility rejections than they had been in the years following Alice. The January 2019 guidance in particular, as I wrote at the time, seemed designed to reduce Alice rejections. As this graph illustrates, that has proven to be true. Alice rejections peaked prior to Berkheimer; the USPTO points to its April 2018 memorandum modifying § 101 examination procedure in light of Berkheimer as accelerating the downward trend. But again, the dramatic downturn in patent-eligibility rejections occurred after the January 2019 guidance. Perhaps even more interesting than the decrease in Alice rejections is…

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Patent Owner Loses under § 101 in CBM Where Claims Not Limited to Technological Innovation Allegedly Disclosed in Patent Specification

All claims of a patent directed to a “security-based order processing technique” are unpatentable under 35 U.S.C. § 101, said the Patent Trial and Appeal Board (PTAB) in a final written decision in a Covered Business Method Review. Miami Int’l. Holdings, Inc. v. NASDAQ, Inc., CBM2018-00030, Patent 7,921,051 B2 (PTAB October 3, 2019). The decision is instructive for two reasons. First, the Patent Owner made unsuccessful arguments that elements described in the specification but not explicitly claimed somehow breathed a patentable technological innovation into the claims. Second, the PTAB continues to explicitly rely on the USPTO’s 2019 revised § 101 guidance that has been questioned, and even disregarded, by the Federal Circuit. The CBM proceeding had been instituted for all claims (1-49) of the ’051 patent, solely on the issue of patent-eligibility under 35 U.S.C. § 101. The PTAB considered independent claim 13 to be illustrative: A computer implemented method…

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Courts Don’t Follow the PTO’s § 101 Patent-Eligibility Guidance so Why Should You?

The Federal Circuit’s recent dicta in a non-precedential decision stating that it need not give deference to the USPTO’s 35 U.S.C. § 101 patent-eligibility guidance highlights the challenges faced by patent applicants. In Cleveland Clinic Foundation v. True Health Diagnostics LLC, No. 2018-1218 (Fed. Cir. April 1, 2019), the court affirmed a District Court’s grant of a Rule 12(b)(6) motion to dismiss based on invalidity of claims of US Patent Nos. 9,575,065 and 9,581,597, as “invalid under 35 U.S.C. § 101 as directed to an ineligible natural law.” The patent owner argued, among other things, that, under Skidmore v. Swift & Co., 323 U.S. 134 (1944), the District Court should have given “appropriate deference to subject matter eligibility guidance published by the PTO,” specifically “Example 29,” published on May 4, 2016. Judge Lourie, writing for the court, explained that While we greatly respect the PTO’s expertise on all matters relating…

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PTAB: Derivatives Trading Patent Claim Passes Alice Test, Opinion Designated “Informative”

Here is a sign that the USPTO’s January, 2019, guidance on 35 U.S.C. § 101 and patent-eligibility may have an immediate and significant impact on USPTO rejections under the Mayo/Alice abstract idea test. The guidance became effective January 7, 2019. The Patent and Trial and Appeal Board (PTAB) soon thereafter decided In re Smith (Appeal No. 2018-000064; Application 13/715,476; Feb. 1, 2019), reversing an examiner’s § 101 rejection of claims directed to “trading derivatives in a hybrid exchange system.” Then, on March 19, 2019, the PTAB singled out Smith for designation as “informative.” The PTAB only very rarely designates a decision as “informative,” which it does according to a strictly defined “Standard Operating Procedure.” The “informative” designation means that, while the decision “is not binding authority,” it is deemed to “provide the Board’s general consensus on recurring issues and guidance to examiners, appellants, patent owners, or petitioners in areas where…

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New USPTO Patent-Eligibility Guidance Is a Material Change

Effective January 7, 2019, United States Patent and Trademark Office patent examiners and PTAB judges will be operating under new guidance for evaluating subject matter eligibility. Specifically, the USPTO is changing its interpretation and application of the first step of the two-part Alice/Mayo test. (Step one is whether claims are directed to a judicial exception such as an abstract idea, and step two is whether, if so, the claims recite a significant additional innovation.) Under the new guidance, the USPTO is expanding the analysis under step one to determine whether a claimed judicial exception that is an abstract idea “is integrated into a practical application of that exception.” If so, then “a claim is not ‘directed to’ a judicial exception.” The new guidance is clearly aimed at computer-implemented inventions. The new procedure, the USPTO explicitly says, applies only to judicial exceptions that are abstract ideas, but not to laws of nature and natural…

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