News & Updates

USPTO Gives New Guidance on Software Inventions

Earlier this month, the United State Patent and Trademark Office released new guidance for its Examiners to help them better determine when an invention is too abstract to be patentable. This latest effort by the Patent Office brings more clarity and predictability to the examination process for inventors seeking patent protection for software and business methods.

To be patentable, an invention must be new, useful, and unobvious. The courts have also recognized that abstract ideas and laws of nature are also not eligible for patent protection. Predicting which inventions are too abstract for patent protection has been a challenge in the past, and has become more difficult since the Supreme Court’s ruling in Alice Corp. v. CLS Bank (March, 2014). The Court of Appeals for the Federal Circuit has so far attempted to follow the Supreme Court’s guidelines on a case by case basis giving us clues as to the kinds of inventions that are too abstract to be patented. This effort has created some clarity in specific cases, but it has also created additional confusion where the Federal Circuit has given differing opinions for similar inventions. This raises the possibility that different Examiners in the same technology area may pick and choose how to handle similar inventions thus arriving at different conclusions for similar subject matter.

The Patent Office has responded with this latest guidance for the Examiner corps that attempts to synthesize the case law into a more practical legal framework that may be applied in a more predictable manner. Although they do not have the force of law, the guidelines offer valuable insights into how Examiners will determine whether the subject matter in a given application is unpatentably abstract.

Looking briefly at the substance of the latest guidance, the USPTO is revising its examination procedure by: (1) Providing groupings of subject matter that it considers to be an abstract idea; and (2) clarifying that a claim is not ‘‘directed to’’ a judicial exception if the judicial exception is integrated into a practical application of that exception.

On the first point, the Patent Office sees three separate categories of material that are unpatentably abstract:

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

According to the guidelines, concepts that do not fit one of these categories are probably not abstract ideas. The Patent Office does leave open the possibility that exceptional cases could arise where the concept is too abstract to be patented, but also does not fit into one of these categories.

On the second point, the Patent Office explains that even if the claims do fall within one of the three groupings above, they may still be eligible for patent protection if the abstract concept is integrated into a practical application of that concept. A “practical application” is one that applies, relies on, or uses the concept “in a manner that imposes a meaningful limit on the abstract concept.”

The new guidance represents a noteworthy change in the way applications will be handled by Examiners, and it marks the latest attempt by the Patent Office to bring clarity and predictability to the process. It is also important to note that this is not a change in the statute approved by Congress, nor is it a change to the legal framework that has been endorsed by the Federal Circuit or the Supreme Court. It remains to be seen then, what the long-term effect of this change will be on applications currently under examination, and what affect, if any, it will have on patent litigation going forward.