New USPTO Patent Guidelines and Important Considerations for Software Patent Applications

When one is trying to patent an invention, there are various criteria to consider. Is the invention novel? Is the invention useful and perhaps most importantly, is the subject matter patentable?

In the United States, four categories of invention, processes, machines, manufactures and composition of matter, are patentable. Abstract ideas, laws of nature and natural phenomena are exceptions to patentability. While most would agree that abstract ideas should not patentable, controversy and confusion might arise when attempting to define what constitutes a law of nature or an abstract idea. For example, is an application of an abstract idea patentable?

Recent case law has attempted to answer such questions. In the 2014 decision, Alice v CLS, which heavily cited Mayo Collaborative Services v Prometheus Laboratories, Inc., the United States Supreme Court ruled that a computerized scheme to “mitigate settlement risk” was not patentable. The Court viewed the computerized scheme as an “abstract idea” “merely requiring generic computer implementation”.  For an invention, whose claims are “directed towards a patent-ineligible concept”, to be patent-eligible, the court must determine “whether the claims, considered both individually and as an ordered combination transform the nature of the claim into a patent-eligible application”.

Many scholars have felt the Alice/Mayo framework is confusing, did not adequately address what constituted “transformation” and has produced inconsistent results. These shortcomings have impacted the software industry strongly. The United States Patent and Trademark Office (USPTO) has been issuing subject matter eligibility guidance updates to reduce uncertainty. However uncertainty still abounds, which may have impeded innovation.

The new eligibility guidance

Under new director Andrei Iancu, the USPTO addressed these concerns by issuing new subject matter eligibility guidance. Specifically, the USPTO included a new two-prong inquiry:

Prong One

In prong one, “examiners should evaluate whether the claims recite a judicial exception” to patentability using a two-step process:

1)    Identifying specific claim limitations that the examiner believes recites an abstract idea.

2)    Determining if the identified limitations fall within subject matter groups (a) – (c) below:

(a)   Mathematical concepts – mathematical relationships, mathematical formulas or equations, mathematical calculations;

(b)   Certain methods of organizing human activity, including

  1. Fundamental economic principles or practices,
  2. Commercial or legal interactions, and
  3. Managing personal behaviour, relationships or interactions between people; and

(c)   Mental processes which are concepts performed in the human mind such as observation, evaluation, judgment, and opinions.

Prong Two

If in prong one the examiner decides that the claim does “recite a judicial exception”, then in prong two the examiner must “evaluate whether the judicial exception is integrated into a practical application” based on:

1)    Identifying presence of additional elements in the claim beyond the judicial exception, and

2)    Evaluating the additional elements individually and in combination to determine whether the additional elements integrated the exception into a practical application.

Importantly, under the new guidelines, step (2) excludes consideration of whether the additional elements represent well-understood, routine, conventional activity. A claim that includes conventional elements may still integrate an exception into a practical application. Indications of integration of the exception into a practical application include the following:

1)    The additional elements reflect an improvement in the functioning of a computer, or an improvement to other technology or technical field;

2)    The additional elements apply or use a judicial exception to effect a particular treatment or prophylaxis for a disease or medical condition;

3)    The additional elements implement a judicial exception with, or use a judicial exception in conjunction with, a particular machine or manufacture that is integral to the claim; and

4)    The additional elements effect a transformation or reduction of a particular article to a different state or thing.

Best practices for software patent applications under the new eligibility guidelines

In light of these new guidelines, some best practices for software patent applications are:

  1. Describe the interoperation of the software with hardware in the specification and claims, and use non-generic terms to describe the hardware in the specification and claims. This may help facilitate the “particular machine or manufacture integral to the claim” argument.
  2. Explain clearly in the specification how the claimed invention improves the operation of the underlying computer or technology over the prior art.
  3. Explain clearly in the specification why the claimed invention cannot be performed mentally and therefore requires software. For example:
    1. Operations with complexity exceeding human capability need to be performed.
    2. There is a need to process very large input data sets.
    3. Processing speeds beyond human capability are needed.
  4. Direct claims towards particular solutions, or particular ways to achieve a desired outcome, to facilitate the “particular machine or manufacture integral to the claim” argument.
  5. If possible, show how an article is transformed or reduced to a different state or thing.
  6. Use non-mathematical claim elements instead of mathematical equations or formulas.
  7. File continuations to obtain better claims in the future as the legal environment evolves.

The new developments are likely to please software patent applicants and inventors due to increased certainty. In contrast, concerns about patent trolls may arise as “practical application” could be loosely defined. Finally, it will be interesting to see what the future impact on the number and types of US patent filings is.

Co-authored: Ramesh Rajaduray, for Raja Technologies Inc. & Margot Davis, INNOVATE LLP

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