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The 2014 Interim Guidance on Patent Subject Matter Eligibility (“Interim Guidance”) was printed in the Federal Register Tuesday [1] (December 16) and “supplements” the Preliminary Examination Instructions in view of the Supreme Court decision in Alice Corp. of June 25, 2014 (“Preliminary Instructions”).[2] The Interim Guidance includes a flowchart that presents the two-part test for Section 101 eligibility in graphical form:

With respect to Step 2A, the Interim Guidance still includes the four categories of abstract ideas identified in the Preliminary Instructions: “fundamental economic practices, certain methods of organizing human activities, an idea ‘of itself,’ and mathematical relationships/formulas.”  However, while the Preliminary Instructions suggested that Part 1 of the two-part test is met by any claim that includes an element that falls into one of these categories, the Interim Guidance provides 17 distinct examples from various cases, allowing for a finer-grained analysis.  Similarly, while the Preliminary Instructions recited five examples relating to Part 2 of the two-part test, the Interim Guidance provides ten.

For six of the 17 abstract idea examples, the Interim Guidance walks through the two-part analysis to show how the decision regarding Section 101 eligibility was reached (or how the decision was consistent with the two-part analysis, for decisions rendered prior to Mayo or Alice).[3] Additionally, fifteen Federal Circuit and Supreme Court case summaries are provided.  The case summaries should help to provide context for practitioners and Examiners, but are unlikely to provide clear direction in any particular application.  Accordingly, future battles over Section 101 rejections may look more like litigation than prosecution, with the applicant arguing that Case X provides the appropriate precedent for analysis of his claims and the Examiner arguing that Case X is distinguishable and Case Y is the relevant case.

In addition to discussing the two-step process, the Interim Guidelines also include a streamlined eligibility analysis for a claim that “when viewed as a whole, clearly does not seek to tie up any judicial exception such that others cannot practice it.”  Four examples are provided of such claims:

• a robotic arm assembly having a control system that operates using certain mathematical relationships
• an artificial hip prosthesis coated with a naturally occurring mineral
• a cellphone with an electrical contact made of gold
• a plastic chair with wood trim

Unfortunately, the Interim Guidelines do not go into any greater detail as to why these examples “clearly” do not implicate the judicial exceptions.  For example, if the naturally occurring mineral and its properties are natural phenomena, and the artificial hip prosthesis is otherwise known in the art, then why isn’t the hip prosthesis claim merely a field of use limitation for the mineral?  In that case, the hip prosthesis, no matter how complex in its own right, would merely be well-understood and routine, and could not be significantly more than the use of the natural phenomenon.

The Interim Guidelines specify that “if there is doubt … the full analysis should be conducted.”  Accordingly, once an examiner has decided to perform the full analysis, an applicant will have little recourse to argue that the streamlined eligibility analysis should have been used.  Thus, as with the Preliminary Guidelines, examiners retain broad discretion in deciding what the abstract idea is, whether preemption concerns apply, and whether the claim involves significantly more than the abstract idea.

For reference, the examples included in the Interim Guidance for Part 1 and Part 2 of the test are provided below.  The 17 example laws of nature, natural phenomena, and abstract ideas are:

• isolated DNA – Myriad
• a correlation that is the consequence of how a compound is metabolized – Mayo
• electromagnetism to transmit signals – Morse
• the chemical principle underlying the union between fatty elements and water – Tilghman
• mitigating settlement risk – Alice
• hedging – Bilski
• creating a contractual relationship – buySAFE
• using an advertisement as currency – Ultramercial
• processing information through a clearinghouse – Dealertrack
• comparing new and stored information and using rules to identify options – SmartGene
• using categories to organize, store, and transmit information – Cyberfone
• organizing information through mathematical correlations – Digitech
• managing a game of bingo – Planet Bingo
• the Arrhenius equation for calculating the cure time of rubber – Diehr
• a formula for updating alarm limits – Flook
• a formula relating to standing wave phenomena – Mackay Radio
• a procedure for converting one form of numerical representation to another – Benson

The six positive examples of what qualifies as “significantly more” than the abstract idea are:

• improvements to another technology or technical field – Diehr
• improvements to the functioning of the computer itself – Alice
• applying the judicial exception with, or by use of, a particular machine – Bilski
• effecting a transformation or reduction of a particular article to a different state or thing – Diehr, Benson, Tilghman
• other meaningful limitations beyond generally linking the use of the judicial exception to a particular technological environment – Alice

The four negative examples of what is not “significantly more” are:

• adding the words “apply it” (or the equivalent) with the judicial exception, or mere instructions to implement an abstract idea on a computer – Alice
• simply appending well-understood, routine and conventional activities previously known to the industry, specified at a high level of generality, to the judicial exception, e.g., a claim to an abstract idea requiring no more than a generic computer to perform generic computer functions that are well-understood, routine and conventional activities previously known to the industry – Alice, Mayo
• adding insignificant extrasolution activity to the judicial exception, e.g., mere data gathering in conjunction with a law of nature or abstract idea – Mayo, Flook
• generally linking the use of the judicial exception to a particular technological environment or field of use – Mayo, Bilski, Flook

My thanks to Domenico Ippolito for this post.

Software patent owners that have been underwater holding their breath since the Supreme Court’s Alice Corp. v. CLS Bank decision can finally come up for air.   In DDR Holdings, LLC v. Hotels.com, et al.  (13-1505.Opinion.12-3-2014.1),  the Federal Circuit finally found a software patent it could love in spite of the Alice decision.   The DDR Holdings patent involved methods of serving web pages offering commercial opportunities by an “outsource provider.”  The claimed invention provided for more than one unrelated web stores to offer a single product while allowing an “outsource provider” to provide a standard web page format for the product.  In particular, the invention allowed product merchandisers to control the “look and feel” of their products even when offered for sale on unrelated merchant sites.

Representative claim 13 of the ’572 patent recites:

13.  An e-commerce outsourcing system comprising:

a) a data store including a look and feel description

associated with a host web page having a

link correlated with a commerce object; and

b) a computer processor coupled to the data store

and in communication through the Internet

with the host web page and programmed, upon

receiving an indication that the link has been

activated by a visitor computer in Internet

communication with the host web page, to serve

a composite web page to the visitor computer

wit[h] a look and feel based on the look and feel

description in the data store and with content

based on the commerce object associated wit[h]

the link.

The Federal Circuit noted that the claims did “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 claimed solution is necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks.” Id. (emphasis added).   The Federal Circuit reasoned the Alice did not preclude protection because there were no abstract ideas implemented by the invention, and furthermore that the claims recited a combination of specific, what could be termed “technical” steps.

The claims recently held 101 ineligible in Ultramercial, finding that unlike the claims in Ultramercial, the claims at issue do “not merely the routine or conventional use of the Internet.”  Id. at 22-23.

There are a couple things worth noting about the DDR invention, and this decision:

1. The point of novelty of this invention is a technical architecture and operation that, while perhaps fulfilling a non-technical business objective of providing the same look and feel across multiple different web sites, is not an abstract “business idea” like an advertising or accounting scheme.
2. The invention recites a fairly complex (and novel) technical arrangement, in which:
   1. A “data store” contains “look and feel” information;
   2. A “processor” is “programmed” and interacts with the data store to serve a composite web page through the Internet to a “visitor computer” using the look and feel information and “content” based on a “commerce object.”

As I have alluded to in earlier posts, after all is said and done, we now have a “technical” test for software inventions – if the advance over the art is technical in nature, it is likely inside Section 101.  If the advance over the art is non-technical it will not be statutory even if it is wrapped inside a technical shell.  Instead of using the word “abstract idea” in the Alice test, at least as far as software is concerned, just substitute “non-technical idea”, and you will get the same result.  The trick is, however, that the vessel implementing the idea doesn’t count in making this determination.  Here is an example of what I mean.  Let’s say the claimed “invention” is a computer programmed to play a novel musical score, or a robot programmed to dance a novel dance move.

In either example, let’s assume for the sake of argument the music and score are novel and non-obvious.  Would we expect these “inventions” to be patentable?  I would say history tells us no, as I am not aware of any patents issued on inventions where the point of novelty is a musical idea.  So, in this case, even though the computer “vessel” is most definitely a machine, what is new is actually a work of authorship that we would all agree is not patentable.  In this way we can see that merely reciting a computer in a claim does not mean that “machine” should, as a matter of policy, be automatically statutory.  Accordingly, if we accept that not all computers programmed to behave in a novel manner are 101 statutory, and that not all novel ideas are patentable just because they are machine-implemented (for example neither music nor choreography), we can open ourselves to the possibility that certain other types of innovation, like non-technical ideas, even though computer implemented, are not necessarily patent eligible.  For example, the Federal Circuit appears to have viewed the invention as a whole in Ultramercial v. Hulu (November 2014), as a non-technical, content monetization concept as opposed to a technical innovation inside the perimeter of the useful arts.  Of course, it is possible for innovation to encompass both non-technical and technical ideas simultaneously, some would argue that Ultramercial was such a case, tipping it inside 101.

Another point of confusion in Alice and its progeny is the mixing of obviousness requirements into Section 101.  I would submit that the Court did not really conflate these two requirements.  What the Court was really doing can be understood with reference to my example given above.  Let’s assume again that the the “invention as a whole” is a musical score, and that this score is claimed as a computer programmed to “play” the score using a straight forward technical approach with nothing new about it.  Here, the hypothetical tells us that the way the computer is programmed is not novel in and of itself, only the music is novel.  But normally this is not a given, requiring an inquiry into whether there is a technical contribution of some kind.  It is not so much an inquiry as to the obviousness of the technical contribution as it is whether or not the asserted innovation lies in the technical domain as opposed to a non-technical domain.  If the technical component appears to be a routine implementation of the non-technical component of the innovation, then the conclusion is that the invention as a whole contains no patent eligible subject matter.  Clearly this can get confusing to sort out, and particularly where the applicant or patentee would prefer to conflate any non-technical innovation with the technical implementation.

In essence, what the Court did in Alice was say that once the abstract idea was stripped out, the technical component remaining was routine engineering bereft of any inventive content.  Unfortunately, the patentee may beg to differ on that point in most cases.