35 USC 101

USPTO office actions

USPTO office actions
USPTO office actions

USPTO office actions are used to reject most patent applications by using “done before”, “obvious”, “vague”, or “not patent-eligible” type arguments.

Although we all hope that a patent application will sail through the USPTO patent examination process and be allowed “as is”, this usually doesn’t occur.  As a practical matter, examiners work on a quota system. The net effect of this quota or “count” system is that the average successful patent is usually rejected several times before it is allowed.

Typically an examiner will first read the patent claims and search for various citations (often earlier-filed patent applications) that match certain claim key-words.  The examiner will then write a 20-40+ page “office action” document that rejects your various claims for various reasons, and send it to the correspondence contact of record.  The examiner expects you to respond within three months by submitting a written “office action response” that rebuts these various rejections.

The most “popular” USPTO rejections are:

Done before – 35 USC 102: The examiner thinks he has found another single citation that teaches everything in your particular claim. However absent actual copying, no two patents are usually totally alike. This type of rejection can often be rebutted by explaining where the citation is different or amending the claims to add additional detail that differs from the citation.

Note that filing a patent application more than one year after the invention was first published or sold also results in 35 USC 102 rejections. Under the law, the invention is instead considered to be public domain.

Obvious – 35 USC 103:  The examiner (sometimes impermissibly guided by your disclosure) is attempting to reject your claim by combining features from multiple citations. The examiner may often create a Frankenstein concept that may or may not be plausible. Fortunately, there are examination rules here. Often this type of rejection can be rebutted by any of 1) showing that the examiner is misquoting the citations, 2) amending your claims, 3) showing which “103” examination rules were broken.

Vague – 35 USC 112:  This “vagueness” or “indefinite” type rejection is used for different things. Sometimes it is harmless and easily corrected, such as when the claim’s grammar is off. Sometimes it is deadly, such as when your underlying patent application doesn’t teach how your invention works in adequate detail.  This is more likely to happen if the original application lacks specific examples.  Although this can often be rebutted or fixed by changing the claims, sometimes the only way to attempt to fix this is to file a “continuation in part” application that adds the missing detail.

Not eligible – 35 USC 101:  In the old days (i.e. before 2015), this was a rarely used rejection because the 35 USC 101 law was written to be very expansive. However, recent court decisions have made this area quite a swamp, and this is still being sorted out. In the meantime, realize that business methods and financial methods have a higher than average rejection risk.

Thales patent eligibility ruling

Thales Visionix head mounted display
Not the Thales Head Mounted Display!

A recent Federal Circuit case, Thales Visionix Inc. v United States, continues the process of restoring sanity to the ongoing “Alice” patent eligibility mess.

As previously discussed, since the Supreme Court’s 2014 “Alice” decision, patent law has been burdened with an unworkable “is it abstract?” test for patent eligibility. This test is similar to a medieval test to determine witches:  Step 1: “determine if the test subject is a witch abstract”;  Step 2: “if so, does the witch float? is there something more?”

The Federal Circuit, charged with cleaning up patent law, sometimes chips away at this nonsense, and sometimes adds to the nonsense. In two earlier cases (Enfish and Rapid Litigation), the Federal Circuit established at least a few reasonable step 1 rules (such as read the entire claim), and now we have another.

Thales Visionix had a patent on a motion-tracking Head Mounted Display (HMD).  This patent claimed a HMD arrangement of inertial sensors and signal processing elements, used in the F-35 fighter jet. Any enemy pilot blown up by this HMD system might not consider this to be “abstract”, but a lower US court was not so easily impressed. They used their own “Alice: it’s abstract” weapon to shot down the HMD patent.

In the absence of rules (the Supreme Court thoughtfully declined to provide any), lower courts have often used a type of “guilt by association” logic, where if a given patent claim has some elements in common with another claim previously ruled to be abstract, then that claim is also abstract. The lower court argued that the Thales patent claims were abstract because the claims allegedly “used mathematical equations (previously determined to be abstract) for determining the relative position of a moving object to a moving reference frame”.

However. the Federal Circuit disagreed.  They determined that just because a claim contains a patent-ineligible (abstract) concept (e.g. mathematical equations) does not mean that the entire claim is (step 1) “abstract.” Rather, the question is if the patent-ineligible concept (math, natural law) is being used to improve some other technique. If so, then the claim as a whole is not abstract. This is similar to their earlier, more biotech-focused, ruling in the Rapid Litigation case.

So as a medieval logic analogy, just because a woman has a cat does not automatically mean that the woman is a witch, if the cat is unusually good at catching mice. If improved mouse catching can be shown, the step 1 conclusion is that the woman is not a witch. There is no need to go on and subject the poor woman to a step 2 “witch float” test.  This is good because there is a high casualty rate at step 2.

Rapid Litigation: Biotech patent win

Rapid litigation and biotech patents
Rapid Litigation v Cellzdirect: Federal Circuit cleaning up a patent mess

In Rapid Litigation v Cellzdirect, the Federal Circuit further clarified a biotech patent eligibility mess caused by SCOTUS’s Alice and Mayo decisions.

In 2012 and 2014, the Supreme Court (SCOTUS), which wanted to invalidate a few pesky financial and medical diagnostics patents, decided to use legal “nuclear weapons” rather than legal “fly swatters“.  The SCOTUS legal nuclear weapons were the now-infamous two-step “abstract material” patent eligibility test.  Step 1 of this test is summarized below:

Step 1) Determine if the patent is directed to “abstract” subject material.  If not then congratulations, the patent passes this test and is patent-eligible.  

SCOTUS refused to define “abstract material”. This allowed the USPTO and the lower courts to run amok and start randomly invalidating patents, including biotech patents. This, in turn, started to damage US biotech and software startups, which need patents to get funding, as well as for protection from larger competitors.

The Federal Circuit, one step below SCOTUS, and charged with cleaning-up patent law, waited several years for SCOTUS to correct itself, to no avail.  The Federal Circuit is itself confused about these issues, and their rulings largely depend on which judges hear a particular case. However, in mid-2016, they issued a series of patent eligibility decisions, first Enfish, then Bascom, now Rapid Litigation (Celsis) v Cellzdirect that suggest that at least some of the judges want to do some damage control.

“Abstract” is just as undefined for biotech as it is for software, but for biotech, it seems have more of a “natural law-ish” flavor.  Arguably a technologically illiterate approach since everything involves natural laws, but alas SCOTUS has no STEM majors.

Fortunately, a few Federal Circuit judges are STEM majors, and they have the power to do at least some damage control by providing official interpretations/clarifications of SCOTUS decisions. Here they clarified that in step 1, “directed to” is not the same thing as “involving”.

The patent in this case, 7,604,929, was about an improved method of freeze storing liver cells (cryopreservation of hepatocytes).  Before the patent, everyone in the field believed that freezing damages living cells, and that multiple freeze-thaw cycles should be avoided.  The inventors discovered that some hepatocytes were resistant to this problem, and used this discovery to invent an improved hepatocyte cryopreservation method.  This method first freeze-thawed the cells, then used a density gradient to select for the freezing resistant cells, and then refroze these resistant cells again, producing very freeze resistant hepatocytes.

An earlier court had ruled this patent invalid by arguing that discovering that some hepatocytes could survive multiple freeze-thaw cycles involved a “law of nature”. However, the Federal Circuit pointed out that “involved” isn’t enough grounds to invalidate a patent, because the ‘929 methods also claimed other steps, such as using density gradients.  So “directed to” is more than just “involves“.

This Federal Circuit decision makes it harder to invalidate a biotech patent, at least in the most common cases where the claims also have other steps in addition to the “natural law” steps.  The fact that the ‘929 claims were relatively simple helps to further clarify the legal issues.

Bascom: another Alice software win

Bascom - 35 USC 101 Alice abstract test step 2 is like a 35 USC 103 obviousness test
Bascom – fish delivering mail

The Bascom court decision helps software patents by suggesting that step 2 of the Alice test should follow established obviousness rules.

US software patents got another win from the Federal Circuit Court this week.  This court, which has a Congressional mandate to clarify patent law (actual results may vary), made an important clarification to the Alice (software patent killer) “abstract subject matter” test in the Bascom v AT&T case (Bascom).

As you may recall from our last “Enfish” episode, the Supreme Court (SCOTUS) “Alice” decision created a judge-ordered incoherent two-step test that any given patent must pass in order to be patent-eligible under 35 USC 101 rules.  To simplify:

Step 1) Determine if the patent is directed to “abstract” subject material.  If not then congratulations, the patent passes this test.  

Step 2) But if the patent is found to be “abstract” in step 1, then determine if the patent contains “something extra” beyond just “abstract” subject material.  If there is nothing extra, then reject the patent as being “abstract”.   

The Federal Circuit is one step down from SCOTUS.  The Federal Circuit doesn’t have enough clout to overrule SCOTUS, but does have enough clout to overrule the USPTO and the lower courts.  More importantly, the Federal Circuit has both the clout and mandate to “clarify” SCOTUS decisions. Sometimes they do so, sometimes they make it worse. But I think they got it right in this case.

The USPTO and the lower courts were often ignoring Alice step 1 and just assuming that a patent had “abstract” subject matter. The previous Federal Circuit “Enfish” decision pointed out that this was improper.  By contrast, the newer Federal Circut “Bascom” case is now clarifying that another common practice, just asserting that the patent fails Alice step 2 because it lacks an undefined “something extra”, isn’t right either.

More specifically, in Bascom, the Federal Circuit pointed out that based on earlier SCOTUS decisions (e.g. Mayo v. Prometheus, which SCOTUS used for “Alice”), Alice step 2 tests if the claim is “well-understood, routine or conventional”.  According to the Federal Circuit’s interpretation, SCOTUS was probably thinking about something similar to an obviousness test.   The Federal Circuit also pointed out that there are well-established rules for establishing obviousness, which the USPTO and the lower courts were (also) ignoring.

Specifically, the Bascom case was an appeal of a lower court decision that had earlier found the Bascom patent claims to be “abstract” and therefore invalid.  The lower court’s arguments (in simplified form) were that the Bascom patent claim language words described conventional computer pieces, and therefore the Bascom claims failed Alice step 2 due to lack of “something more”.  

In Bascom, the Federal Circuit Court, after “clarifying” Alice by pointing out that SCOTUS’s Alice step 2 resembled an obviousness test, then pointed out that the lower court had failed to follow established rules to determine obviousness (35 USC 103 rules).  These 35 USC 103 rules require that the combination of the pieces and the motive for combining the pieces also be considered.  Here conventional pieces, arranged in a non-conventional way, are often not obvious.

The Federal Circuit then looked at the Bascom claims, determined that they were not obvious, and (again somewhat simplifying) therefore had “something more” that satisfied step 2 of the Alice test.  They then overruled the lower court and found the Bascom patent to be “not abstract” and therefore valid under 35 USC 101.

If there were more cases like the Bascom decision, it might almost introduce some sanity to the Alice test. Sadly, for every coherent Federal Circuit ruling, there is another incoherent ruling.  Stay tuned…

Software patents in China, Europe, and the US

Software patents in China, Europe, and the US
Software patents in China, Europe, and the US

Summary: In general, software patents that deal with technical effects, physical parameters, and improving computer function tend to be favored. By contrast, international software patents focused on business methods tend to be disfavored.

China: Before April 2017, China restricted software patents to methods that solve technical problems, control internal or external processes according to the laws of nature, and produce technical effects in accordance with the laws of nature.  Machine-readable medium type claims, and game patents, were not allowed. However, these guidelines are now somewhat more expansive. For example, business methods that also have a technical aspect may now also be eligible for patent protection.

Europe: Software patents should have a “technical effect” (e.g. controlling industrial aspects, improvements in computer technology, data pertains to physical properties,). Pure methods directed “only” to doing business and computer programs without “technical effect” are not allowed.

United States: The rules are presently somewhat incoherent. Traditionally (before 2014-2015) US policy was permissive. Indeed the present written (i.e. statutory) US legal standard is that all types of software patents are permitted. However, the latest judicial rulings and USPTO policies are that at least some software patents may represent “abstract ideas” run on “generic computers” that are not patentable unless there is “something more”. Unfortunately the terms “abstract”, “generic computer” and “something more” are effectively undefined (and thus can vary according to the whims of the judge or patent examiner at hand).

How will US software patent rules evolve in the future? This is a bit like reading tea leaves, but the latest US software patent decisions appear to be trending more towards a Chinese or European-like approach. On average, “business method” software has a higher risk of being rejected as being “abstract”. However, software that exhibits technical effects, operates on data pertaining to physical properties, or improves computer function is often accepted on the basis that it is not “abstract”, not run on “generic computers” or contains “something more”.  Arguably the US, presently lacking coherent rules, may be at least temporarily filling the void by borrowing rules from other countries.  The constitutionality of this approach remains to be determined.

Harming the economy with over-aggressive, haphazard Alice-based 101 rejections

Alice problem, what is abstract under 35 USC 101, and what is not?
Alice in Wonderland – Mad Tea Party

What to do about “Alice”? The US Supreme Court’s “Alice” decision has invited us all to a Mad Tea Party.  What fun! But, as previously discussed, if you like logical coherency, or even just want to keep from crashing the economy, there are a few problems with this decision.

Attorney Louis Hoffman, writing in ipwatchdog.com, sums up some of these recent”Alice” problems nicely.

Damaging the economy: As Louis points out, some of the most important areas of US technology are based on software, business methods, and biotechnology.  The USPTO has recently taken upon itself to reject many patents in this area.  However, this loss of patent coverage can impede the economy by making investments difficult, and/or by driving inventions underground in the form of trade secrets.

https://www.ipwatchdog.com/2016/02/07/uspto-harms-over-aggressive-and-haphazard-application-of-alice/id=65810/

What about actual (written) patent law? Article I, Section 8, Clause 8 of the US Constitution has empowered Congress to:  “promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

Congress has done so, and has determined under 35 USC 101 that:  “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, subject to the conditions and requirements of this title.”

The US Supreme Court has given itself the power to override Congress, however.  In Alice, they chose to exercise this power.  In this regard, Attorney John Duffy writes in Scotusblog:  “The uncertain expansion of judge-made exceptions to patentability” points out some interesting implications of this decision.

If you want to know what’s important about this case, it’s right there: the Court’s acknowledgement that the judge-made “exclusionary principle” has the potential to “swallow all of patent law” because “all patents” are at some level based on the very things that can’t be patented under the judge-made doctrine.

Decisions, decisions: So the Alice decision, read too broadly, produces an unconstitutional result.  At some point, there will be likely corrective action.  However, the practical question that some inventors, particularly business method inventors, have to address today is: file a patent and risk an “‘Alice” rejection, or don’t file a patent and be certain that the invention will become public domain?