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The Current State of § 101 Examination for Computer-Related Inventions

The Current State of § 101 Examination for Computer-Related Inventions published on 1 Comment on The Current State of § 101 Examination for Computer-Related Inventions

The impact of recent § 101 changes on the patent community, particularly for computing technologies, is difficult to overstate. As the various administrative bodies seek (and fail to find) a coherent and consistent statement of the law, a distinct reality is manifesting at the point where the rubber meets the road – in day-to-day patent examination. This first post of the reconstituted USPTO Talk presents observations about the state of play in § 101 examination practice for computer-related inventions.


The Alice decision just had its three-and-half-year birthday, and the patent community is in no mood to celebrate.

The caretakers of patent law that help to define the law of § 101 include five distinct bodies – all of which declined to move the ball in any significant direction in 2017:

  • Congress, bearer of the ultimate power to rewrite § 101 as it sees fit, has been preoccupied with… other matters.
  • The Supreme Court declined certiorari on three § 101 cases (and accepted cert in Oil States Energy Services v. Green’s Energy Group, which nominally involves § 101 as the basis for “covered business method” review, but addressed it strictly as an Article I vs. Article III courts issue).
  • The Federal Circuit has issued only ten significant opinions for computer-related cases this year (of which nine cases are more or less redundant with past cases, and one case (Thales Visionix v. US) is bizarrely irreconcilable with the established case law). Of course, the Federal Circuit has resolved far more than ten such cases this year – but the overwhelming majority of them were decided with an opinion-less entry of judgment under FRAP Rule 36. The Federal Circuit appears to be, in a word, stuck. It is unable or unwilling to cover new ground, to issue any bold statements, or to make more than a passing effort to clarify the boundaries between apparently inconsistent cases. The 2017 Federal Circuit operated more as a star-chamber-like apparatus, content with issuing decisions based on a whim and no explanation due. 1
  • The PTAB is thrashing badly. As Bilski Blog has observed, cases with unresolvable disputes over § 101 are clogging up the PTAB docket. Cases that have reentered examination after a PTAB reversal are frequently receiving new § 101 rejections, and many will reappear on the PTAB’s docket during a second round of review. Meanwhile, the PTAB has issued only a total of three precedential decisions pertaining to § 101 since Alice – none of which is remotely interesting. 2
  • Throughout 2015 and 2016, USPTO administration was very active in defining § 101 policy – writing and supplementing the Interim Eligibility Guidance, authoring examiner training materials, and hosting roundtables with the public. In stark contrast, the USPTO fell completely silent on the issue this year: its sole actions in 2017 have been providing summaries of recent court cases and a summary of public comments – published without any opinions expressed by the USPTO.

It is difficult to make sense of this uneasy silence. The volume of § 101 rejections being appealed and litigated, and the continuing uncertainty of the entire patent system, demonstrate that the issue is far from settled – so why has a year passed with practically no development? The situation feels like a standoff: every adjudicative body is holding its power in check, waiting for someone else to make the first move. 3

Given this state of affairs, the examining corps should be operating according to the most relevant and up-to-date summary of the law: the current version of the Interim Eligibility Guidance, including the memoranda updates. While some parts of it are problematic – owing to unanswerable questions created by conflicting case law – the IEG lays out a definitive framework for reaching patent-eligibility decisions and formulating rejections under 35 U.S.C. § 101 for day-to-day patent examination practice.

There’s only one problem: Examiners are not following the Interim Eligibility Guidance.

Examiners are treating the IEG as a template to wrap around a bare statement of conclusion that the claims are abstract. Instead of providing detailed explanations of their reasoning as mandated by the IEG, examiners are copying-and-pasting generic boilerplate statements from unrelated cases. The following specific problems are abundant in current § 101 rejections:

  • The IEG states: “Examiners should consider the claim as a whole under Step 2A of the USPTO’s SME guidance, and should not overgeneralize the claim or simplify it into its ‘gist’ or core principles, when identifying a concept as a judicial exception.”

    The reality: Rejections under § 101 routinely characterize claims to a specific technique based on a cherry-picked handful of words. 4 Often, the claimed techniques are generalized to the point of unrecognizability. Specific, detailed claims that involve a technique that materially improve the operation of the device are routinely dismissed as: “collecting, processing, and presenting data.” These summaries do not even reflect the point of novelty that is recited at length in the specification, and that is the focus of the claims.

    The problem: To date, the Federal Circuit has issued seven precedential decisions in which computer-related technologies were found to be patent-eligible. 5 Every single one of those decisions involved, at some level, “collecting, processing, and presenting data.” In each case, the Federal Circuit went on to evaluate what that processing accomplished, and based its decision upon whether technical consequence and inventive merit were present (as in these seven instances) or lacking (Digitech Image, Electric Power Group). However, many rejections suggest that no such analysis is necessary – as if the patent-eligibility test is: do the claims involve data processing? If so, the claims are patent-ineligible… The End.

  • The IEG states: “A subject matter eligibility rejection under Step 2 should: identify the judicial exception by referring to what is recited (i.e., set forth or described) in the claim and explain why it is considered an exception; and explain the reason(s) that the additional elements taken individually, and also taken as a combination, do not result in the claim as a whole amounting to significantly more than the judicial exception.”

    The reality: Rejections under § 101 routinely present no explanation – but a conclusory statement that the identified words (such as “collecting, analyzing, and processing data”) are abstract. Some rejections paste in a few lines of the Alice opinion. Nothing in these rejections can be considered an “explanation” by any fair meaning of that term.

    The problem: The purpose of the “explain why” requirement is to permit the examiner’s rationale to be considered on its own merits. After all, the examiner bears the prima facie burden to provide an adequate basis of rejection under patent law. By the same token, examiners’ refusal of this requirement is a tactic to insulate the rejection from being contested – and a rejection of the principle of the examiner’s prima facie burden. 6

  • The IEG states: “Citing an appropriate court decision that supports the identification of the subject matter recited in the claim language as an abstract idea is a best practice that will advance prosecution. Examiners should ensure that the rejection is reasonably tied to the facts of the case and to avoid relying upon language taken out of context. Examiners should not go beyond those concepts that are similar to what the courts have identified as abstract ideas.”

    The reality: Examiners will haphazardly cite any case from which a statement from the opinion that appears to support their conclusion – irrespective of any substantive nexus (or vacuous absence thereof) between the invention ruled patent-ineligible and the currently presented techniques. For instance: database query processing techniques have been rejected based on Classen Immunotherapies v. Biogen Idec, which involves doctors establishing immunization schedules for patients. Many computer-related inventions have been rejected based on Electric Power Group v. Alstom, while simultaneously refusing to give any consideration to arguments of the technical effect of the invention – which was the very point upon which Electric Power Group turned. Many computer-related inventions have been rejected based on Digitech Image because the invention (as understood by the examiner) merely involves “applying rules to data,” despite the fact that Digitech Image only presented a static data structure (a color profile) with no description of utility. 7

    The problem: The courts seem to be resolving the turmoil over § 101 by amassing collections of exemplary cases for each of the identified zones of patent-eligibility and ineligibility. However, as long as the decisions of the USPTO follow no such pattern, the patents issuing from this system – or improperly rejected – will frustrate the development of this solution.

  • The IEG states: “After identifying [an abstract idea], identify any additional elements in the claim beyond the judicial exception and explain why they do not add significantly more to the exception. The explanation should address the additional elements both individually and as a combination when determining whether the claim as a whole recites eligible subject matter. It is particularly critical to address the combination of additional elements, because while individually-viewed elements may not appear to add significantly more, those additional elements when viewed in combination may amount to significantly more than the exception by meaningfully limiting the judicial exception.”

    The reality: After characterizing a small portion of the independent claims as an “abstract idea,” examiners summarily dismiss the remainder of the independent claim – and all dependent claims – as “failing to provide significantly more.” These blanket rejections do not identify or discuss the elements of the independent claims, nor the content of any dependent claims – often not even bothering to distinguish between them: dismissing “claims 2-19” collectively, or literally “all claims.” Any such “explanation” is a bland, generic assertion that any such elements are “conventional.”

    The problem: These dismissals often omit the point of novelty. Even if the specification spells it out in clear detail – describing the technical problem presented by a task, the limitations of existing solutions, and the advantages of the new technique. Even if the independent claims recite the improvement in the context of the overall process, as a solution for the task. Even if the dependent claims directed to the variations. All of that context is dismissed without consideration by the examiner, using the generic phrase: “fails to provide significantly more.”

In general, examiners regard the IEG as if its requirements could be satisfied by a checkbox-style form, such as:

Under 35 U.S.C. § 101, the claims are: [ ] Patent-Eligible [ ] Patent-Ineligible
(Optional) Ineligible because: [ ] Economic/Financial/Business [ ] Law of Nature [ ] Mental Steps [ ] Conventional
(Optional) Supporting case: [ ] Alice v. CLS Bank [ ] Electric Power Group [ ] CyberSource [ ] Other: __________

These patterns of behavior reflect a consistent theme: The examining corps does not use the IEG as an operating manual, but merely a source of supporting material that they may choose to cite when convenient. Its requirements and descriptions of best practices have been reduced to meaningless trivialities such as generic boilerplate; its prohibitions can be ignored en masse. Moreover, examiners face no consequences for being wrong. They receive the same number of production counts and bonuses whether their decisions are affirmed or reversed at any stage. Accordingly, they have no motivation for ensuring that their rejections are well-founded – leading to incidents such as art units exhibiting a 75% reversal rate at the PTAB, with at least one examiner exhibiting a 90% reversal rate.

Examiners also exhibit such unconstrained behavior in other areas of patent examination: combining references under KSR; restriction requirements based on made-up rules and principles; “broadest reasonable interpretations” of claim language that do not even resemble the specification. 8 Collectively, these deference-laden areas of examination practice are empowering examiners to reach a personal decision to reject the application, and then fabricate obstacles that are comparatively easy to toss out – often just collections of boilerplate – and that are costly for applicants to overcome. This is not patent examination, in accordance with legal principles; this is low-effort gamesmanship, thrown up around examiners’ subjective preferences over issuing patents. It is a reversal of the prima facie burden, in which a few casual words by the examiner impose a major burden on the applicant to explain the deficiencies.

In summary, the ground-truth reality of § 101 patent examination practice is breathtakingly different than the courts’ intent. The Alice decision includes a full eight pages of detailed analysis – reviewing the substance of the invention, and a lengthy comparison with other notable § 101 cases (Bilski, Diehr, and Gottschalk). Precedential Federal Circuit decisions also focus closely on the details of the invention and provide a detailed explanation of the rationale of the rejection. The examining corps refuses to abide by these examples – as summarized by the IEG – and instead relies on boilerplate and conclusory statements. The grave inefficiency and inequity caused by these behaviors are causing inflated appeal volume, as well as growing public discontent with the intractable state of the law. The USPTO shares the blame for letting examiners run wild with § 101 rejections – and for failing to enforce, in any meaningful way, its own best-practices examination guide. 9


Notes:

  1. Incidentally, how frustrating must it be for a litigant – either patentee or accused infringer – to put in all the hard work of appealing a case to the Federal Circuit, assembling a brief and enduring oral arguments, only to get a decision reading: “Affirmed?” Especially if the PTAB decision raised new and significant questions of law that, apparently, remain unaddressed? Especially if the case at issue is extremely similar to a previous case in which the Federal Circuit ruled in your favor, and the PTAB decision just dismisses that precedent? The Federal Circuit’s refusal to provide satisfying answers that strengthen the state of law is a serious and growing problem.
  2. The PTAB’s refusal to designate opinions as precedential may be a relief, since many of its decisions cannot be reconciled into a coherent body of law. Compare U.S. Bancorp v. Solutran and Fidelity National Information v. DataTreasury Corp. – in which two PTAB courts reviewed startlingly similar claims, and reached diametrically opposed verdicts.
  3. Federal Circuit Chief Judge Michel even expressed an interest in more active leadership from the USPTO – which has apparently gone unmet.
  4. In one case, a 240-word claim was rejected as providing an “abstract idea” represented by five words of the claim: “measuring, comparing, and evaluating metrics.”
  5. Patent-eligible computer-related technology cases under the Federal Circuit: DDR Holdings v. Hotels.com; BASCOM v. AT&T; McRO v. Bandai America; Amdocs v. Openet; Thales Visionix v. Elbit Systes; Enfish v. Microsoft; Visual Memory v. Nvidia.
  6. Some examiners, when presented with arguments as to why the rejection is deficient, have argued that the applicant has failed to show why the claims are patent-eligible. The USPTO should focus on such statements as a clear indication that such examiners either do not understand, or just refuse to honor, the purpose of the prima facie burden.
  7. The IEG explicitly prohibits this kind of rejection by stating: “An ‘improvement in computer-related technology’ [sufficient to confer patent-eligibility] is not limited to improvements in the operation of a computer or a computer network per se, but may also be claimed as a set of ‘rules’ (basically mathematical relationships) that improve computer-related technology by allowing computer performance of a function not previously performable by a computer.” Nevertheless, examiners continue to disregard this explicit prohibition – issuing § 101 rejections suggesting that claims become patent-ineligible because they recite something the examiner construes as “rules.”
  8. In one instance, an examiner rejected some claims that involved variable polling of a server for new data “at a particular frequency” (such as once per hour, once per day, etc.) based on a reference involving satellite communication in a completely different technical field – not even the slightest resemblance to the claimed invention. The examiner explained this rejection by assering a “broadest reasonable interpretation” of the term “frequency” as including radiofrequency, and the satellite reference certainly used adaptive radiofrequencies.
  9. The stark reality of patent examination is not perceived at the Federal Circuit level – noting this excerpt from IP Watchdog:

    “In the Spring of 2016, Federal Circuit Judge Jimmie Reyna told an audience of American University Law School students in a speech delivered in a courtroom at the Federal Circuit that he is not worried about the surge in appeals from the PTAB. He said that the water is at his ankles and that the court can handle it even if it rises to his throat. Reyna went on to tell the students that when a Rule 36 affirmance is delivered the court has done 90% of the work to get to a decision.”

    The obliviousness of the damage wrought by its actions is further evidence that legislative solutions are desperately needed. The courts have sought to bring stability to § 101, unsuccessfully, for over 40 years. Simply put, their time is up.

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