New USPTO Appeals-Board Decision and
Interim Examination Guidelines on Patentable Subject Matter and "Business
Method" Patents
Two recent developments in the USPTO could mean that the range and
quantity of “business method” patents being issued will
increase, or at least remain the same, to the chagrin of some and
the delight of others. The first is a decision of the Board of Patent
Appeals and Interferences entitled Ex parte Lundgren; the second is
a set of guidelines for examiners on determining whether applications
contain subject matter eligible for patent protection.
Ex parte Lundgren
A panel of administrative patent judges, in a 3-2 decision, has ruled
that it is improper to reject as nonpatentable subject matter claims
to a business method — on the ground that the claimed invention
is outside the “technological arts” —; even when
nothing in the application describes implementing the method in a
computer or other machine. Ex
parte Lundgren, Appeal No. 2003-2088 (Bd. Pat. App. & Int.
Sept. 28, 2005).
Carl Lundgren’s patent application claims a particular executive
compensation scheme that addresses some of the anticompetitive aspects
of an oligopoly. Because an oligopoly provides incentives for companies
to collude to limit output, thus artificially raising prices above
pure-competition levels, Lundgren proposes a method that purportedly
reduces the likelihood of collusion by pegging a manager’s compensation
to the company's relative, rather than absolute, profitability.
Typically, if one company’s manager tries increasing his compensation
by increasing profits relative to competitors, the relative profits
of one or more other companies in the oligopoly will fall. In Lundgren’s
scheme, if all company managers in the oligopoly are compensated based
on the relative profitability of their respective firms, there will
be no incentive to collude. At least that seems to be his theory.
Lundgren’s application recites the following in claim 1:
- A method of compensating a manager who exercises administrative
control over operations of a privately owned primary firm for the
purpose of reducing the degree to which prices exceed marginal costs
in an industry, reducing incentives for industry collusion between
the primary firm and a set of comparison firms in said industry,
or reducing incentives for coordinated special interest industry
lobbying, said set of comparison firms including at least one firm,
said primary firm having the manager who exercises administrative
control over said primary firm's operations during a sampling period,
wherein privately owned means not wholly government owned, the method
comprising the steps of:
- choosing an absolute performance standard from a set of absolute
performance standards;
- measuring an absolute performance of said primary firm with
respect to said chosen absolute performance standard for said
sampling period;
- measuring an absolute performance of each firm of said set
of comparison firms with respect to said chosen absolute performance
standard for said sampling period, said measurement of performance
for each firm of said set of comparison firms forming a set
of comparison firm absolute performance measures;
- determining a performance comparison base based on said set
of comparison firm absolute performance measures by calculating
a weighted average of said set of comparison firm absolute performance
measures;
- comparing said measurement of absolute performance of said
primary firm with said performance comparison base;
- determining a relative performance measure for said primary
firm based on said comparison of said primary firm measurement
of absolute performance and said performance comparison base;
- determining the managerial compensation amount derived from
said relative performance measure according to a monotonic managerial
compensation amount transformation; and
- transferring compensation to said manager, said transferred
compensation having a value related to said managerial compensation
amount.
Following lengthy proceedings in the Patent Office,[1]the
USPTO Examiner rejected Lundgren’s application as ineligible
for patent proctection — nonstatutory subject matter under 35
U.S.C. § 101 — on the ground that the claimed invention
was outside the ’technological arts.’ Because the Board’s
majority found that U.S. law specifies no separate ’technological
arts test,’ the Examiner’s decision was reversed.
As an initial matter, two prominent Federal Circuit appeals-court
decisions — AT&T
v. Excel and State
Street Bank v. Signature Financial — were not dispositive
in the Board’s decision. In AT&T v. Excel,[2]
the Federal Circuit extended to method claims that court’s decision
on machine claims in State Street,[3]
which held that an application presents patentable subject matter
when claims recite a “practical application, i.e., ‘a
useful, concrete and tangible result,’ ”[4]
For the Lundgren application, the Examiner refrained from arguing
that the claims failed to produce a useful, concrete, and tangible
result, thus acknowledging that these cases did not preclude patentability.
Instead, the Examiner’s rejection was based on the language
in the U.S. Constitution that authorizes Congress to enact laws regarding
patents:
The Congress shall have power . . . To promote the Progress of
. . . useful Arts, by securing for limited Times
to . . . Inventors the exclusive Right to their . . . Discoveries.
[U.S. Const. art. I 8, cl. 8 (emphasis added).]
The Examiner reasoned that, because the laws that Congress enacts
cannot exceed the Constitutional authorization, patentable subject
matter must be within the “useful arts” — or, to
use the modern phrase, the “technological arts.”
The Board’s majority — in an unsigned “per curiam”
decision — rejected that reasoning, finding that U.S. courts
have never articulated a “technological arts test” separate
from other doctrines used in determining whether an application claims
patentable subject matter.
Considering the Supreme Court’s 1981 decision in Diamond
v. Diehr,[5]
the Board’s majority opined that the Court recognized only three
categories of inventions excluded from patent protection: laws of
nature, physical phenomena, and abstract ideas. The Board’s
majority also maintained that the Supreme Court was aware of a technological
arts test and refused to adopt it in a 1972 decision, Gottschalk
v. Benson.[6]
The majority then rejected the Examiner’s contentions that
two decisions by the Court of Customs and Patent Appeals (CCPA) —
the Federal Circuit’s predecessor — and a prior Board
decision set forth a separate technological arts test. There is language
in the 1970 and 1978 CCPA decisions — In re Musgrave[7]
and In re Toma[8]
— that addresses the “technological arts,” and the
2001 Board decision in Ex parte Bowman[9]
— which was designated as “non-precedential” —
explicitly rejected an application because “the invention .
. . does not promote the progress of . . . the useful arts, and does
not fall within the definition of technological arts.”[10]
The Board’s majority concluded that none of the cases supported
a separate technological arts test. Although the majority provided
some analysis to discount Musgrave and Toma,
the majority simply dismissed Bowman as nonprecedential
and thus nonbinding. Nevertheless, this should end the practice of
rejecting claims as nonstatutory under Bowman, which
Examiners had been doing since about May 2003, when the practice was
announced at a USPTO Business Methods Partnership meeting.
As a result of the majority’s decision, Lundgren’s application
returns to the Examiner for further proceedings, and no further 35
U.S.C. §101 rejections are likely.
The two dissenting administrative patent judges provided spirited
and — in one case — extensive arguments urging that Lundgren’s
application should have been rejected.
One dissenting Board member argued that a separate technological
arts test is appropriate. He first asserted that no court has expressly
decided the question:
[O]ne can scrutinize as many court decisions as one may like,
but there is no decision out there which unequivocally holds that
the claimed invention on appeal before us must be granted a patent.
Likewise, there is no decision out there that unequivocally holds
that the claimed invention on appeal must be denied a patent.
Thus, in my view, the issue before us raised by the examiner is
one of first impression.
[Slip op. at 10.]
This dissenter then addressed the majority’s discussion of
the three categories of nonstatuory subject matter listed by the Supreme
Court in Diamond v. Diehr and by other courts, asserting that the
list was not exhaustive:
The majority is of the view that every invention is patentable
unless it is nothing more than an abstract idea, a law of nature
or a natural phenomenon, each of which has been held to be unpatentable
by court decisions. These categories of nonstatutory subject matter
did not come to us by Scripture, however, but instead, resulted
from some enlightened individual raising the question of whether
such subject matter should be patented. Inventions within these
categories certainly can be claimed in a manner which technically
comply with 35 U.S.C. § 101. The point is that there is no
absolute law that says that every category of nonstatutory subject
matter has been decided for all time.
[Slip op. at 11-12.]
This dissenting administrative patent judge concludes that the Examiner’s
technological arts test should have been affirmed “because the
process as claimed is not tied to any known science or technology.”
(Slip op. at 12.) He then offers an interesting speculation about
what America’s Founders would have concluded:
It is interesting to note that the claimed invention could have
been performed by the writers of the Constitution using only the
knowledge available at that time. I find it ludicrous, however,
to think that the writers of the Constitution would have found
the idea of providing compensation to an executive, as claimed,
to be something that would qualify for a patent.
[Id.]
The second dissenting Board member in Lundgren agrees
with the majority that there is no separate technological arts test,
but urges another ground for rejecting Lundgren’s application
for nonstatutory subject matter. His decision examines the definitions
of such terms as “technology,” “science,”
and “engineering”; reviews the case law extensively;[1]
and identifies three possible tests for determining whether process
claims recite patentable material:
- a transformation test;
- an exceptions-to-patentability test; and
- a useful-concrete-and-tangible result test.
The transformation test derives from Cochrane v. Deener,[12]
a 19th-century Supreme Court case, which held that “[a] process
is . . . an act, or series of acts, performed upon the subject matter
to be transformed and reduced to a different state or thing.”
[13] This dissenting
Board member finds Cochrine still applicable today:
The 1877 Cochrane v. Deener definition of a
statutory “process” requires a transformation of physical
subject matter to a different state or thing . . . . [T]he subject
matter transformed can be tangible or intangible, which I interpret
to be matter or some form of energy to be consistent with the
definition of “technology.” This Supreme Court test
has a good pedigree and I think defines the essential nature of
a statutory “process” and “technology.”
I believe that all cases where statutory subject matter was found
can be explained with this test.
[Slip op. at 87.]
Applying this test, this dissenting Board member opines that “[t]he
claimed steps do not require transformation of any physical subject
matter, such as an electrical signal, into a different state or thing,”
thus rendering the invention unpatentable. (Slip op. at 89.)
The exceptions test refers to the categories of nonpatentable subject
matter that the Supreme Court identified in Diamond v. Diehr:
The exceptions for “laws of nature, physical phenomena
and abstract ideas,” are, logically, a second test, i.e.,
“but for” the exceptional condition, the claimed process
would be patentable subject matter . . . .It is difficult to determine
whether a process is merely a “law of nature,” “physical
phenomena,” or “abstract idea,” because the
claims are usually drafted to recite minor physical limitations
such as data-gathering steps, field of use limitations, and post-solution
activity. The question is whether the claim “as a whole”
is directed to the kind of subject matter that was intended to
be protected.
[Slip op. at 87.]
Applying this test, the dissenter states that “[t]he subject
matter of claim 1 is also directed to an ‘abstract idea’
or, at least, it is nonstatutory because it broadly covers both the
nonstatutory ‘abstract idea’ and any physical implementation
of it that might possibly be statutory.” (Slip op. at 90.)
Testing whether the claimed invention produced a useful, concrete,
and tangible result was prescribed in the Federal Circuit’s
1998 decision in State Street. The dissenting member
believes that the claimed invention fails this test:
“I concluded in [applying the transformation test] that
the claimed subject matter on appeal does not fall within the
definition of a ‘process’ under § 101 because
it does not transform physical subject matter into a different
state or thing, and concluded in [the exceptions test] that it
is an ‘abstract idea.’ Thus, because a ‘concrete
and tangible result’ is the opposite of an ‘abstract
idea’ and requires some sort of physical instantiation,
I conclude that claim 1 does not recite a ‘concrete and
tangible result’ or a ‘practical application’
of the plan for reducing incentives for industry collusion under
the State Street test . . . .”
[Slip op. at 91.]
The Board majority in Lundgren notes the rationale
in the second dissenting opinion, but declines “at this stage
of the proceedings to enter a new ground for rejection.” It
is therefore conceivable that Lundgren’s application —
now remanded to the Examiner for further proceedings — will
later be rejected under one or more of the transformation, exceptions,
and State Street tests.
Interim Examination Guidelines
On October 26, 2005, the Commissioner for Patents signed the Interim
Guidelines for Examination of Patent Applications for Patent Subject
Matter Eligibility. These are apparently intended to substitute
for a current section of the Manual for Patent Examining Procedure,
“Examination Guidelines for Computer-Related Inventions”
(M.P.E.P. § 2106). That the Guidelines’ title omits the
reference to computer-related inventions is perhaps a signal that
business-method applications that contain no disclosure of computer
or other machine implementations will no longer be rejected as unpatentable
subject matter for that reason alone.
Much can be gleaned from considering the annexes to Interim Guidelines
before considering the Guidelines themselves. Annex I — a flowchart
of the process Examiners should follow — is discussed below.
Annex II summarizes the USPTO’s view of the case law that separates
eligible and ineligible subject matter. (10/26/05 Interim Guidelines
at 32-41.)
Annex III lists improper tests — which Examiners are prohibited
from using — for determining subject matter eligibility:
(A) ’not in the technological arts’ test [which was
rejected in Ex parte Lundgren, discussed above]
(B) Freeman-Walter-Abele test
(C) mental step or human step tests
(D) the machine implemented test
(E) the per se data transformation test.
[10/26/05 Interim Guidelines at 42; tests discussed id. at 42-49.]
Annex IV discusses computer-related nonstatutory subject matter,
such as data structures representing descriptive material, computer
listings, and electromagnetic signals. (10/26/05 Interim Guidelines
at 50-57.) In this section, for example, is the USPTO’s position,
based on case law, that ’[m]erely claiming nonfunctional descriptive
material, i.e., abstract ideas, stored in a computer-readable medium,
in a computer, on an electromagnetic carrier signal does not make
it statutory.’ (Id. at 51.)
Annex V addresses mathematical algorithms. (10/26/05 Interim Guidelines
at 58-59.)
Annex I in the new Guidelines is a flowchart depicting the steps
that an Examiner should follow when determining whether an application
is directed to patentable subject matter. Comparing this flowchart
with the flowchart provided in the Appendix to the old Guidelines
provides some hints about how the USPTO’s examination of business-method
applications may change.
Turning finally to the text of the new Interim Guidelines, Examiners
are told in some detail what they should do when reviewing applications.
The new Guidelines thus suggest what applicants should do when preparing
applications. Some key excerpts follow.
I. Introduction
These Examination Guidelines (’Guidelines’) are based
on the USPTO’s current understanding of the law and are believed
to be fully consistent with binding precedent of the Supreme Court,
the Federal Circuit and the Federal Circuit’s predecessor courts.
These Guidelines do not constitute substantive rulemaking and hence
do not have the force and effect of law. These Guidelines have been
designed to assist USPTO personnel in analyzing claimed subject matter
for compliance with substantive law . . .
[10/26/05 Interim Guidelines at 2.]
II. Determine What Applicant Has Invented and Is Seeking
to Patent
. . . .
A. Identify and Understand Any Utility and/or Practical
Application Asserted for the Invention
The applicant is in the best position to explain why an invention
is believed useful. Accordingly, a complete disclosure should contain
some indication of the practical application for the claimed invention,
i.e., why the applicant believes the claimed invention is useful.
Such a statement will usually explain the purpose of the invention
or how the invention may be used (e.g., a compound is believed to
be useful in the treatment of a particular disorder) . . .
[10/26/05 Interim Guidelines at 3-5.]
B. Review the Detailed Disclosure and Specific Embodiments
to Understand What the Applicant Has Invented
The written description will provide the clearest explanation of
the applicant’s invention, by exemplifying the invention,
explaining how it relates to the prior art and explaining the relative
significance of various features of the invention. Accordingly,
USPTO personnel should continue their evaluation by:
(1) determining the function of the invention, that is what the
invention does when used as disclosed (e.g., the functionality
of the programmed computer); and
(2) determining the features necessary to accomplish at least
one asserted practical application.
Patent applicants can assist the USPTO by preparing applications
that clearly set forth these aspects of an invention.
[10/26/05 Interim Guidelines at 5 (citation omitted).]
C. Review the Claims
. . . .
The subject matter of a properly construed claim is defined by
the terms that limit its scope. It is this subject matter that must
be examined. As a general matter, the grammar and intended meaning
of terms used in a claim will dictate whether the language limits
the claim scope. Language that suggests or makes optional but not
require steps to be performed or does not limit a claim to a particular
structure does not limit the scope of a claim or claim limitation.
The following are examples of language that may raise a question
as to the limiting effect of the language in a claim:
(A) statements of intended use or field of use,
(B) ’adapted to’ or ’adapted for’ clauses,
(C) ’wherein’ clauses, or
(D) ’whereby’ clauses.
This list of examples is not intended to be exhaustive. See also
MPEP § 2111.04 . . .
[10/26/05 Interim Guidelines at 6-7.]
III. Conduct a Thorough Search of the Prior Art
Prior to evaluating the claimed invention under 35 U.S.C. §
101, USPTO personnel are expected to conduct a thorough search of
the prior art. Generally, a thorough search involves reviewing both
U.S. and foreign patents and nonpatent literature . . .
[10/26/05 Interim Guidelines at 10.]
IV. Determine Whether the Claimed Invention Complies with
the Subject Matter Eligibility Requirement of 35 U.S.C. § 101
A. Consider the Breadth of 35 U.S.C. § 101 Under Controlling
Law
. . . .
35 U.S.C. § 101 defines four categories of inventions that
Congress deemed to be the appropriate subject matter of a patent:
processes, machines, manufactures and compositions of matter. The
latter three categories define ’things’ or ’products’
while the first category defines ’actions’ (i.e., inventions
that consist of a series of steps or acts to be performed). See
35 U.S.C. § 100(b) (”The term ‘process’ means
process, art, or method, and includes a new use of a known process,
machine, manufacture, composition of matter, or material.”).
Federal courts have held that 35 U.S.C. § 101 does have certain
limits. First, the phrase ’anything under the sun that is
made by man’ is limited by the text of 35 U.S.C. § 101,
meaning that one may only patent something that is a machine, manufacture,
composition of matter or a process. See, e.g., Alappat,
33 F.3d at 1542, 31 USPQ2d at 1556; In re Warmerdam,
33 F.3d 1354, 1358, 31 USPQ2d 1754, 1757 (Fed. Cir. 1994). Second,
35 U.S.C. § 101 requires that the subject matter sought to
be patented be a ’useful’ invention. Accordingly, a
complete definition of the scope of 35 U.S.C. § 101, reflecting
Congressional intent, is that any new and useful process, machine,
manufacture or composition of matter under the sun that is made
by man is the proper subject matter of a patent.
The subject matter courts have found to be outside of, or exceptions
to, the four statutory categories of invention is limited to abstract
ideas, laws of nature and natural phenomena. While this is easily
stated, determining whether an applicant is seeking to patent an
abstract idea, a law of nature or a natural phenomenon has proven
to be challenging. These three exclusions recognize that subject
matter that is not a practical application or use of an idea,
a law of nature or a natural phenomenon is not patentable . . .
[10/26/05 Interim Guidelines at 12-13.]
B. Determine Whether the Claimed Invention Falls Within
An Enumerated Statutory Category
To properly determine whether a claimed invention complies with
the statutory invention requirements of 35 U.S.C. § 101, USPTO
personnel must first identify whether the claim falls within at
least one of the four enumerated categories of patentable subject
matter recited in section 101 (process, machine, manufacture or
composition of matter) . . .
The burden is on the USPTO to set forth a prima facie case of unpatentability.
Therefore if the examiner determines that it is more likely than
not that the claimed subject matter falls outside all of the statutory
categories, the examiner must provide an explanation. For example,
a claim reciting only a musical composition, literary work, compilation
of data, or legal document (e.g., an insurance policy) per se does
not appear to be a process, machine, manufacture, or composition
of matter. If the examiner can establish a prima facie case that
a claim does not fall into a statutory category, that does not preclude
complete examination of the application for satisfaction of all
other conditions of patentability. The examiner must further continue
with the statutory subject matter analysis as set forth below. Also,
the examiner must still examine the claims for compliance with 35
U.S.C. §§ 102, 103, and 112.
[10/26/05 Interim Guidelines at 14-16.]
C. Determine Whether the Claimed Invention Falls Within
§ 101 Judicial Exceptions — Laws of Nature, Natural Phenomena
and Abstract Ideas
Determining whether the claim falls within one of the four enumerated
categories of patentable subject matter recited in 35 U.S.C. §
101 (process, machine, manufacture or composition of matter) does
not end the analysis because claims directed to nothing more than
abstract ideas (such as mathematical algorithms), natural phenomena,
and laws of nature are not eligible and therefore are excluded from
patent protection . . .
While abstract ideas, natural phenomena, and laws of nature are
not eligible for patenting, methods and products employing abstract
ideas, natural phenomena, and laws of nature to perform a real-world
function may well be. In evaluating whether a claim meets the requirements
of section 101, the claim must be considered as a whole to determine
whether it is for a particular application of an abstract idea,
natural phenomenon, or law of nature, rather than for the abstract
idea, natural phenomenon, or law of nature itself.
[10/26/05 Interim Guidelines at 16-18.]
1. Determine Whether the Claimed Invention Covers Either
a § 101 Judicial Exception or a Practical Application of
a § 101 Judicial Exception
An examiner must ascertain the scope of the claim to determine
whether it covers either a § 101 judicial exception or a
practical application of a § 101 judicial exception. The
conclusion that a particular claim includes a § 101 judicial
exception does not end the inquiry because “[i]t is now
commonplace that an application of a law of nature or mathematical
formula to a known structure or process may well be deserving
of patent protection.” Diehr, 450 U.S.
at 187, 209 USPQ at 8 (emphasis in original).
[10/26/05 Interim Guidelines at 18.]
2. Determine Whether the Claimed Invention is a Practical
Application of an Abstract Idea, Law of Nature, or Natural Phenomenon
(§ 101 Judicial Exceptions)
For claims including such excluded subject matter to be eligible,
the claim must be for a practical application of the abstract
idea, law of nature, or natural phenomenon.
To satisfy section 101 requirements, the claim must be for a
practical application of the § 101 judicial exception, which
can be identified in various ways:
• The claimed invention “transforms” an
article or physical object to a different state or thing.
• The claimed invention otherwise produces a useful,
concrete and tangible result, based on the factors discussed
below.
a. Practical Application by Physical Transformation
The examiner first shall review the claim and determine if
it provides a transformation or reduction of an article to a
different state or thing. If the examiner finds such a transformation
or reduction, the examiner shall end the inquiry and find that
the claim meets the statutory requirement of 35 U.S.C. §
101. If the examiner does not find such a transformation or
reduction, the examiner has not determined as a final matter
that the claim is non-statutory. The examiner must proceed in
further inquiry.
b. Practical Application That Produces a Useful, Concrete,
and Tangible Result
For eligibility analysis, physical transformation “is
not an invariable requirement, but merely one example of how
a mathematical algorithm [or law of nature] may bring about
a useful application.” AT&T, 172 F.3d at 1358-59,
50 USPQ2d at 1452. If the examiner determines that the claim
does not entail the transformation of an article, then the examiner
shall review the claim to determine if the claim provides a
practical application that produces a useful, tangible and concrete
result. In determining whether the claim is for a “practical
application,” the focus is not on whether the steps taken
to achieve a particular result are useful, tangible and concrete,
but rather that the final result achieved by the claimed invention
is “useful, tangible and concrete.” . . .
In determining whether a claim provides a practical application
that produces a useful, tangible, and concrete result, the examiner
should consider and weigh the following factors:
(1) “Useful Result”
For an invention to be ’useful’ it must satisfy
the utility requirement of section 101. The USPTO’s
official interpretation of the utility requirement provides
that the utility of an invention has to be (i) specific, (ii)
substantial and (iii) credible . . .
(2) “Tangible Result”
The tangible requirement does not necessarily mean that a
claim must either be tied to a particular machine or apparatus
or must operate to change articles or materials to a different
state or thing. However, the tangible requirement does require
that the claim must recite more than a §101 judicial
exception, in that the process claim must set forth a practical
application of that §101 judicial exception to produce
a real-world result. . . .
(3) ’Concrete Result’
Another consideration is whether the invention produces a
“concrete” result. Usually, this question arises
when a result cannot be assured. In other words, the process
must have a result that can be substantially repeatable or
the process must substantially produce the same result again.
. . .
[10/26/05 Interim Guidelines at 19-22.]
3. Determine Whether the Claimed Invention Preempts an
Abstract Idea, Law of Nature, or Natural Phenomenon (§ 101
Judicial Exceptions)
Even when a claim applies a mathematical formula, for example,
as part of a seemingly patentable process, the examiner must ensure
that it does not in reality “seek[] patent protection for
that formula in the abstract.” Diehr, 450 U.S. at 191, 209
USPQ at 10. “Phenomena of nature, though just discovered,
mental processes, abstract intellectual concepts are not patentable,
as they are the basic tools of scientific and technological work.”
Benson, 409 U.S. at 67, 175 USPQ at 675. One may not patent a
process that comprises every “substantial practical application”
of an abstract idea, because such a patent “in practical
effect would be a patent on the [abstract idea] itself.”
Benson, 409 U.S. at 71-72, 175 USPQ at 676; cf. Diehr, 450 U.S.
at 187, 209 USPQ at 8 (stressing that the patent applicants in
that case did “not seek to pre-empt the use of [an] equation,”
but instead sought only to “foreclose from others the use
of that equation in conjunction with all of the other steps in
their claimed process”) . . .
[10/26/05 Interim Guidelines at 23.]
D. Establish on the Record a Prima Facie Case
The examiner should review the totality of the evidence (e.g.,
the specification, claims, relevant prior art) before reaching a
conclusion with regard to whether the claimed invention sets forth
patent eligible subject matter. The examiner must weigh the determinations
made above to reach a conclusion as to whether it is more likely
than not that the claimed invention as a whole either falls outside
of one of the enumerated statutory classes or within one of the
exceptions to statutory subject matter. “The examiner bears
the initial burden . . . of presenting a prima facie case of unpatentability.”
In re Oetiker, 977 F.2d 1443, 1445, 24 USPQ2d 1443, 1444 (Fed. Cir.
1992). If the record as a whole suggests that it is more likely
than not that the claimed invention would be considered a practical
application of an abstract idea, natural phenomenon, or law of nature,
the examiner should not reject the claim.
After the examiner identifies and explains in the record the basis
for why a claim is for an abstract idea with no practical application,
then the burden shifts to the applicant to either amend the claim
or make a showing of why the claim is eligible for patent protection.
See, e.g., In re Brana, 51 F.3d 1560, 1566, 34 USPQ2d 1436, 1441
(Fed. Cir. 1995); see generally MPEP § 2107 (Utility Guidelines).
[10/26/05 Interim Guidelines at 24.]
V. Evaluate Application for Compliance with 35 U.S.C. §
112
A. Determine Whether the Claimed Invention Complies with
35 U.S.C. § 112, Second Paragraph Requirements (MPEP §
2171)
The second paragraph of 35 U.S.C. § 112 contains two separate
and distinct requirements: (A) that the claim(s) set forth the subject
matter applicants regard as the invention, and (B) that the claim(s)
particularly point out and distinctly claim the invention.
An application will be deficient under the first requirement of
35 U.S.C. § 112, second paragraph when evidence including admissions,
other than in the application as filed, shows applicant has stated
that he or she regards the invention to be different from what is
claimed (see MPEP §§ 2171-2172.01).
An application fails to comply with the second requirement of 35
U.S.C. § 112, second paragraph when the claims do not set out
and define the invention with a reasonable degree of precision and
particularity . . .
[10/26/05 Interim Guidelines at 25.]
B. Determine Whether the Claimed Invention Complies with
35 U.S.C. § 112, First Paragraph Requirements (MPEP §
2161)
The first paragraph of 35 U.S.C. § 112 contains three separate
and distinct requirements:
(A) adequate written description,
(B) enablement, and
(C) best mode.
1. Adequate Written Description (MPEP § 2163)
For the written description requirement, an applicant’s
specification must reasonably convey to those skilled in the art
that the applicant was in possession of the claimed invention
as of the date of invention...
[10/26/05 Interim Guidelines at 26.]
2. Enabling Disclosure (MPEP § 2164)
An applicant’s specification must enable a person skilled
in the art to make and use the claimed invention without undue
experimentation. The fact that experimentation is complex, however,
will not make it undue if a person of skill in the art typically
engages in such complex experimentation. See MPEP § 2164
et. seq.. for detailed guidance with regard to the enablement
requirement of 35 U.S.C. § 112, first paragraph.
[10/26/05 Interim Guidelines at 27.]
3. Best Mode (MPEP § 2165)
Determining compliance with the best mode requirement requires
a two-prong inquiry:
(1) at the time the application was filed, did the inventor possess
a best mode for practicing the invention; and
(2) if the inventor did possess a best mode, does the written
description disclose the best mode such that a person skilled
in the art could practice it.
See MPEP § 2165 et. seq. for additional guidance . . .
[10/26/05 Interim Guidelines at 27.]
VI. Determine Whether the Claimed Invention Complies with
35 U.S.C. §§ 102 and 103
Reviewing a claimed invention for compliance with 35 U.S.C. §§
102 and 103 begins with a comparison of the claimed subject matter
to what is known in the prior art. See MPEP §§ 2131 - 2146
for specific guidance on patentability determinations under 35 U.S.C.
§§ 102 and 103. If no differences are found between the
claimed invention and the prior art, the claimed invention lacks novelty
and is to be rejected by USPTO personnel under 35 U.S.C. § 102.
Once differences are identified between the claimed invention and
the prior art, those differences must be assessed and resolved in
light of the knowledge possessed by a person of ordinary skill in
the art. Against this backdrop, one must determine whether the invention
would have been obvious at the time the invention was made. If not,
the claimed invention satisfies 35 U.S.C. § 103.
[10/26/05 Interim Guidelines at 28.]
VII. Clearly Communicate Findings, Conclusions and Their
Bases
Once USPTO personnel have concluded the above analyses of the claimed
invention under all the statutory provisions, including 35 U.S.C.
§§ 101, 112, 102 and 103, they should review all the proposed
rejections and their bases to confirm that the examiner is able to
set forth a prima facie case of unpatentability. Only then should
any rejection be imposed in an Office action. The Office action should
clearly communicate the findings, conclusions and reasons which support
them.
[10/26/05 Interim Guidelines at 29.]
Endnotes
--------------------------------------------------------------------------------
[1] The application
before the Board, filed in 1993, was the latest in a series of continuation
applications, the earliest parent application being filed in 1988.
[2] AT&T
Corp. v. Excel Communications, Inc., 172 F.3d 1352, 50 USPQ2d
1447 (Fed. Cir. 1999).
[3] State Street Bank & Trust Co. v. Signature Financial
Group, Inc., 149 F.3d 1368, 47 USPQ2d 1596 (Fed. Cir. 1998).
[4] State Street, 149 F.3d at 1373, 47 USPQ2d at
1600-01(citation omitted); see also AT&T v. Excel, 172 F.3d at
1358, 50 USPQ2d at 1452 (Fed. Cir. 1999).
[5] Diamond v. Diehr, 450 U.S. 175, 209 U.S.P.Q.
1 (1981).
[6] Gottschalk v. Benson, 409 U.S. 63, 175 U.S.P.Q.
673 (1972).
[7] In re Musgrave, 431 F.2d 882, 167 U.S.P.Q.
280 (CCPA 1970).
[8] In re Toma, 575 F.2d 872, 197 U.S.P.Q. 852
(CCPA 1978).
[9] Ex parte Bowman, 61 U.S.P.Q.2d 1669 (Bd. Pat.
Apps & Int. 2001).
[10] Bowman, 61 U.S.P.Q.2d at 1671.
[11] The second dissenting opinion in Lundgren spans 77 single-spaced
pages; the majority and first dissenting opinions required 9 and 6
double-spaced pages, respectively.
[12] Cochrane v. Deener, 94 U.S. 780 (1877).
[13] Cochrane v. Deener, 94 U.S. at 788.
