An invention must have patent-eligible subject matter. The Supreme Court has held for a long time that physical phenomena, abstract ideas, and laws of nature are not eligible to be patent protected. Hence, abstract ideas are not allowed to be patentable according to the United States Patents Act. 

patent eligibility analysis

Step 1 in the patent eligibility analysis determines if claims are directed at one of the four categories described in 35 U.S.C. Section 101 (processes, machines, articles of manufacture, compositions of matter). If the claim does not meet these criteria, it is invalid. If the claim is not eligible, the process proceeds to the two-step Alice/Mayo procedure that the USPTO has implemented as steps 2A & 2B in the patent eligibility analysis. 

Step 2A determines whether the claim refers to a judicial exemption. If the claim is not directed to a judicial exception, then the claim is patentable and the application is reviewed under the other criteria (useful, new, and non-obvious). Step 2A if the claim is directed at a judicial exception, then step 2B is determined whether there is anything more than the judicial exception that provides the novelty.

The Alice-Mayo Taxonomy – Can Abstract Ideas Be Patented?

The United States Patent and Trademark Office (USPTO), which prosecutes software-related patents, has spent the past several years focusing on the USPTO’s interpretations of patent subject matter eligibility issues that have arisen from the Supreme Court’s Alice decision. 

In January 2019, the USPTO published revised guidance regarding the application of Section 101. The Update and the Guidance set out a step-by–step eligibility analysis. Step 2 is the Supreme Court’s Alice/Mayo test to determine if a claim is patent-eligible because it directs to a judicial exception. Particularly, Step 2A, and 2B of Office’s eligibility analysis correspond respectively to the first and second part of the Alice/Mayo tests. Below we discuss Alice mayo steps for eligibility:

Step 2A

Step 2A is a 2-prong inquiry. Examiners should examine whether claims are citing any judicial exceptions under Step 2A Prong 1. If yes, this does not necessarily mean that the claim “directly addresses” the judicial exceptions. Instead, the examiner should move to Step 2A Prong 2, to determine if the claim includes additional elements that incorporate the judicial exception into a practical application. If the answer is no, then the claim is not directed at the judicial exception and is patentable. The examiner will only proceed to Step 2B if the judicial exception does not integrate practical application.

Step 2B

Further analysis is performed to determine if the additional elements, regardless of their significance, are present in the claim. If so, then the combination is unconventional and provides an inventive concept. This is a patent-eligible claim if it adds substantially to the judicial exception. Although Step 2B includes consideration of whether additional elements are routine, well-understood conventional activity, this consideration is excluded by Step 2A Prong 2.

The Alice-Mayo test for patent eligibility has been applied by the Federal Circuit in over 100 precedential cases and has created a clear taxonomy of inventions eligible for patent protection.

Section 101 exception for “laws of nature, natural phenomena, and abstract ideas”

Patent claims reciting natural phenomena and laws of nature are often invalid under SS 101. However, courts have interpreted the SS 101 exception to provide a wider range of claims, extending the scope of the exception to encompass abstract ideas and laws. These claims, often involving computer systems, computer-readable media, and abstract ideas, may still be subject to SS 101 claims despite a broad application of Mayo.

The patentability of abstract ideas is a complicated topic. While laws of nature and abstract ideas are not patentable, the court considers whether the patent claims a building block of human ingenuity that can be utilized by anyone. Patent-eligible subject matter requires integration of the building blocks into something more. The courts have emphasized this important distinction between patentable and non-patentable abstract ideas.

While the Alice test applies to laws of nature, abstract ideas, and natural phenomena, the majority of the analysis will still be relevant to non-patented ideas. However, issues relating to one ineligible concept will be discussed separately. This case law provides important guidance for litigants and patent offices assessing section 101 rejections. Likewise, it will be helpful in deciding invalidity claims against issued patents.

Method claims fail to transform an abstract idea into a patent-eligible invention

The Supreme Court in Alice has again affirmed that “Method claims fail to transform an abstract idea into… a patent-eligible invention.” This reasoning stems from the fact that the mere use of a computer does not transform an abstract idea into a patent-worthy invention. Instead, an abstract idea must be “substantially improved” by the addition of specific computer elements.

While the Alice decision ruled that an intermediated settlement method was an abstract idea, the Court also cited cases that held that a generic computer implementation of such a method could be an equivalent to the claimed process. This reasoning is consistent with the Alice holding that method claims fail to transform an abstract idea into a patent-eligible invention because the generic implementation failed to provide additional features.

A mental process can be an abstract idea, and the Alice decision has identified numerous product claims as reciting a mental process. However, courts have also found that reciting a mental process requires a generic computer, and thus, fails to transform an abstract idea into a patent-eligible invention. Alice rejections have resulted in extensive wasted time and considerable cost for patent applicants, and have undermined the patent system in general.

The Alice decision highlights the importance of defining “abstract idea” in the specification and the preamble. Patent applicants must determine whether the claim contains an inventive concept and then examine its elements to ensure that it does. An inventive concept is required to transform an abstract idea into a patent-eligible invention. This is often an easy task, but the Court has not given clear guidelines.

Although method claims can be a valuable feature of a patent, the patent examiner must determine whether the claim contains additional features, or if it is just an attempt to monopolize the market. Without further development, an abstract idea may not qualify for patent protection. The patent examiners must also determine whether the claim represents an improvement on a known, widely used idea.

Using a computer to perform an abstract idea fails to transform an abstract idea into a practical application

The Federal Circuit has repeatedly rejected patent applications based on the premise that using a computer to perform an abstract idea is a practical application. While the concept behind this claim is indeed abstract, using a computer to perform a particular task does not turn that idea into a practical application. It demonstrates the limits of the concept of an abstract idea.

However, the Interval Licensing decision contradicts this reasoning. The court found that the claimed method of content filtering using an algorithm was an abstract idea, even under step two of the Alice test. However, the court did not ignore the elements of the claim that were related to the abstract idea of content filtering. Rather, the court found that the ordered combination of the claim elements did constitute an inventive concept.

While generic building blocks may not be patent-eligible, generic computer processing steps are. As a result, many patent examiners reject such claims. Known examples of such claims include Electric Power, buySAFE, Mortgage Grader, and the Mortgage Grader. Ultimately, this problem has led to extensive wasted time and cost, and has weakened the patent system as a whole.

The USPTO has released Revised Patent Subject Matter Eligibility Guidance that outlines the two-pronged inquiry used to determine whether a claim is an abstract idea or not. In other words, if a claim is directed to a generic building block, but recites additional elements, then it fails to transform an abstract idea into a practical application.

The key to making a patentable software invention is finding an “inventive concept.” This concept is found in the claim’s “additional elements.” These are the elements of the claim that do not form an ineligible concept. However, recent Federal Circuit case law explicitly states that a computer performing an abstract idea cannot be an “invention” unless it embodies the abstract idea itself.

The Federal Circuit found that claims directed to voting were not patentable if they failed to transform an abstract idea into a practical use. This is because voting is an activity that humans have performed for hundreds of years and do not have a concrete, tangible form. The Federal Circuit also said that the claim limitations did not add anything outside the realm of abstraction. This means that claims based on abstract ideas are not patentable in all cases.

Federal Circuit affirmed abstract ideas can be patented

The USPTO categorization of abstract ideas consists of three categories: mathematical concepts, computer programs, and human activities. These categories overlap somewhat and some claim to include more than one type of idea. However, the USPTO’s enumeration of these categories is supported by additional explanatory language and case law. The “human activity” category is particularly problematic because it doesn’t provide extrapolable examples of what constitutes an abstract idea.

However, the court found that a method claim failed because it failed to transform the abstract ideas into a patent-eligible one. Rather, the method claims simply required the abstract idea to be implemented in a conventional computer. This decision will have a lasting impact on the way patent laws are written. In light of this ruling, the Federal Circuit should reconsider the way patent eligibility is decided in the future.

The Federal Circuit found that the claims were directed to an abstract idea. It noted that the idea was meaningfully different from previous cases where a similar claim was rejected. In the Bilski case, an abstract idea was referred to as a “convention” in the patent, but the Federal Circuit determined that this claim was directed to an abstract idea. This case raises many issues about the scope of patentability.

The Federal Circuit has inconsistent approaches to patent eligibility. In Bilski, for example, the court rejected a risk hedging method as patent-ineligible. Moreover, the court did not provide general guidance on what constitutes an abstract idea. It determined that an abstract idea is a “practice” that is already widely used in commerce. Thus, it is difficult to patent an abstract idea without a proper description.

The USPTO has argued for the patentability of a computer program that incorporates an abstract idea. Nonetheless, this approach has limitations. It can’t be applied to an abstract idea if it does not contain any concrete steps for performing the claimed functions. Further, the claim doesn’t require a computer. Instead, it requires verbal practice or use of a telephone. Hence, RecogniCorp’s claim doesn’t qualify as an abstract idea under Alice step two.