As a patent lawyer helping many software companies obtain software patents, I encounter many misunderstandings from inventors on the process and why details on the software description is important.
If you are thinking of preparing a software patent application, it may be instructive to see how software patent applications have been rejected at the US Patent and Trademark Office (USPTO). Knowing how the USPTO reviews a software patent application will help you in crafting a stronger and a more defensible patent application.
Read on to see a typical 101 Alice Rejection of a Software Patent Application.
The Law On Software Patentability
The Patent Act states 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 therefore, subject to the conditions and requirements of this title.” 35 U.S.C. § 101.
The courts have found, and the PTO has noted, that Section 101 excludes protection for “laws of nature, natural phenomena, and abstract ideas.” Diamond v. Diehr, 450 U.S. 175, 185 (1981). This restriction has been put in place to avoid “monopolization of [the basic tools of scientific and technological work that]…might tend to impede innovation more than it would tend to promote it,” thwarting the main objective of the patent laws. Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. ___, 132 S. Ct. 1289, 1293 (2012).
US Patent Office Views On Software Patent Eligibility
Examiners must determine whether the patent claim meets the criteria for subject-matter eligibility by reviewing the claim according to the flowchart below. This flowchart shows the steps involved in the subject matter eligibility analysis of products and processes. It is used to determine whether a claim draws to patent-eligible material. There may be slight variations to the subject matter eligibility analysis as per the legal precedent, but they will all achieve the same result. This analysis promotes consistency and efficiency in examination across technologies.
The flowchart shows that Step 1 is related to the statutory category and confirms that the claim falls within one the four categories of invention. For more information about Step 1, please see MPEPSection 2106.03.
Step 2 is the Supreme Court’s Alice/Mayo Test. It is a two-part test that identifies claims directed to a court exception (Step 2) and then determines if additional elements provide an inventive concept (Step 397) for more information on Step 1. For more information about Step 2A, see MPEP Section 2106.05.05.
The flowchart also shows three routes (A, B, and C) to eligibility.
- Pathway A: Claims that are taken together and fall within a specific statutory category (Step 1) can be identified as eligible at Pathway A by a simplified analysis. For more information about this pathway and self-evident eligibility, see MPEP Section 2106.06.
- Pathway B: Claims that are taken together and fall within a specific statutory category (Step 1), but are not directed at a judicial exception or step 2A (NO) are eligible for Pathway B. These claims don’t need to be sent to Step 2B. For more information on this pathway and Step 2, see MPEP Section 2106.04
- Pathway C: Claims that are taken together and fall within a specific statutory category (Step 1), are directed at a judicial exemption (Step 2), and must cite additional elements individually or in an orderly combination that amounts to significantly more than the exception (Step 3: YES). For more information on this pathway and Step 2, please see MPEP Section 2106.05.
If claims are not eligible for Pathway A (streamlined analyses), they will be subject to additional analysis at Steps 2A and Step 2B. In the end, however, any claim that is eligible for Pathways B, B, or C may be eligible for Pathways B, or C. If the claim is not eligible for any of the Pathways A, B, or C, it is patent ineligible. The claim should be rejected according to 35 U.S.C. 101 based on USPTO guidelines.
In addition to rejections made under 35 U.S.C. 101, the examiner then continues the analysis of patentability under 35 U.S.C. 102 (novelty), 103 (obviousness) and 112 (description and support for the claims). The examiner also checks for other requirements such as inventorship and double patenting, and non-statutory dual patenting under MPEP Section 2103.
Example Of A Rejection Of A Saas Software Application
Below is an example of how the US Patent and Trademark Office (USPTO) makes a Section 101 rejection:
Claim Rejections – 35 USC § 101
1. 35 U.S.C 101 reads as follows:
2. Claims 1-15 are rejected under 35 U.S.C. 101 because the claimed invention is directed to an abstract idea without significantly more.
As per Step 1 of the subject matter eligibility analysis, it is to determine whether the claim is directed to one of the four statutory categories of invention, i.e., process, machine, manufacture, or composition of matter.
In this case, claims 1-15 are directed to a method for delivering a product with tied to a particular machine for performing the steps, which falls outside of the four statutory categories. However, claims 1-15 will be included in Step 2 Analysis for the purpose of compact prosecution.
With respect to claims 1-15, the claims are directed to non-statutory subject matter because the claims are directed to a method without tied to a particular machine in the body of the claims for performing the steps. One factor to consider when determining whether a claim recites a §101 patent eligible process is to determine if the claimed process (1) is tied to a particular machine or; (2) transforms a particular article to a different state or thing. See In re Bilski, 545 F.3d 943, 88 USPQ2d 1385 (Fed. Cir. 2008) (en banc) aff’d, Bilski v. Kappos, 561 U.S. _, 130 S.Ct. 3218, 95 USPQ2d 1001 (U.S. 2010). (Machine-or-Transformation Test).
In Step 2A of the subject matter eligibility analysis, it is to “determine whether the claim at issue is directed to a judicial exception (i.e., an abstract idea, a law of nature, or a natural phenomenon). Under this step, a two-prong inquiry will be performed to determine if the claim recites a judicial exception (an abstract idea enumerated in the 2019 Guidance), then determine if the claim recites additional elements that integrate the exception into a practical application of the exception. See 2019 Revised Patent Subject Matter Eligibility Guidance (2019 Guidance), 84 Fed. Reg. 50, 54-55 (January 7, 2019).
In Prong One, it is to determine if the claim recites a judicial exception (an abstract idea enumerated in the 2019 Guidance, a law of nature, or a natural phenomenon).
Here, claim 1 recites limitations “receiving the product from manufacture located in a first country, matching the products with a seller in the second country, managing delivery logistics by matching available third-party truckers and third-party warehouses in a second county based on proximity, forecasting demand, managing logistics for the manufacturer with the forecasted demand.” Claims 2-15 recite the similar limitations of “managing sales process, managing inventory by forecasting one or more demands and moving the product close to the one or more local demand, managing shipping based on forecasted demand, managing production based on forecasted demand, performing a bulk product upload to a seller or retailer, mapping product data to third party product data, mapping product to a retailer SKU, managing digital assets, providing an online product, providing a marketplace exchange, and providing augmented reality to enable a customer to see how the product fits in the customer’s environment”. The limitations, as drafted, are processes that, under the broadest reasonable interpretation, cover performance of the limitations in the human mind. For example, the claim encompasses a user can manually matching the products with a seller, managing delivery, forecasting demand, managing sales process, managing inventory managing shipping managing production in his/her mind (including observation, evaluation, judgment, opinion), which is a mental process group. That is, other than reciting “through a dashboard [] by a neural network” for managing logistics, nothing in the claim elements precludes these steps from practically being performed in the mind. Therefore, under the 2019 Guidance, the limitations of claims 1-15 recite concepts that fall within the “mental processes” grouping. See 84 Fed. Reg. 52. Accordingly, the claims recite an abstract idea, and the analysis is proceeding to Prong Two.
In Prong Two, it is to determine if the claim recites additional elements that integrate the exception into a practical application of the exception.
Beyond the abstract idea, claims 1-15 recite the additional elements of “through a dashboard [] by a neural network”. The additional elements are nothing more than displaying on a user interface. None of these elements reflects an improvement to the functioning of the computer system itself, or in any particular technical field or technology, none of the limitations effects a transformation or reduction of a particular article to a different state or thing, or provides some meaningful way beyond generally linking the use of the judicial exception to a particular technological environment, such that the claim as a whole is more than a drafting effect designed to monopolize the exception. Therefore, the claims do not integrate the judicial exception into a practical application. The claims are directed to an abstract idea, the analysis is proceeding to Step 2B.
In Step 2B of Alice, it is “a search for an ‘inventive concept’—i.e., an element or combination of elements that is ‘sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept’ itself.’” Id. (alternation in original) (quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1294 (2012)).
The claims as described in Prong Two above, nothing in the claims that integrates the abstract idea into a practical application. The same analysis applies here in Step 2B.
The claim recites the additional elements of “through a dashboard [] by a neural network” for managing logistics for the manufacture. Without any recitation of a computer for performing the steps, given its broadest reasonable interpretation, a computer is not required, and the steps are performed by a human user. Even if a computer was recited for performing the steps, the computer is nothing more than a generic computer for performing the generic computer functions, at best, the computer may simply perform generic computer functions including receiving, manipulating and transmitting data over a network, at best, the device may perform the steps of receiving, storing and transmitting data over a network. However, these generic computer functions have been recognized by the courts as merely well-understood, routine, and conventional functions of generic computers. See MPEP 2106.05 (d) (II) (Receiving or transmitting data over a network, e.g., using the Internet to gather data, buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355, 112 USPQ2d 1093, 1096 (Fed. Cir. 2014) (computer receives and sends information over a network)). Thus, simply implementing the abstract idea on a generic computer for performing generic computer functions is not qualify as a practical application, and the combination of the claimed elements do not provide significantly more to an abstract idea (MPEP 2106.05(f) & (h)).
Therefore, the claims as a whole, viewed individually and as a combination, do not provide meaningful limitations to transform the abstract idea into a patent eligible application of the abstract idea such that the claims amount to significantly more than the abstract idea itself. The claims are not patent eligible.
How To Overcome The 101 Rejection
Section 101 rejection attacks the patent application as claiming abstract ideas, which can be mathematical concepts that are easily understood by people. Patentability is possible if the ideas have a technical effect. Methods and methods that organize human activity include abstract ideas. These can include social activities, following instructions, and mental processes such as evaluation, observation, and decision-making.
The Section 101 rejection can be overcome by showing computer performance. If you can show that the invention improves hardware (such as processor or networking device or vision device, among others), such technological improvements to the device typically overcome the Section 101 rejection.
The examiner could interpret an invention in patenting as an abstract idea in certain technical areas, such as user interfaces, artificial Intelligence, and machine learning. It is important to eliminate the possibility that an examiner will interpret the invention as an abstraction when filing a patent application in these fields. An optimal application is written in a way that allows for future development and protects the invention as widely as possible.
As noted above, one prong to overcome the 101 rejection is to show in the application that the invention has a practical application. While the meaning of a “practical application” is not yet defined, this second prong of the USPTO § 101 analysis provides arguments to demonstrate patent eligibility. You can argue that your application has:
- Additional elements reflecting an improvement in computer function, technology or another field;
- Additional elements using the judicial exception to effect a transformation such as medical treatment;
- Additional elements implementing a particular machine integral to the claims; and
- Additional elements using the judicial exception meaningfully such that the claim is more than a drafting effort to monopolize the judicial exception.
Patent attorneys’ experience and expertise play a major role in whether the invention is granted a patent. If the invention is about rearranging graphic icons on touch screens, it can be either an abstract idea or a non-abstract patentable invention depending on what the application contains.
The risk of an invention being misinterpreted as an abstract idea is high if it can be described as an activity of the mind. Even though the invention can be valuable, patentable and good, it could also be poorly worded. Everything boils down to how the application is written, and more importantly how the invention is claimed. For example, let’s say that the invention is about rearranging icons on touch screens according to how often a user uses one icon. The invention must be linked to a physical device such as a touchscreen or other concrete elements that might be related to the invention. If the application is drafted simply by defining the icons used and determining based on their importance how important a particular icon is to a user, it can be done in the mind, without the need for integration into a practical application.
In order to obtain a patent, an invention must be integrated into a practical application. In this case, you can show how the icon is used as part of a bigger scheme that improves computer performance or improves the quality of the output (such as the image processing quality or the encryption quality). In this example, if you can tie the touchscreen gesture to an improvement in decrypting the login password, it may well be patentable.
Overall, software patenting can be a complex and challenging process, requiring a thorough understanding of the technical and legal aspects of the invention. Software is often a collection of abstract concepts and mathematical algorithms, making it difficult to clearly define the invention and distinguish it from prior art. By focusing on features that are important to your customers can focus the application and provide details showing the invention is novel and non-obvious, and further showing any of the following: 1) reflecting an improvement in computer function, technology or another field; (2) using the judicial exception to effect a transformation such as medical treatment; (3) implementing a particular machine integral to the claims; and (4) using the judicial exception meaningfully such that the claim is more than a drafting effort to monopolize the judicial exception.
In conclusion, your patent applications in computer-related arts should focus the claims and detailed description with an eye toward the “practical applications” listed in the guidance. Be sure to include both the technical problem in existing art and the claim’s solution as part of a practical app.
Now go and protect your Unicorn software invention!