By Dennis Haszko
“A transient event is a short-lived burst of energy in a system caused by a sudden change of state.” –Wikipedia
Recently, the U.S. Patent & Trademark Office (USPTO) published the 2019 Revised Patent Subject Matter Eligibility Guidance (2019 PEG) which has predictably caused a stir in the field of business method patents.
After the U.S. Supreme Court’s key decisions over the last decade in Bilski v. Kappos, 130 S. Ct. 3218 (2010); Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289 (2012), and Alice Corp. Pty. Ltd. V. CLS Bank International, 134 S. Ct. 2347 (2014), the courts in the US have increasingly found certain computerized methods of doing business to be unpatentable. Moreover, patent examiners at the USPTO have been brought to near deadlock in many instances where patent applications become mired in the threshold question of whether the invention constitutes patent eligible subject matter under 35 U.S.C. 101.
To date, the USPTO has applied the key decisions inconsistently and oftentimes seemingly arbitrarily. This has made negotiating with patent examiners less a science and more of an art. Typical rejections under 35 U.S.C. 101 include a blanket assertion that the subject matter “forms an abstract idea” and “fails to constitute something significantly more.”
The 2019 PEG is an effort by the USPTO to provide clarity and consistency during the patenting process. Patent examiners are now directed to review and analyze patent applications in a more stringent manner. The updated analysis can be distilled to the following steps:
- Does the claimed subject matter recite a judicial exception related to:
- Mathematical concepts— mathematical relationships, mathematical formulas or equations, mathematical calculations;
- Certain methods of organizing human activity—fundamental economic principles or practices (including hedging, insurance, mitigating risk); commercial or legal interactions (including agreements in the form of contracts; legal obligations; advertising, marketing or sales activities or behaviors; business relations); managing personal behavior or relationships or interactions between people (including social activities, teaching, and following rules or instructions); or
- Mental processes – concepts performed in the human mind (including an observation, evaluation, judgment, opinion)?
- If a judicial exception is identified, then is it integrated into a practical application? If so, then the invention is at least subject matter eligible, though it must still be analyzed for novelty and non-obviousness.
- If a judicial exception is identified, but not integrated into a practical application, then the claimed subject matter may only be considered subject matter eligible if it provides an inventive concept where the claimed subject matter forms “significantly more” than the recited judicial exception.
While this updated analysis under the 2019 PEG still reflects a lot of gray area, it does clearly lay out the types of claimed subject matter in a more distinct list. Moreover, the analysis provides patent practitioners with a more “scientific” or logical approach to arguing that a practical application exists. This is better than the previous, more ambiguous approach of arguing that the invention provides “significantly more.” As experienced patent practitioners can attest, previous USPTO attempts at dealing with business method inventions had led to arguments that can, at best, be characterized as mere throws of the dice. The 2019 PEG, at the very least, should provide a seemingly logical blueprint for crafting suitable arguments.
Only time will tell whether the 2019 PEG is a mere signal transient or something more meaningful in terms of obtaining business method patents from the USPTO.