Author: Howard Sheerin, SiliconValleyIP.com
There has been an incredible amount of consternation around recent claim rejections based on § 101 (under the Alice two-step rule). Many practitioners seem completely flummoxed by these rejections, arguing they are unfair at best and unconstitutional at worst. But when you analyze the recent case law, it has become glaringly apparent the rejections under § 101 are really just rejections under § 103 (obviousness). Accordingly when counseling a client on whether to pursue a new patent application, or when responding to a § 101 rejection, the recommendation or traversal should be based on whether the invention is considered obvious under § 103. There is no sense consternating or flummoxing over a § 101 rejection when it is basically the same as a § 103 rejection.
ORIGINAL § 101 CASES
In the original cases involving § 101, the courts analyzed essentially no prior art when determining whether claims cover unpatentable subject matter. Instead the courts merely determined whether the claims on their face covered unpatentable subject matter, such as a law of nature or mathematical formula.
Gottschalk v. Benson 1972
The invention in this case was a method of programming a general-purpose digital computer using an algorithm to convert binary-coded decimal numbers into pure binary numbers. The Supreme Court noted that phenomena of nature, mental processes and abstract intellectual concepts were not patentable, since they were the basic tools of scientific and technological work. The Court found that the discovery in Benson was unpatentable since the invention, an algorithm, was no more than abstract mathematics. In finding unpatentable subject matter the Court did not rely on any prior art other than to describe the subject matter as an algorithm.
Parker v. Flook 1978
The invention in this case was a method of calculating alarm limits by using a "smoothing algorithm" to make the system responsive to trends but not momentary fluctuations in process variables (such as temperature). Because it was conceded the implementation of the algorithm was conventional (using a general purpose computer), the Court found the subject matter unpatentable as covering nonstatutory algorithm which must be regarded as already in the prior art. This is the key basis of all early § 101 cases; that is, a finding of unpatentable subject matter as if the algorithm was already in the prior art (i.e., the prior art is irrelevant under § 101).
Diamond v. Diehr 1981
The Court repeated its earlier holding that mathematical formulas in the abstract are not eligible for patent protection. But it also held that a physical machine or process which makes use of a mathematical algorithm is different from an invention which claims the algorithm, as such, in the abstract. The Court stated "[t]he 'novelty' of any element or steps in a process, or even of the process itself, is of no relevance in determining whether the subject matter of a claim falls within the 35 U.S.C. § 101 categories of possibly patentable subject matter," thereby reaffirming the principle the prior art has no relevance under § 101.
Bilski v. Kappos 2010
The Court ruled in Bilski v. Kappos that Bernard Bilski's patent application for a method of hedging the seasonal risks of buying energy is an abstract idea and is therefore unpatentable. Again the Court relied on no prior art in rendering the patentability decision under § 101.
Alice Corp. v. CLS Bank International 2014
The district court stated that a method "directed to an abstract idea of employing an intermediary to facilitate simultaneous exchange of obligations in order to minimize risk" is a "basic business or financial concept," and that a "computer system merely 'configured' to implement an abstract method is no more patentable than an abstract method that is simply 'electronically' implemented." The district court relied on no prior art in reaching this decision. The Supreme Court affirmed the decision (again without reference to any prior art) and further directed the lower courts to follow a two-step rule originally set forth in Mayo v. Prometheus:
Step 1: determine whether the patent claim under examination contains an abstract idea, such as an algorithm, method of computation, or other general principle; and
Step 2: determine whether the patent adds to the idea "something extra" that embodies an "inventive concept."
RECENT § 101 CASES - ANALYZING PRIOR ART
In recent cases, patent examiners and the courts have used the Alice decision (particularly Step 2) to find claims unpatentable in view of the prior art. That is, in almost every case that a claim fails Step 1 of Alice (which is typically irrefutable once made), the examiners and courts analyze Step 2 of Alice in view of prior art. This unsanctioned change for analyzing the patentability of claims under § 101 has essentially morphed § 101 into § 103, which is understandable since analyzing a claim based on whether it embodies an "inventive concept" is the definition of patentability under § 103.
Enfish, LLC v. Microsoft Corp. 2016
The Federal Circuit reversed the district court's summary judgment ruling that all claims were patent–ineligible abstract ideas under Alice. Instead, the claims were directed to a specific improvement to the way computers operate, embodied in the claimed "self-referential table" for a database, which the relevant prior art did not contain. Here the Federal Circuit bases their finding of patentable subject matter on what was taught by the prior art.
Yu v. Apple 2020
The Federal Circuit affirmed the district court's decision that the whole point of the claim is to provide two digital images so that a generic "digital image processor" can enhance one with the other which is an abstract idea. The district court explained that while this is enough to answer Step 1 under Alice, a useful cross-check is to look for "fundamental [and] long prevalent" implementations or practices of the same basic concept. See Intellectual Ventures I LLC v. Symantec Corp., 838 F.3d 1307, 1314 (Fed. Cir. 2016) (quoting Alice, 573 U.S. at 219). Although the district court did not recite specific prior art references for the contention that using one image to enhance another is well known, the court asserted a right to "take note of fundamental concepts" similar to an examiner taking "Official Notice." Instead of arguing against the premise for the finding of a fundamental concept, the patent holder merely argued the district court's taking "Official Notice" was inappropriate. The patent holder should have argued the contention was factually incorrect so as to "force" the district court to support the contention. Either way, the district court based the decision of unpatentable subject matter on what has been disclosed in the prior art which is appropriate under § 103 not § 101. Assuming the district court's "Official Notice" is factually correct, then finding the claims unpantentable would likely be appropriate under § 103... just more sound and consistent with historical precedence.
CosmoKey Solutions GmbH & Co. KG. v. Duo Security LLC 2021
The Federal Circuit reversed the district court's finding of unpatentable subject matter finding the invention provides a “specific improvement to authentication that increases security, prevents unauthorized access by a third party, is easily implemented, and can advantageously be carried out with mobile devices of low complexity.” Of course since the Federal Circuit wanted to find patentable subject matter they did not rely on prior art (or take Official Notice). The Court explained that the district court erred in its interpretation of certain sections of the specification. Specifically, the district court read the specification to describe prior art that shows the steps were routine or conventional; however, the Federal Circuit found that the last four steps of claim 1 solved a technical problem in the field using steps that were not conventional. In other words, the Federal Circuit found the claim recites patentable subject matter because (in view of the prior art) the claim was not obvious.
When traversing a rejection under § 103 an inventor may argue"secondary considerations" such as (1) the invention’s commercial success, (2) long felt but unresolved needs, (3) the failure of others, (4) skepticism by experts, (5) praise by others, (6) teaching away by others, (7) recognition of a problem, (8) copying of the invention by competitors, and (9) other relevant factors. Accordingly these arguments should also be made when traversing a rejection under § 101; that is, the inventor should assert secondary consideration when arguing Step 2 of Alice (i.e., argue the claims must embody an "inventive concept" given the weight of the secondary considerations).
When discussing a new patent application with a client, the patent practitioner should inform the client about the many possible road blocks that may impede the patent application, particularly if the subject matter seems relatively simplistic (e.g., using one image to enhance another image). The client should understand the claims may be found unpatentable not only under § 102 or § 103, but also § 101. The practitioner should explain that a rejection under § 101 is basically the same as a rejection under § 103 which serves two purposes. First, it puts the client on notice that describing the invention in terms of innovative improvements will help overcome a § 103 or § 101 rejection, and second if the claims are rejected under § 101, the client will not think the patent practitioner is incompetent. Otherwise a reasonable client's reaction to a § 101 rejection might be: "What do you mean the subject matter is unpatentable in general? Why didn't you just tell me this in the beginning before I wasted all of my time and money!"
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About the Author: Howard Sheerin is a California licensed patent attorney having drafted and prosecuted over 800 complex electrical and computer patent applications, including the successful defense of claim rejections under the Alice two step rule. Mr. Sheerin offers a free review of pending patent applications rejected under § 101, including how the claims might be amended to overcome the rejection, and potential arguments for traversing the rejection. Mr. Sheerin can be contacted by phone at 415-238-4007.