On 23 April 2020, the Chief Economist issued an analyzing patent examination outcomes report following the Supreme Court’s decision on patent subject matter eligibility in Alice case 2014 (Alice Corp v.s. CLS Bank International). The report has highlighted some good news regarding patent ineligible subject matter and uncertainty in patent examination.
The FULL Chief Economist Report is here.
In Alice case, relying on Mayo case, the decision confirmed two-step analysis to determine whether a patent claimed a patent ineligible abstract idea or instead a potentially patentable implementation of an idea, known as Mayo/Alice 2-step test. For the Alice-affected technologies, the chances of receiving a first office action with a patent-ineligible subject matter rejection increased by 31%, and 26% increase in uncertainty in 18 months following Alice case. This means more applications at that time received an “abstract idea” rejection with ambiguous definition boundaries among Examiners.
In the analyzing report found that Berkheimer memo 2018 has reversed this trend. The memo provides additional USPTO guidance specifically to the limited question of whether a patent element represent well-understood, routine, conventional activity that may require factual evidence. The USPTO responded to the memo by providing changes in Examination Procedure Pertaining to Subject Matter Eligibility in April of 2018 and subsequently published Revised Patent Subject Matter Eligibility Guidance (PEG) memo in January of 2019.
The 2019 PEG makes changes to how Examiners apply the first step of Alice/Mayo test for determining whether a claim is directed to a judicial exception. The changes explicitly layout the procedure including:
- patent claims must be directed to a statutory category;
- the claims must not recite a judicial exception;
- if the claims DOES recite judicial exception, any exception must be integrated into a practical application; and
- if the claims DOES recite judicial exception and NOT integrated into a practical application, the claims must include limitations that amount to significantly more than the exception.
In this report, for the Alice-affected technologies, the likelihood of receiving an eligibility rejection in a first action is approximately 35% before the memo, and a huge drop to under 20% after 2019 PEG has published. Uncertainty in the first office action is also decrease from the highest 1.2 to approximately 0.5.
Accordingly, the report provides statistical evidence about the impact of the 2019 PEG that improves examination quality with more predictable eligibility rejections and less individual examiner variability.