The USPTO Guidance on Eligibility: a journey into the unknown

Former guest Kats are always welcome when they purr their way back into our lives. Last week it was Miri Frankel who treated us to a pleasantly unexpected comment on the Google-to-Alphabet branding story (here). This time round it's patent attorney Suleman Ali (Holly IP), who has been taking another look at life in the United States in the wake of that great nation's Guidance on Eligibility. This is what he has to say:

The United States Patent and Trademark Office (USPTO) Guidance on Eligibility: a journey into the unknown

The quest for the rules of eligibility

The USPTO Interim Guidance on Patent Subject Matter Eligibility which issued in December of last year (see Katpost here) is continuing to redefine the patentability landscape in the US. Few attorneys in Europe seem to recognise the extent of the changes that are happening. Fundamental questions about which inventions are constitute ‘eligible matter’ are being asked and answered by Federal Circuit decisions. At the moment we seem to be in the curious situation of not knowing what types of invention satisfy the US eligibility requirement in the fields of computer implemented inventions, business methods, chemistry, pharma and biotech. This has already had a major impact on US patent litigation, but there is a probably a more significant impact to come on the research and development ecosystem and the business models which companies involved in innovation will adopt.

Basic principles of eligibility: the judicial exceptions are now very broad

The jury was fascinated by the theory
of judicial exceptions

In the US inventions can only be granted for particular types of invention (here). Patents cannot be granted for inventions which ‘wholly embrace’ a judicial exception, i.e. laws of nature, physical phenomena and abstract ideas. It must be remembered that this ‘eligibility’ requirement is completely separate from novelty, obviousness, written description, etc. That means a ground-breaking significant finding is not necessarily an eligible invention. The Guidance defines the judicial exceptions very broadly, so that many inventions which would have previously been patentable no longer are. Naturally occurring products are in general no longer patentable, even when present in compositions with other molecules.  Natural correlations, such as those which are used as the basis of diagnostic inventions, are not patentable. Many business methods are now deemed to be ‘abstract ideas’. The Guidance sets out a two-part test for determining eligibility. The first part asks whether a judicial exception is involved, and the second part asks whether there is something ‘significantly more’ that would transform the claimed matter into an eligible invention. At this stage we know that the ‘significantly more’ requirement is not necessarily an easy one. It cannot be overcome by referring to conventional and routine techniques or steps. It is also clear that one cannot attempt to monopolise the underlying judicial exception by claiming at a ‘high level of generality’.

The updated Guidance: it is not getting easier

An updated Guidance was issued in July of this year (here). This does not really change things very much, and what seems clear is that ‘eligibility’ will continue to be a high hurdle. While Federal Circuit decisions continue to add to the list of inventions which are not eligible matter, we still don’t know what makes an invention to be eligible matter. That may be because parties are still pursuing claims which are too broad.  From the updated Guidance it is clear that ‘preemption’ is an important consideration when looking at eligibility. The patent claim must not ‘preempt’ other uses of the judicial exception. That means that other parties will not be hindered in developing technologies which also make use of the same judicial exception.

Ariosa Diagnostics v Sequenom

Ariosa Diagnostics, Inc. v Sequenom, Inc., No. 2014-1139 (Fed. Cir. Jun. 12, 2015) is a sobering example of how the US Courts will apply the eligibility requirement on biotech cases (see PatLit post here). The invention was based on the finding that foetal DNA (cffDNA) could be sampled from the blood of the pregnant mother, avoiding the need to use invasive techniques to obtain such DNA. The Court was of the opinion that the invention was meritorious but still found the claim to relate to ineligible matter. It said:

‘It is important to note that the ’540 patent does not merely claim uses or applications of cffDNA, it claims methods for detecting the natural phenomenon. Because generally one must be able to find a natural phenomenon to use it and apply it, claims covering the only commercially viable way of detecting that phenomenon do carry a substantial risk of pre-empting all practical uses of it.’

Clearly the problem here was the invention was simply claimed too broadly.

What does this mean for R&D?

Under the Guidance:
no more patents for trees

The Guidance prevents newly-discovered natural phenomena from being monopolised. Is that fair? One can imagine that it might have a positive impact on the way that R&D is carried out. It certainly means that a company may have to do more than discover the phenomenon to obtain a patent. That could promote innovation. Presumably there will be less  ‘dominant’ patents as a result and that will encourage incremental inventions in the same field.  Having less ‘dominant’ patents may also encourage collaboration between parties as negotiations could happen on a level playing field.

Thanks, Suleman, it's great to hear from you! This Kat suspects that we may hear from some of our many US-based patent-y readers too.