The patent subject matter eligibility problem has rattled the world of diagnostics for several years, but the U.S. Senate has been silent about legislation in recent months. Patent attorney Michael Borella, of McDonnell Boehnen Hulbert & Berghoff LLP (MBHB), said on a recent webinar that it has been “crickets so far from Congress since late summer,” and that consequently he does not expect Congress to provide any legislative fix to the problem any time soon.
The problems with patent subject matter eligibility under Section 101 of Title 35 of the U.S. Code have led to the invalidation of numerous diagnostic patents, a fact not lost on inventors or legislators. The U.S. Supreme Court declined to hear a case recently that the Solicitor General said might have lent some much needed clarity to the problem, an outcome that suggests to some patent attorneys that there is no fix without congressional intervention.
The two sponsors of patent legislation in the Senate, Sens. Thom Tillis (R-N.C.) and Chris Coons (D-Del.) released a statement in June blasting the Supreme Court’s jurisprudence, and Borella said on the Jan. 22 MBHB webinar that the Senate Judiciary Committee had held seven hours of hearings over the course of the summer of 2019. “The majority of these witnesses were pro-reform,” Borella said, although there was an anti-reform and vocal minority that also appeared at the hearings.
The legislation proposed by Coons and Tillis would have redefined the term “useful” as meaning any invention or discovery that provides “specific and practical utility” in any field of technology. The legislation also would have required that the subject matter eligibility question be addressed by considering the claimed invention as a whole rather than by dissecting the claims one by one before arriving at a determination of eligibility.
Stealth mode or bust for reform
The opposition to reform seems to have had the desired effect, Borella said, thus prompting the “crickets” remark about congressional action since the August 2019 recess. Although several members of the House and Senate have complained about case law in the meantime, Borella said, “unless they’re in stealth mode, Congress is not going to do anything about [Section] 101” in the foreseeable future.
Borella noted that the U.S. Patent and Trademark Office (PTO) had issued two guidance documents to update its subject matter eligibility policy, which are not formally binding on patent examiners. He said examiners at the PTO have struggled to consistently apply the standard for subject matter eligibility over the past few years. This is in large part because case laws emerging from both the Supreme Court and the Federal Circuit have lacked both clarity and consistency.
The January 2019 PTO guidance was a significant departure from the eligibility test used in the courts, but was intended to smooth out the different standards used by examiners in the different art units at the agency. Borella said at least 130 subject matter eligibility cases have come through the Federal Circuit since the case of Alice v. CLS Bank emerged from the Supreme Court in 2014. “There are so many that we’ve lost count,” he quipped, adding that the volume of case law is more than examiners can digest. Most examiners at the PTO do not have a law degree and thus are ill-equipped to make sense of the implications of this volume of jurisprudence.
The January 2019 PTO guidance broke down prong 1 of the so-called Alice test for the judicial exceptions into two parts. The first step of the PTO flowchart now asks whether the claim is directed to any of the four statutory categories (process, machine, manufacturing process or composition of matter), after which the two steps of Alice must be answered. However, the PTO process breaks down the first step in Alice into two parts, the first of which to ask whether the claim recites one of the judicial exceptions (abstract ideas, laws of nature, etc.) rather than being directed to that judicial exception. Borella noted that the courts typically ask whether the claim is directed to a judicial exception rather than whether the claim recites that exception.
The second part of the PTO handling of the first step in Alice is whether that exception is integrated into a practical application, which Borella said is not necessarily a simpler process than that used by the courts. He said PTO attempted to provide some simplicity when it “bucketized” the abstract idea exception into three categories, specifically mental processes, mathematical concepts and certain methods of organizing human activity. “In practice, these are very broad categories, so they haven’t really done much to restrain the scope of” prong 1 of Alice.
Most examiners “are taking the guidance quite seriously,” Borella said, a statement he said is backed by the lesser volume of long-held justifications for rejections. Still, there is still a conspicuous number of instances of conclusory reasoning on the part of the examiners, a predicament he said shifts the burden of proof onto the applicant rather than being borne by the examiner. Borella said also that a number of cases have come through the Patent Trial and Appeal Board that have reversed a patent examiner’s finding of ineligibility, but that the differences in the approaches used by the PTO and the court’s suggests that the agency may be issuing patents that will ultimately be reversed in litigation.
Conversely, the October 2019 update to the January guidance was a “relatively minor update” that was more “notable for what it didn’t say than what it did say,” Borella noted. That document might not have been a major shift, but it carried some confusing example claims and unclear requirements for prima facie case requirements. The October update further failed to address conclusory reasoning used to reject claims, something Borella said “we see a lot in Section 101 rejections coming from examiners and from the PTAB.”
Despite the lack of action from Congress, Borella noted that Coons and Tillis had subsequently blasted the Supreme Court for the latter’s inability to separate subject matter eligibility from other considerations under Title 35, such as priority (Section 102) and obviousness (Section 103). Borella was anything but optimistic that Congress will move on the problem despite the Supreme Court’s disinterest and the PTO’s struggles with devising durable, clear and consistent guidance for examiners.
Methods of treatment claims still find better traction
Don Zuhn, also of the Chicago office of MBHB, said the top patent stories for 2019 included Athena v. Mayo, but he noted that there is a dichotomy of case law that divides diagnostic patents from methods-of-treatment patents. Of the six Section 101 cases that arrived at the Supreme Court in 2019, all three diagnostic patents were deemed patent ineligible, whereas all three cases that examined method-of-treatment patents were found eligible. Zuhn said Judge Kimberly Moore of the Federal Circuit had expressed the view that this dichotomy was “difficult to resolve,” a perspective Zuhn seconded.
Zuhn said the first three claims of the Athena patent reflected typical method-of-diagnosis claims construction, although these three claims were not at dispute in the case. However, the four claims in dispute in that case relied to some extent on the first three claims, and Zuhn said Judge Pauline Newman was the sole member of the three-judge panel at the Federal Circuit to vote to overturn the district court finding for non-infringement by Mayo.
The two-judge majority said the disputed claims did nothing more than “recite only a natural law together with conventional steps to detect that law,” and Zuhn said the 12-judge panel that denied Athena’s petition for an en banc hearing took place conspicuously rapidly. The denial of an en banc hearing was 90 pages long, Zuhn said, reflecting the split as to whether there was justification for a hearing with a full 12-judge panel. He said that Judge Alan Lourie was on the right track when Lourie wrote that that the only solution to the subject matter eligibility problem “lies in the pens of claims drafters or legislators.”