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Issue of fact in the Patent Subject Matter Inquiry - Well-understood, Routine, Conventional Activities (WRUC) --2019 Revised Patent Subject Matter Eligibility Guidance Reflects the Federal Circuit's Holding in Berkheimer v. HP, Inc.

Posted By Weijie Wang, Sep 30, 2019

The 2019 Revised Patent Subject Matter Eligibility Guidance (“2019 PEG”) was issued on January 7, 2019, by the United States Patent and Trademark Office (“USPTO”). Notably, it revises the procedures in the USPTO's eligibility framework for determining whether a claim is directed to a judicial exception (Step 2A in the framework) and whether a claim amounts to significantly more (step 2B in the framework), corresponding to the Supreme Court's two-step framework to determine the patent-eligibility under 35 U.S.C. § 101, described in Mayo[1] and Alice.[2]

A main revision in the 2019 PEG reflects the recent Federal Circuit decision Berkheimer v. HP, Inc.[3] in patent eligibility assessment. In that case, the United States Court of Appeals for the Federal Circuit (“Federal Circuit”) issued a decision regarding the inquiry of whether a claim limitation represents well-understood, routine, conventional activities (“WURC”) to a skilled artisan in the relevant field. Specifically, the Federal Circuit found that the question of whether a claim element (or combination of elements) represents well-understood, routine, conventional activities to a skilled artisan in the relevant field is a question of fact.

The WURC inquiry frequently arises in the second step of the Supreme Court's two-step framework for patent eligibility under 35 U.S.C. § 101. The first step makes a determination about whether a claim is "directed to" a patent-ineligible concept (laws of nature, natural phenomena, and abstract ideas).[4] If the claim is found to be so directed, then, in the second step, patent examiners must “consider the elements of each claim both individually and as an ordered combination to determine whether the additional elements transform the nature of the claim into a patent-eligible application of the abstract idea”.[5] This is the search for an “inventive concept” — something sufficient to ensure that the claim amounts to “significantly more” than the abstract idea itself.[6] In the second step, one consideration is that “additional steps [that] consist of well-understood, routine, conventional activity already engaged in by the scientific community…are not sufficient to transform unpatentable natural correlations into patentable applications of those regularities.”[7]

In Berkheimer, the court held that “whether claims…perform well-understood, routine, and conventional activities to a skilled artisan is a genuine issue of material fact making summary judgment inappropriate with respect to these claims.”[8] The Federal Circuit further stated that “the Supreme Court recognized that in making the § 101 determination, the inquiry ‘might sometimes overlap’ with other fact-intensive inquiries like novelty under § 102.”[9] The Federal Circuit also noted that it had previously stated that “[t]he § 101 inquiry 'may contain underlying factual issues.'"[10]

To reflect the holding in Berkheimer v. HP Inc., the USPTO added a section on WURC requiring a factual determination and how examiners can support this determination.[11] However, the USPTO interpreted the holding in a restrictive way by tying the WURC consideration in the second step, as well as restricting the burden of factual determination within the WURC assessment.[12] Consequently, examiners may continue to give full weight to the improvement’s consideration in the first step as a matter of law.

To be specific, the “improvements” evaluation is in the first step of the Alice-Mayo two-step framework. In Enfish, the Federal Circuit determined that claims related to a database architecture that used a new, self-referential logical table were non-abstract because they focused on "an improvement to computer functionality itself, not on economic or other tasks for which a computer is used in its ordinary capacity."[13] Together with other “improvement” cases (Finjan, Enfish, and McRO)[14] after Alice, the Federal Circuit established several situations that are not directed to an abstract idea and can thus survive the first step, eliminating the need to search for an inventive concept in the second step. Correspondingly, the revision indicates that certain consideration (2106.05(a) through (c) and (e) through (h))[15] can be conducted in the first step (step 2A, whether a claim is directed to a judicial exception) and in the second step (step 2B, whether a claim amounts to significantly more). However, WURC consideration (2106.05(d)) can only be carried on in step 2B.

The latest revision shows the USPTO’s careful way of clarifying the Federal Circuit’s cases into the two-step framework. The USPTO states that it is “determined to continue its mission to provide clear and predictable patent rights in accordance with this rapidly evolving area of the law, and to that end, may issue further guidance in the area of subject matter eligibility in the future.”^[16] However, to many practitioners, the eligibility standard established by the Supreme Court is ambiguous and unpredictable, which is dramatically reflected in Judge Lourie’s concurring opinion in the Berkheimer decision:  “However, I believe the law needs clarification by higher authority, perhaps by Congress, to work its way out of what so many in the innovation field consider are § 101 problems. Individual cases, whether heard by this court or the Supreme Court, are imperfect vehicles for enunciating broad principles because they are limited to the facts presented. Section 101 issues certainly require attention beyond the power of this court.”[17] On the legislative side, a bill to broaden patent eligibility has been proposed in Congress and was debated during a Senate hearing this June.

[1] Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66 (2012).

[2] Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208 (2014).

[3] Berkheimer v. HP Inc., 881 F.3d 1360, 1367-1368 (Fed. Cir. 2018); Robert W. Bahr, Deputy Commissioner for Patent Examination Policy, Memorandum on Changes in Examination Procedure Pertaining to Subject Matter Eligibility (Apr. 19, 2018), https://www.uspto.gov/sites/default/files/documents/memo-berkheimer-20180419.pdf.

[4] Alice, 573 U.S. at 208 (2014).

[5] Id. at 209.

[6] Id.

[7] Mayo, 566 U.S. at 79-80 (2012).

[8] Berkheimer, 881 F.3d at 1370 (Fed. Cir. 2012).

[9] Id. at 1368 (citing Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 90 (2012)).

[10] Id. (citing Mortg. Grader, Inc. v. Frst Choice Loan Servs., 811 F.3d 1314, 1325 (Fed. Cir. 2016).

[11] Robert W. Bahr, Deputy Commissioner for Patent Examination Policy, Memorandum on Changes in Examination Procedure Pertaining to Subject Matter Eligibility (Apr. 19, 2018), https://www.uspto.gov/sites/default/files/documents/memo-berkheimer-20180419.pdf.

[12] U.S. Patent and Trademark Office, Chart of MPEP Sections Affected by the 2019 Revised Patent Subject Matter Eligibility Guidance (“2019 PEG”) (Jan. 7, 2019), https://www.uspto.gov/sites/default/files/documents/mpepchart_for_2019peg_20190107.pdf.

[13] Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1336 (Fed. Cir. 2016).

[14] Finjan, Inc. v. Blue Coat Sys., Inc., 879 F.3d 1299 (Fed. Cir. 2018), patent claims constituted sufficient non-abstract improvement in computer functionality to render claims patent-eligible; Enfish, 822 F.3d (Fed. Cir. 2016); Top of Form

McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299 (Fed. Cir. 2016), claims that “uses the limited rules in a process specifically designed to achieve an improved technological result in conventional industry practice” is not direct to the ineligible patent subject matter. Bottom of Form

[15] See supra note 14; see also MPEP § 2106.05 (a) Improvements to the Functioning of a Computer or To Any Other Technology or Technical Field; (b) Particular Machine; (c) Particular Transformation; (e) Other Meaningful Limitations; (f) Mere Instructions to Apply an Exception; (g) Insignificant Extra-Solution Activity; (h) Field of Use and Technological Environment.

[16] Robert W. Bahr, Deputy Commissioner for Patent Examination Policy, Memorandum on Recent Subject Matter Eligibility Decision: Vanda Pharmaceuticals, Inc. v. West-Ward Pharmaceuticals, (June 7, 2018), https://www.uspto.gov/sites/default/files/documents/memo-vanda-20180607.pdf. 

[17] Berkheimer v. HP Inc., 890 F.3d 1369, 1374 (Fed. Cir. 2018) (Lourie, J., concurring).