The State of Patent Eligibility - Chicago-Kent | Journal of Intellectual Property

Written by Brandon Furdock

Section 8 of the U.S. Constitution directs Congress “[t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” [1] This clause was first codified by Congress into law in the Patent Act of 1790. [2] United States patent law entered into its modern era when Congress enacted the Patent Act of 1952. Among other things, the 1952 Patent Act set forth the foundation for what is patent-eligible subject matter. Namely, “[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.” [3]

Seventy years later, United States patent law is facing an eligibility crisis. [4] Inventors, patent practitioners, and legal theorists have all recognized the uncertainty surrounding this fundamental area of patent law. Even the Federal Circuit, a court specifically created to manage the complexities of patent law, has recognized the badly muddled state of patent subject matter eligibility. [5] In American Axle, Chief Federal Circuit Judge Moore remarked that, “[a]s the nation’s lone patent court, we are at a loss as to how to uniformly apply § 101. All twelve active judges of this court urged the Supreme Court to grant certiorari in Athena to provide us with guidance regarding whether diagnostic claims are eligible for patent protection.” [6]

If the patent system is currently buckling under the stress of modern technologies, future advancements threaten to completely break the system. For example, rapid advancements in artificial intelligence (“AI”) could exacerbate the challenges facing the U.S. subject matter eligibility framework. [7] Section 101 of the Patent Act (“§ 101”) has been interpreted to extend only to human inventors. [8] Some suggest that the failure to extend patent rights to inventions created by AI could have significant effects on innovation. [9]

In recent years, the United States Patent and Trademark Office (“USPTO”) has entered the patent eligibility debate with its own interpretation of what should be patent eligible. The 2019 Patent Subject Matter Eligibility Guidance (“PSMEG”), now codified in the Manual of Patent Examining Procedure (“MPEP”), presents a detailed interpretation of subject matter eligibility, including various examples of what the USPTO believes to be models for patent-eligible subject matter. [10] While the MPEP interpretation may provide clarity and a starting point for future eligibility jurisprudence, the “Office Guidance is not, itself, the law of patent eligibility, does not carry the force of law, and is not binding.” [11]

This article seeks to explore the conversations surrounding 35 U.S.C. § 101 and the complex issue of what should be patent-eligible subject matter. By reaching out to all stakeholders (e.g., companies, inventors, patent professionals, legislators, etc.) and carefully examining the successes and failures of the current statute, a solution can be reached that most effectively promotes the progress of the useful arts in this exciting new era.

I. Patent Eligibility Basics

Section 101 states that one is entitled to a patent for developing “any new and useful process.” This language seems relatively straightforward at first glance. On its face, there are no qualifiers; therefore there should be no limit on what can constitute patentable subject matter. The 1952 Patent Act Committee Reports indicate that Congress intended § 101 to “include anything under the sun that is made by man.” [12] Yet, in the time since the Patent Act was enacted, a complex web of jurisprudence has developed limiting patent subject matter eligibility.

Importantly, the Supreme Court has determined the statute contains an important implicit exception that “laws of nature, natural phenomena, and abstract ideas” are not patentable. [13] The Supreme Court developed a two-part test to determine if a patent is eligible in Alice and Mayo, a pair of Supreme Court decisions. The Alice/Mayo test, set forth in 2014, thrust § 101 into the spotlight as a critical requirement for patentability. [14] Eight years and more than seventy Federal Circuit cases later, we may not be any closer to clarity on this topic. [15]

The first part of the Alice/Mayo test seeks to find if the claims are “directed to” an abstract idea. [16] Although the concept of an “abstract Idea” is fundamental to patentability, there is no single, succinct, usable definition or test of what an “abstract idea” is. [17] In practice, the Federal Circuit has simply relied on a comparison of new claims to those in earlier decisions. [18] The second part of the test considers “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.” [19]

Few argue that recent Federal Circuit decisions have led to a coherent body of eligibility jurisprudence. [20] In response to the lingering confusion regarding how to apply the law, the USPTO has attempted to step in and fill in the gaps that have not been addressed by the courts. [21] The USPTO set forth its position in the PSMEG. The PSMEG set forth guidelines that patent examiners at the USPTO must use to determine if an invention is patent-eligible subject matter. [22]

Recently, the USPTO requested public feedback on their guidelines. [23] Groups that provided feedback include the American Civil Liberties Union (“ACLU”), the High Tech Inventors Alliance (“HTIA”), and the Intellectual Property Owners Association (“IPO”). The ACLU describes itself as an entity that works in the courts, legislatures, and communities to defend and preserve the individual rights and liberties guaranteed to all people in this country. [24] In their comments, the ACLU argued that § 101 should be more restrictive, specifically with regard to the pharmaceutical industry. [25] Their position is that by further restricting patent grants in the field, more people will be able to obtain access to life-saving pharmaceuticals. The HTIA is a group of eleven of the largest technology companies that took a relatively similar position to that of the ACLU. However, they also argued that clarification of the guidelines will benefit those companies that are dealing with non-practicing patenting entities. [26]

On the other hand, comments by the IPO advocate for clarification of the subject matter of the PSMEG. [27] Specifically, the IPO suggests that, while the PSMEG provided increased consistency to the examination process, there were still many areas that would benefit from clarification. [28]

II. Artificial Intelligence and Section 101

Section 101 is causing problems beyond the current confusion in patent subject matter eligibility. [29] For example, some argue that the jurisprudence developing around § 101 is stifling future innovation by denying patentability in certain AI-based inventions. [30] For example, 35 U.S.C. § 101 has been interpreted to extend only to human inventors. [31] This means that artificial intelligence systems cannot be named as inventors on U.S. patents, and companies are unable to obtain patent protection for inventions developed by these entities. [32]

The failure to extend patent rights to inventions created by AI could have significant effects on innovation. For example, if a company realizes that they will not be granted any exclusive rights for AI-based inventions, the company may not invest as much money into developing the AI. In rejecting the idea that AI can be an inventor, countries across the world have relied on a narrow interpretation of current laws. [33] Some argue that existing patent frameworks are simply incapable of adapting to a world in which AI entities can rapidly generate new technologies. [34] Others suggest that simply “tinkering” with existing laws may produce more unintended consequences than completely new legislation that is tailored to the specific problems posed by AI-based inventions. [35]

One interesting idea is that the current system could undergo minor reforms to be more compatible with AI-based inventions. For example, AI-based inventions could be granted a shorter patent term. [36] The policy position behind this stems from the concept that AI may be able to generate new inventions much more quickly than a human inventor. Thus, without the hard work and time invested by a human inventor, a lesser reward may be appropriate. Regardless, the discussions surrounding 35 U.S.C. § 101 are likely to continue until a solution can be reached that most effectively promotes the progress of the useful arts in this exciting new era.

References

[1] U.S. CONST. art I, §9, cl. 9.

[2] Patent Act of 1790, ch. 7, 1 Stat. 109-112, repealed by Patent Act of 1793, ch. 11, 1 Stat. 318-323.

[3] 35 U.S.C. § 101.

[4] Paul Michel et al., Presenting the Evidence for Patent Eligibility Reform: Part I – Consensus from Patent Law Experts, IPWATCHDOG (Oct. 6, 2022, 3:15 PM), https://www.ipwatchdog.com/2022/10/06/presenting-evidence-patent-eligibility-reform-part-consensus-patent-law-experts/id=151886/ [https://perma.cc/NTH3-86WH] (last visited Nov. 21, 2022); Am. Axle & Mfg., Inc. v. Neapco Holdings, LLC, 967 F.3d 1285, 1289 (Fed. Cir. 2020), cert. denied, 142 S. Ct. 2902 (2022); Michael Borella, The Supreme Court Sidesteps America’s Patent Eligibility Crisis, JDSUPRA (July 1, 2022), https://www.jdsupra.com/legalnews/the-supreme-court-sidesteps-america-s-9535702/ [https://perma.cc/QS3D-Y64C] (last visited Nov. 21, 2022).

[5] Am. Axle & Mfg, Inc., 967 F.3d at 1289, supra n.4.

[6] Id.

[7] Alexandra George & Toby Walsh, Artificial Intelligence Is Breaking Patent Law, NATURE (May 24, 2022), https://www.nature.com/articles/d41586-022-01391-x [https://perma.cc/5FUQ-239Q] (last visited Nov. 21, 2022).

[8] Thaler v. Vidal, 43 F.4th 1207 (Fed. Cir. 2022).

[9] Id.

[10] 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019).

[11] In re Rudy F., 12 Cal. Rptr. 3d 483 (Cal. Ct. App. 2004).

[12] H.R. REP. NO. 82-1979, at 5-6 (1952).

[13] Alice Corp. v. CLS Bank International, 573 U.S. 208 (2014).

[14] Anthony Blum & Jonathan Musch, Will There Be Reform of Alice and Mayo in 2021?, JDSUPRA (Mar. 22, 2021), https://www.jdsupra.com/legalnews/will-there-be-reform-of-alice-and-mayo-6981978/ [https://perma.cc/6J4G-JSNY] (last visited Nov. 21, 2022).

[15] Burman York (Bud) Mathis III, Alice-Insanity (Part One), or Why the Alice-Mayo Test Violates Due Process of Law, IPWATCHDOG (Oct. 26, 2021, 4:15 PM), https://ipwatchdog.com/2021/10/26/alice-insanity-part-one-alice-mayo-test-violates-due-process-law/id=139229/ [https://perma.cc/USH3-UKXW] (last visited Nov. 21, 2022)

[16] Blum, supra n.14.

[17] Amdocs (Israel) Ltd. v. Openet Telecom, Inc., 841 F.3d 1288, 1293 (Fed. Cir. 2016).

[18] Id.

[19] Blum, supra n.14.

[20] Steve Brachmann, Eligibility Comments to USPTO Suggest Alice/Mayo Framework Changes, While PTAB Practices RFC Sees Copy-Paste Campaign, IPWATCHDOG (Oct. 23, 2022, 12:15 PM), https://ipwatchdog.com/2022/10/23/eligibility-comments-uspto-suggest-alice-mayo-framework-changes-ptab-practices-rfc-sees-copy-paste-campaign/id=152276/ [https://perma.cc/B6WS-7DJ3] (last visited Nov. 21, 2022).

[21] Id.

[22] USPTO, OCTOBER 2019 UPDATE: SUBJECT MATTER ELIGIBILITY, https://www.uspto.gov/sites/default/files/documents/peg_oct_2019_update.pdf [https://perma.cc/5ACH-JWQE] (last visited Nov. 21, 2022).

[23] Brachmann, supra n.20.

[24] ACLU, FAQS, https://www.aclu.org/faqs [https://perma.cc/J5R7-KNDE] (last visited Nov. 21, 2022).

[25] Brachmann, supra n.20.

[26] Submission of Comments Regarding the Patent Subject Matter Eligibility Guidance, 87 Fed. Reg. 53736 (Sept. 1, 2022), https://www.federalregister.gov/documents/2022/09/01/2022-18895/submission-of-comments-regarding-the-patent-subject-matter-eligibility-guidance [https://perma.cc/4DNE-3R4K] (last visited Nov. 21, 2022)

[27] USPTO, Patent Subject Matter Eligibility Guidance, REGULATIONS.GOV (Aug. 31, 2022), https://www.regulations.gov/document/PTO-P-2022-0026-0001/comment [https://perma.cc/K2WP-C2VQ] (last visited Nov. 21, 2022).

[28] Id.

[29] George, supra n.7.

[30] Id.

[31] Robert A. McFarlane & Rosanna W. Gan, Circuit Decision on AI Complicates Inventor Strategies, BLOOMBERG LAW (Sept. 14, 2022, 3:01 AM), https://news.bloomberglaw.com/in-house-counsel/circuit-decision-on-ai-complicates-inventor-strategies [https://perma.cc/9TTX-23L5] (last visited Nov. 21, 2022).

[32] Id.

[33] George, supra n.7.

[34] Id.

[35] Id.

[36] Id.