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PTO Issues New Guidance Memorandum for Determining Patent-Eligible Subject Matter

March 17, 2014

By: Eric M. Balicky, Ph.D. and Deirdre E. Sanders

Hamilton Brook Smith Reynolds Alert

On March 4, 2014, the U.S. Patent and Trademark Office (PTO) published a much-anticipated memorandum announcing a "new procedure" for determining whether a claim is drawn to patent-eligible subject matter.  This memorandum, entitled "Guidance for Determining Subject Matter Eligibility Of Claims Reciting Or Involving Laws Of Nature, Natural Phenomena, and Natural Products" (Guidance Memorandum), was published together with a companion "Eligibility Guidance Quick Reference Sheet" and became effective immediately, superseding the PTO's June 13, 2013 memorandum on this topic.  
In addition to meeting other requirements (e.g., utility, novelty, and nonobviousness), a claimed invention will only be eligible for patenting if it is drawn to subject matter that falls within one of the categories of invention set forth in 35 U.S.C. § 101 (i.e., "a new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof") and does not fall within a judicially-recognized exception to patent-eligible subject matter (e.g., laws of nature, natural phenomena, and abstract ideas).
Designed to assist examiners in making subject matter eligibility determinations, the Guidance Memorandum sets forth a new examination procedure for addressing changes in the law in view of recent court decisions, particularly the Supreme Court decisions in Association for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. _, 133 S. Ct. 2107, 2116 (2013)("Myriad"), and Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. _, 132 S. Ct. 1289 (2012)("Mayo").  The Guidance Memorandum applies to "all claims ... reciting or involving laws of nature/natural principles, natural phenomena and/or natural products," including claims directed to machines, compositions, manufactures, and processes.  However, because of the emphasis on "laws of nature/natural principles, natural phenomena and/or natural products," the Guidance Memorandum likely will impact the prosecution of patents in the biotechnology and chemical fields more than others.  As noted in the Guidance Memorandum, claims reciting abstract ideas will continue to be examined using only earlier PTO guidance.  
There are four sections in the Guidance Memorandum.  Section I includes a discussion of the overall process for analyzing subject matter eligibility using the new procedure.  According to Section I, examiners should establish the broadest reasonable interpretation of the claim being examined and then ask three successive questions:

  1. Is the claim directed to one of the four statutory categories of patent-eligible subject matter (i.e., a process, machine, manufacture, or composition of matter)?
  2. Does the claim recite or involve a judicial exception(s) to patent-eligible subject matter (e.g., abstract ideas, laws of nature/natural principles, natural phenomena, natural products)?
  3. Does the claim as a whole recite something "significantly different" than the judicial exception(s)?

A flowchart in the Guidance Memorandum and corresponding Quick Reference Sheet expands on each of these questions.
Section II in the Guidance Memorandum explains how to determine whether a claim, as a whole, recites eligible subject matter.  This section analyzes the meaning of the phrase "significantly different" in the third question shown above.  According to the PTO, this is a factor-based analysis that requires examiners to consider and weigh multiple factors for and against subject matter eligibility to determine whether, on balance, the totality of the relevant factors weighs toward or against patent-eligible subject matter.  To assist in this analysis, the Guidance Memorandum includes a non-exhaustive list of six factors weighing toward eligibility and six factors weighing against eligibility.  The PTO explains that not every factor will be relevant to every claim and, moreover, the weight accorded each factor will vary based upon the facts of the application.  
As some of the factors listed in the Guidance Memorandum require an assessment of whether a product recited in a claim is "markedly different" in structure from a naturally occurring product, Section II also provides insight on how to resolve this question, i.e., by:

  • identifying the differences between the recited product and naturally occurring products, and then
  • evaluating whether the identified differences together rise to the level of a marked difference in structure.

According to the PTO, a "marked difference" must be a "significant difference," which is described as a difference that is "more than incidental or trivial."  The PTO further notes that a marked difference brought about as a result of routine activity or human manipulation of natural processes still may be a marked difference weighing in favor of patent eligibility.
Section III provides eight examples of how to apply the new procedure to different types of claims including:

  • composition, article of manufacture, and method claims reciting or involving natural products;
  • process claims involving a natural principle; and
  • process claims reciting an abstract idea.

The examples provide claims, background information, an analysis of each claim under the appropriate guidance [i.e., either the PTO's factor-based analysis set forth in the Guidance Memorandum or, for claims reciting an abstract idea, guidance provided in the Manual of Patent Examining Procedure (MPEP) at § 2106(II)], and a conclusion as to whether or not each claim qualifies as patent-eligible subject matter.
Finally, Section IV contains a revised form paragraph to be used by patent examiners when rejecting claims that recite or involve laws of nature/natural principles, natural phenomena and/or natural products under 35 U.S.C. § 101 in accordance with the new procedure in the Guidance Memorandum.  
Although the Guidance Memorandum does not have the force of law or create binding legal precedent, it nonetheless is an important document because it reflects current PTO policy and will serve as a training material for patent examiners.  Accordingly, patent applicants and practitioners should keep in mind the procedure set forth in the Guidance Memorandum when drafting and prosecuting applications that include claims reciting or involving subject matter that could be construed as a law of nature/natural principle, natural phenomenon, or natural product under the current state of the law. 
Notably, the Supreme Court is expected to issue another decision on patent-eligible subject matter by the summer in Alice Corp. v. CLS Bank, which raises the question of patent-eligible subject matter in the context of computer-implemented inventions.  Therefore, it is likely that the PTO will be issuing new guidance materials on patent-eligible subject matter as the law in this area continues to develop.

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