UNITED STATES PATENT AND TRADEMARK OFFICE
`
`MEMORANDUM
`June 25, 2014
`
`DATE:
`
`TO:
`
`FROM:
`
`Patent Examining Corps
`
`Andrew H. Hirshfeid
`Deputy Commissioner
`For Patent Examination Policy
`
`CommissiOlltf fOf Patent,
`Ulliled Stales Pattm and Trademurk Office
`PO. Ho~ 1450
`AIe~aJldfia, VA 22313-14S0
`""'.,., "'I"<>~Q '
`
`SUBJECT: Preliminary Examination Instructions in view of the Supreme Court
`Decision in Alice Corporation Ply. Ltd. v. CLS Bank Illternational, et af.
`
`Last week, in a unanimous decision, the Supreme Court held that the patent claims in Alice
`Corporation Pty. Ltd. v. CLS Bank International, el al. ("Alice Corp. ") are not patent-eligible
`under 35 U.S.c. § 101. The patents at issue disclose a scheme for mitigating "settlement risk,"
`i.e., the risk that only one party to an agreed-upon financial exchange will satisfy its obligation,
`in which a computer system is used as a third-party intermediary between the parties to the
`exchange. The patent claims are styled as a method for exchanging financial obligations, a
`computer system configured to carry out the method, and a computer-readable storage medium
`containing program code for causing a computer to perfonn the method.
`
`The Court determined that Alice Corp.'s claims to methods were ineligible because "the claims
`at issue amount to 'nothing significantly more' than an instruction to apply the abstract idca of
`intermediated settlement using some unspecified, generic computer." Alice Corp.'s claims to
`computer systems and computer-readable storage media were he ld ineligible for substantially
`the same reasons, e.g., that the generically-recited computers in the claims add nothing of
`substance to the underlying abstract idea. Notably, Alice Corp. neither creates a per se
`excluded category of subject matter, such as software or business methods, nor imposes any
`special requ irements for eligibility of software or business methods.
`
`The purpose of this memorandum is to provide preliminary instructions effective today to the
`Patent Examining Corps relating to subject matter eligibility of claims involving abstract ideas,
`particularly computer-implemented abstract ideas, under 35 U.S.c. § 101. The USPTO is
`continuing to study Alice Corp. in the context of existing precedent and will seek public
`feedback on the instructions. Further guidance will be issued after additional consideration of
`the decision and public feedback in the context of the existing law under 35 U.S.c. § 101.
`
`Preliminary Instructions for Analvzing Claims with Abstract Ideas
`
`The Supreme Court made clear in Alice Corp. that it applies the framework set forth in Mayo
`Collaborative Services v. Prometheus LaboralOries, Inc., 566 U.S. _ (2012) (Mayo), to
`analyze all claims directed to laws of nature, natural phenomena, and abstract ideas for subject
`matter eligibility under 35 U.S.c. § 101. This framework is currently being used by the
`
`Versata Exhibit 2015
`Callidus v. Versata
`CBM2013-00053
`
`

`

`USPTO to examine claims involving laws of nature, but had not been used for claims
`involving abstract ideas. Therefore, the following instructions differ from prior USPTO
`guidance in two ways:
`
`1) Alice Corp. establishes that the same analysis should be used for all types ofjudicial
`exceptions, whereas prior USPTO guidance applied a dilTerent analysis to claims with abstract
`ideas (Bilski guidance in MPEP 2106(1I)(B)) than to claims with laws of nature (Mayo
`guidance in MPEP 2106.0 1).
`
`2) Alice Corp. also establishes that the same analysis should be used for all categories of
`claims (e.g., product and process claims), whereas prior guidance applied a different analysis to
`product claims involving abstract ideas (relying on tangibility in MPEP 2106(Il)(A)) than to
`process claims (Bilski guidance).
`
`Despite these· changes, the basic inquiries to determine subject matter eligibility remain the
`same as explained in MPEP 2 106(1). First determine whether the claim is directed to onc of
`the four statutory categories of invention, i.e., process, machine, manufacture, or composition
`of matter. If the claim does not fall within one of the categories, reject the claim as being
`directed to non-statutory subject matter. Next, if the claim does fall within one of the statutory
`categories, determine whether the claim is directed to ajudicial exception (i.e., law of nature,
`natural phenomenon, and abstract idea) using Part I of the two-part analysis detailed below,
`and, if so, determine whether the claim is a patent-eligible application of an exception using
`Part 2. This two-part analysis supersedes MPEP 21 06(1I)(A) and 2106(11)(8).
`
`For purposes of this preliminary instruction memo, only claims that involve abstract ideas are
`addressed, si nce the USPTO's current guidance for claims that involve laws of nature/natural
`phenomena already uses the Mayo framework . See Guidance For Determining Subject Maller
`Eligibility O/Claims Reciting Or involving Laws o/NalUre, Nalural Phenomena. & Nalural
`Products (March 4,2014).
`
`Two-part Analysis for Abstract Ideas
`
`Following Alice Corp., now analyze all claims (product and process) having an abstract idea
`using the following two-part analysis set forth in Mayo :
`Part I: Determine whether the claim is di rected to an abstract idea.
`
`As emphasized in Alice Corp., abstract ideas are excluded from eligibility based on a concern
`that monopolization of the basic tools of scientific and technological work might impede
`innovation more than it would promote it. At the same time, the courts have tread carefully in
`construing this exclusion because, at some level, all inventions embody, use, reflect, rest upon
`or apply abstract ideas and the other exceptions. Thus, an invention is not rendered ineligible
`simply because it involves an abstract concept. In fact, inventions that integrate the building
`blocks of human ingenuity into something more by applying the abstract idea in a meaningful
`way are eligible.
`
`Examples of abstract ideas referenccd in Alice Corp. include:
`
`• Fundamental economic practices I;
`• Certain methods of organizing human activities2
`
`;
`
`2
`
`
`

`

`•
`"[A]n idea ofitself,J; and,
`• Mathematical reiationships/fonnulas4
`•
`Claims that include abstract ideas like these should be examined under Part 2 below to
`determine whether the abstract idea has been applied in an eligible manner.
`
`Ifan abstract idea is present in the claim, proceed to Part 2 below. Ifnot, proceed with
`examination of the claim for compliance with the other statutory requirements for patentability.
`
`Part 2: If an abstract idea is present in the claim, determine whether any element, or
`combination of elements, in the claim is sufficient to ensure that the claim amounts to
`significantly more than the abstract idea itself. In other words, are there other limitations in
`the claim that show a patent-eligible application of the abstract idea, e.g., more than a mere
`instruction to apply the abstract idea? Consider the claim as a whole by considering all claim
`elements, both individually and in combination.
`
`Limitations referenced in Alice Corp. that may be enough to qualify as "significantly more"
`when recited in a claim with an abstract idea include, as non-limiting or non-exclusive
`examples:
`
`•
`
`•
`
`Improvements to another technology or technical fields;
`
`Improvements to the functioning of the computer itselr;
`
`• Meaningful limitations beyond generally linking the use of an abstract idea to a
`
`particular technological environment7
`•
`
`
`Limitations referenced in Alice Corp. that are not enough to qualify as "significantly more"
`when recited in a claim with an abstract idca include, as non-limiting or non-exclusive
`examples:
`
`• Adding the words "apply it" (or an equivalent) with an abstract idea, or mere
`
`instructions to implement an abstract idea on a computerS;
`
`
`• Requiring no more than a generic computer to perform generic computer functions that
`are well-understood, routine and conventional activities previously known to the
`. d
`9
`m ustry .
`
`If there are no meaningful limitations in the claim that transform the exception into a patent
`eligible application such that the claim amounts to significantly more than the exception itself,
`the claim should be rejected under 35 U.S.c. § 101 as being directed to non-statutory subject
`matter (use Fom1 ~ 7.05.01).
`
`After conducting the two-part analysis, proceed with examination of the claim, regardless of
`whether a rejection under § 101 has been made, to determine patentability in accordance with
`the other requirements of 35 U.S.c. § 101 (utility and double patenting), non-statutory double
`patenting, and §§ 112, 102, and 103.
`
`1 Alice Corp., slip op. at 7·9: e.g., intermediated settlement, i.e. , the use of a third party intermediary to mitigate
`settlement risk.
`
`3
`
`
`

`

`2 Id , slip op. at 10: e.g., a series of steps instructing how to hedge risk (ciling Bilski v. Kappas, 561 U.S. 593, 599
`(2010)).
`3 Id., slip op. at 7-8: e.g., a principle, an original cause, a motive (citing GolI~'chalk v. Benson, 409 US. 63, 67
`(1972) and LeRoy v. Tatham, 14 How. 156, 175 (1853)).
`~ Id., slip op. at 8: e.g., a mathematical formula for computing alarm limits in a catalytic conversion process (Parker
`v. Flook. 437 U.S. 584, 594-595 (1978)), or a fonnula for converting binary-coded decimal numerals into pure
`
`binary form (Benson. 409 U.S. at 71-72).
`
`~ Id., slip op. at 15: e.g., a mathematical formula applied in a specific rubber molding process (citing Diamond v.
`
`Diehr,4S0U.S. 175,177-178(1981)).
`
`6 Id., slip op. at 15.
`
`7 Id., slip op. at 16: noting that none of the hardware recited "offers a meaningful limitation beyond generally linking
`
`'the use of the [method] to a particular technological environment,' that is, implementation via computers" (citing
`
`Bilski. 561 U.S. at 610, 611).
`
`8!d, slip op. at 12, 13: e.g., simply implementing a mathematical principle on a physical machine, namely a
`
`computer (citing Mayo. sl ip op. , al 16).
`
`9 Id. , slip op. at 15: e.g., using a computer to obtain data, adjust account balances, and issue automated instructions.
`
`
`4
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