TAKEAWAY: The PTAB has already issued several decisions favorable to applicants under the two-prong analysis of the 2019 Revised Patent Subject Matter Eligibility Guidance.

On January 7, 2019, the USPTO published the “2019 Revised Patent Subject Matter Eligibility Guidance” (“the Guidance”) revising the procedures for evaluating subject matter eligibility under 35 U.S.C. § 101. Specifically, the Guidance adds a two-prong inquiry to Step 2A of the two-step Alice test for determining whether the claims are “directed to” any judicial exceptions (e.g., a law of nature, a natural phenomenon, or an abstract idea). The two prongs are:

  • Prong One: evaluate whether the claim recites any judicial exception, including certain groupings of abstract ideas (e.g., mathematical concepts, certain methods of organizing human interactions such as a fundamental economic practice, or mental processes).
  • Prong Two: evaluate whether the claim recites additional elements that integrate the judicial exception into a practical application.

Since the publication of the Guidance, the PTAB has already issued several decisions reversing the examiner under the new two-prong analysis. The PTAB has reversed the examiner under Prong One in eleven decisions and under Prong Two in twelve decisions.

Under Prong One, the PTAB has found that collecting usage information of devices connected to a computing system is not an abstract idea. See, Ex parte Fanaru, No. 2017-002898. Two decisions found claim limitations were not abstract ideas when requiring action by a processor that cannot be practically performed in the mind. See, e.g., Ex parte Herbst, No. 2018-000602 (dealing with embedding a tag in an image). Further, the PTAB reversed examiners in two decisions by holding that, although some limitations of the claim may be based on mathematical concepts, the specific mathematical concepts are not recited in the claims, and therefore the claims are not directed to an abstract idea. See, e.g., Ex parte Kim, No. 2018-005712 (dealing with shapes based on mathematical relationships). Lastly, in three decisions the PTAB found that, when the claim is looked at as a whole, the claim is not directed to organizing human interactions (e.g., a fundamental economic practice). See, e.g., Ex parte Shin, No. 2017-010994 (dealing with a recruitment system for generating a job report).

Under Prong Two, the PTAB found practical applications in eight decisions where the claims recited improvements to the functioning of a computer or improvements to other technologies or technical fields. See, e.g., Ex parte Rockwell, No. 2018-004973 (dealing with updating software specifically for a vehicle module); and Ex parte Dawson, No. 2017-011353 (dealing with a bandwidth-sharing ad hoc network among lenders and borrowers). In four decisions, the PTAB found that the claims as a whole were more than a drafting effort designed to monopolize the abstract idea, and thus a practical application. See, e.g., Ex parte Tavares, No. 2017-009694 (dealing with aggregated point of sale (POS) datasets).

The PTAB has already issued over 20 decisions reversing examiners’ Section 101 rejections based on the Guidance. While this may inspire optimism for applicants, the reversal rate is still relatively low, approximately 25 percent, for decisions analyzed under the Guidance.