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This is the third of four different sections that make up our guidance on Section 101 rejections. The first section describes Section 101 issues in general and introduces the two-step Alice test. The second section discusses how to apply the first step of the Alice test, while this third describes the second step of the test. The fourth section provides a list of potential arguments that one can make when responding to a rejection from the patent office under Section 101. If you have any comments or suggestions for this guidance, please contact Dan Tysver.
Overview of Step Two of the Alice Test
Necessary only if invention does not pass step one
The second step of the Alice test is reached only if the first step determines that the claims are directed to an abstract idea. If the claims are not directed to an abstract idea under step one, the claim is patent-eligible and there is no need to proceed to step two of the analysis. Enfish. But if the claims were found to be “directed to” an abstract idea under step one, the claims will still be eligible for patent protection if they contain an inventive concept under the second step of the Alice test.
Requirement for an "Inventive Concept"
The Supreme Court has explained that the second step of the Alice test is to determine whether the claim contains an "inventive concept" sufficient to transform the claimed abstract idea into a patent-eligible application. This second step originated in the Mayo decision and was clarified by the Supreme Court in Alice:
At Mayo step two, we must examine the elements of the claim to determine whether it contains an "inventive concept" sufficient to "transform" the claimed abstract idea into a patent-eligible application. A claim that recites an abstract idea must include "additional features" to ensure "that the [claim] is more than a drafting effort designed to monopolize the [abstract idea]."
Citations omitted. As was the case with phrase "abstract idea" (explained in our Guidance on Identifying the Abstract Idea without any Definitions), the fact that we lack any clear definition of what constitutes an "inventive concept" makes it more difficult to analyze a claim for its existence. Nonetheless, the Alice decision as interpreted by the Federal Circuit has provided some guidance on how to perform step two.
What is Enough for an Inventive Concept?
Step two is only applied to a claim that has been determined to be directed to an ineligible concept under step one. The purpose of step two is to determine whether there are claim elements that transform the ineligible concept found in step one into a patent-eligible claim. The guidance that is provided by the Supreme Court is mostly negative, explicitly defining the type of elements that are not sufficient to show an inventive concept. However, a close examination of the Alice decision and a review of the relevant Federal Circuit decisions does provide a pathway for getting claims allowed under step two.
One of the most important instructions from both the Supreme Court and the Federal Circuit is that "well-understood, routine, and conventional" activities or claim elements cannot form an inventive concept. A corollary of this instruction (that has not yet been definitively established) is that non-routine elements in a claim are enough to form an inventive concept. This concern with well-understood, routine, and conventional claim elements has become such a central part of the analysis under step two of the Alice test that we will analyze this issue separately below. Before reaching that discussion, we will consider the following instructions/teachings of the courts related to how to identify an inventive concept under step two:
- Not enough: Mere instructions to apply (such as a generic computer element or high degree of generality)
- Not enough: Insignificant, extra-solution activity
- Not enough: Field of use restriction or technological environment
- Enough: Improving the Computer or Other Technology
Not Enough: Mere Instructions to Apply (Generic Computer or High Degree of Generality)
"Apply It:" The first instruction or guidance for inventive concepts comes directly from the Supreme Court. In explaining the origin of the second step of the Alice test, the Supreme Court emphasized that:
Mayo made clear that transformation into a patent-eligible application requires "more than simply stat[ing] the [abstract idea] while adding the words 'apply it.'"
Alice (citations omitted).
Generic Computers While very few claims include instructions to "apply" something, the Alice court found that claiming a generic computer that simply processes the steps of an abstract idea was effectively the same as saying to "apply the abstract idea on a computer." In other words, an inventive concept under step two of the Alice test will not be found just because a claim includes a generic physical computer that performs process steps. This is a common conclusion, and similar holdings can be found, for example, in Electric Power, buySAFE, Mortgage Grader, and Intellectual Ventures v. Capital One.
MPEP 2106.05(f) also argues that claims in which a computer is used just "as a tool" to perform an existing process is doing no more than saying "apply it" to the implemented claims. It appears that the MPEP is simply stating that if the computer is being used merely as a tool, then it is no more than a generically claimed physical computer and will not be sufficient to find an inventive concept. Note that the "as a tool" language used here is the same language we saw being used in step one of the Alice test to determine if a claim is directed to an abstract idea. See our guidance on Improving Computers vs. Using Computers as a Tool.
High Degree of Generality Another instruction from the courts relating to step two is that language which merely claims solutions to a problem at "a high degree of generality" is insufficient to constitute an inventive concept. See Ultramercial v. HULU, LLC ("Instead, the claimed sequence of steps comprises only 'conventional steps, specified at a high level of generality,' which is insufficient to supply an 'inventive concept.'") Many would consider this instruction be different than the rule related to adding the words "apply it," although section 2106.05(f) of the MPEP combines these two rules/instructions into a single concern. Under the MPEP, patent claims that only recite the outcome or solution to a problem, and don't recite any details about how the outcome is obtained, should be rejected under the "mere instructions to apply" rationale.
The rule that elements specified at a high degree of generality cannot constitute an inventive concept is worthy of some additional consideration. In Electric Power, the Federal Circuit denied patent eligibility to a claim related to data gathering and analysis in an electric power grid. But the Federal Circuit took care to emphasize that the claims in that case did not specify any particular solution to the problem at hand, and the court might have reached a different conclusion had the claims been more specific. The Federal Circuit agreed with the trial court that there was a distinction “between patenting a particular concrete solution to a problem and attempting to patent the abstract idea of a solution to the problem in general." As the claims in Electric Power did not claim a specific implementation or a specific solution to a problem, but attempted to patent all solutions in the abstract, the Federal Circuit found that the claims did not include an inventive concept.
A similar resolution was found in Intellectual Ventures v. Capital One, which explained that if an inventive concept is to be found in a claim, the claim must provide more than result-oriented solutions to an identified problem. Instead, the claim must describe the steps undertaken to overcome the problem with the prior art. Similar discussions and rationales can be found in the Federal Circuit cases of Symantec and Affinity Labs.
It is important to note that our guidance in Claiming a Particular Solution vs. Claiming the Outcome under step one also discussed this same distinction between outcome-oriented claiming and the claiming of specific steps to achieve a goal. Our guidance indicated that this test was a shadow test for determining whether or not a claim is directed to an abstract idea under step one. This is one of several examples where similar arguments are applicable to both step one and step two of the Alice test.
Not Enough: Insignificant, extra-solution activity
A second teaching to help determine whether a claim includes elements that constitute an inventive step relates to whether the elements constitute insignificant, extra-solution activity. Not surprisingly, if a claim element is characterized as having "insignificant, extra-solution activity" or as "routine data gathering steps," courts have refused to find any inventive steps in those claim elements. OIP Technologies. See also Mayo and Apple, Inc. v. Ameranth, Inc..
The question, of course, is how to identify when a claim element is no more than "insignificant, extra-solution activity." At MPEP 2106.05(g), the patent office has set forth several items to be considered in making this determination. One of these items is whether the limitation is "well-known." In this regard, the determination as to whether any activity is insignificant may be quite similar as to whether the claim element is well-understood, routine, and conventional. In our opinion, these two teachings should eventually be combined into a single concern. In fact, the merging of "insignificant, extra solution activity" and "well-understood, routine, conventional activity" is already playing out at the Federal Circuit. OIP Technologies, for example, states that "routine data-gathering steps" are just one example of "well-understood, routine conventional activities."
Not Enough: Field of use restriction or technological environment
Another teaching that is well accepted is that claim limitations that serve to limit an invention to a particular technological environment will not be enough to constitute an inventive concept. This teaching is explicitly set forth in Alice, and the Federal Circuit also repeatedly relied upon this rule. See, e.g., Electric Power ("limiting the claims to the particular technological environment of power-grid monitoring is, without more, insufficient to transform them into patent-eligible applications of the abstract idea"), and Versata ("[s]imilarly, the prohibition on patenting an ineligible concept cannot be circumvented by limiting the use of an ineligible concept to a particular technological environment").
The Supreme Court's 1978 Parker v. Flook case is one of the primary cases referred to for this teaching. The invention at issue related to calculating an alarm limit. Even though the claims narrowly limited the use of this alarm limit to catalytic chemical conversion processes for hydrocarbons, the Supreme Court found the alarm limit calculations to comprise an abstract idea. The fact that the calculation was limited to a particular catalytic process is considered by the patent office as proof that mere field of use limitations do not save an otherwise patent-ineligible claim.
In MPEP 2106.05(h), the patent office asserts that mere field of use limitations can be identified through the "absence of integration" of the field of use "into the claim as a whole." For example, the patent office views Flook's field of use limitation as "an incidental or token addition to the claim." In contrast, the manner in which the rubber molding process was integrated into the claim as a whole in Diamond v. Diehr meant that this limitation was not a mere field of use limitation and therefore the claim was patentable-eligible. This position means that one way of responding to an office action that identifies a claim element as a mere field of use limitation is to compare the integration of your claim element to Diamond v. Diehr while citing MPEP 2106.05(h).
Enough: Improving the Computer or Other Technology
While all of the previous instructions provide guidance on what is not enough to constitute an inventive concept under step two, this teaching is different. Under this rule, a claim element that improves a technological process or otherwise improves the functioning of a computer will constitute an inventive concept. This technological improvement standard was hinted at in Alice, and has become generally accepted in recent Federal Circuit cases. See Amdocs, Symantec, Mortgage Grader
The MPEP describes this teaching at Section 2106.05(a). This section provides helpful guidance as to how an argument relating to the improvement of a computer should be made to the patent office. If an inventor argues that their claim contains an inventive concept because it improves the functioning of the computer or improves another technology, Section 2106.05(a) states that the examiner is to ensure that the specification provides "a technical explanation as to how to implement the invention" such that "one of ordinary skill in the art would recognize the claimed invention as providing an improvement." Based on this, it would obviously be helpful to draft a patent specification in a manner that identifies a specific technical problem and then explains how the invention provides a technical solution to that problem. If these details are found in the specification, the examiner is then to ensure that the claim includes the described technical solution. In doing this evaluation, the examiner is reminded to account for all of the specific requirements of the claim. If the specification and the claim meet these requirements, the examiner should find an inventive concept in the claim and determine the claim to be patent-eligible.
MPEP 2106.05(a) also provides a very useful list of technology improvements that have been found to be an inventive concept by the courts, as well as a list of alleged improvements that failed to convince a court. These lists are extremely valuable for finding comparable technologies and making an appropriate analogy in arguments to the patent office attempting to overcome a Section 101 rejection.
It is possible that this step two rule includes an additional requirement, namely that the claimed improvement to the computer must not be well-understood, routine, or conventional. In Berkheimer, some of the claims included elements that arguably would improve the functioning of the computer. However, there were insufficient factual determinations made as to whether these steps were "well-understood, routine, and conventional activities to a skilled artisan." As a result, the Federal Circuit explained that there was a factual issue yet to be determined, and summary judgment was inappropriate. In other words, the claim elements on their face seemed to improve a technology so as to constitute an inventive concept, but the court implied that this would overcome a Section 101 argument only it the improvement were not well-understood or routine.
Well-Understood, Routine, and Conventional Claim Elements
Well-understood, Routine, Conventional Activity is not Inventive Concept
As explained above, the teaching/rule about well-understood, routine, and conventional claim elements has become more and more important in evaluating step two of the Alice test. The basic teaching comes from the Supreme Court's holding in Mayo. The claims in Mayo related to correlations between certain metabolites in the blood and an appropriate drug dosage. This correlation was considered a natural phenomenon, and therefore the claim was directed to a patent-ineligible concept under step one. Under step two of the test, the additional elements of the claim had to be considered. These additional elements included measuring the metabolite levels using a known process. The Supreme Court found the use of standard techniques for measuring metabolite levels to be nothing more than the addition of well-understood, routine, conventional activity to the claim. As such, the additional claim element did not constitute an inventive concept.
In contrast, there appears to be a corollary that states that, if claims contain elements that are not well-understood, routine, and conventional, those elements should constitute an inventive concept. In the words of the Federal Circuit:
We have explained that the second step of the Alice/Mayo test is satisfied when the claim limitations "involve more than performance of `well-understood, routine, [and] conventional activities previously known to the industry.'"
Aatrix, quoting Content Extraction. The importance of this statement is that prior cases have simply held that "well-understood, routine, and conventional activities" will not support a finding of an inventive concept, while the Aatrix decision says that elements that do not meet this standard (are not well-understood, are not routine, or are unconventional) will be sufficient for a finding of an inventive concept, and will render a claim patent-eligible under step two of the Alice test.
Must Consider Ordered Combination of Claim Elements
When analyzing whether the claim elements contain an inventive concept under step two, the Supreme Court has instructed us to examine each claim element individually and "as an ordered combination" of elements. Alice. This is a very important instruction, as the Federal Circuit held in Bascom that “an inventive concept can be found in the non-conventional and non-generic arrangement of known, conventional pieces.” Thus, under Bascom, we may look for claim elements that define a non-conventional arrangement, even if the individual claim elements are well-understood, routine, and conventional. Similarly, in Rapid Litigation Mgmt., the Federal Circuit emphasized that step two may find an inventive concept in a new combination of steps "even though all the constituents of the combination were well known and in common use before the combination was made."
This is an important factor to remember when arguing that a claim meets step two of the Alice test. Examiners will frequently argue that the individual elements of the claim are well-understood and conventional. Even when that is an accurate description of the claim elements, an effective argument can be created that the ordered combination set forth in the claims is not routine or conventional. This argument should be similar to arguments that patent attorneys are used to making concerning whether a particular grouping of claim elements is a non-obvious improvement over the prior art. One key question to consider in making this argument is which claim elements can be included in this ordered combination. See the discussion below on Where may one look to find the inventive concept? for more information on this topic.
Question of Fact--Requires a Factual Determination on Conventionality
A recent change in the Alice test occurred in the Federal Circuit’s Berkheimer and Aatrix decisions. At first blush, the conclusions reached in these cases seem straight-forward. Both cases stand for the proposition that, even though the determination of subject matter eligibility under Section 101 is a question of law, the determination of whether something is well-understood, routine, and conventional under step two of the Alice test is a question of fact. In Berkheimer, the Federal Circuit rejected a trial court's summary judgment holding of patent invalidity because the determination as to whether elements of the claim were well-understood and routine under step two involved an unresolved factual determination that made summary judgment inappropriate. Aatrix involved a similar rejection of a Rule 12(b)(6) determination.
Although many observers believed these cases to be a significant change in the way in which the Alice test is to be evaluated, the Federal Circuit has rejected a request for rehearing en banc. Berkheimer, denial of rehearing en banc. In rejecting the rehearing, the majority indicated that these cases were “unremarkable,” while Judge Reyna, in dissent, believed the cases to “alter the § 101 analysis in a significant and fundamental manner,” having the “effect of reducing the entire step two inquiry into what is routine and conventional.”
The patent office has developed new guidelines for examiners responding to the Berkheimer and Aatrix decisions. The guidelines state that the determination of whether a claim element is well-understood, routine, or conventional is “the same as the analysis under Section 112(a) as to whether an element is so well-known that it need not be described in detail in the patent specification.” See MPEP 2163 for some discussion of this standard. Under this new policy, it will be more difficult for patent examiners to meet this level of proof, especially in light of the policy’s admission that the mere fact that the prior art teaches a certain element does not make the element “well-known” or “routine” for purposed of the Alice test.
Prior art search is not needed
Even though step two of the Alice test requires an evaluation as to whether the claim elements are well-known or routine, the patent office has taken the position that no prior art search is to be undertaken as part of this analysis. Instead, "examiners should rely on what the courts have recognized, or those in the art would recognize, as elements that are well-understood, routine, conventional activity in the relevant field." MPEP 2106.05(d).
Not Same as Section 103--Can be Inventive Concept Even if Obvious Under Section 103
Furthermore, it needs to be emphasized that determining whether a claim element or ordered combination of elements is well-known, routine, or conventional is not the same as determining whether or not the element is anticipated or obvious under Section 102 and Section 103 of the Patent Act. The Federal Circuit has held as follows:
Whether a particular technology is well-understood, routine, and conventional goes beyond what was simply known in the prior art. The mere fact that something is disclosed in a piece of prior art, for example, does not mean it was well-understood, routine, and conventional
Berkheimer. The patent office has recognized this in their new guidelines, and has reminded examiners that merely finding an element in the prior art does not establish that it is well-understood, routine, and conventional.
At one point, the machine-or-transformation ("M-o-T") test was the sole test for determining whether or not a process was subject matter eligible under Section 101. In re Bilski. The test basically stated that a process is patentable if "(1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing."
The Supreme Court rejected the view that the machine-or-transformation was the sole test for determining subject matter eligibility of process claims, but it did hold that the M-o-T test remained a “useful and important clue, an investigative tool, for determining whether some claimed inventions are processes under §101.” Bilski v. Kappos. The majority opinion in this decision called the machine-or-transformation test “a useful and important clue”, while Justices Breyer and Scalia emphasized that the Supreme Court “intends neither to deemphasize the test’s usefulness nor to suggest that many patentable processes lie beyond its reach.” Importantly, no Justice questioned the actual formulation of the M-o-T test, thereby leaving in place the Federal Circuit’s interpretation of the test.
Under the two-part Alice test, the Federal Circuit has clarified that the machine-or-transformation test remains a “useful clue” in determining whether a claim contains an inventive concept under the second step of the Alice framework. Ultramercial v. HULU, LLC . Consequently, if a process involves a particular machine (other than a general purpose computer) that plays a significant part of the claimed method, or if the process transforms a physical article, the machine-or-transformation test should be used to argue that the claimed process includes an inventive concept under step two of the Alice test.
Where may One Look to Find the Inventive Concept?
An important question in applying step two of the Alice test is where one can look to find the “inventive concept.” We know from Alice itself that the inventive concept is found in the "additional elements" of the claim, which presumably refers to those elements that do not form the ineligible concept (the abstract idea or natural phenomenon). More recent case law from the Federal Circuit explicitly states that the inventive concept cannot be found within the abstract idea itself. Berkheimer, denial of rehearing en banc ("It is clear from Mayo that the 'inventive concept' cannot be the abstract idea itself, and Berkheimer and Aatrix leave untouched the numerous cases from this court which have held claims ineligible because the only alleged 'inventive concept' is the abstract idea."). In spite of these relatively clear statements, the identification of which elements of a claim may contain the inventive concept requires more analysis and more case law, as this issue will be of vital importance in determining the scope of eligible subject matter under the Alice test.
Remember that before the search for an inventive concept under step two is undertaken, a determination must have been made that the claims are directed toward an ineligible concept (an abstract idea or natural phenomena) under step one of the Alice test. Therefore, it is probable that at least some of the claim elements are responsible for setting forth that ineligible concept. It still needs to be determined if all of those claim elements must be ignored when trying to find the inventive concept of step two.
At the present time, the courts have been inconsistent in analyzing this issue. In Bascom the claims were directed to the abstract idea of filtering content on the Internet. Although the claims did not pass step one of the Alice test, they were found to be patent eligible under step two because the claims included a unique and nonconventional method for performing content filtering. It is not at all clear that the court ignored those elements of the claim relating to the abstract idea of content filtering when it decided that the ordered combination of claim elements constituted an inventive concept. After all, the inventive concept in Bascom found under step two of the Alice test was a specific technique of performing the same abstract idea that was cited against the claim in step one. It is possible that this case means that claim elements that disclose unconventional implementation details can be examined for the inventive concept under step two of the Alice test even if those same claim elements are part of the elements that set forth the abstract idea.
In contrast to Bascom, other cases instruct us to ignore claim elements that serve to implement the underlying abstract idea of the claim. This seems to be the meaning of the quotation from the Berkheimer, denial of rehearing en banc that was cited above. Similarly, in SAP, a claim for analyzing financial investments on a website was analyzed under the Alice test. The claims failed step one, as they were found to be directed to the abstract idea of “collecting information, analyzing it, and displaying certain results of the collection and analysis.” Under step two, the Federal Circuit did not examine claim limitations that narrowed the type of analysis being done because they “added nothing outside the abstract realm.” Although these claim elements might have been a unique method of implementing the abstract idea, they were not available for analysis under step two because they were still part of that abstract concept. Only limitations relating to databases and processors were analyzed under step two of the Alice test.
In BSG, the Federal Circuit took its strongest stance yet that the analysis in step two should ignore claim elements that implement the abstract idea. In this case, the court found the claims were directed to the abstract idea of using historical usage information to guide a user inputting data into a database. Consequently, the court dismissed an argument that the claims included an inventive concept even though, when the claims were considered as a whole, the claims implemented a non-conventional solution that provided benefits over prior art database solutions. This argument was rejected because the only unconventional aspect of the claim was the abstract idea of using historical usage information. As the court stated:
If a claim's only "inventive concept" is the application of an abstract idea using conventional and well-understood techniques, the claim has not been transformed into a patent-eligible application of an abstract idea.This position, however, seems to contradict the position of the immediately preceding Federal Circuit Section 101 opinion from 2018, namely Interval Licensing. Here, the court found that the claims were directed to an abstract idea of providing someone an additional set of information without disrupting the ongoing provision of an initial set of information. The court also found that there was no inventive concept under step two because the claims did not provide details on an inventive method on how the secondary information is displayed. In other words, the Federal Circuit appears to be stating that if the claims did provide an inventive method for performing the basic abstract idea, an inventive concept under step two may be found.
Section 2106.05 of the MPEP states that examiners are to determine whether "there are any additional elements (features/limitations/steps) recited in the claim beyond the judicial exception(s)" and only if additional elements are found is there to be a determination as to whether they form an inventive concept. If all claim elements that comprise the judicial exception are to be ignored in the step two analysis, then it can be very important to convince the patent examiner that only a small subset of the claim elements actually comprise the judicial exception. The more elements that are outside the ineligible concept (the abstract idea or natural phenomenon), the stronger the argument that the remaining claim elements comprise unconventional and non-routine details. A broad recitation of the ineligible concept, as opposed to one narrowly focused on the details of the claims, would assist an inventor in this endeavor.
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Guidance on Patent Prosecution--Section 101 (Patent Subject Matter Eligibility)
The following pages provide guidance on how to analyze and respond to section 101 rejections at the patent office, or section 101 claims of invalidity against issued patents.
Section 101 Rejections
Four statutory categories under Section 101
Non-statutory exceptions to subject matter eligibility
Overview of the Alice text
Overview of step one of the Alice test
Analyzing step one for abstract ideas
Analyzing step one for natural phenomena
Applying the Markedly Different Characteristics test
Overview--Searching for an "inventive concept"
Evaluating the "conventionality" of the claim elements
What is enough for inventive concept?
The machine-or-transformation test
Responding to a statutory rejection (outside four categories)
Proving patent eligibility under step one
Proving patent eligibility under step two