Patent Eligibility Now and in the Future

Five years have passed since the Supreme Court weighed in on the “abstract idea” exception to eligibility of patent claims under 35 U.S.C. §101. See Alice Corp, Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014). Since then, the United States Court of Appeals for the Federal Circuit (CAFC) has issued more than 150 decisions regarding patent eligibility. The United States Patent and Trademark Office (USPTO) has issued several Federal Register notices directing patent examiners and practitioners as to its interpretation of all the post­-Alice judicial precedent. Attorneys have spent countless billable hours attempting to interpret and apply this case law and administrative guidance. Now Congress is stirring. In May of this year, Congress released a draft of a bipartisan, bicameral bill that could redefine the kinds of inventions that can be patented. It remains to be seen if this bill or any similar bill, if enacted, will bring clarity to patent eligibility.

The Supreme Court has held that 35 U.S.C. §101, the statute that defines what inventions are eligible for patent, contains an implicit exception for “laws of nature, natural phenomena, and abstract ideas.” In Alice, the court found patent claims directed to a computer-implemented scheme for mitigating settlement risk to be an ineligible abstract idea under section 101. The court in Alice set forth a two-part test for determining whether a claim is ineligible: (1) whether the claim is “directed to” a judicial exception, in this case an abstract idea; and (2) whether there is an element or combination of elements in the claim that amount to significantly more than the judicial exception. Id. at 2355. The court did not, however, define the term “abstract idea,” leaving that to the CAFC and the USPTO. While the claims in Alice were directed to fundamental economic practices, the CAFC applied the two-part test to several other inventions, including claims directed to software and the machines that implement such software. The result was hundreds of decisions defining what is abstract and what is non-abstract, including some inconsistent decisions defining the same subject matter as both.