Eligible subject-matter USPTO two-step test
16 December 2016
Under US patent practice, laws of nature, natural phenomena and abstract ideas are not patentable.
In recent years, several key decisions by the US Supreme Court (namely: Mayo, Myriad and Alice) have led to the development of a 'two-step eligibility test' by the USPTO and a toughening of what will be considered patent eligible subject-matter under US patent law (35 USC §101).
In brief, the Mayo case concerned a method for optimising the therapeutic efficacy of a specific drug; it was held that the level of the drug and its efficacy was a natural law and that the steps in the method were not sufficient to transform the claim as they described routine, conventional activity. The Myriad case concerned the identification of BRCA genes associated with an increased risk of breast cancer; it was held that the isolated sequences encoding a naturally-occurring gene were not patent eligible - in effect, this case reversed the USPTO's previous practice of allowing patents to naturally isolated substances as long as they were 'isolated' from nature and met with patentability requirements. In the Alice case it was held that claims directed to a computer-implemented electronic servicer for facilitating financial transactions were an abstract idea and ineligible for patent protection.
Based on these cases, the two-step eligibility test has been developed by the USPTO (see figure 1). If a claim is considered to be directed to a law of nature, a natural phenomenon or an abstract idea then the examiner must consider if the additional elements in the claim amount to significantly more than the exception. If an additional element (or combination of elements) is not routine or conventional in the field then it should be considered as 'significantly more' and, thus, the claim is directed to patent eligible subject-matter.
The USPTO has issued guidelines together with examples of what falls within and outside this test. Most recently, in May 2016 the USPTO issued long-awaited examples for diagnostic methods.
Referrals to the US Supreme Court
The case of Ariosa Diagnostics, Inc v, Sequenom, Inc concerned a diagnostic test to measure cell-free foetal DNA (cffDNA) in maternal plasma and serum. This test allows for prenatal diagnosis of foetal DNA without sampling from the foetus or placenta thus avoiding risks such as miscarriage. This test was considered to be a significant scientific breakthrough. However, the Federal Court upheld the patent to be ineligible because cffDNA is a natural phenomenon and the methods used to test for it do not themselves represent anything beyond routine, conventional steps. Notably, Circuit Judge Linn in his concurring opinion stated that:
The new use of the previously discarded maternal plasma to achieve such an advantageous results is deserving of patent protection...But for the sweeping language in the Supreme Court's Mayo opinion, I see no reason, in policy or statue, why this breakthrough invention should be deemed patent ineligible.
Many commentators felt that this comment would lead to a review of the case and the two-step eligibility test by the Supreme Court. Disappointingly, the US Supreme Court declined to accept the case for review.
Four further patent eligibility cases (Genetic Tech, Jericho, Essociate and Trading Technologies) were recently put before the US Supreme Court for consideration. Disappointingly, in October 2016 the US Supreme Court announced that it would not review any of these cases.
Some clarification of the two-step eligibility test
Rapid Litigation Management Ltd v, CellzDirect Inc is one case in the life sciences field which has provided some clarification with regard to the two-step eligibility test.
The claims in this case concerned methods of producing multi-cryopreserved hepatocytes. The District Court had held that the discovery that hepatocyte cells were capable of surviving multiple freeze-thawing cycles was patent ineligible subject-matter because it is a law of nature and that the inventors had simply reapplied a well-understood freezing process.
The Federal Court held that
[t]he inventors certainly discovered the cells' ability to survive multiple freeze-thaw cycles, but that is not where they stopped, nor is it what they patented...They employed their natural discovery to create a new and improved way of preserving hepatocyte cells for later use.
The Federal Court looked at the two-step eligibility test and held that at step 1 it is not enough to merely identify a patent-ineligible concept underlying the claim; it must be determined whether that patent ineligible concept is what the claim is directed to.
Further at step 2, if it improves an existing technological process then it is sufficient to transform the process into an inventive application of the patent-ineligible concept. Under step 2, the elements must be viewed "both individually" and "as an ordered combination". A new combination of steps in a process may be patentable even though all the constituents of the combination were well known and in common use before the combination was made. The Federal Court also pointed out that patent eligibility does not turn on the ease of execution or obviousness of the application – these questions are examined under separate provisions.
The USPTO issued a memorandum in July 2016 confirming that neither Rapid Litigation Management Ltd v, CellzDirect Inc nor Ariosa Diagnostics, Inc v, Sequenom, Inc altered the subject-matter eligibility guidance.
Under the guidance recently issued in May and November 2016, the USPTO confirmed that the two-step eligibility test is to be used.
Examiners must, nevertheless, support a rejection with reasoned rationale and identify any elements beyond the patent ineligible subject-matter and explain why the additional elements taken individually and as a combination do not result in the claim as a whole amounting to more than the judicial exception. Examiners should not require applicants to model their responses and claims to an allowable example of patent eligible subject-matter in the guidance. Nevertheless, when faced with such an objection, applicants may find it useful to point out how their case is similar to such an example. The recent November memorandum from the USPTO cautions examiners to not use non-precedential decisions unless the application uniquely matches the facts at issue in the decision and, thus, the memorandum may be useful in overcoming rejections of claims which are only tenuously similar to non-precedential decisions; the USPTO's website concerning subject-matter eligibility indicates whether or not a decision is precedential. This recent memorandum alludes to a forthcoming update to the subject-matter eligibility guidance.
- Expect the USPTO to issue further guidelines.
- The US Supreme Court seems satisfied with how subject-matter eligibility is being dealt with by the lower courts. Therefore it may be some time before the US Supreme Court takes on any 'patent ineligible' case for review and issues further guidance.
- It remains a tough environment for applicants who find themselves facing an eligible subject-matter objection from the USPTO and it seems that this will be the case for some time yet.