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“While the new guidance document is admirably clear, detailed, and serves the aim of encouraging innovation, some challenges remain.”
On July 17, the U.S. Patent and Trademark Office (USPTO) issued a 2024 Guidance Update on patent subject matter eligibility (SME), including on artificial intelligence (AI). This update complements the guidance that the USPTO issued in February 2024 regarding patent inventorship and AI-assisted inventions. Both documents were created at the direction of Executive Order 14110 on the “Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence” (October 30, 2023). The order directs the USPTO to “promote innovation and clarify issues” related to AI and intellectual property.
The July Guidance Update provides an overview of the USPTO’s SME analysis. It explains the Supreme Court’s two-part framework, called the “Alice/Mayo test,” and then discusses how this test is applied to AI inventions. The Alice/Mayo test asks, first, whether a claim is directed to a law of nature, natural phenomenon, or abstract idea: the so-called “judicial exceptions” to patent-eligible categories. If the answer to the first question is “yes,” then the second step of the inquiry considers whether there is an inventive concept present, such that the claim recites additional elements that amount to significantly more than the judicial exception.
The Guidance notes that this analysis can be challenging for AI inventions, because they may be classed in Prong One as an ineligible abstract idea, such as a mathematical concept, a method of organizing human activity, or a mental process. It provides numerous examples, both hypothetical and drawn from recent Federal Circuit cases, that illustrate how to apply the two-prong Alice/Mayo test to inventions that involve an abstract idea. It also directs the reader to three new hypothetical SME examples (47-49) for AI inventions developed by the USPTO that show exemplary analyses of claims that are either directed to or incorporate an abstract idea.
Positive Aspects of the USPTO Guidance
The new guidance on SME and AI has some very positive features: it offers clarity, consistency, and encouragement in light of emerging technologies and innovation. As for clarity, the guidance provides helpful instructions for distinguishing among claims that merely recite abstract ideas, and so are patent-ineligible, and those that incorporate abstract ideas into practical applications. While the guidance itself does not have the force and effect of law, the discussion of how to apply the Alice/Mayo test to claims involving abstract ideas is rooted in examples taken from recent relevant Federal Circuit cases. Moreover, its inclusion of three new, hypothetical, highly detailed examples of patent claims involving AI inventions (Examples 47-49) is particularly helpful. The examples are carefully crafted to illustrate how different claims involving an abstract idea would be analyzed according to the multi-step SME inquiry under the Alice/Mayo test.
Another virtue of the guidance update is its consistency with prior USPTO guidance on SME. While it is an “update” in the sense that it is focused on the emerging technology of AI, it is designed to be consistent with the USPTO’s prior guidance on SME, which was released in 2019 and incorporated into the MPEP in 2020. What is new are the kinds of technology recited in the patent claims that the existing SME analysis is applied to.
Third, this Guidance document shows that the USPTO, following the Executive Order, is encouraging innovation in the AI sphere. The Guidance emphasizes the importance of integrating AI into practical applications to secure patent eligibility, and it aims to accelerate AI innovation without restricting it, ensuring consistency and adding clarity specifically for AI contexts.
Negative Aspects of the USPTO Guidance
Although the new guidance has many positive features, it also has some drawbacks. With this document, the USPTO is attempting to provide clear, consistent guidance while also being sensitive to complexity and nuance. Some stakeholders may find the guidance too complex to apply, especially regarding the integration of abstract ideas into practical applications. Second, there might not be sufficient clarity about what constitutes a “practical application.” If it is interpreted too broadly, it could lead to inconsistent patent eligibility decisions. Another concern is that the guidance might be more suited to some AI technologies than others, and so it might be difficult to apply the guidance consistently across different AI technologies. Further clarification may be necessary here.
Some Perspectives and Action Items for In-House Patent Counsel
One key piece of practical advice when drafting claims for AI inventions: claim AI-specific technological advancements and practical applications. As the guidance notes, AI inventions are at risk of being categorized as abstract ideas, which are one of the three judicial exceptions that are patent ineligible. Hence, any patent claim directed to an abstract idea must also recite additional elements that amount to significantly more than the abstract idea itself. As the guidance puts it, “a claim that integrates a judicial exception into a practical application of the exception will apply, rely on, or use the judicial exception in a manner that imposes a meaningful limit on the judicial exception, such that the claim is more than a drafting effort designed to monopolize or preempt the judicial exception.” This means, again, that patent claims should highlight specific technological advancements and practical applications of AI. For example, claims should go beyond routine data processing to demonstrate significant extra-solution activity.
In addition to strategic claim drafting, practitioners should also monitor how the Patent Trial and Appeals Board (PTAB) and the courts interpret and apply the updated guidance in AI-related cases. They should also stay updated with ongoing feedback and potential adjustments to the guidance by participating in opportunities for public comment. The comment period for the SME guidance including AI was just recently extended by a month and now closes on October 16, 2024. Finally, patent professionals should invest in training to understand and apply the new guidance effectively. They should also develop internal resources and checklists to ensure compliance with the updated eligibility criteria.
Be Proactive
The July USPTO guidance update to SME and AI inventions represents a significant effort to balance innovation with patent protection in the AI field. While the new guidance document is admirably clear, detailed, and serves the aim of encouraging innovation, some challenges remain. It is not yet clear how to ensure that it is consistently applied, for example. In-house patent counsel should proactively adapt to these changes to maximize the potential for securing patents in the evolving AI landscape.
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