Eligibility Rulings May Lead To Shift In Patent Prosecution
Three recent decisions by the Federal Circuit, Berkheimer, Aatrix and Exergen, explain that the legal question of subject matter eligibility involves underlying, subsidiary fact questions.[1] For example, the subject matter eligibility analysis involves determining whether the claim limitations, individually or in combination, furnish an inventive concept beyond a judicial exception sufficient to ensure that the claim as a whole amounts to significantly more than the judicial exception itself.[2] Berkheimer held that whether claim limitations constitute an inventive concept is a fact question that can preclude summary judgment.[3] Moreover, the additional elements recited in a claim (beyond the identified judicial exception) will not amount to significantly more if they recite “well-understood, routine and conventional” activities.[4] In the context of a Rule 12(b)(6) judgment on the pleadings, Aatrix held that whether claim limitations recite “well-understood, routine and conventional” activities is also a fact question.[5] In fact, Berkheimer states proving an activity is “well-understood, routine and conventional” requires proof “beyond [being] simply known in the prior art”:A recently filed petition for rehearing en banc, if granted, may open new arguments for applicants fighting subject matter eligibility rejections. Since Alice, a frustrating aspect of subject matter eligibility determinations for patent prosecutors has been the typically fact-free analysis by examiners. However, three recent Federal Circuit decisions all authored by Judge Kimberly Moore conflict with the U.S. Patent and Trademark Office’s guidance that “judicial notice” fact-finding is sufficient for subject matter eligibility rejections. In addition, the substantial evidence standard applicable to administrative fact-finding during examination does not comport with the underlying “examiner expertise” rationale for that guidance. With dissents in two of the three cases, the petition for rehearing en banc, if granted, may afford the full court an opportunity to participate in clarifying the role of factual evidence in eligibility determinations.
Mere citation of a single prior art reference for claim limitations or combinations thereof will therefore be insufficient to demonstrate that “a particular technology is well-understood, routine, and conventional.” Most recently, in Exergen Corp. v. Kaz USA Inc,[7] the majority accorded deference to a trial court’s factual conclusion after trial that certain “claim elements were not well-understood, routine, and conventional.”
The same fact questions identified in Berkheimer, Aatrix and Exergen are implicated by analysis of subject matter eligibility during examination, setting up a conflict with patent office examination guidance. In the Manual of Patent Examining Procedure update promulgated in January, subject matter eligibility is characterized as a question of law that can be decided “without resolving any factual issues.”[8] The MPEP tells examiners that factual support is unnecessary not only for the determination of whether a claim is “directed to” a judicial exception, but also for the “something more” analysis: “Similarly, the courts do not require any evidence when conducting the significantly more inquiry.”[9] In fact, the January update tells examiners that “courts have not required evidence to support a finding that additional elements were well‐understood, routine, conventional activities, but instead have treated the issue as a matter appropriate for judicial notice.”[10] That guidance directly conflicts with the Federal Circuit’s subsequent statement that “[w]hether the claim elements or the claimed combination are well-understood, routine, conventional … cannot be answered … based on … materials subject to judicial notice.”[11] In earlier decisions such as those cited by the patent office examination guidance, the Federal Circuit explained, evidence was not necessary because the facts were undisputed, such as having been conceded:
In the prosecution context, such “undisputed” facts might arise when patent applications acknowledge that concepts are “conventional.” Judge Jimmie Reyna dissented in Aatrix from “the majority’s broad statements on the role of factual evidence in a § 101 inquiry,” and Judge Todd Hughes dissented in Exergen based in part on the district court having “clearly erred by finding an inventive concept based on the asserted claims’ use of well-understood, routine, and conventional … techniques for [a] new purpose.” Thus, HP’s petition for rehearing en banc in Berkheimer, if granted, should test the views of more than just six judges.[13]
The MPEP’s stated rationale for evidence being unnecessary — “the examiner’s expertise” in the art[14] — is inconsistent with precedent regarding application of the substantial evidence standard in patent examination:
Thus, like the “basic knowledge” and “common sense” rejected above, “the examiner’s expertise in the art” is insufficient to meet the substantial evidence standard for administrative fact-finding. In fact, even the MPEP acknowledges that “official notice” is rarely proper:
Official notice without documentary evidence to support an examiner’s conclusion is permissible only in some circumstances. While “official notice” may be relied on, these circumstances should be rare when an application is under final rejection or action under 37 CFR 1.113. Official notice unsupported by documentary evidence should only be taken by the examiner where the facts asserted to be well-known, or to be common knowledge in the art are capable of instant and unquestionable demonstration as being well-known. …
It would not be appropriate for the examiner to take official notice of facts without citing a prior art reference where the facts asserted to be well known are not capable of instant and unquestionable demonstration as being well-known. …
It is never appropriate to rely solely on “common knowledge” in the art without evidentiary support in the record, as the principal evidence upon which a rejection was based.[16]
If an applicant adequately traverses the taking of official notice by stating why the noticed fact is not considered to be common knowledge or well-known in the art, documentary evidence must be provided.[17]
Given how burdens of proof are allocated during examination, insufficient evidence that a particular technology is well-understood, routine and conventional may constitute a fatal defect in any rejection alleging that a particular feature or an ordered combination of features does not comprise “something more” than the judicial exception or its mere application. The patent office acknowledges that examiners have the initial burden of establishing “a prima facie case of ineligibility”[18] before the burden shifts to the applicant.[19] A rejection without evidentiary support for the “something more” analysis is therefore legally deficient.
Failure to develop evidentiary support within the record for the proposition that a particular technology is well-understood, routine and conventional is also a basis for appeal. The Administrative Procedure Act, which applies during patent examination, requires that factual determinations on which legal conclusions are based be supported by substantial evidence.[20] Substantial evidence is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.”[21] A mere allegation unsupported by evidence within the record should not be sufficient:
Moreover, an applicant’s conflicting evidence could effectively negate any evidence cited by the examiner since the substantial evidence standard requires examination of the record as a whole, taking into account the evidence that detracts from an agency decision as well as the evidence that justifies it.[23]
While most commentary to date on Berkheimer, Aatrix or Exergen has focused on the implications for litigation, those decisions have promising implications for patent prosecutors struggling to overcome conclusory rejections that claims lack subject matter eligibility.
