USPTO reforms not enough to fix Alice-Mayo

V. Regulatory Reforms in Examination Guidelines at the USPTO Are Not Enough

In early January 2019, USPTO Director Andrei Iancu, who was confirmed by the Senate in early 2018, issued new examination guidelines under the Alice-Mayo framework. Director Iancu announced the reforms with the intent to “improve certainty and reliability” in how examiners would use § 101 in reviewing patent applications.32 The USPTO further modified these new examination guidelines in October 2019.33 Anecdotal reports suggest that patent applications may now be faring a bit better under the Alice-Mayo framework than they were in the years between 2014 and 2018.

But Director Iancu is limited in how much he can achieve. First and foremost, he has authority only over the USPTO, not the courts. Thus, even if the USPTO scales back its high rates of rejections under the Alice-Mayo framework, courts and the PTAB will continue to invalidate these patents in alarmingly high numbers in their own application of the Alice-Mayo framework. This is not merely a law professor’s hypothetical scenario. On April 1, 2019, the Federal Circuit applied the Alice-Mayo framework to invalidate another patent on a breakthrough diagnostic method for detecting heart disease; the court held that the patent claimed an unpatentable “law of nature” in allegedly identifying merely the biological processes of the how the heart functions.34 In this case, the patent owner argued that the Federal Circuit should defer to the USPTO’s examination guidelines in finding this invention to be patent eligible. The court expressly rejected this contention, stating that “we are not bound by [the USPTO’s] guidance.”35

Second, and related to the first point, Director Iancu lacks the legal authority to change the fundamental cause of the problem: the Alice-Mayo framework created by the U.S. Supreme Court. While Director Iancu has some discretion to act within this generalized legal inquiry to lessen its arbitrariness and negative impact in examining patent applications, he must ultimately follow the law set by Congress in the statutes it enacts and the Supreme Court in how it interprets these statutes. In fact, his reforms in the examination guidelines have been criticized by advocacy groups for failing to do just this; after Director Iancu announced plans in early 2019 to change the regulations governing the USPTO’s application of the AliceMayo framework to patent applications, the Electronic Frontier Foundation (EFF) started a “Save Alice” campaign.36 EFF proclaimed that “Under its new Director, Andre [sic] Iancu, the Patent Office is trying get around Alice.”37 In its official comments submitted to the USPTO, EFF explicitly argued that the new examination guidelines are “contrary to law.”38

Lastly, Director Iancu’s regulatory reforms can just as easily be undone, whether by a legal challenge in court for allegedly exceeding his authority as head of an administration agency or by repeal by administrative fiat by a future Director of the USPTO. While Director Iancu’s reforms may constrain some of the excessive use of the Alice-Mayo framework in rejecting patent applications, these regulatory measures cannot offer the promise of permanence, reliability, and stability. Inventors and companies making long-term R&D investment decisions need to rely on a stable set of legal rules in order to create innovative medical treatments and other new technologies. They need Congress to amend § 101 and permanently reestablish the long-standing historical approach of a restrained and limited application of this threshold test.