PTO can’t solve uncertainty – it’s perceived as reversible

The UPSTO’s 2019 Patent Eligibility Guidelines Demonstrate Reform is Possible

Admittedly, the USPTO’s 2019 patent eligibility guidelines have brought back some stability and certainty back to the examination of the patent applications under the Alice-Mayo inquiry. Andrei Iancu, the USPTO Director at the time, stated that the purpose of the new guidelines was to “improve certainty and reliability” in the agency’s review of patent applications under § 101.61 Among others, one key reform in the UPSTO’s 2019 guidelines, which is reflected in PERA, is to clearly demarcate the patent eligibility inquiry under § 101 from the separate but equally important patentability requirements of novelty (§ 102), nonobviousness (§ 103), disclosure (§ 112), and utility (§§ 101 and 112). One recent empirical study concludes that the 2019 guidelines have achieved this goal.62 (This may account for the slight 0.5% increase in patent applications in 2022, after mostly declining annual patent application numbers in the U.S. since 2018.63)

However, the USPTO is limited in how much it can achieve with the 2019 guidelines, and ultimately the 2019 guidelines cannot solve the patent eligibility quagmire. First, the USPTO has no authority over how the courts will apply the Alice-Mayo inquiry to the patents that the USPTO grants if it concludes that an application meets all of the patentability requirements: § 101 (patent eligibility), § 102 (novelty), § 103 (nonobviousness), § 112 (disclosure), and utility (§ 101 or 112). This is not a mere prediction. Shortly after the 2019 guidelines went into effect, the Federal Circuit

applied the Alice-Mayo inquiry in Cleveland Clinic v. True Health Diagnostics to invalidate another patent on a breakthrough diagnostic method for detecting heart disease.64 In Cleveland Clinic, the patent owner explained that the Federal Circuit should defer to the 2019 guidelines to reach the same conclusion as the USPTO that its invention is patent eligible. The Federal Circuit rejected this argument outright, stating that “we are not bound by [the USPTO’s] guidance.”65

Second, and just as important, the reforms represented by the 2019 guidelines can be easily undone by the same administrative fiat by the current or future Director of the USPTO. Thus, the 2019 guidelines cannot offer the necessary promise of long-term permanence and stability for the companies in the biopharmaceutical sector with multi-year time horizons and billions in research and development at stake. Inventors and companies making long-term R&D investment decisions need to rely on a stable set of legal rules in order to research, develop, and commercialize innovative medical treatments and other new technologies. Regulatory changes in examination guidelines that can be potentially changed with each change in the administration in the Executive Branch cannot provide this requisite stability and reliability. For these reasons, while providing greater certainty and stability for patent applicants, the 2019 guidelines can neither prevent the continued willy-nilly application of the Alice-Mayo inquiry by courts in invalidating issued patents nor provide the requisite long-term legal certainty and reliability to innovators.