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Jay P. Kesan and Carol M. Hayes

Section 101 of the Patent Act establishes the baseline for patent eligibility. There are three common law exceptions to statutory subject matter eligibility: abstract ideas, laws of nature and natural phenomena. These exceptions were delineated with the primary goal of preventing a patent from preempting beneficial downstream research and innovation. In 2014, the Supreme Court took steps to clarify the abstract idea exception in Alice Corp. v. CLS Bank. The patents at issue in Alice concerned the use of computers as intermediaries for mitigating settlement risk. After commenting on the ubiquity of computers in modern life, the Supreme Court concluded that the use of a generic computer to execute an abstract idea was too routine and conventional to transform the abstract idea into patent eligible subject matter. In this chapter, we discuss post-Alice cases and the ways that they have applied the ambiguously worded two-part test from Alice. Our initial analysis underscores the continuing importance of the machine-or-transformation test. We also examine the “routine and conventional” analysis and the different types of processes that courts have tended to consider and find to be abstract ideas. For example, a mental task or something that can be figured out using a pen and paper is often considered an abstract idea. There are also several procedural issues that have repeatedly emerged, including the stage of litigation where a Section 101 analysis is appropriate, the importance of claim construction, and the presumption of validity for issued patents under Section 282 of the Patent Act. This chapter also examines recently amended USPTO rules and procedures and how they interact with post-Alice eligibility analysis.

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Jay P. Kesan and Carol M. Hayes