New Guidance from the USPTO – a Boon for Patent Applicants

On January 4, 2019, the USPTO announced the issuance of revised guidance relevant to 35 U.S.C. § 101 (Subject Matter Eligibility) rejections. Entitled, 2019 Revised Patent Subject Matter Eligibility Guidance, the document adds a new pathway for patent eligibility, whereby a claim that includes a judicial exception is still subject matter eligible under 35. U.S.C. § 101, if the judicial exception is “integrated into a practical application” of the judicial exception. The guidance was incorporated into the Federal Register on January 7, 2019, and applies to all USPTO personnel, which includes the examiners that review applications for 35 U.S.C. § 101 concerns, and the administrative judges that oversee appeals and disputes on these issues.

Of considerable note, the new procedure, referred to in the guidance and Federal Register as “revised Step 2A,” changes how Step 2A of the Alice/Mayo test is applied.

The old Step 2A asked whether a claim is directed to a judicial exception.   There are three enumerated judicial exceptions: 1) laws of nature; 2) natural phenomena; and 3) abstract ideas. If a claim had no judicial exception, it was patent eligible subject matter.  If a claim did have a judicial exception, the analysis would then move to Step 2B for further review.

The revised Step 2A still looks to see if there is a judicial exception in a claim, and if there is no judicial exception, the claim is considered directed to patent eligible subject matter.  However, the revised Step 2A differs in that if a judicial exception is identified, the claim is still directed to patent eligible subject matter if the judicial exception is “integrated into a practical application” of the judicial exception. For example, if a patent application with claims directed to a software method which incorporated an abstract idea, so long as that abstract idea is integrated into a practical application of that abstract idea, the claim is directed to patent eligible subject matter and may still be entitled to patenting.

 

The Guidance in Action at the Patent Trial and Appeal Board

Now that a little over a month has passed since the new guidance has gone into effect, we are starting to see some opinions from the Patent Trial and Appeal Board (PTAB).  While the PTAB has still issued a greater number of affirmed 101 rejections than reversals since the new guidance, the opinions have been positive with respect to those reversals.

One very telling reversal came on application 14/282,015, for claims directed to a software-based system for vehicles that allows users to provide consent for installing optional software updates that add a feature to a vehicle module or adjust a configuration of an existing feature, and, in lack of receipt of such consent, displaying an icon in a gauge cluster in the vehicle.  The examiner had initially rejected the claims under 101 as directed to: i) the abstract idea of updating software; and ii) organizing human activity (i.e., receiving consent to take an action).

The PTAB reversed, noting that there was a “specific practical application” of the abstract ideas in the claims.   The PTAB found that the claims were “directed to a practical application of updating software specifically for a vehicle module, in which user consent is required and in which lack of receipt of user consent is communicated to a user via an icon within the gauge cluster of a vehicle.  The opinion also noted that the claims were “directed to providing in a head unit display of the vehicle an indication of an optional status of the software update and a request for consent to install the optional update and upon receipt of user consent sends an update command over the vehicle bus and installs the update to a memory of the vehicle module.”

Notably, here we have an opinion from the PTAB identifying a quite low bar for application of the “practical application” standard.  In this case, the “practical application” seems to be not much more than having a prompt for approval that you would see on any software update (e.g., “accept the new Terms of Service”) and then displaying an icon on a display when there is an update still pending approval.

The second opinion we find interesting is one involving US Patent Application No. 12/374,372, and the following claim in particular:

A method of surfing the Internet comprising: a. selecting information on a web page; b. clicking on the information as it resides on the web page; and c. in response to the clicking, conducting a web search on the information.

The PTAB’s opinion in this case is less telling on the what constitutes “practical application” standard, as the opinion does not make such an analysis, and merely focuses on the examiner’s failing to adequately assert a valid analysis of the claim as an abstract idea unto itself.  Rather, the opinion simply notes that:

[T]he Examiner’s factual findings regarding the underlying abstract idea to overgeneralize the claimed invention under the patent eligibility guidelines at the time of the rejection in the Final Action and Examiner’s Answer and this same overgeneralized abstract idea similarly does not meet the Examiner’s requisite burden for analysis under the 2019 Revised Patent Subject Matter Eligibility Guidance.

 Given the simplicity and breadth of the claim, it is likely good news for applicants with inventions in the software space that the PTAB is not outright viewing broad claims as inherently abstract under the new guidance.  The opinion does note other likely issues with the application, but it is in the context of the PTAB’s views on 101 with which we are concerned.

Conclusion

It has only been a month since the USPTO issued the latest in subject matter eligibility guidance, and our initial impressions of how the PTAB is using the new guidance is positive and optimistic.  Even though a greater percentage of opinions citing the 2019 Revised Patent Subject Matter Eligibility Guidance affirmed the 101 findings of the examiner, the limited numbers are not truly representative of what we expect to see over the long run.  Further, a closer look at those affirmed 101 findings leads us to believe that the cases were destined to be maintained, regardless of the updated guidance.

Most notably for us is that the current interpretation of what constitutes when claimed subject matter is “integrated into a practical application” of the judicial exception seems to be initially very favorable for applicants, particularly for those with inventions in the software space.

Patenting and Protecting Artificial Intelligence in the United States

Advancements in Artificial Intelligence (AI) have been occurring at an ever-increasing rate, impacting almost every field of technology, from medical diagnosis and analysis, to driverless cars, to automated securities trading platforms, all the way to home security[i].  The arms of AI can be felt in every industry, in one way or another. Given the speed of advancement and the very nature of AI itself, it is important to consider the complex landscape around how to protect improvements in the AI space.

At first, it is important to note the types of intellectual property (IP) protection that can apply to inventions in the AI space.  The definition of IP generally comprises the core four – patents, copyrights, trademarks and trade secrets.  In the case of AI, each of these may apply, and each has its own particular usefulness and advantages.  Further, each of these types of IP has its own concerns with respect to the timing of obtaining the protection.  For this article, we will primarily be focusing on the two areas of protection that generally are of the most concern – patents and copyrights.

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Patenting AI

AI, in almost all cases, exists as a software component.  Depending on what the use case for the AI is, there may also be a hardware component (e.g., vision system, sensors, actuators), but these hardware components are generally peripheral to the core AI, which is software based.  While AI inventions based in combined software and hardware solutions or standalone software-based solutions may both be patentable, the analysis for whether an AI based system constitutes patent eligible subject matter does take into consideration what is actually involved.

Where there is a corresponding hardware component in use with the software-based AI component, the subject matter eligibility analysis is usually relatively simple, favoring eligibility over not.  For instance, if an AI system is used to automatically control a series of vision systems (e.g., security cameras) and detect intruders, the invention is likely eligible for patent protection from a subject matter perspective, assuming the application is drafted appropriately.

Where the AI system solely exists as a software solution, an examiner at the USPTO will likely give the invention more scrutiny under the subject matter eligibility tests.  We have written more on the patentability of software-based inventions in a separate article that you can find here. However, while patent applications directed to software only inventions may receive additional scrutiny, true AI inventions likely are sufficient to overcome these rejections.  In fact, USPTO Director Andrei Iancu has even discussed the patentability of AI, through discussions of “[H]uman-made algorithms”, during a hearing regarding the oversight of the USPTO in April of 2018.   Again, the critical point in securing a patent in a solely software based AI invention is appropriate drafting of the application.

With respect to patenting AI based inventions, particularly as it relates to the software component of the AI, it is important to note that a utility patent covers the functionality of the software, through defining the software in terms of systems and methods.  What patents do not cover is the actual code.  Source code is covered largely by copyright, which can protect direct copying of the code, but not those who write their own code to perform the same functionality.

In defining what an inventor wants to protect with respect to their software-based AI invention, it is important to look at the invention in terms of a method, or a series of steps.  Considering everything a computer does is generally a series of steps involving processing some data, framing the inventive aspects of the software-based AI invention in such a methodological manner is generally straightforward.

What inventors want to avoid is viewing the invention in the abstract, or very high-level depiction.  For instance, you cannot get a patent on the idea of “an AI based dating platform”, but you could potentially get a patent on the methods performed by the AI in order to find compatible matches (e.g., based on training models and predictive analytics).  So, a focus needs to be on what actual occurs in order to make the invention possible, not solely focusing on a conclusory statement about what problem is being solved.

Another important thing to remember when seeking patent protection for AI inventions, or any invention, is to do so sooner rather than later.  There are two main drivers for this.  First, the USPTO, and most if not all other national patent offices are “first-to-file” for priority on inventions.  What this means is that, even if you get to the market first with your invention, or conceived of the idea before another inventor, if another party’s application gets to the patent office before yours, then the patent rights will be theirs, and you will be prevented from getting a patent on the invention.

The second reason is that your ability to get a patent on an invention, even without worrying about what others are doing, can be jeopardized if you offer for sale or otherwise disclose your invention publicly before filing.  The USPTO gives you one year from making a public disclosure of the invention to file your patent application.  However, the rest of the world is not so nice, with many jurisdictions making it a bar on patentability if you publicly disclose your invention prior to filing a patent application in at least one jurisdiction first.

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Copyrighting AI

With respect to copyrighting all or portions of an invention based in AI, there are certain aspects of these inventions which are protectable and those which are not.  Copyrights cover artistic works, which includes everything from literary works, to graphical/visual works (e.g., paintings, movies, photographs), to musical works and even choreographed dances.

When considering copyrighting portions of an AI based invention, the focus is generally on copyrighting the source code.  Source code is considered a literary work for the purposes of copyrights, and inventors can receive a federal copyright registration in the uncompiled source code.

What is protected by a copyright registration on source code is the copying of the actual code.  It does not prevent others from creating code of their own that performs the same functions.  However, it does restrict the copying of subsets of the whole code, such as the copying of a module, or a series of functions.

One issue when considering copyrighting source code is how frequently the source code is updated.  Rarely is there a piece of software that is static for very long.   Updates in source code, while they may be considered derivative works of the originally copyrighted code, may not be independently covered by the initial registration.  Inventors should consider at what point they want to secure additional copyrights on later versions of a software-based invention.

It is important to note that while a copyright registration can be done at any time, as the works form in the author upon creation, statutory damages and attorneys fees are generally only available if the copyright registration is filed within 3-months of publication of the work[ii].  Filing your registration after that point will limit damages to “actual damages” (e.g., lost profit), which can be harder to prove.

Separately, more and more we see the question about whether it is possible to copyright the output of AI.  Recently there have been numerous instances of AI generating their own artistic works, such as The Next Rembrandt and Bayou.  The law is currently unsettled as to whether these works would be copyrightable.  For instance, in April of 2018, the Court of Appeals for the Ninth Circuit held that the Copyright Act only provides standing to humans[iii].  The case, involving copyrights associated with a Monkey Selfie, but the same findings would presumably extend to works authored by AI.

Of course, numerous scholarly and legal minds believe that works would be derivative works of the individuals who wrote the code for the AI, and as such those individuals would be the rightful owners of works generated by the AI.  We ultimately will have to wait to see how this plays out in the future.

 

Conclusion

Overall, it is important to understand and analyze what aspects of an AI based invention can be secured early on in the process.  Timing is crucial for both patents and copyrights with respect to being able to secure the rights and receiving the greatest protection available under the laws.  This area of technology is moving quickly, so delay and lack of planning can be devastating. Devoting at least some time to do the analysis may help with providing a roadmap for how and when to protect various aspects of your AI based invention so that you reap the greatest rewards possible.

[i]Check out our client Deep Sentinel: https://www.deepsentinel.com/

[ii] See, 17 U.S.C., 412 https://www.law.cornell.edu/uscode/text/17/412

[iii] Naruto v. Slater http://cdn.ca9.uscourts.gov/datastore/opinions/2018/04/23/16-15469.pdf