Recently on July 17 the USPTO issued Guidance Update on Patent Subject Matter Eligibility. The very next day the Federal Circuit affirmed a Texas district court decision invalidating claims of U.S. Patent No. 10,043,188 on the pleadings. Miller Mendel, Inc. v. City of Anna, Texas, No. 2022-1753 (Fed. Cir. July 18, 2024). Are we seeing eye-to-eye yet?
The ‘188 patent claims a method for assisting an investigator in conducting a background investigation comprising the steps (paraphrased) of:
- creating a record identifying the applicant, the position, the organization, and the investigator;
- transmitting a hyperlink to the applicant for viewing a set of electronic documents;
- receiving an applicant electronic response including a reference source with email address;
- transmitting a reference hyperlink to the reference email address for viewing a reference set of electronic documents;
- receiving a reference response;
- generating a suggested list of one or more law enforcement agencies based on the applicant residential address.
Writing for the Court, Judge Cunningham applies the familiar Alice/Mayo 2-step, concluding that the claim language is directed to the abstract idea of performing a background check based on case precedent and admissions in the patent itself. Specifically, “the claims are directed to receiving, storing, transmitting, determining, selecting, and generating information, which place them in the “familiar class of claims directed to a patent-ineligible concept (citing Trinity Info Media and ShoppersChoice.com). She also relies on the patent which states “What has eluded the industry is an automated system to help a background investigator more efficiently and effectively conduct a background investigation.” At Alice/Mayo step two, Appellant Mendel aptly argued that it was error to dismiss under 101 prior to discovery/factual development because on the pleadings there is no evidence that “transmitting hyperlinks” and “generating a suggested list of law enforcement agencies” are well-understood, routine, conventional activities. The Court disagreed, harkening back to the patent’s characterization of the invention as “automat[ing] the majority of the tasks of a common pre-employment background investigation.” This statement was taken as an admission that such tasks were routine prior to the date of the invention. The Court also faulted Mendel for not articulating any contra-evidence he might provide. To Mendel’s point there is ample room for patentable invention in the way that the tasks of a common pre-employment background investigation are implemented by software, and there was no corroborating evidence that the particular way that he did it and claimed it (transmitting hyperlinks for viewing documents, receiving responses, generating lists of law enforcement agencies, etc.) was routine. Put another way, it is a subjective leap to infer that transmitting hyperlinks for viewing documents, receiving email responses, auto-generating lists of law enforcement agencies, etc., are all routine and conventional claim elements from a stated object of the invention to “automate the majority of the tasks of a common pre-employment background investigation.”
That is exactly the point made by the USPTO the day before. Their Guidance forewarns Examiners that they should never conclude that an element or combination of elements represents well-understood, routine, conventional activity without evidence that the element(s) is/are widely prevalent or in common use. Such evidence must include citations to court decisions, prior art publications, an express admission in the specification or statement made by an applicant during prosecution that demonstrates the well-understood, routine, conventional nature of the additional element(s). “A specification demonstrates the well-understood, routine, conventional nature of additional elements when it describes the additional e elements as well-understood or routine or conventional (or an equivalent term), as a commercially available product, or in a manner that indicates that the additional elements are sufficiently well-known.” We are not square. The Federal Circuit steadfastly maintains that USPTO Guidance “is not, itself, the law of patent eligibility, does not carry the force of law, and is not binding on our patent eligibility analysis.” In re Rudy, 956 F.3d 1379, 1382 (Fed. Cir. 2020). On the other hand, in my book objective Guidance beats subjective precedent. A specification does not demonstrate the well-understood, routine, conventional nature of additional elements merely by stating that an object of the invention is "better, faster, cheaper."
