In Ex Parte Bandic, the PTAB ("the Board") has given an insight into how the Office intends to examine patent eligibility under the two-step Alice test, considering the Memorandum published by the USPTO on April 19, 2018 explaining "Changes in Examination Procedure Pertaining to Subject Matter Eligibility" in view of Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018)

The patent at issue covers "an analytic method of tissue evaluation" where the rejected claims address optomagnetic fingerprinting.  Appealed independent claim 27 is reproduced below:

  1. A method for characterizing an epidermis of a person, the method comprising:

    1. subjecting a first sublayer of the epidermis of the person to optomagnetic fingerprinting, yielding first wavelength difference-intensity data to characterize the first sublayer;
    2. subjecting a second sublayer of the epidermis of the person to optomagnetic fingerprinting, yielding second wavelength difference-intensity data to characterize the second

      sublayer;

    3. comparing the first wavelength difference-intensity data to wavelength difference-intensity data of other persons from the first sublayer of the epidermis of the other persons; 
    4. comparing the second wavelength difference-intensity data to wavelength difference-intensity data of other persons from the second sublayer of the epidermis of the other persons; and
    5. determining at least one of an age and a state of hydration of the person using the steps of comparing.

With respect to the first step under Alice, the Examiner initially stated, without giving any explanation, that claims 27-34 were directed to an abstract idea. Subsequently, the Examiner explained that "the abstract idea found within the claim is the comparison and determining steps, which utilize a mathematical algorithm." Appellants argued that the rejection improperly picked and chose "fragments of the claim language without viewing the claim as whole" and that the rejection did not "allege that the claim itself was directed to an abstract idea, but merely that the steps of comparing and determining were directed to this abstract idea." The Board agreed with Appellants. "The Examiner's asserted abstract idea is based on 'the steps within the [claimed] method of comparing and determining' and ignores the claim as a whole." The Board noted that the rejection only addressed steps c-e and ignored the limitations in steps a-b and stated that "[C]laims do not become patent-ineligible under § 101 simply because they use mathematical formulas." The Examiner failed to explain whether the claims as a whole amounted to an abstract idea.

Although it was not necessary, because the Board overruled the Examiner's finding in the first step analysis, the Board went on to discuss the merits of the second step analysis under Alice. The Board found that the Examiner's analysis of the second step was "conclusory and unsupported." The Board continued that unsupported statements from the Examiner were insufficient for complying with the second step. Specifically, the Examiner rejected the claims because the claims allegedly do not include additional elements that "are sufficient to amount to significantly more than the judicial exception because the recited claims are not tied to any particular novel machine or apparatus." The Examiner also alleged that "any use of a machine that may be inherent to the claims is not recited as a non-obvious device, and would thus be merely a recitation of a device in an insignificant extra-solution activity (e.g. data-gathering). Moreover, there is no physical transformation by the recited methods."

In response to Appellants' arguments that the Examiner "has failed to produce prior art for optomagnetic fingerprinting, and therefore any device utilized would not be considered part of an insignificant extra-solution activity," the Examiner merely stated that optomagnetic fingerprinting itself was disclosed prior to the effective filing date of the instant claims.

The Board agreed that the Examiner's analysis in the second step was unsupported. "The Examiner does not persuasively explain why or how subjecting the first and second sublayers of a person's epidermis to optomagnetic fingerprinting recited in claim limitations 27a-b are steps of 'data gathering' or 'insignificant post-solution activity.'" The Board found that the Examiner provided no support for the finding that "optomagnetic fingerprinting itself" was known. The Board explained that "[s]imply because the additional element of optomagnetic fingerprinting may appear in a prior disclosure is not adequate to show that the additional element would not be an activity sufficient to transform a claim into a patent-eligible application of an abstract idea."

Thus, the Board concluded that the Examiner failed to properly consider the elements of the claims, both individually and "'as an ordered combination,' to determine whether the additional elements transform the Examiner's asserted abstract idea into a patent-eligible application."

Examiners will need to provide detailed explanations and specific supporting evidence to withstand scrutiny on appeal.

Ex Parte Jadran Bandic, et al. (Appeal 2016-004417, Application Serial no. 13/036,783, decision issued April 30, 2018)

Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 134 S. Ct.2347 (2014).

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