Today, the Court granted Hikma’s certiorari petition, which recited the following Questions Presented:
1. When a generic drug label fully carves out a patented use, are allegations that the generic drugmaker calls its product a “generic version” and cites public information about the branded drug (e.g., sales) enough to plead induced infringement of the patented use?
2. Does a complaint state a claim for induced infringement of a patented method if it does not allege any instruction or other statement by the defendant that encourages, or even mentions, the patented use?
This case follows patterns found before in instances where the Court has granted cert: the Federal Circuit has rendered decisions with competing stances taken by members of the Court and the decision has “real world” implications on important societal matters (i.e., it isn’t just a patent dispute between the parties but will influence important policy outcomes; here, regarding the availability of generic drugs).
The Court’s Order does not specify which flavor of these Questions they have deigned to consider, and how Hikma crafts the questions it actually argues will be seen in coming months. However, the universal sentiment on both sides of the aisle are that drugs cost too much, and to the extent this sentiment resonated with the Justices (and whether such resonance with common sentiment is, as in other instances, a factor in their decision to hear the case) will also become evident in time. In this way, this certiorari decision is reminiscent of the Court’s grant in Association of Molecular Pathology v. Myriad without the predictably fraught outcomes arising therefrom. After all, what could be bad about lower drug costs (other than reducing the availability of innovator drugs to be copied by generic drugmakers)? We shall see.
The China National Intellectual Property Administration (CNIPA) has instituted a change in its inventor information requirements. For Chinese patent applications filed on or after January 1, 2026, Applicants must submit an inventor ID number for every inventor along with each inventor’s nationality. The nationality of each Inventor mustbe submitted at the time an application is filed. For inventors holding dual nationality, the Applicant must choose one nationality for submission to CNIPA.
The inventor ID number can be submitted at the time of filing or within two months from the date of a CNIPA notification requesting the inventor ID number. For Chinese inventors, the ID number is their National ID number (i.e., an 18-digit Citizen Identity Number issued by the Chinese government). For non-Chinese inventors, a passport number or any other government-issued valid identifying number, such as a driver’s license number, is acceptable.
Patent Docs thanks Chinese intellectual property firm AFD China for alerting us to the new inventor ID requirement.
The preclusive scope of 35 U.S.C. § 314(d) regarding decisions on instituting post grant review proceedings (specifically, inter partes review or IPR) has been decided several times by the Supreme Court since enactment of the Leahy-Smith America Invents Act in 2013 to be very preclusive (seeCuozzo Speed Technologies, LLC v. Lee, 579 U. S. 261 (2016); Thryv, Inc. v. Click-to-Call Techs., LP, 590 U.S. 45 (2020)). Indeed, the only exception to the statutory mandate that institution cannot be subject to judicial review are in circumstances where there may be “appeals that implicate constitutional questions.” Nevertheless the temptation to seek judicial review (and reversal) of institution decisions by the Patent Trial and Appeal Board (PTAB) has persisted (albeit unsuccessfully) as shown in the Federal Circuit’s decision last month in Ethanol Boosting Systems, LLC v. Ford Motor Co.
This case arose in inter partes review proceedings of certain claims in three related patents owned by Ethanol Boosting Systems (EBS): U.S. Patent Nos. 10,619,580; 10,791,760; and 9,708,965, all held to be invalid for obviousness by the PTAB. Claim 1 of the ‘581 patent is cited in the opinion as representative:
1. A fuel management system for a spark ignition engine, comprising: a first fueling system that uses direct injection; a second fueling system that uses port fuel injection; and a three-way catalyst configured to reduce emissions from the spark ignition engine, wherein the fuel management system is configured to provide fueling in a first torque range, the first torque range being a first range of torque values at which both the first fueling system and the second fueling system are operable throughout the first range of torque values, wherein the fuel management system is further configured such that a fraction of fueling provided by the first fueling system is higher at a highest value of torque in the first torque range than in a lowest value of torque in the first torque range, wherein the fuel management system is further configured to provide fueling in a second torque range, the second torque range being a second range of torque values at which the second fueling system is operable throughout the second range of torque values and the first fueling system is not operable throughout the second range of torque values, wherein the fuel management system is further configured such that when the system provides fueling at a torque value that exceeds the second range of torque values, the spark ignition engine is operated in the first torque range, and wherein the spark ignition engine is configured to operate at a stoichiometric air/fuel ratio in at least part of the first torque range and in at least part of the second torque range.
As noted in the opinion, the case between the parties has been before the Court before, wherein a claim construction decision by a district court was vacated (and the details including the timing of those proceedings are relevant to the decision here; seeEthanol Boosting Sys., LLC v. Ford Motor Co., No. 21-1949, 2022 WL 2798395 (Fed. Cir. July 18, 2022) (nonprecedential)). In that case, at issue were claim limitations for embodiments comprising direct fuel injection mechanisms, specifically the words “fuel” in the phrase “directly inject[ed] fuel” and “fueling system that uses direct injection”; these terms were generically called “DI Fuel terms” in the opinion. Before the District Court, EBS asserted construction of these terms under the “plain and ordinary” meaning rubric, whereas Ford argued that the term encompassed fuel that was different from what was used in an alternative, port injection system and contained an antiknock agent other than gasoline itself. When Ford filed its petitions for instituting the IPRs, it argued that the DI Fuel terms be construed under the plain and ordinary meaning; the Board stayed its institution decision while awaiting the District Court’s claim construction.
The District Court handed down its claim construction decision before the PTAB instituted these IPRs, construing the DI Fuel terms (as Ford argued) to mean “(1) different fuel for direct injection and port injection and (2) an anti-knock agent other than gasoline.” Pursuant to the parties’ stipulation, the District Court entered judgment of non-infringement based on this construction. Several months later the PTAB denied institution of the IPRs, holding that the DI Fuel terms required different fuel than was used in the port injector as claimed. This construction defeated Ford’s prior art-based invalidity arguments in its petitions. This construction apparently did not take into account the District Court’s construction nor the EBS appeal to the Federal Circuit, because shortly after the Court vacated the District Court’s construction, the PTAB granted Ford’s petitions to institute based on that decision’s claim construction.
In the earlier opinion, the Federal Circuit had vacated the distinction drawn by the District Court between the fuel used in the direct injection and the port injection embodiments of the claimed fuel management system, finding no basis for requiring such differences. Moreover, the Court considered the disclosure in the specification of fuel comprising 100% ethanol to be excluded from claims construed to require differing fuels in the two alternative embodiments. The opinion notes that EBS only appealed the first portion of the District Court’s construction, i.e., that there was different fuel used for direct injection and port injection, thereby leaving unchallenged the second portion, that gasoline cannot provide the antiknock component of directly injected fuel. Accordingly, the Federal Circuit did not consider in that opinion this second portion of the District Court’s claim construction.
Having instituted the IPRs, the PTAB construed the DI Fuel terms according to their plain and ordinary meaning and rejected EBS’s argument that gasoline cannot be the [sole] antiknock agent because the Court’s earlier construction was “controlling law,” on the grounds that the Court had not considered the second portion of the definition of the DI Fuel term. Having come to these claim construction determinations, the PTAB recognized there was a motivation to combine the asserted prior art references and that the combinations disclosed the claim limitations in dispute. On those grounds the Board issued a Final Written Opinion invalidating all challenged claims as being obvious, and this appeal followed.
The Federal Circuit affirmed in an opinion by Judge Chen joined by Judges Clevenger and Hughes. The first of three arguments made to the Court by EBS was that the Board had exceeded its authority (acted ultra vires) by staying its institution decision while awaiting the District Court’s claim construction. The panel considered this argument as a request for the Court to effectively “de-institute” the IPRs, and that this request was in direct conflict with 35 U.S.C. § 314(d), which precludes courts from reviewing IPR institution determinations. The opinion supports this interpretation and its consequences by citing Thryv, Inc v. Click-To-Call Techs., LP, 590 U.S. 45, 52–53 (2020); IGT v. Zynga Inc., 144 F.4th 1357, 1365 (Fed. Cir. 2025); and ESIP Series 2, LLC v. Puzhen Life USA, LLC, 958 F.3d 1378, 1386 (Fed. Cir. 2020). EBS crafted its challenge less specifically against institution, directing that challenge to the question of whether the Board was entitled to stay its institution decision (i.e., thereby not directly targeting the institution per se). The opinion rejects this characterization of there having been a stay, which is not how the Court has previously considered the time taken by an agency to issue a reconsideration decision, citing CyWee Grp. Ltd. v. Google LLC, 59 F.4th 1263, 1267 (Fed. Cir. 2023). At least one basis for this position is that there is no law or regulation cited by EBS nor known to the Court that requires a definite amount of time for a reconsideration request to be deliberated. Even though EBS’s argument was focused on the propriety of the “stay,” the panel considered the argument to be a challenge of the propriety of the PTAB’s institution decision, barred under § 314(d). And the Court found such grounds for challenge to have been distinguished and rejected by prior precedent, including Thryv, IGT, and ESIP Series 2. The Court also rejected the “special dispatch” requirements enunciated in Ethicon, Inc. v. Quigg, 849 F.2d 1422 (Fed. Cir. 1988), based on procedural (that case involved reexamination proceedings) and factual (the IPR in this case had not been instituted) differences. The Court recognized that the Supreme Court has only held “narrow exceptions” to the statutory bar under § 314(d), including “‘appeals that implicate constitutional questions, that depend on other less closely related statutes, or . . . present other questions of interpretation that reach, in terms of scope and impact, well beyond’ § 314,” citing Cuozzo Speed Techs. v. Com. for Intell. Prop., 579 U.S. 261, 275 (2016). EBS analogized the Board’s delaying its institution decision to “shenanigans” identified as being outside the reach of the § 314 preclusion, which the panel rejected under Cuozzo in view of their earlier decision in SIPCO, LLC v. Emerson Electric Co. (which concerned the Board exceeding its authority to institute a Covered Business Method (CBM) review on a purportedly non-CBM patent (980 F.3d 865, 869 (Fed. Cir. 2020)). This decision was directly applicable to EBS’s argument here, according to the opinion because in that case as here the argument was that the Board exceeded its statutory authority, which the Court held was not outside the § 314 preclusion. In addition, the Court found that the Board had “sound reasons” for delaying its institution decision because the Court’s earlier decision “would address the very claim term that the Board hinged its initial denial of institution upon.”
(In this context, the recent proclamations by incoming U.S. PTO Director John Squires may take on more significance (see “New Director Overturns PTAB Procedural Precedents: Parts I and II“). Under the recently promulgated interpretation of the statute, Congress has conferred decisions regarding IPR institution exclusively to the Director. While Directors can delegate (and have delegated) institution decisions to the PTAB and three- or five-judge panels thereof, such delegation is discretionary with the Director. In view of Cuozzo, Thryv, and this decision, current practice will now give the Director unfettered authority to render such decisions, with consequences that may (and likely will) have IPR institution occur at the whim of the policy (and political) whims of particular Directors. Under current jurisprudence, only modification of the statute by Congress can prevent such an outcome; the likelihood thereof will undoubtedly depend on how prudently Directors exercise such plenary powers.)
EBS’s second grounds for appeal were directed at the Board’s claim construction regarding the “fuel” term. In those arguments EBS maintained that the Board was compelled to adopt the portion of the unchallenged portion of the District Court’s construction (regarding the antiknock properties of the DI fuel), that the Board did not perform its own “substantive analysis” of its construction, and additional arguments directly on the merits. Regarding the unchallenged and previously unconsidered (by the Federal Circuit) second portion of the DI fuel term, EBS relied on the Court’s mandate and waiver doctrines to argue that the Board was limited by the Court’s earlier decision as “controlling law.” However, the panel rejected this argument on the basis that these doctrines did not apply “across different litigations and proceedings” and in particular “for a non-appealed district court construction” (emphasis in opinion), citing Musacchio v. United States, 577 U.S. 237, 244–45 (2016), Hyatt v. Stewart, 148 F.4th 1376, 1382 (Fed. Cir. 2025), and TecSec, Inc. v. Int’l Bus. Machs. Corp., 731 F.3d 1336, 1344 (Fed. Cir. 2013), as relating (“closely related,” according to the opinion) to the “law of the case” doctrine. The opinion did not deign to address EBS’s judicial estoppel argument which it had “briefly allude[d to]” and for failure to identify any unfair advantage to Ford as well as having been forfeited thereby.
With regard to EBS’s argument that the Board failed to “engage in any meaningful claim construction analysis” or “fail[ed] to adequately explain why it substantively reached a different outcome than the non-appealed portion of the district court’s construction,” thereby violating the provisions of 37 C.F.R. § 42.100, the panel identified these arguments to involve “unraised issues” which the opinion asserts the Court did not typically find fault in instances where the Board did not consider them, for example under Apple Inc. v. Gesture Tech. Partners, LLC, 127 F.4th 364, 370 n.2 (Fed. Cir. 2025). The Court found no evidence that EBS had asked the Board to construe the DI fuel terms (and strongly stated that in the panel’s view EBS had asked the Board to “expressly forego any construction of its own” in favor of the non-appealed portion of the construction by the district court (emphasis in opinion), which it had characterized as “controlling law” (see above). (Indeed, neither party had made a claim construction request to the Board, according to the opinion). The Board thus did not abuse its discretion according to the panel.
Turning to the substance of claim construction of the term “DI fuel,” the Court first held that EBS had forfeited the issue by its already-noted failure to request that the Board construe the claims. Further, “on the merits,” the opinion states that there is no evidence on the record that the DI fuel term disavows the use of gasoline as an antiknock agent, citing examples of embodiments where gasoline can be so used when other antiknock agents, such as ethanol, have been exhausted. The opinion also rejects any arguments that such embodiments have been disclaimed, and cites instances in the earlier appeal where EBS “explained” that the specification disclosed embodiments where gasoline was an acceptable antiknock agent.
Regarding the Board’s obviousness determinations, the opinion identifies two prior art combinations that are relevant to the appeal: 1. U.S. Patent No. 6,505,603 (Schray) and Japanese Patent Application Publication No. JP2003013785 (Miura); or
2. German Patent Application No. DE19853799, Japanese Patent Application Publication No. JPH10252512 and Bosch Auto. Handbook (3d ed.).
According to the assessment presented in the opinion, in the references cited in Ford’s first obviousness challenge the ‘603 patent discloses “an internal combustion engine to reduce engine knocking” comprising “directly injecting the fuel twice during each cycle, with the first occurring in the induction phase and the second occurring in the compression phase.” The ‘785 Japanese patent application discloses suppressing engine knocking using a port injector. In Ford’s second challenge for obviousness, German patent application ‘799 teaches a “method for creating fuel mixtures in an internal combustion engine” and “drawing a greater percentage of the fuel from the direct injector at greater loads.” The ‘512 Japanese patent application teaches “an engine that contains both a port injector as well as a direct injector” and a “fuel map” wherein is disclosed “which of those two injectors operate (as a function of torque).” The Bosch reference is a “general-purpose automotive handbook.”
The panel rejected EBS’s contention that the Board erred in its motivation-to-combine determination regarding the first combination, homogeneity and heterogeneity of fuel/air mixing, the Court maintaining that Ford’s arguments did not rely on any such distinctions. The Board had agreed with Ford’s actual arguments according to the opinion, that “a skilled artisan would swap Schray’s first injector with Miura’s port injector because Miura’s port injector would ‘provide the engine of Schray with additional benefits related to mixing and stable combustion at low loads.’” Moreover the panel did not consider EBS to have challenged that argument in this appeal. Additionally, the panel appreciated the Board’s rationale regarding motivation to combine that these two references provided different approaches to solving the engine knocking problem and that a skilled worker would be motivated to combine them. Accordingly, the panel held that there was substantial evidence supporting the Board’s determination that there was sufficient motivation to combine in reaching its obviousness determination.
The Court also rejected EBS’s challenges to particular claim limitations in ground 1 of the IPR, which asserted the first combination of references, on the grounds that the Board had “strayed from” the unpatentability theories asserted in Ford’s petitions regarding the “three way catalyst” limitation. The panel disagreed with EBS on the grounds that the Board would properly consider the “proposed combination” of the references (emphasis in opinion) in reaching the obviousness determination that was the basis for ground 1 in its petition.
The panel also rejected EBS’s arguments regarding Ford’s second ground, under the second combination of references, because “[u]nder the circumstances here, where the Board also provided a full explanation for why it rejected EBS’s multiple counter-arguments, the Board’s reasoning is readily discernible, and therefore, it satisfied its obligation to adequately explain its motivation finding.”
Finally, the Court rejected EBS’s arguments regarding the Board’s rejection of rebuttal arguments they had made, because “on this record, the Board found that Ford satisfied its burden” to assert adequate invalidity grounds for obviousness.
The D.C. Circuit Court today denied Judge Pauline Newman’s request for rehearing en banc of the panel decision handed down by the Court on August 22, 2025 (see “Judge Newman’s Challenge Fails at D.C. Circuit“). That decision affirmed the D.C. District Court’s dismissal of Judge Newman’s complaint against the Judicial Council over the Federal Circuit’s continuing suspension under the Judicial Conduct and Disability Act of 1980. The Judge’s en banc petition was aimed at McBryde v. Committee to Review Circuit Council Conduct & Disability Orders of the Judicial Conference of the United States, 264 F.3d 52 (D.C. Cir. 2001), wherein the panel held that “Congress precluded our jurisdiction over statutory and as-applied constitutional challenges to judicial council orders.” It was provoked in no small measure by what the Judge (and others) considered the panel’s “implicit invitation” for the en banc Court to overrule or at least cabin McBryde, being literally littered with quotes, citations, and dicta from the D.C. Circuit’s opinion suggesting this course of action.
Despite these circumstances, the D.C. Circuit Court rejected the petition in a per curiam opinion (see below) with no further explanation.
The Judge’s forthright challenge to what her briefing has characterized as the constitutional questions regarding separation of powers for removing Article III judges raised by the actions of the Judicial Council suggests a likelihood of a certiorari petition in the New Year.
In an email Patent Alert that was distributed this afternoon, the U.S. Patent and Trademark Office announced that it has issued the one millionth electronic patent grant (eGrant), which the Office stated “mark[ed] a major milestone in the agency’s modernization of the patent grant process.” The Office highlighted the benefits of eGrants, which include:
• Faster protection: Inventors receive enforceable patent rights sooner, providing greater certainty to invest, grow, and compete. • Operational efficiency: The transition to eGrants streamlined publication times, getting groundbreaking technologies to the marketplace sooner. • A modern USPTO: The eGrant reinforces the USPTO’s role as a forward-thinking, digital-first IP office committed to secure, high-quality digital services. • Benefit to applicants and practitioners: The eGrant program also provides applicants with enhanced security, simplified digital records management, and global compatibility across IP systems. These improvements allow inventors and attorneys to access, share, and act on granted patents immediately, supporting faster enforcement, licensing, and commercialization.
The authors and contributors of Patent Docs wish their readers and families a Happy Holidays! It is also our hope that all of our readers, along with their families and friends, have a healthy and safe holiday.
In an email USPTO Alert that was distributed this afternoon, the U.S. Patent and Trademark Office announced that its offices will be closed on December 24 and December 26. Because December 25 is listed as one of eleven federal holidays on the U.S. Office of Personal Management web site (as it is annually), the USPTO will also be closed on Christmas Day. According to the USPTO announcement, the closures on Wednesday, December 24 and Friday, December 26 are the result of “the official closing of the Federal Government offices, including the United States Patent and Trademark Office (USPTO)” on those days. The Office also noted that “the USPTO will consider actions or fees due on Wednesday, December 24, through Friday, December 26, to be timely if taken or paid no later than 11:59 p.m. ET on Monday, December 29, which is the next business day on which the USPTO is scheduled to be open.”
According to the announcement, notices regarding the additional days on which the USPTO will be closed will be published in the Official Gazette and on the Office’s Patent Related Notices webpage “in due course” (these notices were not yet available at the time this article was posted).
While not intended to be a comprehensive list of other patent office closures, Patent Docs has become aware of the following patent office closures during the upcoming holidays:
• The European Patent Office (EPO) will be closed from Wednesday, December 24, 2025 through Thursday, January 1, 2026 (see “Office holidays“)
• The Instituto Nacional da Propriedade Industrial (INPI; Brazilian Patent and Trademark Office) will be closed from 1:00 pm on Wednesday, December 24, 2025 through December 26, 2025 and then from 1:00 pm on Wednesday, December 31, 2025 through January 2, 2026.
• The Instituto Mexicano de la Propiedad Industrial (IMPI; Mexican Patent and Trademark Office) closed its offices on Monday, December 22, 2025 and will reopen on Wednesday, January 7, 2026.
Patent Docs readers aware of other patent office closures are invited to submit comments with the dates of those other office closures.
One might be forgiven for assuming, based on a cursory reading of the Constitution or perhaps a fleeting bout of logic, that the U.S. patent system exists to promote the progress of science and useful arts. Historically, this meant incentivizing inventors to create tools that reduced human drudgery, increased accuracy, and generally made life less miserable for the species.
However, under the current jurisprudence of the Federal Circuit, patent law lives in a fascinating dystopia – the more an invention is described in terms of its utility to human beings (e.g., saving time, organizing data, reducing errors), the more likely it is to be summarily executed under 35 U.S.C. § 101. Welcome to the usefulness paradox, where the very benefits of an invention are used as evidence against its eligibility.
To understand the absurdity of the current moment, we first look at what the Patent Office used to consider worthy of protection. Let us review a few inventions that, under today’s Section 101 analysis, would likely be categorized as abstract “fundamental practices” or “methods of organizing human activity.”
Eli Whitney’s Cotton Gin (1794). The invention was a machine that separates cotton fibers from their seeds. Today, a § 101 contention would write itself: “The act of separating desirable objects from undesirable objects is an abstract practice performed by humans since the dawn of agriculture. The rollers and brushes are merely generic mechanical components performing their expected functions.”
Alexander Graham Bell’s Telephone (1876). The claim covers “the method of, and apparatus for, transmitting vocal or other sounds telegraphically.” Under the modern interpretation of § 101, this invention could be viewed as the abstract concept of human communication over a distance with the electric wire just a generic conduit.
Thomas Edison’s Light Bulb (1880). Another loser in view of the current law that is drawn to the abstract idea of “generating incandescence by heating a resistive wire through conduction of electricity.” Further, the additional elements of metallic wires, glass, and a closed chamber, were in routine use at the time of the invention.
These inventions defined the modern world. They were patentable because they provided a solution to a physical problem formerly performed by humans (e.g., separating seeds from cotton, sending messages from place to place, and providing illumination in dark environments, respectively). They involved some degree of making a human task more efficient and useful through machinery. In each case, the machinery performed the task differently than humans had previously.
This notion of new and useful machines being patentable was prevalent in the Industrial Age, but has not survived unscathed in today’s Information Age. The Federal Circuit appears to view computer-implemented methods as being fundamentally different from those carried out by other types of non-computer automation. Indeed, a thread running through the last 11 years of § 101 jurisprudence is that if a human could perform a task (no matter how slowly or poorly), a computer doing it differently and better is likely ineligible. The fact that the computer can, in practice, achieve a useful result that a human could not appears to be irrelevant. Let’s consider some examples.
In Yu v. Apple Inc., the invention was a digital camera system that used two separate image sensors and lenses to create a single, higher-quality image. This is a classic hardware-software hybrid invention designed to overcome the physical limitations of single camera lenses. The Federal Circuit found it ineligible. Why? Because photographers have been taking pictures for a long time. The Court reasoned, “[t]he claim is directed to the abstract idea of taking two pictures . . . and using one picture to enhance the other in some way . . . the idea and practice of using multiple pictures to enhance each other has been known by photographers for over a century.” By this logic, the fact that a human could manually overlay two film negatives in a darkroom renders a real-time, digital signal processing invention abstract. The court reduced a complex technical configuration of sensors and lenses to the fundamental human activity of taking photos.
In IBM Corp. v. Zillow Group, Inc., the patent involved a method for displaying search results in a way that contextually adjusted based on user input – an improvement in how humans interact with database systems. The Federal Circuit affirmed invalidity, stating, “[t]he claims . . . do nothing more than improve a user’s experience while using a computer application [and fail to] do anything more than identify, analyze, and present certain data to a user, which is not an improvement specific to computing.”[1] The Court is effectively saying that making a computer easier for a human to use is not a technical improvement to the computer. In doing so it separates user experience from technology, as if the entire purpose of a computer isn’t to be used by and provide utility to humans.
The inanity escalates with Recentive Analytics Inc. v. Fox Corp. The invention was a machine learning method for optimizing event schedules (like TV broadcasts) by analyzing vast arrays of constraints. This replaces a logistical nightmare with an optimized, AI-driven schedule. The Federal Circuit found it ineligible because optimizing a schedule is a human concept, and using AI to do it (differently) is just generic. Notably, “the use of machine learning to achieve this result is merely the application of a generic computer tool.” This holding suggests that if AI is used to solve a problem that a human understands (like scheduling), the AI itself is just a generic tool for an abstract idea. The Court punished the invention for being useful in a domain that humans care about.
The tragic irony of this jurisprudence is that it incentivizes patent practitioners to draft applications that obfuscate the actual benefit of the invention. If you write a patent application today that states that the invention helps the user take better photos, you have handed the examiner a loaded gun. They can cite Yu and say you are merely automating the abstract idea of picture enhancement. If you write, “this invention makes the interface more intuitive,” they can cite IBM and contend that the invention is focused on user experience rather than technical functionality. We have reached a point where the usefulness requirement of § 101 is being used to negate eligibility.
The downside to the public good is palpable. We are effectively telling innovators in consumer electronics, user interface design, and applied AI that their work is not technology, but merely convenience. This outcome ignores the fact that in an information economy, the ability to process, visualize, and interact with data is the technology. If we continue to interpret abstract ideas as anything that a human could theoretically do regardless of time, error rate, or physical capability we are not protecting the public from monopolization of fundamental truths. We are preventing the public from accessing the specific applications that make those truths usable.
[1] Even a casual glance at the detailed claims of the patent in question calls this statement into question.
Teva was only one such FTC target, there having been ten pharmaceutical companies and 100 patents identified by FTC under former Chairwoman Lina Khan, which number expanded to 300 so-called “junk patents” by the end of her tenure. This campaign against Teva was aided by a decision in the New Jersey District Court (Teva Pharms. Inc. v. Amneal Pharms. LLC (D.N.J. 2024)), affirmed by the Federal Circuit (Teva Branded Pharmaceutical Products R&D, Inc. v. Amneal Pharmaceuticals of New York, LLC (Fed. Cir. 2024)) holding that five device patents owned by Teva and asserted against Amneal Pharmaceuticals were improperly listed in the Orange Book (the FTC having filed an amicus brief relied upon by the District Court in coming to its decision).
The press release ascribed the current administration’s asserted policies to be part of its efforts to reduce drug prices, referencing an Executive Order on Lowering Drug Prices. FTC Chairman Andrew N. Ferguson was quoted as saying that “[t]he Trump-Vance FTC is working hard to ensure that Americans have access to the affordable prescription drugs they need” (pursuing a policy started by the Biden Administration). Further, in the press release (also echoing the sentiments of the Biden administration) the FTC stated that:
Improper patent listings can limit competition by preventing generic alternatives from entering the market. This can keep drug prices artificially high and prevent patients from accessing lower-cost alternatives. The removals of more than 200 improper listings will pave the way for greater competition for generic alternatives for more than 30 asthma, diabetes, and COPD drugs and epinephrine autoinjectors.
While reducing drug prices is a goal shared by policymakers on both sides of the aisle, it is difficult not to respond to assertions such as those in the FTC’s press release with “Not so fast, FTC.” Because as appealing as declaring victory may be, it ignores the realities of the structure provided by the Hatch-Waxman Act that has greatly increased the availability of generic drugs since it was enacted in 1984. Some of the reasons for these successes is that the Orange Book contained the patents a branded drug maker could assert in obtaining a thirty-month stay in FDA approval for a generic drug who had filed an ANDA (abbreviated new drug application). In addition, because of that stay, infringement (by filing the ANDA) was constructive under the statute (35 U.S.C. § 271(e)(2)) so that money damages were not available for the branded drug maker (unless at the expiration of the 30 months the generic company launched “at risk,” which also provided the branded drugmaker with the possibility of obtaining treble damages for willful infringement under 35 U.S.C. § 284)).
Having delisted any patents now determined by the FTC to be improperly listed, none of these protections (for either party) exist regarding those patents. After all, they have not evaporated or been deemed unenforceable, and the capacity for branded drugmakers to assert them still exists under 35 U.S.C. § 271(a) should the generic drugmaker enter the market after its ANDA was approved. It remains an open question, but despite FTC’s triumphant rhetoric that delisting has improved the likelihood of generic entry it may on the contrary inhibit it; although having no Orange Book listed-patents precludes a branded drug maker from asserting infringement under § 271(e)(2), it is unlikely that they would not bring suit under §271(a). With the attendant risks of enhanced liability under § 284, it seems equally likely that potential generic drugmakers, even having obtained FDA approval for their generic version of the “more than 30 asthma, diabetes, and COPD drugs and epinephrine autoinjectors” cited in the FTC press release, would prudently pause to consider their best strategic path to bringing their product to market. And the possibility of reaching a licensing agreement with the branded drugmaker might be less appealing in view of the protracted (and ultimately somewhat successful; seeFTC v. Actavis) efforts by the FTC over a decade ago to thwart certain of these types of licenses (see “The FTC’s Thinking Does Not Make It So Regarding Reverse Payment Agreements“; “Federal Trade Commission Issues Report on Reverse Settlement Agreements in FY2010“; “FTC Releases Another Report on Reverse Payment Settlement Agreements in ANDA Litigation“; “The FTC Is at It Again“) (albeit those that delayed rather than facilitated generic market entry).
But the possibility of FTC scrutiny even of efforts to bring generic drugs to market being an uncertain eventuality, it is at least possible that the unadorned benefit of the FTC’s success in getting some (but by no means all, at least not yet) of the threatened listed patents and companies having listed them may not be quite the policy coup that is being touted by the administration this week. Time will tell.
Late last week, the U.S. Patent and Trademark Office (USPTO) published three memos addressing its latest policies regarding subject matter eligibility. These included “Subject Matter Eligibility Declarations” from Director Squires to the patent examining corps, “Best Practices for Submission of Rule 132 Subject Matter Eligibility Declarations (SMEDs)” from Director Squires to applicants and practitioners, and “Advance notice of change to the MPEP in light of Ex Parte Desjardins” from Deputy Commissioner Charles Kim.
The memos are part of Squires’ push to move the subject matter eligibility analysis under § 101 away from subjective legal notions toward a more rigorous, evidence-based framework. Nonetheless, the underlying law surrounding eligibility remains structurally flawed due to its reliance on amorphous judicial exceptions that allow certain types of technical advances to be ignored. Thus, these administrative remedies may ultimately fall short of resolving the systemic unpredictability that plagues § 101.
1. Subject Matter Eligibility Declarations
The first memo is intended to “raise examiner awareness about the existing option for applicants to submit a declaration under 37 CFR 1.132, an underutilized path to proffer evidence to establish subject matter eligibility of the claimed invention.” Indeed, these declarations have been used by applicants since Alice v. CLS Bank came down in 2014, but have been a largely hit or miss affair. Given the amount of time and effort needed to research the facts behind an invention and craft a compelling narrative regarding its contribution, many applicants have chosen to forgo this option.
The memo sets the stage by reiterating rules for evidentiary declarations as set forth in M.P.E.P. § 716:
Any person who has knowledge of the facts being asserted in the declaration may sign the declaration (e.g., an inventor, an inventor’s co-worker, an independent expert, or others). No special qualification other than knowledge of the facts is required . . . . The declaration must be timely filed to be entered and entitled to consideration. In addition, the declaration must comply with other formalities. Applicants are not required to submit an evidentiary declaration in an application, and applicants cannot be penalized for not submitting a declaration.
Importantly, “there must be a nexus between the invention as claimed and the evidence provided in the declaration.” In other words, the improvement provided by the invention and expounded upon in the declaration should at least be reflected in the claim language. While a declaration may be used to supplement the disclosure in a specification by describing how it would be understood by a person of skill in the art as of the application’s filing date, it cannot be used to introduce new matter to the specification.
When the specification does not explicitly set forth the improvement but such an improvement would have been apparent, the declaration:
[M]ay provide facts that describe the state of the art at the time of filing, provide objective evidence as to how the invention improved upon the state of the art, or provide a factual basis for determining that one of ordinary skill in the art would have concluded that the invention improved the underlying technology.
Nonetheless, a declaration can only provide the factual basis that would support an outcome of eligibility, and any legal conclusions can be ignored.
Regarding an examiner’s consideration of the evidence presented, the memo states:
The examiner must carefully consider all of the applicant’s arguments and the evidence rebutting the subject matter eligibility rejection when evaluating the applicant’s response. The evidence provided in the declaration must be taken into account whenever properly presented; however, such evidence alone would not necessarily control the eligibility determination because the examiner must weigh all relevant evidence of record and then determine whether the claims are eligible based on the preponderance of the evidence (i.e., more likely than not) standard.
Whether or not the examiner is persuaded by a declaration, the examiner must explain why they have withdrawn or maintained the § 101 rejection.
The memo ends with several examples, not of actual declarations but of how declarations might be used in practice. This is where the memo falls short, as each example reiterates that a declaration must not improperly supplement the specification and must provide a nexus between the claimed invention and the proposed technical improvements. But the exact nature of establishing technical improvements remains fact-intensive and specific to individual inventions.[1] Thus, it is not clear exactly how an examiner is expected to go about the evaluation.
For patent applications written with rigorous support for the claimed invention being a specific technical improvement over the prior art (e.g., with statements of technical improvements and reminders of such improvements distributed throughout the text), it is unlikely that a subject matter eligibility declaration will move the needle. However, specifications not written in this fashion, particularly older specifications, may benefit from this new initiative.
2. Best Practices for Submission of Rule 132 Subject Matter Eligibility Declarations (SMEDs)
The second memo is perhaps the least interesting of the three. Its main purpose is to remind applicants that subject matter eligibility declarations “should be submitted as separate documents and not combined with declarations or testimony addressing other issues, such as obviousness.” Notably, one is permitted to submit a combined declaration, but doing so is discouraged to “avoid the risk of intertwining issues of enablement, written description, novelty and nonobviousness with those of subject matter eligibility.”
Finally, and perhaps most substantively, the M.P.E.P. is being updated to reflect Director Squires’ precedential ARP decision in Ex Parte Desjardins. This memo includes several edits to § 2106 that effectively codify the reasoning behind the decision. The memo begins by stating:
Examiners are expected to consider existing precedent like Enfish, as discussed in MPEP § 2106, in addition to these updates when assessing eligibility under 35 U.S.C § 101, particularly when evaluating claims related to machine learning or artificial intelligence.
Importantly, this reliance on Enfish should be not read to indicate that the reasoning of Desjardins is limited to machine learning inventions but is instead generally applicable. For machine learning, however, Desjardins provides specific examples of how those types of inventions can be viewed as patent eligible.
Other key language added to various sections of the M.P.E.P. include:
The Appeals Review Panel (ARP) overall credited benefits including reduced storage, reduced system complexity and streamlining, and preservation of performance attributes associated with earlier tasks during subsequent computational tasks as technological improvements that were disclosed in the patent application specification . . . . In Step 2A Prong Two, the ARP then determined that the specification identified improvements as to how the machine learning model itself operates, including training a machine learning model to learn new tasks while protecting knowledge about previous tasks to overcome the problem of “catastrophic forgetting” encountered in continual learning systems. Importantly, the ARP evaluated the claims as a whole in discerning at least the limitation “adjust the first values of the plurality of parameters to optimize performance of the machine learning model on the second machine learning task while protecting performance of the machine learning model on the first machine learning task” reflected the improvement disclosed in the specification. Accordingly, the claims as a whole integrated what would otherwise be a judicial exception instead into a practical application at Step 2A Prong Two, and therefore the claims were deemed to be outside any specific, enumerated judicial exception.
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Indeed, enumerated improvements identified in the Desjardins specification included disclosures of the effective learning of new tasks in succession in connection with specifically protecting knowledge concerning previously accomplished tasks; allowing the system to reduce use of storage capacity; and the enablement of reduced complexity in the system. Such improvements were tantamount to how the machine learning model itself would function in operation and therefore not subsumed in the identified mathematical calculation.
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When evaluating a claim as a whole, examiners should not dismiss additional elements as mere “generic computer components” without considering whether such elements confer a technological improvement to a technical problem, especially as to improvements to computer components or the computer system.
Each of these passages is quotable grist for the mill of § 101 rebuttals. In recent weeks, applicants have taken to quoting the Desjardins decision in such rebuttals. While doing so still has merit, directly addressing the new language of the M.P.E.P. should subsume and replace it.
Still, it is important to re-emphasize that applications written to explain how the claimed invention is a specific technical improvement over the prior art in as many ways as reasonably possible will almost certainly fare better than those that are not. But until Congress or the Supreme Court intervenes to fix the broken foundation of § 101, these administrative updates merely allow applicants to navigate the maze of eligibility with slightly better maps. The ground remains as shaky as ever.
[1] For example, the memo states that performance results can be supplied if they were not included in the specification.
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