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Ex parte Gutta: a New Test for Evaluating the Patentability of Algorithms

By: David Moore of Rahman LLC


On December 21, 2009, the Board of Patent Appeals and Interferences (BPAI) issued a precedential decision in Ex parte Gutta, which pertains to the patentability of algorithms. In the decision, the BPAI set forth the following test for determining whether a physical implementation of an algorithm qualifies as statutory subject matter:

(1) Is the claim limited to a tangible practical application, in which the mathematical algorithm is applied, that results in a real-world use (e.g., “not a mere field-of-use label having no significance”)?

(2) Is the claim limited so as to not encompass substantially all practical applications of the mathematical algorithm either “in all fields” of use of the algorithm or even in “only one field”?

The first prong appears to borrow from State Street's "useful, concrete and tangible result" language. The second prong, on the other hand, checks whether the claimed application of the algorithm encompasses all uses in all fields, or even in one field. This seems strangely contradictory to some of the language in the Interim Examination Instructions for Evaluating Subject Matter Eligbility under 35 U.S.C. § 101, which states on the first paragraph of page 3 that "[w]hen subject matter has been reduced to a particular practical application having a real world use, the claimed practical application is evidence that the subject matter is not abstract, not purely mental and does not encompass substantially all uses (pre-emption) of a law of nature or a natural phenomenon" (emphasis added).

With respect to sufficient structure, it appears that disclosure of a processor and memory alone is insufficient. The algorithm may be described as a mathematical formula, prose or as a flowchart, but the BPAI did not discuss the degree of specificity that is required. The BPAI consists of over 80 judges, and the number is likely to rise as the USPTO tries to address the appeals backlog. In the future, further clarification may be provided in precedential cases regarding the disclosure requirements for algorithms. Also, as Mr. Moore notes in his case synopsis, the U.S. Supreme Court's decision in In re Bilski may supercede Ex parte Gutta. However, at least in the interim, this case is worthy of careful consideration with respect to applications directed to practical applications of algorithms.

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