Step Two is where the Federal Circuit has failed. The court has regularly held claims are not patent eligible if everything they add to a patent-ineligible concept is “well-understood, routine, or conventional.” But the Federal Circuit has provided little guidance as to when the a claim contain an “inventive concept,” i.e., when the claim elements, as said by Justice Breyer in Mayo, “” The reason the Federal Circuit has not done so seems clear—it has not accepted that an “inventive concept,” as and use the term in Step Two, is a concept that is not obvious. Were it to do so, Step Two would work. Its test would be one that both the United States Patent and Trademark Office (USPTO) and the courts understand and regularly apply: is the claim new and non-obvious? Requiring that a claimed application of an underlying “patent-ineligible concept” be non-obvious would also largely eliminate any risk that the claim might improperly “pre-empt” the underlying non-patentable concept.

An “Inventive Concept” Is a Concept that Is Not Obvious

The Supreme Court held the claims in , , , and invalid because, apart from a “formula” (), “law of nature” (), or “abstract idea” (), the claims included nothing that was not “ or .” Mayo twice said that purely “ or ” activity cannot transform an unpatentable principle into a patentable process. , whose claims included the old and unpatentable , is the other side of the coin. The Court took pains to point out that “obviousness” was the reason why and reached opposite conclusions. claims because there was no suggestion that the steps added to the old Arrhenius formula “” were not because the steps it added to new formula “” Despite this, Judge Lourie’s and Judge Rader’s concurring opinions in the Federal Circuit’s fractured decision in dismissed the possibility that “” required “” Instead, Judge Lourie said that the term “”; and to Judge Rader “”

Not surprisingly the Supreme Court’s decision did not endorse these novel views, and they fortunately do not bind the Federal Circuit going forward. Judge Rader has since said that “” , as Judge Dyk recently said, “”:

We cannot confine to its facts or otherwise cabin a clear statement from the Supreme Court. “[O]nce the Court has spoken, it is the duty of other courts to respect that understanding of the governing rule of law.” A court of appeals must not “confus[e] the factual contours of [a Supreme Court decision] for its unmistakable holding” to arrive at a “novel interpretation” of that decision. As we have recognized, “[a]s a subordinate federal court, we may not so easily dismiss [the Supreme Court’s] statements as dicta but are bound to follow them.”

Recently, some Federal Court judges seem to have accepted that “inventive concept” does indeed have a great deal to do with obviousness. Last June, Judge Newman pointed out that “” In December, Judge Laurie recognized that “;” and Judge Dyk that agreed that patent failed because “.”

What is the Prior Art?

In determining whether a claim is obvious, the prior art applied in a Step Two analysis is broader than that normally used under analysis. In the latter, the prior art is defined by . In a Step Two “inventive concept” determination, it includes more. Because “laws of nature, natural phenomena and abstract ideas” are “excluded from … patent protection” under , such excluded subject matter is “.” In , the Court . But it nonetheless held claims to a noninhibiting mixture of these bacteria invalid:

Thirty years later, confirmed rule: “” In 2010, the rule that unpatentable subject matter is “assumed to be within the prior art” was confirmed once again; repeated that Flook’s process “ (mathematical algorithm), , and (law of nature), and and (abstract idea) are also clear that if there is to be invention from a discovery of a law of nature, . “[I]nvention” cannot be “borrowed” “” , as Judge Dyk said last December, “”

Conclusion

In short, the guidance that the Federal Circuit should give practitioners, USPTO Examiners, and the lower courts, all of whom need to determine both when claim elements “add enough … to allow the processes they describe to qualify as patent-eligible to qualify as patent-eligible processes that apply natural laws, and when they , is clear. Step Two’s “‘inventive concept’ sufficient to ‘transform’ the claimed abstract idea into a patent-eligible application” must come from the application of the “patent-ineligible concept” principle, and must not be obvious. This is not to say that it will always be clear whether a claim directed to the application of something that is excluded is nonetheless patent-eligible. For example, last month, that claims to a test that used a blood sample to detect a fetus’s inherited cffDNA were invalid. Following its usual analysis, that both the of cffDNA in blood and inherited cffDNA were natural phenomena, and that appending “routine, conventional steps … is not enough to supply an inventive concept.” What the Federal Circuit did not do was to consider if, looking at Sequenom’s claims as a whole, the claimed method of diagnosis using these phenomena was obvious. The Federal Circuit decision never used either “obvious,” or “claim as a whole.” Nor did it note that many, if not most, valid patents are for combinations of elements or steps that are individually old. The newly-filed petition asks the Supreme Court to clarify and “to emphasize that a of otherwise conventional techniques is patent-eligible even if it is straightforwardly motivated by a patentee’s unique discovery of a natural law or phenomenon.” Hopefully, the petition will be granted and the Court will clarify that whether Sequenom’s “new combination” satisfies Step Two depends on whether or not the claim as a whole is “inventive.”

Before the introduced “obviousness,” the Supreme Court regularly decided whether what a patent claimed was an “invention.” Since , the Court has used the terms “inventive” and “nonobvious” interchangeably, e.g.,: “” The phrase “inventive concept” seems to have originated with Flook’s statement that ” Flook also said that deciding whether there is an “inventive concept” required “a determination of “obviousness”:

“[F]irst determine whether the claims at issue are directed a patent-ineligible concept.” Second, “examine the elements of the claim to determine whether it contains an ‘inventive concept’ sufficient to ‘transform’ the claimed abstract idea into a patent-eligible application.”