By Robert R. Sachs
After Alice, the USPTO's various guidance memoranda included references to non-precedential Federal Circuit decisions, particularly Smartgene, Cyberfone, and Planet Bingo, as examples of patent-ineligible subject matter. Naturally, examiners cited these decisions in support of their Section 101 rejections. Smartgene was the most frequently cited because the USPTO glossed it simply as “comparing new and stored information and using rules to identify options," a characterization that allowed examiners to apply the case to just about any computer-implemented method. I and others expressed our concerns to the USPTO about the examiners' reliance on Smartgene and other non-precedential cases in comments on the Interim and subsequent guidance memos. Full disclosure: I was counsel to ABL, the patentee in Smartgene.
On November 2, 2016, the Office issued the "McRO" memo, explaining how examiners should interpret the Federal Circuit's decision in McRO v. Bandai. The memo ended with an instruction that examiners should limit their reliance on non-precedential cases:
Non-precedential decisions: Finally, given the large and ever-increasing number of precedential decisions, examiners should avoid relying upon or citing non-precedential decisions (e.g., SmartGene, Cyberfone) unless the facts of the application under examination uniquely match the facts at issue in the non-precedential decision. The updated chart of court decisions available on the USPTO' s SME Webpage indicates whether a decision is precedential or non precedential.
The guidance seemed clear: unless the application before the examiner "uniquely matched" the facts of a non-precedential decision, the decision should not be relied upon--there was an "ever-increasing" number of precedential cases that could be used instead.
I waited for six months to gather data to determine if the examiners were following this guidance. Here's what I found.
Practitioners' concerns regarding the examiners' use of non-precedential cases, especially Smartgene, were well justified, as shown how the citation rate (percent of office actions) more than doubled from 1.44% in January 2016 to 3.21% in October 2016.
The good news is that the citation rate dropped immediately after the McRO memo, especially for citations to Smartgene and Cyberfone. The citation rate for Planet Bingo dropped slightly, since it is generally only applied in specific gaming related applications.
The bad news is that Smartgene continues to be cited in many office actions. Here are the number of office actions citing Smartgene since November 2016:
| Month | No. of Citations |
| Nov-16 | 1522 |
| Dec-16 | 1194 |
| Jan-17 | 1044 |
| Feb-17 | 876 |
| Mar-17 | 890 |
| Apr-17 | 713 |
| May-17 | 465 |
I find it hard to accept that so many applications have facts that "uniquely match" the facts of Smartgene. The Federal Circuit itself expressly limited its decision, saying “[o]ur ruling is limited to the circumstances presented here, in which every step is a familiar part of the conscious process that doctors can and do perform in their heads.” Indeed, my research shows that this opinion is being cited in applications that have no relationship whatsoever to what doctors do, in their heads or otherwise. Here are some example titles of applications in which Smartgene was cited in a rejection since April, 2017:
| 14577509 | Wireless Connected Indoors Slipper and Wireless Connected Footwear and Associated Detection Methods |
| 15093482 | METHOD OF DETERMINING MOTION VECTORS FOR BI-PREDICTIVE IMAGE BLOCK |
| 14663989 | PRECISION AGRICULTURE SYSTEM |
| 15050582 | SYSTEM AND METHOD FOR HIGH-SPEED SERIAL LINK DESIGN |
| 13690674 | MAINTENANCE CYCLE FOR AN AIRCRAFT |
While I'm sure some doctors maintain their own planes or vineyards, or design high speed data links while lounging in their wireless slippers, such activities would hardly be familiar to most physicians. Here's a typical example of a rejection of an application that in no way uniquely matches Smartgene or Cyberfone: "For further clarification purposes the fact pattern in the [application] is similar to other concepts that have been identified as abstract by the courts, such as using categories to organize, store and transmit information in Cyberfone, and comparing new and stored information and using rules to identify options in SmartGene (in how the claimed system accepts bids in categories of greater than standard price increment or lower than standard price increment then displayed either the standard price incremented amount or precludes display (or displays something else) should the offer/bid be less than the standard price increment." I don't know of any doctors who accept bids for their medical services in categories at various price increments "in their heads."
The Office needs to continue to educate examiners on when it is proper and improper to rely on a non-precedential case. Smartgene should only be cited in applications that claim methods in which "every step" is one that a physician would make mentally upon observing a patient or reviewing medical data.
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