After Alice: the two-step rule


Judith Kim and Scott Schaller

After Alice: the two-step rule

Existing portfolios should be carefully reviewed and care must be taken in drafting new patent applications to withstand section 101 scrutiny in the US, as Judith Kim, director, and Scott Schaller, of counsel, at Sterne Kessler Goldstein & Fox, describe.

Patent-eligible subject matter in the US includes four statutory categories defined in title 35, section 101 (§101) of the US code as “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof”. 

Laws of nature, natural phenomena, and abstract ideas have been held by the US Supreme Court to be implicit exceptions to patent-eligible subject matter under §101, with the exceptions rationalised as a means to prevent the monopolisation of the basic scientific and technological tools required for future innovation. These judicial exceptions arguably did not play a large role in US prosecution or enforcement of biotechnology and pharmaceutical patents until recent years. 

Instead, innumerable patents were issued with claims directed to, for example, isolated genes, isolated biological products, and diagnostic tests, in the decades before the Supreme Court’s holdings in Mayo Collaborative v Prometheus Labs (Mayo) and Association for Molecular Pathology v Myriad (Myriad).

Alice Corp v CLS Bank; Sterne Kessler Goldstein & Fox; patentability; Mayo Collaborative v Prometheus Labs; section 101 (§101) of the US code