Alice Step One

Alice Step One (also called Mayo Step 1) is the first inquiry in the two-step framework established by Mayo Collaborative Services v. Prometheus Laboratories (S.Ct. 2012) and Alice Corp. v. CLS Bank Int'l (S.Ct. 2014) for evaluating patent eligibility under 35 U.S.C. § 101: THE QUESTION: Is the claim directed to a patent-ineligible concept — specifically, one of the three judicial exceptions: (1) ABSTRACT IDEAS; (2) LAWS OF NATURE; (3) NATURAL PHENOMENA? ANALYTICAL APPROACH: the court or examiner considers the claim AS A WHOLE — not element by element — to determine what the claim is 'directed to' at its core; not merely whether the claim 'involves' or 'recites' an abstract idea; DIRECTED TO vs. INVOLVES: a claim is not automatically ineligible merely because it involves a mathematical concept or natural law; the question is whether the 'CHARACTER AS A WHOLE' of the claim is directed to the judicial exception; if the claim, viewed as a whole, applies the exception in a practical, technical context, it may NOT be directed to the exception even at Step One; CONSEQUENCE: if Step One is answered YES (claim IS directed to a judicial exception), the analysis proceeds to Alice Step Two to determine if there is an 'inventive concept' that saves the claim; if Step One is answered NO (claim is NOT directed to a judicial exception), the claim is patent-eligible and the analysis ends — no need for Step Two.

The Supreme Court has never precisely defined 'abstract idea,' but the Federal Circuit and USPTO have identified common categories: MATHEMATICAL CONCEPTS (per 2019 USPTO Guidance): mathematical relationships, mathematical formulas and equations, mathematical calculations; examples: correlating two values mathematically; computing a result through a formula; encrypting data using a mathematical algorithm; CERTAIN METHODS OF ORGANIZING HUMAN ACTIVITY: fundamental economic practices; commercial or legal interactions; managing personal behavior or relationships; examples: hedging financial risk (Bilski v. Kappos); intermediated settlement of financial transactions (Alice); comparing new and stored information and using rules to identify options (Content Extraction); MENTAL PROCESSES: concepts that can be performed by a human mind alone; steps that a person can perform mentally or with pen and paper; examples: collecting information, analyzing it, and displaying results (Electric Power Group); comparing information against criteria and giving a result; recognizing patterns in information; WHAT IS NOT AN ABSTRACT IDEA: claims that are directed to a specific, concrete application or a technical solution to a technical problem are generally NOT directed to an abstract idea at Step One; Enfish LLC v. Microsoft (Fed. Cir. 2016): claims to a specific type of self-referential table for database indexing were NOT directed to an abstract idea — they were directed to an improvement in computer functionality itself; McRO v. Bandai Namco (Fed. Cir. 2016): claims to specific rules for automated 3D lip synchronization were NOT abstract — they were a technological improvement, not a broad abstract rule.

The January 2019 Revised Patent Subject Matter Eligibility Guidance (often called the 2019 PEG or Alice Guidance) significantly restructured the USPTO's Step One analysis: KEY CHANGES: the 2019 Guidance divided what was previously a single Step One into two sub-steps: STEP 2A, PRONG 1: Does the claim recite a judicial exception (i.e., is one of the three types of judicial exceptions present in the claim language)? STEP 2A, PRONG 2: If yes, is the claim 'directed to' the judicial exception — OR does the claim integrate the judicial exception into a PRACTICAL APPLICATION that imposes a meaningful limit on the exception? PRACTICAL APPLICATION TEST: at Step 2A, Prong 2, if the claim integrates the exception into a practical application, the claim is eligible — no need to proceed to Step 2B (the old inventive concept step); PRACTICAL APPLICATION EXAMPLES: improving the functioning of a computer itself; improving another technology or technical field; applying the exception in a meaningful way using a particular machine; effecting a transformation or reduction of a particular article; SIGNIFICANCE: under the old analysis, many claims were found directed to an abstract idea at Step One and survived only at Step Two; under the 2019 PEG, claims with a practical application pass at Step 2A, Prong 2 without needing an 'inventive concept'; this widens the set of claims that pass Step One and reduces the burden at Step Two; LEGAL STATUS: the 2019 Guidance is not binding on courts — it reflects USPTO's interpretation of current Federal Circuit law; the Federal Circuit may deviate.

The 'directed to' analysis is the most contested aspect of Step One, requiring a holistic claim evaluation: CHARACTER AS A WHOLE: courts look at what the claim is 'directed to' by examining the purpose and effect of the claim overall — not by parsing individual elements; the presence of a computer, processor, or network does not automatically make the claim non-abstract if the computer merely performs the abstract steps faster or more efficiently; SPECIFICITY MATTERS: claims that narrowly describe a specific technical improvement to a specific type of computer functionality are less likely to be directed to an abstract idea; claims that broadly describe organizing human activity or mathematical operations in a way that ANY machine could perform are more likely directed to an abstract idea; FEDERAL CIRCUIT CASES: (1) CLAIMS ARE DIRECTED TO ABSTRACT IDEA: Alice Corp.: all claims broadly directed to using a computer as an intermediary for escrow transactions — the 'core' was an abstract financial concept; (2) CLAIMS NOT DIRECTED TO ABSTRACT IDEA: Enfish: specific type of self-referential table that improves database efficiency — directed to a specific improvement in computer technology; Bascom Global Internet Services v. AT&T: filtering software installed on a local server for customized internet content filtering — directed to a specific technological arrangement; Core Wireless v. LG Electronics (Fed. Cir. 2018): specific improved display interface for computing devices — directed to an improvement in display technology; CONTEXTUAL EVIDENCE: the specification's description of what problem the invention solves, and what technical improvement it provides, informs the directed-to analysis.

SURVIVING STEP ONE (CLAIM NOT DIRECTED TO EXCEPTION): (1) Claim is directed to a specific improvement in computer technology (not abstract mathematical functions on a computer); (2) Claim is directed to a specific machine or transformation with a meaningful practical application; (3) Claim is directed to a specific technical solution to a technical problem (e.g., improving network packet routing, optimizing memory allocation, specific encryption for a particular type of security vulnerability); (4) Under 2019 PEG: claim integrates a mathematical concept into a practical application that imposes meaningful limits; EXAMPLES THAT SURVIVE STEP ONE: Enfish self-referential table; McRO automated lip-sync rules; Core Wireless display interface; DDR Holdings v. Hotels.com (Fed. Cir. 2014): retaining website visitors by generating a hybrid web page combining elements from the host website's look-and-feel with the merchant's product information; FAILING STEP ONE (ANALYSIS PROCEEDS TO STEP TWO): claim broadly describes: organizing financial transactions; comparing data against criteria; collecting and analyzing information; presenting results or recommendations; performing mathematical calculations; concepts humans could perform mentally; THEN STEP TWO APPLIES: if Step One is failed, the claim must have an 'inventive concept' — something significantly more than the abstract idea itself — to be eligible; most purely software business method claims fail Step Two as well; THRESHOLD: Step One is meant to be a preliminary filter, not an exhaustive analysis; close cases may be better resolved at Step Two where the 'inventive concept' analysis can more specifically target what makes the claim more than just the exception.