Alice Step Two

The Alice/Mayo two-step test for patent eligibility under 35 U.S.C. § 101 was articulated by the Supreme Court in Alice Corp. v. CLS Bank International (2014) — drawing on Mayo Collaborative Services v. Prometheus Laboratories (2012) and Association for Molecular Pathology v. Myriad Genetics (2013). The test: STEP ONE (STEP 2A, PRONG 1 under current USPTO guidance): Is the claim directed to a judicial exception — an abstract idea, a law of nature, or a natural phenomenon? If not, the claim is eligible; if yes, proceed to step two. STEP TWO (STEP 2A PRONG 2 / STEP 2B): Does the claim contain an inventive concept — something 'significantly more' than the abstract idea itself — that transforms the nature of the claim into a patent-eligible application? The claim must include additional elements that, individually or in combination, go beyond well-understood, routine, or conventional activity to produce 'significantly more.' If the claim does not contain 'significantly more,' it is patent-ineligible under § 101. POLICY RATIONALE: the Supreme Court was concerned that broadly claiming abstract ideas, natural laws, or natural phenomena could pre-empt these fundamental building blocks of science and technology, chilling future innovation.

Under step two, 'significantly more' means additional claim elements or combinations thereof that demonstrate that the claim is directed to a specific implementation of an abstract idea — not the abstract idea itself. WHAT COURTS HAVE FOUND IS NOT 'SIGNIFICANTLY MORE': (1) Generic computer implementation — Alice: simply using a generic computer to implement an abstract financial transaction idea is not 'significantly more'; (2) Well-understood, routine, or conventional steps — adding 'apply it' to a law of nature is not enough (Mayo); (3) Instructions to 'implement via the internet' with no additional technical improvement; (4) Field-of-use limitations that merely narrate a specific context for an abstract idea; (5) Purely conventional data gathering steps followed by abstract concept application. WHAT HAS BEEN FOUND TO BE 'SIGNIFICANTLY MORE': (1) DDR Holdings v. Hotels.com (Fed. Cir. 2014): claims that improved how the internet itself functioned — overriding routine, conventional internet activity — were eligible; (2) Enfish, LLC v. Microsoft (Fed. Cir. 2016): claims directed to a specific improvement to computer functionality (a self-referential database table) — not merely an abstract idea implemented in a computer; (3) McRO, Inc. v. Bandai Namco (Fed. Cir. 2016): rule-based system for animating 3D characters using specific rules that improve the technical process; (4) Berkheimer v. HP Inc. (Fed. Cir. 2018): whether claim elements are well-understood, routine, and conventional is a question of FACT — not something that can be decided summarily without evidence.

The USPTO has issued several guidance documents clarifying how examiners should apply the Alice/Mayo test: JANUARY 2019 REVISED GUIDANCE (2019 PEG): restructured the step two analysis into two prongs: Step 2A, Prong 1: Are any claim elements directed to a judicial exception (abstract idea, law of nature, natural phenomenon)? Step 2A, Prong 2: If yes, do the additional claim elements integrate the exception into a practical application? (This is a refinement of the 'significantly more' inquiry) — if the additional elements: result in an improvement to the functioning of a computer or to another technology or technical field; apply the exception with, or by use of, a particular machine; effect a transformation or reduction of a particular article; use the exception in some other meaningful way beyond generally linking it to a particular technology; the claim integrates the exception into a practical application and IS eligible. Step 2B (if no integration): Do the additional elements amount to 'significantly more' than the exception alone — i.e., do they add an inventive concept beyond well-understood, routine, conventional activity? KEY CHANGE: the 2019 guidance requires consideration of whether the claim integrates the exception into a practical application BEFORE reaching the 'significantly more' / 'inventive concept' inquiry; more claims survive step 2A prong 2 (practical application) than the prior guidance allowed.

Claim structures and features most likely to survive Alice step two eligibility analysis: (1) TECHNICAL IMPROVEMENT CLAIMS — claims directed to a specific technical improvement to how a computer operates (Enfish self-referential database), how a network functions (DDR Holdings), or how a specific hardware/software system operates; avoid framing as business problems solved by generic computers; frame as computer/technical problems solved by specific technical approaches; (2) SPECIFIC ALGORITHMS WITH TECHNICAL EFFECT — claims that specify a particular algorithm, data structure, or computational method that produces a specific technical result beyond a generic 'calculate and apply' step; (3) MACHINE OR TRANSFORMATION — claims that transform specific data types, physical signals, or measurable parameters; or that are tied to a specific machine with unique technical structure; (4) CONCRETE DATA FORMS — claims to specific data structures, compression algorithms, rendering methods, or hardware architectures (not just 'data about concept X'); (5) CLAIM STRUCTURE — write dependent claims that add technical detail, specific computer hardware, specific algorithms, or specific data structures; write the specification to emphasize the technical problem the invention solves and the specific technical improvement it achieves — 'what does the invention do differently and better at a technical level?' is the core question. WHAT TO AVOID: claiming the result without the technical means; generic computer implementation; broad method claims at a high level of abstraction.

The Federal Circuit's Alice § 101 case law is extensive and often divided. Key patterns: CLAIMS THAT SURVIVED STEP TWO: Enfish (2016): self-referential table database structure that improved computer memory and processing — directed to a specific improvement in computer functionality, not an abstract idea implemented in a computer; McRO (2016): specific rule sets for automatic lip-sync animation, using a specific series of rules to transform data in a way that improves technical 3D animation process; Ancora Technologies (2019): storing program's verifying license in BIOS memory — specific improvement to computer security using a specific technical structure; TecSec (2021): claims to layered data security with specific encryption protocols — specific technical implementation beyond generic encryption; CLAIMS THAT FAILED STEP TWO: Bilski (S.Ct. 2010): hedging risk using mathematical concepts — purely abstract; Alice Corp (S.Ct. 2014): intermediated settlement using a generic computer — no technical improvement; Interval Licensing (2018): attention manager for unobtrusive display of information — abstract idea implemented on a generic computer; BSG Tech (2018): providing information about database queries — abstract idea with a generic database; COMMON THREAD: the Federal Circuit looks for whether the claim is directed to a specific technological improvement — not just a business or organizational problem implemented using generic technology. The specification's disclosure of the technical problem and technical solution matters greatly to how judges characterize what the claims are 'directed to.'