Piloting Applicant-Initiated 101 Deferral Through A Randomized Controlled Trial

Abstract

Responding to frustration with the Supreme Court’s patentable subject matter (PSM) decisions, the Federal Circuit has issued clarifying decisions, the USPTO has released new guidance and Senators Coons and Tillis have been holding roundtables, regarding 101.This short essay proposes a complementary approach that aims to conserve agency and applicant resources even while policymakers work to clarify the law. It builds on the idea of deferring 101 subject matter until other issues are exhausted first proposed by Robert Merges and Dennis Crouch, but with some important modifications. Deferral would be at applicant’s option, not mandatory, and the USPTO should roll out this intervention through a controlled trial with randomization, as the agency has done previously. The case for deferring subject matter builds on the insight that 101 is rarely the single dispositive issue – among office actions prior to abandonment, less than 15% of TC36BM and medical diagnostic applications and 2% applications overall are “only 101.” Yet 101 is controversial – the rate of ex parte decisions addressing 101 has also shot up, from less than 10% to over 80% in 2018 in medical diagnostic and software technology areas, and to 26% overall. Deferring 101 would borrow from Supreme Court and executive acts of avoidance, and allow cases to resolve on other, more-settled bases of patentability. Implementing the policy as a pilot with radomization allow the USPTO to determine the practice’s impact on metrics like 101 appeals and rejections, which have all risen following Alice and Mayo, particularly within impacted technology areas. The piece explores the rationale, evidence, and experimental design of a structured 101 deferral pilot.

Keywords: administrative law, experimentation, patents, patentable subject matter

JEL Classification: K20, L51, O31, O34