USPTO Archives - Foresight Valuation Group

Redefining Inventorship: The USPTO’s Path Forward for AI-Assisted Inventions

Posted on March 1, 2024 7:07 pmModified on March 1, 2024 7:07 pmby Lynn Dudinsky

On February 13, 2024 the United States Patent and Trademark Office (USPTO) released examination guidance pursuant to the “Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence.” The process started back in 2019 when the USPTO issued a request for public comment on patenting Artificial Intelligence (AI)-assisted inventions which was followed by a report in 2020 summarizing the various viewpoints found in the public comments received. In 2023, the USPTO issued a follow-up request for public comment focused on the issue of inventorship of AI or machine generated inventions. Following additional sessions to hear from various parties and the public in general, the USPTO determined that it would provide guidance regarding inventorship and patentability of AI-assisted inventions. Moreover, President Biden issued the “Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence” in October of 2023 which set out a number of policies and principles that would allow the US to lead in AI while also promoting responsible innovation, competition and collaboration so that a fair, open, and competitive ecosystem and marketplace for AI technologies could be created in a manner that would drive continued innovation in the AI field. The Executive Order required the USPTO to publish guidance to patent examiners and applicants addressing inventorship and the use of AI which was released on the 13^th of February, 2024.

As a background on the history of inventorship and AI, the genesis of the question of AI as an inventor started with the USPTO’s decision in April of 2020 denying petitions to name the AI system DABUS as an inventor on two patent applications. The reasoning behind this decision was simple: current U.S. patent laws limit inventorship to a natural person. This seemingly simple decision was then upheld by the U.S. District Court for the Eastern Division of Virginia in September of 2021. This decision was later appealed and the Federal Circuit in Thaler v. Vidal affirmed the underlying reasoning that only a natural person can be an inventor. However, in this decision the court specifically noted that it was not deciding on the related question of whether inventions made by natural persons with the assistance of AI are eligible for patent protection. However, the basis for the decision on inventorship should equally apply to co-inventors when one of the inventors is a natural person and the other is AI. In that situation, a co-invention made by a natural person and an AI would not be eligible for patent protection due to improper inventorship. This position by the USPTO that any patent application listing a machine as an inventor will be rejected due to improper inventorship led to the question of whether any invention that is AI-assisted would be eligible for patent protection.

The guidance addresses the above question by building upon previously established case law derived from Pannu v. Lolab Corp which focused on the level of contribution by the natural person to the claimed invention. The underlying concept as explained by the guidance is that while “AI systems cannot be listed inventors, the use of an AI system by a natural person does not preclude a natural person from qualifying as an inventor if the natural person significantly contributed to the claimed invention.” Interestingly, the guidance and the current structure of patent applications do not provide a mechanism to list or attribute the contribution of AI tools to the claimed invention, even if the AI systems were instrumental in the creation of the invention, due to the focus on current patent law and juridical precedent on natural persons. Since AI is not a natural person, there is no requirement to list the tool used in the creation of the claimed invention. This may be an area where Congress needs to act to enable a requirement to attribute non-natural person contributions to a claimed invention. The basis for this change would be to align patent disclosure policies with the stated policy goals of the Executive Order of promoting responsible innovation, competition and collaboration so that a fair, open, and competitive ecosystem and marketplace for AI technologies could be created in a manner that would drive continued innovation in the AI field.

As emphasized above, the central question or test under the new guidance can largely be boiled down to the “Significant Contribution” test. Historically, this test was used to determine whether an inventor must be included as a named inventor due to his/her significant contribution to the claimed invention. The guidance uses historical references to joint inventorship principles where the inventors may apply for a patent jointly, “even though (1) they did not physically work together or at the same time, (2) each did not make the same type or amount of contribution, or (3) each did not make a contribution to the subject matter of every claim of the patent.” Instead, each inventor must contribute in some significant manner to the invention, and these contributions have been tested by factors such that each inventor must: “(1) contribute in some significant manner to the conception or reduction to practice of the invention, (2) make a contribution to the claimed invention that is not insignificant in quality, when that contribution is measured against the dimension of the full invention, and (3) do more than merely explain to the real inventors well-known concepts and/or the current state of the art.” These factors were derived from the Pannu case referenced above and in the event that an inventor fails to meet any one of these factors, that inventor should not be named as a listed inventor on the patent.

What do these factors have to do with inventorship in AI-assisted inventions? In the AI-assisted invention context, the natural person must contribute significantly to the invention pursuant to these Pannu factors. If the natural person fails any one of these factors, the natural person is precluded from being a listed inventor as is the AI system resulting in an application that is rejected for improper inventorship. When viewing this from the perspective of a single inventor using AI, the single inventor must significantly contribute to each claim in the patent application. If the AI tool contributes solely to one or more claims, this would violate the Pannu factors as there would be no natural person contributing to those particular claims and an AI system cannot be a listed inventor. The complexity of this historical precedent being applied to AI assisted inventions led the USPTO to outline Guiding Principles to assist applications and USPTO personnel in determining proper inventorship. These Guiding Principles are:

A natural person’s use of an AI system in creating an AI-assisted invention does not negate the person’s contributions as an inventor so long as the natural person contributes significantly to the AI-assisted invention.
A natural person who only presents a problem to an AI system may not be a proper inventor of an invention identified from the output of the AI system. However, a significant contribution could be shown by the way the person constructs the prompt in view of a specific problem to elicit a particular solution from the AI system.
Reducing an invention to practice alone is not a significant contribution that rises to the level of inventorship. Therefore, a natural person who merely recognizes and appreciates the output of an AI system as an invention is not necessarily an inventor. However, a person who takes the output of an AI system and makes a significant contribution to the output to create an invention may be a proper inventor.
A natural person who develops an essential building block from which the claimed invention is derived may be considered to have provided a significant contribution to the conception of the claimed invention even though the person was not present for or a participant in each activity that led to the conception of the claimed invention. In some situations, the natural person who designs, builds, or trains an AI system in view of a specific problem to elicit a particular solution could be an inventor, where the designing, building, or training of the AI system is a significant contribution to the invention created with the AI system.
Ownership of an AI system does not, on its own, make a person an inventor of any inventions created through the use of the AI system. Therefore, a person simply owning or overseeing an AI system that is used in the creation of an invention, without providing a significant contribution to the conception of the invention, does not make that person an inventor.

It should be noted that the USPTO guidance highlights that there is “no bright-line test” in determining whether a natural person’s contribution in AI-assisted inventions is significant. This should come as no surprise to anyone who has been in the world of patents for more than a few years. While the USPTO tries to provide the best guidance possible, the ambiguities often times leave more uncertainty than most practitioners would like to see resulting in a period of uncertain outcomes in both patent prosecution and litigation. As the AI field grows and capabilities that we cannot yet image are developed on top of AI systems, this is surely going to be an area of active litigation and developing case law.

Arthrex v. Smith & Nephew: SCOTUS Preserves Inter Partes Review

Posted on June 25, 2021 8:15 pmModified on June 25, 2021 8:16 pmby Lynn Dudinsky

We last wrote about the Arthrex case back in November of 2019 and this blog is a continuation now that the case has finally reached a decision by the Supreme Court. In our previous blog, we described how the United States Court of Appeals for the Federal Circuit ruled that the appointment of the Patent Trial and Appeal Board’s (“PTAB”) Administrative Patent Judges (“APJs”) violated the Appointments Clause of the U.S. Constitution. This decision was based on the lack of direction and supervision of APJs by the presidentially-appointed Secretary of Commerce or Director of the USPTO as well as the lack of independent statutory authority to review the final written decisions by the APJs during inter partes revew. These factors resulted in the United States Court of Appeals for the Federal Circuit to decide that APJs are acting as principal officers, in violation of Appointments Clause, and to remedy the constitutional violation the tenure protections of APJs were invalidated.

On June 21, 2021, the U.S. Supreme Court delivered its written opinion in United States v. Arthrex, Inc. in which it vacated the judgement of the United States Court of Appeals for the Federal Circuit and remanded the case to the Acting Director of the USPTO. In its opinion, the Court addressed the responsibilities of the APJs and, as was the case in the previous ruling, focused on the requirement that APJs, as inferior officers, are required to be directed and supervised at some level by others who were appointed by Presidential nomination with the advice and consent of the Senate. In the case of APJs, the majority opinion concluded that lack of review by a superior officer meant that the APJs wielded unreviewable authority during inter partes review which elevates them to a higher position than an inferior officer, in violation of the Appointments Clause.

The Court then addressed the appropriate remedy for the violation of the Appointments Clause and crafted a tailored approach to overcome the Constitutional violation. The remedy described in Part III of the Court’s opinion created a new framework for review by the Director of the USPTO of PTAB decisions and the ability of the Director to issue decisions on behalf of the PTAB. In crafting this remedy, the Court overcame the lack of review by a Presidential nominee and therefore preserved the status of APJs as inferior officers. The Court was careful to note that this decision “concerns only the Director’s ability to supervise APJs in adjudicating petitions for inter partes review” and does not address over types of adjudications conducted by the PTAB.

It is unclear at this stage how this Director-level review will be made available for parties in inter partes review proceedings and by what standard the Director will review petitions for rehearing by disappointed parties. In 2020 there were more than 1,400 inter partes review petitions and over 400 Final Written Decisions by the PTAB. Given these number, it is unlikely that the Director of the USPTO will review all decisions by APJs, but this framework enabled the Court to preserve the inter partes review process and we are forced to wait and see how this new power by a political appointee will impact the post-grant proceedings of the PTAB.

USPTO v. Booking.com: Acquired Distinctiveness of a Generic Domain

Posted on July 28, 2020 7:49 pmModified on July 28, 2020 7:50 pmby Lynn Dudinsky

The Supreme Court (“Court”) in USPTO v. Booking.com resolved a dispute about whether a generic name can become eligible for federal trademark registration though the addition of an internet-domain-name suffix such as “.com.” The USPTO rejected applications by travel-reservation website Booking.com seeking federal registration of marks including the term “Booking.com.” The USPTO concluded that “Booking.com” is a generic name for online hotel-reservation services and as a generic name, the USPTO was forced to reject the applications. Booking.com took their argument to the District Court seeking judicial review and the District Court held that “Booking.com” – as opposed to the term booking standing alone – is not generic. The Court of Appeals agreed with the District Court and rejected the USPTO’s position that combining a generic term with “.com” results in a generic composite.

In order to understand this case, it is important to understand the meaning of generic in the field of federal trademark registration. A generic name is the name of a class of products or services and is therefore ineligible for trademark registration. As it relates to this case, all parties agreed that the word “booking” is a generic word for the class of hotel-reservation products or services. Moreover, the word “.com” is a generic internet-domain-name suffix. The USPTO argued for the adoption by the Court of a rule that the combination of a generic word (i.e., “booking”) with “.com” maintains the generic nature of this combination.

Another important idea to understand when reviewing this case is the purpose of trademarks and how this impacts the decision of the Court. The purpose of trademarks is to distinguish one producer’s goods or services from another’s. Distinctiveness is defined as the quality of being distinguishable and the USPTO recognizes and expresses distinctiveness on an increasing scale: generic, descriptive, suggestive, arbitrary and fanciful. The higher on this distinctiveness scale, the more readily it qualifies for trademark registration. The Court noted that generic terms, such as booking, are ordinarily ineligible for trademark protection. Moving up the distinctiveness scale, the USPTO argued that even if “Booking.com” was considered descriptive, it could not be registered because it lacked secondary meaning. Secondary meaning, also known as acquired distinctiveness, refers to the concept of a descriptive term achieving significance in the minds of the public as identifying the applicant’s goods or services.

In the lower courts, Booking.com leveraged the concept of acquired distinctiveness by providing evidence that the consuming public understood Booking.com to refer to the specific product or services offered by Booking.com at that domain name. This evidence allowed the District Court to hold that “Booking.com” was descriptive and had acquired secondary meaning and thus met the requirement for trademark registration. The Court of Appeals affirmed the holding of the District Court.

The Supreme Court granted certiorari and, in its opinion, delivered by Justice Ginsburg, the Court highlighted the importance of a mark’s capacity to distinguish goods in commerce as the underlying principle of trademark registration. The Court agreed with the Court of Appeals and discussed the USPTO’s failed logic behind its argument that “Booking.com” signifies to consumers the class of online hotel-reservation services. Under the USPTO’s approach, this would mean that consumers would understand Travelocity or Expedia to be a “Booking.com” or that when a consumer is looking for a trusted source of online hotel-reservation services they might ask a frequent traveler to refer them to their favorite “Booking.com” provider. The evidence provided by Booking.com in the lower courts provided enough support to demonstrate that this is not the perception of the word “booking.com” and that consumers understood “booking.com” to refer to the services provided by Booking.com. Based on this analysis the Court affirmed the decision by the lower courts reflecting the eligibility for “booking.com” to receive trademark registration.

Arthrex v. Smith & Nephew: Inter Partes Review and Unconstitutional Appointment of APJs

Posted on November 26, 2019 5:23 pmModified on June 24, 2021 8:50 pmby Lynn Dudinsky

On Halloween, the United States Court of Appeals for the Federal Circuit delivered its opinion in Arthrex, Inc., v. Smith & Nephew, Inc. that the appointment of the Patent Trial and Appeal Board’s Administrative Patent Judges (“APJs”) violates the Appointments Clause of the U.S. Constitution. The background of this case involved Arthrex receiving a final written decision in the inter partes review of its patent finding the claims unpatentable as anticipated. Anthrex subsequently appealed the written decision of the PTAB arguing that the APJs presiding over the inter partes review were not constitutionally appointed.

A brief background on the appointment and power of the APJs is required to understand the potential impact of this decision. APJs are appointed by the Secretary of Commerce in consultation with the Director of the USPTO. This leads to the question of whether the APJs are defined as inferior officers or principal officers. The Court described the functions of APJs in determining how to define these officers and highlighted the significant discretion APJs exercise when carrying out their functions in the inter partes review process. It was noted that their decisions on patentability are final and subject only to rehearing by the Board or appeal to the CAFC. The Court then described the defining characteristics of inferior officers as compared with principal officers as being: (1) whether the officer has a superior, (2) whether the superior was appointed by Presidential nomination, and (3) the level of supervision and direction over the officer by the superior.

The Court then explained that the two presidentially-appointed officers at the USPTO, the Secretary of Commerce and the Director of the USPTO, provide direction to the USPTO. While these officers provide direction, the Court held that neither officer individually nor combined exercised sufficient direction and supervision over APJs to render them inferior officers. The Court’s opinion was based on the lack of independent statutory authority to review the final written decision by the APJs before that decision is issued on behalf of the United States. Another factor considered by the Court was the removal power over an officer, which the Supreme Court described as “a powerful tool for control.” APJs, the court noted, may be removed “only for such cause as will promote the efficient of the service,” meaning that the APJ may be removed when his or her misconduct is likely to have an adverse impact on the agency’s performance. With this in mind, the Court held that APJs are principal officers and thus the current structure of the Board violates the Appointments Clause because the APJs are appointed by the President and confirmed by the Senate.

In an effort to resolve the Constitutional conflict, the Court suggested removal of the employment protections that currently exist and providing the presidentially-appointed officers at the USPTO broad removal powers over APJs. It is unclear what the lasting impact of this decision will be, but recently, the House Judiciary Committee’s Subcommittee on Courts, Intellectual Property, and the Internet conducted a hearing that included a discussion of the Arthrex decision. A variety of solutions were presented and discussed to resolve the issue created by the Arthrex decision and time will tell if a legislative fix will soon emerge.