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USPTO Implements Deferred Subject Matter Eligibility Response (DSMER) Pilot Program

Client Updates
The United States Patent and Trademark Office (USPTO) recently implemented a new pilot program that allows certain applicants to defer responding to subject matter eligibility rejections under 35 U.S.C. §101 during prosecution.  This program, which is effective from February 1, 2022 to July 30, 2022, is intended to evaluate whether deferring applicant responses to subject matter eligibility rejections can improve prosecution efficiency and patent quality.

Traditionally, patent examiners at the USPTO practice “compact prosecution.”  Deferred Subject Matter Eligibility Response Pilot Program, 87 Fed. Reg. 776, 777 (Jan. 6, 2022).  In “compact prosecution,” an examiner evaluates each and every pending claim for compliance with all statutory patentability requirements during initial review of the application, and identifies all applicable grounds of rejection in the first office action.  MPEP 2173.06.  The purpose of this practice is to “clearly articulate any rejection early in the prosecution process” and “avoid unnecessary delays in the prosecution of the application.”  Id.  In response, the applicant is therefore required to address all grounds of rejection, or risk abandonment of the application.  See 37 C.F.R. 1.111(b); MPEP 714.02; MPEP 714.03.

However, in a departure from traditional practice, applicants under the recently implemented Deferred Subject Matter Eligibility Response Pilot Program (the “DSMER Pilot Program”) can defer responding to rejections for lack of patent-eligible subject matter under 35 U.S.C. § 101 during prosecution.  Deferred Subject Matter Eligibility Response Pilot Program, 87 Fed. Reg. at 776.  The DSMER Pilot Program was adopted in response to a letter from Senators Thom Tillis and Tom Cotton to the Commissioner for Patents.  Id. at 777.  In their letter, the Senators explained that while patent examination under 35 U.S.C. §§ 102 (novelty), 103 (non-obviousness), and 112 (written description and enablement) is “based on well-developed and objective criteria under the law,” examination under 35 U.S.C. § 101 lacks the same “clarity, consistency, and objectiveness.”  Letter from Senators Thom Tillis and Tom Cotton to the Commissioner of Patents (Mar. 22, 2021),  The Senators expressed concern that “by conducting an inherently vague and subjective analysis of eligibility early in the examination process, examiners may be spending inordinate time on Section 101 at a time when it is difficult or impossible to conduct a meaningful examination under Section 101.”  Id.  The Senators thus requested the USPTO initiate a pilot program whereby examiners are required to examine the grounds of subject matter eligibility after examination of other patentability grounds is complete, arguing that such a “sequenced approach” could “focus[] initial examination on the objective areas of patentability as opposed to the abstract, vague, and subjective questions of eligibility,” “improve[] efficiency by avoiding waste of valuable examination and applicant time on vague questions of patent eligibility as a threshold matter,” and “lead[] to stronger, more reliable, and higher quality patents by focusing first on the more rigorous and easy to identify standards of patentability.”  Id.

The DSMER Pilot Program
An applicant may receive an invitation to participate in the DSMER Pilot Program if its application meets the following criteria: (1) the application is assigned to an examiner participating in the program, (2) the application is an original nonprovisional utility application or an international application that has entered the national stage, (3) the application does not claim the benefit of an earlier filing date of any nonprovisional application, (4) the application has not been advanced out of turn, for example, under 37 CFR 1.102 or by participation in another program that provides “fast-track examination,” and (5) the first Office action on the merits in the application raises both subject matter eligibility rejections and non-subject matter eligibility rejections.  Deferred Subject Matter Eligibility Response Pilot Program, 87 Fed. Reg. at 777-78.

If an applicant elects to participate in the program, the applicant is provided with a “limited waiver of 37 CFR 1.111(b) with respect to [subject matter eligibility] rejections.” That is, while the applicant must still make a timely response to the Office action, the applicant may (but is not required to) defer responding to subject matter eligibility rejections until the earlier of (1) “final disposition of the participating application” or (2) “the withdrawal or obviation of all other outstanding rejections.”  Id. at 778.  “Final disposition” of the participating application occurs upon the earliest of (1) the mailing of a notice of allowance, (2) the mailing of a final office action, (3) the filing of a notice of appeal, (4) the filing of a Request for Continued Examination (RCE), or (5) the abandonment of the application.  Id. at 779.  After “final disposition,” the limited waiver of 37 CFR 1.111(b) ends, and the applicant must address subject matter eligibility rejections moving forward, for example, when responding to a final office action.  Id.  “Withdrawal or obviation of all other outstanding rejections” occurs when a second or subsequent non-final Office action containing only subject matter eligibility rejections is issued, because the applicant has overcome the examiner’s non-subject matter eligibility rejections.  Id.  

The DSMER Pilot Program does not otherwise alter the patent prosecution process followed by the examiner.  Id.  While an applicant may defer addressing subject matter eligibility rejections, the examiner will consider whether the applicant’s response to non-subject matter eligibility rejections overcome the pending subject matter eligibility rejections, which may place the application in condition for allowance without requiring the applicant to address the subject matter eligibility rejections at all.  Id.  If the applicant’s response does not overcome all pending rejections, then the examiner will issue an Office action (typically a final Office action) presenting all outstanding rejections, including the subject matter eligibility rejections, and addressing all of the applicant’s amendments and arguments.  Id.

The DSMER Pilot Program gives applicants the opportunity to tailor their §§ 102, 103, and 112 arguments and amendments with the Examiner’s § 101 rejections in mind.  If these arguments and amendments successfully overcome both the non-subject matter eligibility and subject matter eligibility rejections, the applicant may completely avoid making any subject matter eligibility arguments on the record.  However, applicants should note that under the Program, they may defer subject matter eligibility responses only until “final disposition” of the application, which includes the mailing of a final office action.  Id. at 779.  If an applicant’s non-subject matter eligibility responses fail to overcome the Examiner’s § 101 rejections, the applicant must address all outstanding rejections in its after-final response. Id.  This may increase cost and prosecution time relative to a situation in which the applicant chose not to defer its subject matter eligibility responses and instead addressed all rejections earlier in prosecution.  Therefore, applicants, especially those in technological fields such as software and the life sciences that are particularly prone to subject matter eligibility rejections, should deliberately consider whether participation in the DSMER Pilot Program is worthwhile.

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