Over the past few years, a dramatic number of blockchain-related patent applications have been filed at the U.S. Patent & Trademark Office (USPTO). Blockchain innovations may be categorized as software-use cases and thus may receive resistance by the USPTO as being directed to patent ineligible subject matter under 35 U.S.C. § 101 in view of the Supreme Court’s decision in Alice v. CLS Bank Int’l.
In Alice, the Supreme Court established a two-step test to determine whether claims are patent eligible. In the first step, the Court determines whether the patent claim includes a law of nature, natural phenomenon, or abstract idea. If the patent claim does not fit into one of these categories, it includes patentable subject matter. However, if the patent claim does fit into one of these categories, the second step of the test inquires whether the patent claim includes an “inventive concept sufficient to transform the nature of the claim into a patent-eligible application.”
Under the first step, the manner in which the patent claim is characterized determines whether the claim is considered an abstract idea. With regard to blockchain-related patent claims, the USPTO will likely consider one of two lines of cases to make this determination.
Under the first line of cases, the Supreme Court and Federal Circuit have held that the use of a computer to implement a fundamental economic or conventional business practice does not, by itself, render claims patent ineligible., Under the second line of cases, the Federal Circuit has held that claims directed to solutions rooted in computer technology to overcome a problem arising in the realm of computer networks, or to an improvement to the functionality of a computer itself, are not directed to an abstract idea.,
The USPTO has provided guidance based on the reasoning provided in the second line of cases. Like the Federal Circuit, the USPTO appears to focus its analysis on the claimed invention’s technical advantages to determine whether the claimed concept provides an advantage over the prior art.
Accordingly, when preparing blockchain-related applications, applicants should first identify the novel concepts of the patent application. And, when drafting the patent specification, applicants should clearly explain technical advantages provided by the novel concepts. Though the technical advantages may be similar to what others sought to accomplish, the novel concepts may be directed to a different technique to solve a different problem.
Some blockchain-related applications may not pass the first step of the Alice lice test and be considered an abstract idea. In these instances, the analysis moves to second step of the Alice test.
Under the second step of the Alice test, the claim elements at issue are considered, individually and in combination, to determine whether they have an inventive concept that amounts to significantly more than a judicial exception (e.g., abstract idea) itself. In Alice, the Supreme Court held that an “inventive concept” is determined by an element or combination of elements recited in the claim that is beyond the judicial exception and is sufficient to ensure the claim as a whole amounts to significantly more than the judicial exception itself.
Therefore, when drafting claims for blockchain-related applications, applicants should be cognizant of the application’s novel concepts. For example, applicants should intertwine the novel concepts into one or more claim limitations. Applicants should further consider, if possible, arranging claim limitations in a particular—or novel—order such that the particular arrangement is distinguishable over the prior art. Again, it is important for applicants to clearly explain how the novel concepts provide technical advantages over the prior art in the patent specification.
 134 S. Ct. 2347 (2014).
 Id. at 2355
 Id. at 2357-2358.
 See Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed. Cir. 2014).
 See Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016).
 See McRO Inc. v. Bandai Namco Games America, 837 F.3d 1299 (Fed. Cir. 2016).
 Alice Corp., 134 S. Ct. at 2355