Since the Supreme Court’s 2014 Alice decision, U.S. patent law has included a two-step test for subject matter eligibility (SME): first, determine if a claim is directed to an abstract idea, and if so, then ask if it contains an “inventive concept” that makes it patent-eligible. For software and AI-based inventions, this framework has been notoriously difficult to navigate because it is often unclear what counts as an “abstract idea” versus a “technological improvement.” As a result, SME remains one of the most challenging and unpredictable issues in patent law, with inventors and practitioners struggling to craft claims that satisfy shifting case law and USPTO guidance.
Two recent USPTO developments relating to SME for AI/software inventions are of particular interest to patent practitioners.
In August of 2025, Deputy Commissioner Charles Kim issued a memo to examiners in Technology Centers 2100, 2600, and 3600, in which the agency’s official guidance regarding software and AI-related inventions was restated. Notably, the memo included several “reminders” to examiners about how to properly evaluate subject matter eligibility and cautioned them not to issue § 101 rejections simply because they are “uncertain as to the claim’s eligibility.”
The following month, in one of his first official acts as the 60th director of the USPTO, John Squires issued a decision on request for rehearing in Ex parte Desjardins (Appeal No. 2024-000567; application 16/319,040). In the decision, Director Squires vacated a § 101 rejection for claims directed to a computer-implemented method of training a machine learning model that had been issued sua sponte by the PTAB. He cautioned that “[c]ategorically excluding AI innovations from patent protection in the United States jeopardizes America’s leadership in this critical emerging technology,” while emphasizing that “§§ 102, 103 and 112 are the traditional and appropriate tools to limit patent protection to its proper scope … [and] should be the focus of examination.”
If the Kim memo could be viewed as a gentle reminder that examiners should be more judicious in their issuance of § 101 rejections for AI and software claims, then the Desjardins rehearing decision marks a clear signal that the new leadership at the Office intends to take a pro-patent stance on the controversial SME issue. While the Desjardins decision is not officially designated as “precedential,” practitioners can view Squires’ action as an aggressive push to curtail the volume of § 101/SME rejections tendered by examiners and largely permit the patenting of AI-related inventions.
