This article is part 2 of a 2-part series analyzing Director Squires’ first USPTO decision. In Part 1, we examined the Desjardins decision and its departure from previous Section 101 approaches. Now, let’s explore the strategic implications for global patent portfolio management and prosecution strategy.
Director Squires’ early decision signals a meaningful shift in USPTO policy toward emerging technologies. For companies developing innovations in AI, blockchain, diagnostics, and related fields, understanding these strategic implications is essential for maximizing patent value across global markets.
Eligibility in Applied Technologies: A More Permissive Signal
For clients developing inventions in AI/ML, blockchain/distributed ledger, digital diagnostics, quantum or related fields, this decision suggests a more favorable environment at the USPTO for “technological improvements” rather than pure algorithms or business methods. The shift creates new opportunities for patent protection that were previously uncertain under restrictive Section 101 interpretations.
Particularly for non-U.S. applicants, the U.S. market is important for commercialization and licensing, and counsel should emphasize claims that recite how a technical system, model or machine improves performance, efficiency, memory usage, training metrics, etc. The key is demonstrating concrete technical advantages that go beyond merely implementing abstract ideas on generic computer hardware.
Claim Drafting: Technical Advantage Must Be Front-and-Center
Given the emphasis on a “technical improvement,” practitioners should ensure claims and specification highlight how the invention materially advances the functioning of a machine or system (not merely automates a business process or abstract formula). This requires careful attention to both claim language and supporting disclosure that establish the technological nature of innovations.
In a global strategy for Asia/Europe clients, this might mean adapting U.S. filings (or U.S.-directed claims) to emphasize system-level improvements, performance metrics, data structure optimization, resource usage — to align with the Squires/USPTO message. Specifications should include detailed explanations of technical problems solved, comparative performance data, and concrete examples of system improvements.
Portfolio Selection: U.S. Filings Worth Re-Visiting
Clients who previously shelved U.S. filings or did not pursue U.S. protection because of eligibility concerns may now reconsider — particularly in emerging tech fields. The decision creates a window of opportunity to revisit inventions that were previously deemed too risky for U.S. patent prosecution under restrictive Section 101 standards.
While no guarantee of allowance exists, the risk threshold at the front-end has arguably shifted. Companies should conduct portfolio reviews to identify candidates for U.S. filing that were previously abandoned or deprioritized due to eligibility concerns. This is particularly relevant for innovations involving machine learning, artificial intelligence, distributed ledger technologies, and digital health diagnostics.
Enforcement and Licensing: Stronger Up-Front Value
The decision also has downstream implications: if more applications are allowed, patent portfolios may gain enhanced licensing/monetization value. A more permissive eligibility standard means that patents covering software-implemented innovations become stronger assets for licensing negotiations and enforcement actions.
For non-U.S. entities licensing into the U.S. market, this is meaningful — a stronger U.S. patent position increases bargaining power. Companies can command higher royalty rates and more favorable licensing terms when their patent portfolios include robust U.S. protection in emerging technology areas. This enhanced value extends to M&A transactions, where patent portfolios often represent significant portions of company valuations.
Global Impact: Watch for Harmonization or Divergence
While this decision is U.S.-specific, it may influence behavior in other jurisdictions (Europe, Japan, Korea) either via applicant strategy or via local offices taking cues. Patent offices often observe policy shifts in major jurisdictions when developing their own examination guidelines and practices.
Whether EPO or national offices follow a more expansive eligibility lens remains to be seen, but counsel should monitor. The divergence or convergence of eligibility standards across jurisdictions will significantly impact global patent strategy, particularly for companies pursuing international patent families. Companies may need to adjust prosecution strategies differently for each jurisdiction based on evolving local standards.
Adapting Prosecution Strategy for Maximum Impact
Director Squires’ first decision sends a clear message: the USPTO intends to foster innovation in AI, diagnostics, blockchain and related fields, by taking a more expansive view of § 101 eligibility where genuine technical improvements are at issue. For middle-market and international clients, this is a timely moment to recalibrate U.S. patent strategy, especially when global alignment is in play.
By proactively adapting claim drafting, specification strategy and cross-jurisdictional coordination, counsel can help clients capture the upside of this subtle but meaningful shift in U.S. patent eligibility policy both prior to gaining patent protection and post in licensing and valuation. The key is recognizing that eligibility analysis now places greater emphasis on articulating technical improvements rather than simply avoiding abstract idea language.
Practitioners should work closely with inventors to identify and document technical advantages during the invention disclosure process, ensuring that applications are positioned from the outset to demonstrate the concrete technological improvements that Director Squires’ decision emphasizes.
Ready to optimize your patent strategy for emerging technologies? We advise startups, middle market companies and funders on global patent protection strategies, due diligence and valuation, and commercial negotiations. Contact our intellectual property experts at CrossBorder IP to schedule a consultation and align your patent portfolio with evolving USPTO policy for maximum protection and value.