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The August 4, 2025 memorandum (Memo) issued by the U.S. Patent and Trademark Office (USPTO) clarifies how examiners should approach subject matter eligibility under 35 U.S.C. § 101. Importantly, the Memo provides critical reminders and clarifications that collectively raise the bar for § 101 rejections and offer applicants new tools to defend their claims.

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The Memo explicitly instructs examiners not to expand the mental process category to encompass claim limitations that cannot practically be performed in the human mind. For example, limitations involving (i) complex neural network operations, (ii) multidimensional matrix calculations or (iii) hardware-specific AI implementations are generally recognized as being outside the scope of mental processes, even if they involve mathematical concepts. This may particularly aid technologies directed to LLMs, computer vision and ML accelerators.

The Memo draws a critical distinction between claims that recite a judicial exception and those that merely involve one. This nuance has practical consequences under Step 2A Prong One of the Alice/Mayo framework. For instance, a claim that recites a backpropagation algorithm or gradient descent algorithm may be subject to further eligibility analysis because that claim requires specific mathematical calculations by referring to the mathematical calculations by name. Meanwhile, a claim that involves training a neural network using a dataset but without also specifying the algorithm would not require further analysis. In other words, such a claim is presumed subject matter eligible under Step 2A Prong One.

The Memo also states that examiners should evaluate each “claim as a whole” instead of in isolation with respect to Step 2A Prong Two. Examiners are required to assess how all claim limitations interact and impact each other as to whether the judicial exception (e.g., abstract idea) is integrated into a practical application.&nbsp; This holistic approach aligns with Federal Circuit precedent, including McRO v. Bandai Namco and Amdocs v. Openet, which recognize that specific technological solutions can render claims patent-eligible.

In addition, with respect to Step 2A Prong Two, the Memo reminds examiners to consult the specification to determine whether the disclosed invention improves a technology or a technical field. Importantly, the Memo explains that the claim itself does not need to explicitly recite the improvement described in the specification. Separately, the Memo cautions examiners to avoid the “apply it” trap of oversimplifying claim limitations so as to see a claim as only an application of a judicial exception to a particular context and failing to appreciate whether the claim as a whole provides an improvement to technology or a technical field, as “claims that are determined to improve computer capabilities or improve technology or a technical field support a finding that the claim integrates the judicial exception into a practical application or amounts to significantly more than the judicial exception itself.”&nbsp;

One of the most impactful parts of the Memo is Section III. Here, the USPTO is helping examiners who may be on the fence in terms of making a § 101 rejection. USPTO guidance indicates that if it is “a close call,” examiners should make a rejection only when it is more likely than not – greater than a 50 % probability – that a claim is ineligible. This may help discourage speculative rejections.

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The Memo provides a range of strategic considerations for applicants, in both pending and abandoned applications as well as future filings. When responding to existing § 101 rejections, Applicants may wish to consider one or more of the following arguments. First, consider arguing the claim limitations cannot be performed in the human mind under Step 2A Prong One (i.e., Mental Process Exclusion). Second, cast doubt on the strength of the rejection and emphasize the Memo’s push against claim ineligibility when the probability is NOT more likely than not (i.e., the “close call” standard). Third, challenge the examiner’s position based on an integrated analysis of the claim features directed to improving computer functionality or other technology under Step 2A Prong Two to show that the claim provides a technological improvement, not that the claim recites a judicial exception as a tool to perform an existing process.

Further, companies may wish to reassess previously abandoned applications that received § 101 rejections. In light of the guidance in the Memo, applications and continuations may have a higher likelihood of success moving forward, especially in AI and software.

Navigating Patent Eligibility in the Age of AI: Strategic Insights from the USPTO’s August 2025 Guidance