The Alice Guidance lists four example categories of abstract ideas:

• fundamental economic practices
• methods of organizing human activities
• an idea of itself (sic), and
• mathematical relationships/formulas. 

Each of these examples has supporting footnotes to the Alice decision and other Supreme Court cases.  But it should be understood that these categories are for potential Abstract Ideas.  That is, something in one of these categories may or may not be an Abstract Idea. Taken superficially and out of context, some of these examples sweep too broadly, and will be too easily misused by examiners.  

Fundamental economic practices

Economic practices are an area of primary concern for the Court, but not every economic practice is a fundamental building block. The problem here will be that it is all too easy to classify a specifically claimed way of performing transactions, advertising, accounting, etc. as “fundamental” simply because it falls into the class itself.  In Bilski, the Court specifically rejected the argument that business methods were per se not patent eligible.  In Alice, the Court did not mention business methods at all, which obviously prompted the concurring opinion to set forth its view that "any claim that merely describes a method of doing business does not qualify as a 'process' under §101." This should serve as reminder that examiners should be careful to avoid assuming that any and every claim in the business arts is an Abstract Idea.  Strictly focusing on what is “on the face” of the claim rather than some underlying field or use case will ensure that examiners do not indiscriminately label every economic practice as fundamental.  As noted above, an examiner should present evidence, such as citation to finance or banking textbook or standard, to establish that an economic practice is fundamental.  If the examiner can merely cite one or two items such as other patents or journal publications that disclose the same idea, that is not sufficient evidence that the practice is fundamental; at best it suggests that the claim is anticipated.

Methods of organizing human activities

The Guidance takes the Court’s reference to methods of organizing human activities out of context:

Although hedging is a longstanding commercial practice, id., at 599, 130 S. Ct. 3218, 177 L. Ed. 2d 792, it is a method of organizing human activity, not a "truth" about the natural world "'that has always existed,'" Alice, 134 S. Ct. at 2356.

The Court used this phrase only to rebut Alice’s argument that abstract ideas must be always be “pre-existing” "truths" and independent of human activity. The Court gives the claims in Bilski as an example of something that is not a fundamental pre-existing truth about world, but is a method of organizing human activity, and thus obviously is not pre-existing.  Bilski’s claim was an Abstract Idea because it was a fundamental economic practice, not because it was method of organizing human activity. Thus, the Court is not saying that all methods of organizing human activity are abstract ideas. Rather, it is saying that some methods that are, such as Bilski’s and Alice's.  Concluding from the Court’s argument that all methods of organizing human activities are Abstract Ideas would be an example of the logical fallacy of faulty generalization.  It makes the same mistake as this argument:

All dogs are animals.

All dogs have four legs.

Therefore, all animals have four legs.

Generalizing the “abstractness” attribute of Bilski’s particular member of the class of organizing human activity to all members of that class is a logical error, just as generalizing the attribute of four legs of a dog (member) to all animals (class) is a logical error.  For example, a method of organizing humans to prepare ice cream sundaes on chilled slabs of granite is obviously not an Abstract Idea.  Thus, that a claim recites a method of organizing human activity does not tell us anything interesting at all about whether it is Abstract Idea; whether it is or not depends on other factors.  

Here too, there is a risk of examiners sweeping in far too many claims into the exception.  For example, a very common and long patented field is games, Class 273.  Games are a classic example of organizing human activity, and there are thousands of patents on various types of games, from board games, card games, ball games, and so forth, covering not just the physical equipment used in the games, but the rules of the games themselves-- that is, the rules for organizing the human behavior.  The original Monopoly board and game concept was patented in 1935, with claim 1 specifically claiming the core rule that the property rents increase when the player has a “Monopoly” on a group of properties.  Similarly, there are numerous other types of methods of organizing human activity that have historically been patent-eligible, without any controversy at all, such as methods of fishing (Class 43/4.5), plant husbandry (Class 47), animal husbandry (Class 119), surgery (Class 128), and woodworking (Class 114), just to name a few.  It would be a perverse outcome from Alice, which deals with something as fundamental as intermediate settlement, that board games, farming methods, woodworking methods, bee keeping (Class 449/1), and the like are no longer patent eligible. 

“An idea of itself”

 Frankly, this one is simply meaningless, and provides nothing substantive to examiners, precisely because it has been twice removed from its original context.  This phrase is lifted from Rubber-Tip Pencil Co. v. Howard, 847 U.S. (20 Wall.) 498 (1874). Immediately following the quoted text is the actual holding of the Court:  “The idea of this patentee was a good one, but his device to give it effect, though useful, was not new.”  Thus, this case is about novelty, not patent eligibility.  Similarly the other case cited by the Court, Le Roy v. Tatum is also about novelty, and indeed is an excellent example of the fact that care that must be taken when citing cases, since the Court there expressly states that it is not addressing the patent eligibility of the claims.  A complete analysis of Le Roy is available at Patent Eligibility: The Historical Cases, http://www.bilskiblog.com/blog/2013/05/the-historical-cases.html, May 23, 2013.  

Mathematical relationships/formulas

More than any other area, this is the one place that the Court’s admonition to “tread carefully in construing this exclusionary principle lest it swallow all of patent law,” must be followed.  In Alice, the Court expressly stated that “[o]ne of the claims in Bilski reduced hedging to a mathematical formula, but the Court did not assign any special significance to that fact, much less the sort of talismanic significance petitioner claims.”  Alice, 134 S. Ct. at 2357 (emphasis added).  Equally so, examiners must not assign any special significance to the presence of a mathematical formula either in the disclosure or in the claims.  What matters is the underlying concept, not how it is expressed (e.g. “no special significance”), whether in words or mathematical symbols. 

Indeed, Justice Stevens—the author of Flook—specifically cautioned against sweeping “algorithms” into “laws of nature”:  “the inclusion of the ambiguous concept of an 'algorithm' within the 'law of nature' category of unpatentable subject matter has given rise to the concern that almost any process might be so described and therefore held unpatentable.”  Diamond v. Diehr, 450 U.S. 175, 219 (1981) (Stevens, dissenting).  All modern engineering, including civil, mechanical, electrical, chemical, computer, etc. relies on mathematical analysis for design and formulation.  This is because mathematics “is unique among languages in its ability to provide precise expression for every thought or concept that can be formulated in its terms.” A. Adler, Mathematics and Creativity, The New Yorker, February 19, 1972, p. 39-45.  Using a mathematical equation is simply one, albeit highly precise, way of expressing concepts, which can be either patent eligible or not.  The presence of a mathematical equation does not imply or suggest anything by itself about the underlying concept, and should not be relied upon by examiners as an automatic evidence of an ineligible Abstract Idea. The proper understanding of the Court’s references to mathematical formulas and algorithms is where mathematics is used to express what are already patent ineligible concepts.  In other words, it is the underlying idea or concept that matters, and that underlying concept must be evaluated in Part I as to whether it is ineligible, not the form of its expression. 

Thus, while mathematics can be used to precisely describe patent ineligible Abstract Ideas (e.g., like E=mc²), it also used to describe mundane things as well, such as fuel-efficient aircraft approach procedures (U.S. Patent No. 8,442,707), compressing video for transmission on cell phones (U.S. Patent No 8,494,051), efficiently allocating farming resources (U.S. Patent No. 6,990,459), or calculating golf handicaps and the difficulty of golf courses (U.S. Patent No. 8,282,455). Many of these mathematical algorithms are “models” that seek to represent the world in a form that can be understood by engineers, or in many cases that can then be manipulated by computers. No one would assert that such algorithms are fundamental building blocks of human ingenuity. These are instead simply examples of applied mathematics (“Applied mathematics is a branch of mathematics that concerns itself with mathematical methods that are typically used in science, engineering, business, and industry,” http:/en.wikipedia.org/wiki/Applied_mathematics) rather than pure mathematics (“[P]ure mathematics is mathematics that studies entirely abstract concepts.” http://en.wikipedia.org/wiki/Pure_mathematics).  At best, examiners should carefully evaluate patent applications that address topics in pure mathematics, because these are more likely to be such building blocks.  This approach would recognize the concern the Court expressed in Benson, regarding what it understood to be a patent claim covering the basic, and purely mathematical, algorithm for converting binary-coded-decimal to binary: “Here the 'process' claim is so abstract and sweeping as to cover both known and unknown uses of the BCD to pure binary conversion.  The end use may (1) vary from the operation of a train to verification of drivers' licenses to researching the law books for precedents and (2) be performed through any existing machinery or future-devised machinery or without any apparatus.” Gottschalk v. Benson, 409 U.S. 63, 68 (1972).

Indeed, if all applied mathematical algorithms were in fact fundamental building blocks, it would logically follow that any inventions that related to using computational methods to solve engineering problems would be ineligible, whether they were implemented in software or hardware. This certainly is not the right outcome and is completely inconsistent with the fact that there are thousands of patents directed to adding machines and calculators for performing addition, multiplication, division, and so forth.  Making all such inventions ineligible and all such patents invalid would be the 'exception swallowing the rule,' precisely what the Court warned against.

Further, it would mean that many modern communications technologies as used in smartphones and the Internet—communications protocols, encryption, audio and video compression, to name a few—would likewise no longer be patent eligible.  Such a broad and disruptive outcome is clearly not what the Court intended for Alice.  As will be further discussed below, the Court was quite concerned at oral argument in Alice with avoiding a broad ruling that invalidated all software and computer implemented patents.  An approach by examiners that considers the presence of any mathematical algorithm as indicative of a per se Abstract Idea surely puts too many patent applications at risk. 

In summary, the Alice categories are examples of types of concepts that can fall into the class of Abstract Ideas, but they are not definitions or sufficient conditions that make all categories members Abstract Ideas.