'America’s Leadership is at Stake': Decoding the Message from the USPTO Director
A large audience for the Desjardins AI decision
In a decision that reads as much like a policy directive as a legal ruling, the leadership of the U.S. Patent and Trademark Office (USPTO) has forcefully intervened to protect an artificial intelligence invention from a sua sponte patent eligibility rejection during an appeal of prior art rejections. The recent, often-discussed decision in Ex parte Desjardins (2024-000567), authored by the new Under Secretary of Commerce for Intellectual Property and Director of the USPTO, John A. Squires, is a multi-layered communication. It goes beyond the facts of the case to send loud messages to several different groups of stakeholders, government policy-makers, and the courts.
1. For the Executive Branch: A Day One Declaration on a Critical Technology
The significance of the Desjardins order is amplified by its timing and authorship. Reviewed by a special Appeals Review Panel (ARP) including the Director himself, the decision serves as a clear “Day 1” action item for Commerce Secretary Howard Lutnick and the White House. Acting like an agency-directed executive order, it demonstrates that the agency’s new leadership understands that AI is a critical emerging technology where U.S. leadership is paramount.
The ARP order contains a stark warning directly aligned with the administration’s strategic goals:
“Categorically excluding AI innovations from patent protection in the United States jeopardizes America’s leadership in this critical emerging technology.” (p. 9)
This statement frames patent eligibility not as a legal puzzle, but as a matter of national economic and security interest. It signals that the USPTO is an active partner in the administration’s push to foster and protect American dominance in AI.
2. For Examiners and the PTAB: A Shift to “Claims Discovery”
The decision also serves as a new mandate for the agency’s own corps. Director Squires and the ARP looked at the appeal decision in Patent Application No. 16/319,040 and chastised the lower panel’s “overbroad reasoning” (p. 9), pointedly stating that §§ 102, 103, and 112 are the “traditional and appropriate tools” for examination (p. 10). This directs examiners to spend less time on the amorphous § 101 analysis and more on the substantive requirements of novelty, non-obviousness, and enablement.
Such a directive aligns perfectly with the Director’s inaugural public statements. In an opening address last week, he urged examiners to see themselves not as gatekeepers whose role is to “dispassionately say ‘no’,” but as “seasoned negotiators” working to “help find the ‘yes’ that is properly bounded by law.”
Director Squires proposed an analogy from his time on Wall Street, framing the examination process not as a simple rejection or allowance, but as “claims discovery”—a collaborative effort to find “the line where the prior art leaves off and where the inventive contribution begins.”
Desjardins is the first major application of this new philosophy.
3. For Inventors and Practitioners: A Clearer Roadmap to Eligibility
For the innovation community, the message is one of resounding encouragement: AI is patent eligible. The decision lays out a clear and actionable strategy. Success hinges on the ability to move beyond abstract descriptions and provide a concrete narrative of technical problem and solution. The winning formula appears to be:
Detail the specific technical problem being solved (e.g., “catastrophic forgetting”).
Disclose the specific technical solution in the specification.
Incorporate a claim limitation(s) that explicitly connect the abstract concepts to that tangible technological improvement.
The ARP found the Desjardins claims eligible because they improved how the AI model itself operated, leading to tangible benefits like reduced storage and complexity.
This provides a solid blueprint for drafting robust, defensible AI-invention patent applications.
4. For the Federal Circuit: A Necessary Nuance in Recentive
The ARP decision also engages in a subtle but firm dialogue with the U.S. Court of Appeals for the Federal Circuit. In the final paragraph of its April 2025 opinion, Recentive Analytics, Inc. v. Fox Corp., 134 F.4th 1205 (Fed. Cir. 2025), the court tried to leave a small crack to light a path to eligibility, stating:
Today, we hold only that patents that do no more than claim the application of generic machine learning to new data environments, without disclosing improvements to the machine learning models to be applied, are patent ineligible under § 101 (Recentive, p. 18).
While the CAFC foresaw the risk of its opinion being misread and applied broadly, its prescribed solution—“improvements to the machine learning models to be applied”—was unfortunately narrow. This language could easily be interpreted as AI eligibility requiring a hardware-specific or structural change to the model, a difficult standard for many software-based innovations to meet.
The ARP in Desjardins clearly wanted to clarify and broaden this pathway for inventions in front of the USPTO, demonstrating that a process-based improvement that enhances the functionality of the software itself is precisely the kind of technological improvement that qualifies for patent protection. Enfish is still an important guide.
5. For Congress: An Implicit Plea for a Legislative Fix
Finally, woven throughout the decision is a subliminal message to Congress. By directly acknowledging the “confusing nature of existing § 101 jurisprudence” (p. 9) over a decade after the Supreme Court’s Alice decision, the Director highlights the persistent difficulties in applying the current legal framework.
The need for the agency’s top officials to personally intervene to correct a seemingly straightforward application of the law underscores the deep-seated inconsistency that plagues patent eligibility.
This perceived need for legislative action is exemplified by ongoing discussions around proposals like the Patent Eligibility Restoration Act (PERA), which seeks to restore clarity by amending the statute. Regardless of the specific legislative vehicle, the implicit plea from the agency is clear: without a change in the law from Congress, the courts and the USPTO will struggle to provide the consistency needed to secure America’s innovative future in the global AI race.
Conclusion
The Desjardins decision is a pivotal moment and a strategic communication from the USPTO’s new leadership. By vacating the PTAB’s overreaching § 101 rejection and reaffirming the agency’s understanding of the case law, the decision provides greater clarity and predictability for innovators in one of today’s most important technological fields.
This “Day 1” order, via ARP, acts as a form of agency-directed policy, echoing a broader trend of governance through executive action seen from the White House. Just as the Acting Director (Coke Morgan Stewart, Deputy Under Secretary of Commerce for Intellectual Property and Deputy Director) remained deeply involved in shaping policy through PTAB discretionary denials, this decision signals that the new leadership will also be hands-on.
Stakeholders should be prepared to see Director Squires’ name on USPTO policy papers often, especially when AI is involved, as the new leader of the agency reasserts its role in guiding innovation.
Ultimately, the order encourages a more disciplined and precise application of § 101, pushing examiners and the Board to use the proper statutory tools—like novelty and non-obviousness—to assess patentability.
This shift in focus urgers the patent system to better distinguish true innovation from the prior art without using an overly broad ineligibility standard that risks stifling progress in a critical area of American innovation. How it affects enforcement will be seen in the near future.
Disclaimer: This is provided for informational purposes only and does not constitute legal or financial advice. To the extent there are any opinions in this article, they are the author’s alone and do not represent the beliefs of his firm or clients. The strategies expressed are purely speculation based on publicly available information. The information expressed is subject to change at any time and should be checked for completeness, accuracy and current applicability. For advice, consult a suitably licensed attorney and/or patent professional.