USPTO Overhauls AI Patent Eligibility Guidance, Formalizes SMED Framework

USPTO Director John A. Squires, the 60th director of the United States Patent and Trademark Office (sworn in on September 22, 2025), issued two memoranda on December 4, 2025, substantially revising the agency’s approach to patent subject matter eligibility (35 U.S.C. §101) for AI-related inventions. The guidance replaces Biden-era directives with a framework centered on “technical improvement” and formally establishes the Subject Matter Eligibility Declaration (SMED) as a recognized procedural tool.

Formalization of SMEDs

A SMED is a voluntary declaration under 37 C.F.R. § 1.132 that allows applicants to submit objective evidence and expert testimony to overcome §101 rejections. One memorandum is directed to the Patent Examining Corps, providing guidance on evaluating SMED submissions. The other targets applicants and practitioners, outlining best practices for preparing effective declarations.

While Rule 132 declarations were already available for §101 arguments, they were rarely used in practice. The new guidance formally endorses this pathway, encouraging applicants to present factual evidence of technical improvements when facing eligibility rejections.

Technical Improvement Standard

The central shift in this guidance is an explicit emphasis on “technical improvement” as the key criterion for AI patent eligibility. The updated MPEP now instructs examiners to affirmatively search for a practical application that constitutes “an improvement to other technology or technical field.” Specifications that clearly describe how a claimed invention improves the machine learning model itself, or a related technical field, will be better positioned to overcome §101 rejections.

Building on Ex parte Desjardins

The SMED memoranda build on the Appeals Review Panel’s precedential decision in Ex parte Desjardins, in which Director Squires served on a three-member panel that vacated a §101 rejection the Patent Trial and Appeal Board (PTAB) had raised sua sponte. This decision signaled a more restrained approach to eligibility challenges at the administrative level.

Shift from Biden-Era Policy

Under the previous administration, the USPTO maintained a cautious stance on AI patent eligibility, issuing inventorship guidance in 2024 while keeping §101 standards relatively restrictive. Director Squires has pursued a more flexible examination policy for AI inventions since taking office. At the November 2025 AIPLA Annual Meeting, he signaled further updates to AI eligibility guidance, indicating that the framework will continue evolving.

Practical Implications

For companies and practitioners filing AI-related patents, the guidance carries three key takeaways. First, the formalization of SMEDs provides a strengthened mechanism for overcoming §101 rejections with factual evidence. Second, explicit description of “technical improvements” in patent specifications has become a more critical strategic element. Third, AI patent examination in 2026 and beyond is expected to be more favorable to applicants than in previous years. As AI patent filings continue to surge globally, this policy shift may influence IP strategies well beyond U.S. borders.