PTAB reverses abstract idea rejection of business method patent application – Some key practice tips

There has been much energy focused on the flawed nature of the current Alice/Mayo framework for evaluating patent-eligibility. Even the well-intentioned desires of USPTO director Andrei Iancu’s to move away from this framework has its limits.

In a recent decision, Ex Parte Pasupulati et al, the Board reversed an abstract idea rejection to a claim directed to integrating an API-based mechanism to a merchant’s website without the merchant having to understand the API or having to know how to code in a language specific to the API. The Board rebuffed the Examiner’s position for both steps.

Step 1

Under Step 1, the Board first found that the Examiner had improperly overgeneralized the claims as “payment management in a network” or the general concept of “coding”. Without being able to over simplify the claim, it makes it much more difficult for the claims to be “directed to” an abstract idea.

Next, the Board found that the focus of the claims is not on judicical exceptions (i.e., “do not recite a mathematical algorithm … [n]or do they recite a fundamental economic or longstanding commercial practice” identified as an “abstract idea” by the Supreme Court in its trilogy of Benson, Flook, and Diehr, and its recent duet of Bilski and Alice). Instead, the Board found that the claims provide a particular solution to the particular problem of integrating an API-based mechanism to a merchant’s website without the merchant having to understand the API or having to know how to code in a language specific to the API.

Still, the Board did not have the confidence to rely only on Step 1 in reversing this rejection because “identifying the precise nature of the abstract idea [of Appellants’ claims] is not as straightforward,” it proceeded to Step 2.

Step 2

The Board analogized to DDR Holdings in showing that the claims contain an “inventive concept” for two reasons. The first reason is somewhat related to the step 1 analysis. That is, the Board found that the claims provide a technical solution to a technical problem unique to the Internet. Here it was generating code snippets and files that can be automatically integrated with an online website so that an API-based mechanism can be used with the online website.

The second reason analogized to Bascom. The Board found that the combination of Appellants’ claim elements, like the claims in Bascom, provides a practical application of integrating an API based mechanism to a merchant’s website without the merchant having to understand the API or having to know how to code in a language specific to the APL This transforms any abstract idea (i.e., “coding” or “payment management in network”) into “a particular, practical application of that abstract idea.”

Conclusion

Despite the chorus of criticism of the Alice/Mayo framework continuing to grow, it is the law of the land. That being said, there are ways to navigate through its complexities. This decision nicely shows practice tips that can be used for similarly rejected applications. For step 1, one practice tip is not to let the examiner oversimplify what the claims are directed to. Consider focusing of the claims with its technical features as a problem to solve. For step 2, if applicable, consider showing how the claimed invention is solving a problem unique to a computer-specific environment (e.g., the Internet). Lastly, consider how the combination of claim elements might transform the alleged abstract idea into a particular, practical application.

Try the Newly Upgraded Anticipat to Complement Your Patent Prosecution Practice

We are pleased to let you know about a major upgrade to the overall site at Anticipat.com, giving you relevant information faster, better, and easier.

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We hope you will find our newly organized issue/subissue and tags organization for ex parte appeals decisions to be intuitive and useful in your practice. Easily look up any issue that you face and see what has worked (or not worked) on appeal–with any metric (e.g., your Examiner, art unit, tech center). No other product offers such granularity in appeals results at the PTAB.

We’ve also made major improvements to the full text searching capabilities for even more specific research. Harness the power of patent analytics to make better-informed decisions using the power of aggregate appeals data.

We’d love for you to give us a try for a free two-week trial by clicking here. And if you have any questions or any feedback, please feel free to reach out to us.

Come see us at the AIPLA annual meeting this Thursday and Friday!

We at Anticipat have been busy improving the user experience for patent practitioners who are keen on using patent analytics in their practice. Now, Anticipat would like to show you this functionality first hand. To this end, we will have a booth and a presenter at this year’s AIPLA annual meeting in Washington, DC.

Adam Stephenson, co-founder and chief operating officer of Anticipat, will be at booth 36 demoing our new research and analytics interfaces and answering questions about using Anticipat data in patent prosecution. At the booth, we are giving away a FlashForge Creator Pro 3d printer to the lucky person who signs up for a free trial during the conference period (no need to attend the annual meeting necessary!).  To win, sign up for a free trial Thursday October 25 through 1:30 PM Eastern on Saturday October 27.  Current or past subscribers attending the meeting can leave their business card with Adam at our booth or send an email to admin@anticipat.com during the giveaway period to be entered to win.

Adam will also be presenting in the Thursday am (9am-12noon on October 25) track: patent prosecution. His presentation is titled “Tactics for leveraging objective indicia of nonobviousness during patent prosecution.”

If you are at the annual meeting this week, we’d love to meet up with you. Drop in at our booth, come check out Adam’s presentation or reach out to us to set up a time to meet at admin@anticipat.com or +1.480.779.7093.

 

Number of abstract idea rejections decided at PTAB for August 2018 higher than ever, but reversal rate treads water

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Recently at the IPO Annual meeting on September 24, USPTO director Andrei Iancu acknowledged the obvious: Section 101 is making folks’ lives difficult. The director also had some strong words about the abstract idea patent-eligibility doctrine. Calling into question the established framework, the director asked: “How can a claim be novel enough to pass 102 and nonobvious enough to pass 103, yet lack an ‘inventive concept’ and therefore fail 101?” It does not look like a fix to 101 is coming anytime soon. But it does look like this struggle is increasingly making its way to the Board.

August 2018 saw a record-number of abstract idea rejections decided at the Board. The PTAB decided 209 abstract idea rejections. And even with such a high number of cases, the reversal rate only slightly dipped compared to prior months. See previous post on recent months abstract idea decisions. For August, 30 of 207 decisions were entirely reversed, yielding a complete reversal rate of 14.5%.

As examiners and applicants grapple with the abstract idea doctrine of patent-eligibility, the trend seems to be that applicants will increasingly seek the PTAB judges to adjudicate in their favor. And if recent months are any indication, that gamble is paying off more than ever before. But still with reversal rates in the teens, it’s still one of the most difficult of all rejections to overturn on appeal. Plus with the director’s strong words, the reversal rate should continue to trend upward.

Check out additional information at Anticipat.com. You can look up, for example, all the decisions where the board reversed specific examiner rejections. Try out a trial for Anticipat Research today.

Not a flash in the pan: abstract idea reversal rate continues upward trend for July

July saw a continued trend of reversing Examiners’ abstract idea rejections. Last month, we reported that the PTAB overturned abstract idea rejections in June above 15%. Before this, it had been a year since such a high reversal rate. Now it appears that June was not a one-off month anomaly, but rather a continuation of a trend.

Similar to June, in July the PTAB decided a lot of abstract idea rejections. Of 195 total, 32 were reversed, yielding a pure reversal rate of 16.5%. One decision was partially affirmed, yielding a partial reverse rate of 17%.

Of note, in July the Board decided 20 more abstract idea decisions than in June. And June was no small month for abstract idea decisions. Such a greater sample size (from an already impressive total in June) with similar reversal rate suggests the board has changed its deference of examiner abstract idea rejections in light of recent case law.

Check out additional information at anticipat.com. You can look up, for example, all the decisions where the board reversed specific examiner rejections. Try out a trial for Anticipat Research today.

Another Section 101 lack of utility rejection bites the dust

As reported in today’s recap email, in Ex Parte GELFAND et al (Aug. 2, 2018), the Board reversed a lack of utility rejection. This continues a longstanding trend of the Board frequently reversing such rejections.

In rejecting the claims as lacking utility under Section 101, the Examiner had asserted that the claims were not supported by a specific, substantial, and credible asserted utility, or a well-established utility. For support, the Examiner relied on MPEP § 2107.01 B(C), which states that “[a] method of assaying for or identifying a material that itself has no specific and/or substantial utility” is not considered to have a substantial utility.”

On appeal, the appellant argued “The present invention relates to the field of nucleic acid detection” and that nucleic acid detection has numerous uses including diagnostic uses and research uses–a specific utility.

While acknowledging the Examiner’s cited MPEP section, the Board rejected the Examiner’s reasoning. That identifying the presence of target nucleic acid sequences is a method for assaying “a material that itself has no specific and/or substantial utility.”

According to Anticipat Research, this type of rejection (Section 101 – Lack of Utility) has a very high reversal rate. Over the past two years, the PTAB has reversed 14 of 19 of these rejections, a relatively incredible 74% reversal rate. This may stem from the rejection being applied less frequently with other rejections and Examiners hence not having much experience with properly applying it.

With a reversal rate so low for lack of utility rejections, when struggling with an Examiner with such a type of rejection, it may be helpful to go straight to the Board on appeal to overcome such a rejection.

The PTAB quietly hit a milestone in June in reversing Alice Section 101 rejections

As we have pointed out in a previous post, for more than a year, reversal rates for abstract idea (Alice) rejections have been extremely low. We are finally seeing an uptick of reversals likely due to Berkheimer and other Federal Circuit case law and recent guidance by the USPTO. As we’ve previously predicted, this reversal rate should continue (and may even go up). But until leadership at the USPTO clarifies its policies, it remains to be seen by how much.

As we’ve previously reported, from August 2016 to April 2017, the PTAB had months where it reversed abstract ideas in the 20 and 30 percentage range. That is, if a month had 100 abstract idea decisions, the Board would reverse the examiner on 20 or 30 of those cases. But May 2017 saw a dismal change in appellant fortunes: the reversal rate for abstract idea rejections tanked. For this period of over a year ago, many months saw only single digit reversal rates. Indeed, no month during this time exceeded a 15% reversal rate. The period was bad for Alice appellants.

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But all this may be starting to change. Last month (June) saw a high number of abstract idea appeals decided, 176. Of those, 29 were wholly reversed, yielding a complete reversal rate of 16.5%.

It may be premature to characterize June as a watershed moment for patent eligibility at the PTAB. But there are three reasons for such hope.

First, June had a sizable number of reversals. In other words, the PTAB did not exceed a 15% reversal rate through a blip attributable to a small sample size. For some context, the number of reversals for the single month of June (29) was almost double the number of reversals for the six months between July 2016 and December 2016 (19).

Month Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18
Reversal Rate 33% 33% 27% 33% 29% 14% 28% 39% 20% 3% 11% 14% 15% 8% 15% 11% 14% 11% 14% 11% 10% 12% 9% 16%
Reversed 2 2 3 2 7 3 17 15 16 1 7 13 16 7 10 9 8 2 9 8 21 16 15 29
Total 6 6 11 6 24 22 60 38 81 31 63 94 108 93 68 83 56 19 64 73 203 137 172 176

Second, the number of decisions where the Board partially reverses an abstract idea rejection is increasing as well. In June, two decisions partially affirmed such rejections, pushing up the total rate with at least one claim reversed to 17.6%. March saw seven such decisions. These nine decisions for these months are more than the previous 9 months. The partial reversal rate tells a more complete story about how the Board is treating abstract idea rejections. As seen, the Board’s trend is toward increasing both the number of complete reversals and partial reversals. This means that the Board appears more willing to entertain dependent claims as patent-eligible, giving the appellant some options.

Finally, the Board is recently more holistically relying on both steps for reversing. We are starting to see a return to previous months where the PTAB has been more aggressive in reversing these types of rejections. Part of this is due to case law, which the Board follows. Berkheimer and Vanda guidelines may play a role. We previously noted that Berkheimer temporarily changed the way in which panels reverse. That is, whereas before panels primarily relied on Step 1 to overturn an abstract idea rejection, for a few months it was about even as to whether the Board uses Step 1 or Step 2 of the Alice/Mayo framework to reverse. June saw a return to the disproportionate reliance on Step 1 vs Step 2 reversal rationales (2:1). This goes to show that the Board may not be limiting itself to reversing cases just because of a single Federal Circuit decision (Berkheimer), but is developing a less erratic and more cogent way of deciding such rejections.

Why did the PTAB quietly hit this milestone in June? The PTO’s FOIA website, from which a majority of Anticipat’s data comes, has recently been delaying the time it takes to upload decisions to its page. Before a normal data upload would be a few business days and Anticipat Recap emails would play it safe by waiting until two weeks after a particular date to send a recap of a day’s decisions. So while we typically keep users updated on reversals using Recap emails after two weeks, for many days there have been no decisions to report on. Instead, we accessed this information by using the Research page.

After speaking with the USPTO’s webmaster, we were assured that the decisions will be more quickly uploaded going forward. This did not entirely assuage our concerns. So in the meantime, we are updating our Recap email functionality so that a user can modify the email settings to be sent in whatever way is most helpful to one’s practice. Stay tuned for updates very soon.