April showed a continued high number (204) of abstract idea decisions decided at the Board. Of the 204 total decisions deciding abstract idea rejections for this month, the Board completely reversed the rejection 54 times. This shows a reversal rate of 26.5%, which is lower than the last several months, but higher than many previous months.
In addition to the reversal rate, the volume of this type of rejection being decided continues to be high—higher than last year, with the number of reversals significantly higher.
In a prior blog post, we correctly predicted that the reversal rates for these rejections would come down from record-breaking. We’ll emphasize here factors that are leading to this.
First, Federal Circuit case law has likely contributed to a cautious approach by the PTAB. As we mentioned, Director Iancu can only push patent-eligibility so far before it is inconsistent with case law. And this came to a head most recently with the Athena v. Mayo case, in which the Federal Circuit affirmed an invalidiy judgment on a claim as directed to a judicial exception (law of nature). This, despite the fact that the Examiner had found that it was analogous to a 2016 example claim that was patent-eligible. The Federal Circuit panel gave its respect to the USPTO, but said it was not bound by its guidance.
Likewise, the Board likely appreciates that even though it is bound by the 2019 Subject Matter Guidance, it also shares the USPTO’s interest in making sure that patents don’t get issued that will later be found patent-ineliigible. Thus, adherence to guidance won’t guarantee a patent eligible claim set, so panels are likely taking a careful consideration of the case law as well.
Second, an uptick in the number of remands (PAIR event code = “APAR”) have been observed. These remands are instructions from the Technology Center Director that sua sponte orders the proceeding to be remanded to the Examiner “for further consideration.”
For patent-eligibility rejections, these remands (especially in light of recent subject matter guidance) serve as a sort of proxy for reversals. These remands, are normally very rare. Between 2008 – 2017, there were 2084 remands out of a total of roughly 78,000 final decisions. A quick review of recent remands showed that immediately after a remand, a Notice of Allowance was the next event. See 10/629,597. This seems to indicate that the application likely would have been allowed or had the proceeding continued at the Board Examiner to reopen prosecution, the Board could have reversed the ground.
Third, many of the upstream events have eliminated the need for a reversal from final appeal decisions. This is linked to the above point about remands. That is, Berkheimer and the subsequent Berkheimer memo were issued in March of 2018, which may have started the thaw in freezes to patent-eligibility for applications in examination. This is represented in applications that were allowed before a notice of appeal was filed, after a pre-appeal brief was filed, and after an appeal brief was filed. Thus, many of the reversals in recent months may represent easier cases than those now being decided that have survived such pre-filtering.
Despite chatter on Capital Hill about amending Section 101 for greater predictability, many believe that passage of such a bill will be difficult in this year with competing priorities. And even with such amendments, it appears unlikely that the problem of patent-eligibility will go away—it will simply change. Thus, abstract idea rejections do not appear to be going away any time soon. Expect the reversal rate to continue to be higher than historical reversal rates, but not necessarily record-breaking unless new more favorable case law is made.