Backlog for PTAB ex parte appeals reverses course, up across almost all tech centers

While Chief Judge of the PTAB, David Ruschke took pride in the PTAB’s work in reducing the backlog of ex parte appeals. And for good reason. As we previously reported, the historically long backlog for appeals plunged during his leadership. But since Ruschke stepped down from his position, the backlog has been going back up.

The USPTO recently released the December 2018 ex parte statistics, showing some significant changes in appeal backlog from the previous year.

As can be seen, almost every tech center experienced an increase in the pendency of decided appeals from the prior year. The two exceptions are 3600, home to business methods and software-related tech, and 3700, home to medical devices and mechanical tech. Looking at similar graphs of previous months, there are a few ways to interpret these data.

The first interpretation for the overall backlog increase is that PTAB judges are focusing their production work less on ex parte appeals. Assuming the number of judges has not considerably changed across tech centers, we can see the production difference most apparently in the number of total decisions. In 2017, there were about 11,899 ex parte appeal decisions whereas in 2018, there have been 8,928 to date. One caveat to the 2018 numbers is that as of January 16, 2019 the USPTO is still delayed in rolling out all of December 2018’s decisions. But the total number for 2018 should only shift upward by a few hundred decisions at most. This means that 2018 saw judges deciding fewer appeal decisions than in 2017.

We may assume that the impressive backlog reduction under Ruschke was the exception rather than a sustainable norm. With the ramping up of hiring PTAB judges to accommodate post-grant trials involved training new PTAB judges, which required a period of judges to work on ex parte appeals. Speculating, the PTAB may have seen fit to shift priorities, especially with the ex parte appeal backlogs at historic lows. In August of 2018, Scott R. Boalick became acting chief judge after Ruschke stepped down to become a special adviser to the USPTO patent division. It is unclear whether Boalick has the same enthusiasm for reducing backlog as Ruschke or whether he is interested in other issues, such as quality of decisions.

Further, the change in backlog may be the simple result of monthly fluctuations. But going back to previous months, some tech centers do not seem like a flash in the pan. For example, tech center 1600 increased a significant 4 months each of the three months, fundamental examination disputes being appealed specific to the technology in these tech centers might be at issue. An increase of pendency of decided appeals can be the result of increased appeals. This can indicate a measure of perceived unreasonableness by Examiner rejections assuming applicants appeal at a greater frequency with more unreasonable rejections. What exactly is the specific reason for this consistently higher backlog in TC1600? It’s unclear. It could stem from great uncertainty regarding subject matter eligibility in the diagnostics space.

Another tech center with a skyrocketed backlog is 2900, home of design patent applications. This was consistently and significantly higher for three consecutive months including December 2018. True, the sample size for design appeals is much smaller than other tech centers so the much higher standard deviation contributes to increased flux. See below.

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But at the same token there could be grounds of rejection specific to design applications that are getting appealed. The trickiness here is that since design applications are not published, the e-Foia page does not publish these appealed decisions so Anticipat currently does not keep track of them.

One tech center that consistently continued to decrease its backlog was 3600, home of software/business method applications. At a current backlog of 17 months, it makes the strategy to pursue an appeal ever more appealing, especially in the face of difficult rejections with no progress with the examiner in sight. Knowing the backlogs in real-time for an application you are pursuing can arm you with the information you need to make the best patent prosecution decision.

November 2018 PTAB Appeal Decisions: Record Number of Abstract Idea Reversals, Reversal Rate Dramatically Increases

Ever since a slew of Federal circuit decisions in early 2018, we predicted that many abstract idea rejections would be reversed by the PTAB to comply with the case law. This did not immediately come to pass, as we pointed out. But our prediction has turned out to be prophetic, even if it took longer than predicted. We report here that the PTAB continues its trend of overturning these types of rejections on appeal. In November, it was relatively dramatic, given the high number of abstract idea appeals decided.

First some context for why we have been tracking abstract idea (Alice) rejections so closely at the PTAB. While Examiners can apply multiple types of rejections under Section 101, one category stands out as the most arbitrary: patent-eligible subject matter.

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This so-called judicial exception to eligibility has no real statutory foundation, but is instead rooted in Supreme Court decisions dating back to the 19th century. Today, the most frequently applied–and controversial–of the judicial exceptions is abstract ideas. And over the past 10 years, this type of judicial exception has crept into almost every technology field, but especially computer-related inventions.

November 2018 was a fairly normal month in the number of total appeal decisions, at 708. The number of appeal decisions that included an abstract idea rejection (200) was proportionally higher than previous months, but not by much. In fact, previous months having decisions with abstract idea rejections have exceeded 200.

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But November was remarkable in its number of reversals. Of these 200 decisions, the Board completely reversed 42 times–a record number of reversals for this type of rejection. This bested the previous record in September 2018 with 37 reversals, but with far fewer abstract idea decisions to get there.

November’s high number of abstract idea reversals with fewer total decisions translates into a reversal rate much higher than previous months. That is, November took far fewer abstract idea decisions to yield this record number of reversals, a complete reversal rate (all claims reversed) of 21%. The last time the reversal rate exceeded 20% was back in February 2017 (almost two years ago), when the total number of abstract idea decisions for that month was far fewer. In fact, the 31 such decisions in February 2017 was a small fraction of November’s 200 decisions, making February 2017 at least partially due to a statistical blip. With such a high number of abstract idea decisions in November, it seems like November’s high reversal rate is not an anomaly, but instead a new normal.

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This confirms our predictions that Berkheimer and other factors are contributing to the PTAB reversing Examiner rejections at an unprecedented rate.

Through the Anticipat Research database, you can find these reversals for Board analysis that is persuasive and/or relevant to a related matter you may be working on. You can filter based on Examiner, Art Unit, Tech Center, classification, and many more filters.

Besides showing high-level trends of reversal rates, as described above, Anticipat allows for targeted appeal lookups for specific grounds of rejections or issues. Here, by narrowing the search to November 2018 for the subissue under Section 101 of Abstract Idea, you can access every relevant decision. See filters outlined in red below.

And of course knowing how the Board is reversing Examiners can guide your prosecution strategy.

With recent revised subject matter eligibility guidance, and comments from high-level USPTO personnel, the USPTO is poised to continue to relax the high standard for patent-eligibility, especially for abstract idea rejections. The PTAB is one front that should continue to support this relaxation. Expect more reversals at the PTAB for abstract idea rejections. And subscribe to Anticipat to stay current on developments at the PTAB.

The PTAB continues to increase reversal rate of abstract idea rejections

Recently, the state of patent-eligibility (especially abstract ideas) has been the talk of the patent bar. Yesterday, revised examination guidelines took effect, changing the direction for examiners to examine abstract ideas at the USPTO. For its part, the PTAB has been playing a role in the abstract idea flux as applicants increasingly turn to the Board for overturning difficult rejections. Here, we report that the reversal rate for abstract ideas continues to climb slightly higher.

October 2018 had 30 decisions out of 185 total decisions in which the Board wholly reversed abstract idea rejections, or a reversal rate of 16.2%. This is up from the previous month (September) and it continues a largely unbroken streak of 5 consecutive months with relatively high reversal rates. In fact, during this streak, each month experienced an abstract idea reversal rate over 15% with the sole exception of September, which came close at 14.4%. Prior to this streak, the PTAB had a much gloomier streak for abstract idea appellants, where the reversal rate for abstract ideas was below 15% for eight consecutive months, as we reported here.

Below is a snapshot of October 2018 being queried for abstract idea rejections on Anticipat’s Research page. You can find all these decisions for this time frame, for other time frames, and a whole host of other issues on appeal to guide your prosecution strategy.

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To access this and other types of appeals information using Anticipat’s Research database, feel free to sign up for a 14-day trial.

With new leadership at the USPTO, and as seen from recent appeals data, the pendulum of patent-eligibility continues its slow swing in favor of applicants, even if this swing is at times unpredictable.

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, 33 of 207 decisions were entirely reversed, yielding a complete reversal rate of 15.9%.

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.

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.

Berkheimer’s biggest effect on PTAB outcomes

After Federal Circuit decisions Berkheimer and Aatrix held that abstract idea inquiries required a factual finding, this blog predicted that the number of abstract idea rejection reversals at the Board would dramatically increase. The logic being that many examiners did not perform the rigorous analysis seemingly required for Step 2 of the Alice/Mayo framework in light of these Federal Circuit decisions. It has now been over 4 months since Berkheimer was decided and we can safely say that this dramatic change has not yet happened.

In fact, take the decisions involving abstract idea rejections in the year leading up to Berkheimer (March 1, 2017-March 1, 2018, accounting for some lag time after Berkheimer was decided). In this year, the 107 reversals over the 901 total decisions yields a reversal rate of 11.9%. Post Berkheimer (from March 1, 2018 to present), there have been 54 reversals over 525 total decisions. This reversal rate is 10.3%–lower than the pre-Berkheimer range. (All these decisions can be found using the Anticipat Research page)

But there has been something that has changed: the way that the Board performs its analysis. Historically, the Board has favored relying on step 1 of the Alice/Mayo framework by almost a 3:2 ratio. That is, for every three decisions where the panel reversed because the claims were not directed to an abstract idea under step 1, there were two decisions where the panel reversed because the claims recited something more than the asserted abstract idea under step 2. From March 1, 2017 to March 1, 2018, there were 63 step 1 analyses versus 35 step 2 analyses.

An important piece of the step 2 analysis is whether the claims recite an element or combination of elements that are more than well-understood, routine, or conventional elements. As the Federal Circuit has made clear, this inquiry is an element of fact. And Examiners have been charged in the recent Berkheimer memo to carefully apply factual bases to this step. So it would make sense that the Board, in light of Berkheimer, is reversing under this step more frequently than before.

And that is exactly what is happening. Recently, the two steps are equally used in reversing abstract idea rejections. From March 30, 2018 to present, the Board has used step 1 analysis to reverse 16 times while using step 2 an almost equal 15 times. This means that the Board has become much more receptive to arguments of step 2 in light of Berkheimer–even if the reversal rates have not noticeably increased.

The lower post-Berkheimer reversal rate is not easy to explain. It may stem from a confluence of factors. Perhaps applicants are getting more aggressive and appealing claims that are less patent-eligible. It could be that some applications that would otherwise be reversed if appealed all the way to a final decision are getting allowed at the appeal conference stage or earlier.

Regardless of the success rates of appealing abstract idea rejections, the change in the way that the board reversed these decisions highlights a good practice tip. Focus appeal argumentation on step 2 where appropriate. For those appeals that have long since been forwarded to the appeal, it is not too late to bring this up to the panel by way of an oral hearing. During the oral hearing, explaining the step 2 piece could be helpful to the panel, assuming that some sort of step 2 argument has been made. And of course when interviewing and otherwise responding to Office Actions in response to abstract idea rejections, step 2 has become a powerful step.