Rare request for rehearing granted to reverse obviousness rejection

It may be discouraging to an applicant to appeal all the way to a final decision only to see the rejection(s) be affirmed. The process can take years. Fortunately, there is a procedure that allows for such a decision to be reviewed by the same panel: request for rehearing. This procedure is at times successful, perhaps counter-intuitively.

In ex parte Clendenen (PTAB March 7, 2018), counsel from Faegre Baker Daniels LLP filed a request for rehearing, arguing that the Section 103(a) obviousness rejection was improperly affirmed. Specifically, they argued that the Board misapprehended the disclosure of a reference and that the reference did not teach the claimed features.

In the rehearing decision, the panel, which consisted of the exact same members as the original decision, acknowledged that the reference in fact did not disclose the claimed features. At best, the reference was ambiguous. While the modification was possible and potentially useful, the Board concluded it was unclear on the record that such correlation is required in the reference. Thus, the rehearing was granted.

As we have reported about a Section 101 rehearing getting granted, because of the makeup of the panel being the same as the original decision, intuition would suggest that these requests never get granted. However, they do happen. Plus there are no government fees to file a request for rehearing. So it doesn’t seem like a bad idea to add on a few more months to pursue this procedure, especially after going all the way to the final decision.

 

Recent pattern of PTAB cutting corners: Decide Section 101 and avoid deciding other pending grounds

We have previously reported that PTAB judges, like Examiners, are measured by a quota-based production system. For PTAB judges, the quota is based on the number of decisions they author. It is no secret that this production system prompts some Examiners and PTAB judges at times to get creative with practices to most easily meet their quotas. Here, we look at some recent decisions that show a pattern of PTAB judges deciding a Section 101 rejection without looking to the remaining pending grounds on appeal.

First some context. The Board has discretion not to reach all pending rejections on appeal, which makes sense. For example, ex parte appeals decisions often times do not reach prior art rejections after finding that the claims are indefinite because, e.g., the scope of the claims cannot be determined. But for the overwhelming majority of cases, PTAB judges decide all pending rejections on appeal (unless not argued by the appellant). This practice encourages compact prosecution, something that the USPTO very much favors. So this discretion to avoid deciding grounds of rejection is very rarely used.

But this discretion is sometimes used and as shown in two recent Board decisions, it can also be abused. For example, judges have recently affirmed a “Section 101 – patent-ineligibility” rejection and then declined to reach other pending rejections (either prior art rejections or 112 rejections).

The first decision is Ex Parte Snow (PTAB Feb. 8, 2018), deciding Section 101 and asserting that it therefore need not go to the pending Section 103(a) rejection. To support this action, the panel relied on two cases (one Federal Circuit and one precedential PTAB decision). From the decision:

Because claims 1—33, 35, 37, and 39 are directed to patent-ineligible subject matter, we do not reach the prior art rejection of those claims. See In re Comiskey, 554 F.3d 967, 973 (Fed. Cir. 2009) (declining to reach the prior art rejection when claims are barred at the threshold by § 101); Ex parte Gutta, 93 USPQ2d 1025, 1036 (BPAI 2009) (precedential) (same).

It is true that In re Comiskey declined to rule on a Section 103(a) rejection after concluding that the claims were directed to patent-ineligible subject matter under Section 101 (both the original decision in 2007 and the en banc decision). Interestingly, the Federal Circuit in In re Comiskey newly applied the Section 101 rejection without needing to go to the Section 103(a) rejection. The Board had only reached the Section 103(a) rejection, affirming the Examiner. Thus, it does not appear that the Federal Circuit was attempting to establish precedent for the Board to not reach pending prior art rejections when a Section 101 rejection is at issue. Instead, it merely did not need to go to the Section 103(a) because it vacated and remanded for the Board to pick this up.

The other case cited was a precedential case Ex parte Gutta. In Gutta, the Board declined to reach prior art rejections by citing to Comiskey as well as a 1942 case: In re Rice, 132 F.2d 140, 141 (CCPA 1942) (finding it unnecessary to reach rejection based on prior art after concluding claims were directed to nonstatutory subject matter).

Here, Gutta was an expanded panel that included then Chief-judge and vice-Chief judge. Similar to the Federal Circuit panel in In re Comiskey, it’s possible that this PTAB panel was a special case. In other words, maybe they didn’t want to mix another issue (prior art rejection analysis) with what they wanted to establish as precedential.

Said differently, the Gutta decision does not appear to have been trying to establish that if the Board finds that the claims are patent-ineligible subject matter, then there is no need to reach prior art rejections. Indeed, if all panels did that, then we would start getting into more subjective appeal analyses, where the Board favors ruling on Section 101 so that it need not address other issues. And by not addressing prior art rejections, doesn’t it seem like the panel is implicitly communicating that the application is a lost cause–no matter how the claims are amended? Section 101 should not be used as a tool by the Board to pick and choose eventual patent grants.

Indeed, a goal of the USPTO should be compact prosecution. Just because an appellant loses Section 101 on appeal is not the end of the road. It is possible that after the appeal, the applicant amends the claims to clear the Section 101 rejection. Other less likely scenarios are that a request for rehearing is granted or a Federal Circuit appeal vacates the Board’s findings. In all three of these scenarios, it’s possible that the Examiner and the applicant are later at an impasse with regard to the other rejection (e.g., prior art rejection) and an appeal is needed in the future. The judge panel could have resolved it in the first place.

The second decision cites to the same above-two cases: Ex Parte DeYoung et al (PTAB Feb. 7, 2018) (not reaching written description 112 rejection because Section 101 was affirmed, citing In re Comiskey, 554 F.3d 967, 973 (Fed. Cir. 2009); Ex parte Gutta, 93 USPQ2d 1025, 1036 (BPAI 2009) (precedential)). Unlike decisions where the Board understandably could not reach other rejections because the claims were indefinite and the scope could not be understood, here the Board took the opportunity to avoid analyzing whether the claims found written description support in the specification. And it did so because Section 101 was affirmed.

The fact-specific grounds of rejection to be decided on appeal, which were omitted in the above two cases, do require time to analyze and write up. Especially in Ex parte Snow, it would have taken a lot of time for the panel to pore over multiple references in deciding obviousness. And in Ex parte DeYoung, it would have required careful consideration of the specification. But even though this requires a lot of time, it’s what PTAB judges do. That is, these decisions that do not decide all contested issues are extremely rare compared with the overwhelming majority of decisions that decide every issue that is argued.

If you have experience or opinions about this subject, we would love to hear from you. Please provide feedback in the comments section or by email at admin@anticipat.com whether the Board seems to be correctly relying on In re Comiskey and Ex parte Gutta for the proposition that it need not evaluate rejections after finding Section 101 is affirmed. Unsure opinions are great. 

Practice Tip: Do not recite an abstract idea in claims while merely adding the words ‘apply it’

Alice v. CLS Bank in citing Mayo made one point very clear: stating an abstract idea while adding the words ‘apply it’ is not enough for patent eligibility. This point may seem apparent to patent practitioners who hopefully are not literally reciting abstract ideas in claims and adding “apply it”. But a recent ex parte appeals decision highlights how a more common claim may fall into this same patent-ineligible category.

In Ex Parte Perreault (PTAB Jan. 24, 2018), the Board assessed an extraordinary representative claim for patent-eligibility. This single claim spans five pages of the Board decision, tallying up an impressive 1100-word count. The final clause of the claim recites:

wherein said steps (a)(l)(i), (a)(l)(v), (a)(l)(vi), (b)(l)(i), (b)(l)(v), (b)(l)(vi), and (c) are performed by execution, on a processor of a computer, of computer-readable instructions contained on a non-transitory computer readable medium.

The Board was unconvinced of the appellant’s arguments and instead held that the claim was directed to gathering rules and remedies for each community and then displaying them to a sub-contractor. The fact that the claim recited the equivalent of “apply it” in the final element was no help to the patent-eligiblity of the claim.

The Board instead found that the claim includes neither a technical problem nor a technical solution, but merely the application of an abstract idea on a computer via the Internet. Then the final blow: “We have repeatedly held that such invocations of computers and networks that are not even arguably inventive are insufficient to pass the test of an inventive concept in the application of an abstract idea.” Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1355 (Fed. Cir. 2016).

In conclusion, lengthy claims are not helped by merely reciting generic computer and network language. A final step with a wherein clause clarifying that previous steps are performed on a computer is perhaps a sign that the claim off course from patent-eligibility.

Recent ex parte appeal PTAB decision cuts a corner to avoid deciding an appealed rejection

Patent Office employees are creatures of incentives. It is well-known that patent examiners earn various counts for use in the USPTO’s internal quota system. PTAB judges are also measured by a count-based system, which is based on the number of decisions they author. It is no secret that Examiners and PTAB judges at times get creative with policies and practices to most easily meet their quotas. Here, we look at a recent decision that shows a practice of PTAB judges deciding only one ground of rejection without looking to the remaining pending ground on appeal.

In deciding grounds of rejection on appeal, the three judge panel almost always decides all the contested pending rejections. Of course, if an appellant chooses not to argue against a ground of rejection in the appeal brief, the Board will summarily affirm the rejection. Very rarely, the Board decides only one ground of rejection on appeal and lets that carry the day, without deciding other pending grounds of rejection. This rarity is found in recently decided Ex Parte MacArthur et al (PTAB Jan. 2, 2018).

In Ex parte MacArthur, the appellant had challenged both a Section 101 abstract idea rejection and a Section 112 indefiniteness rejection. But the panel never even reached the second ground of rejection. After affirming the abstract idea rejection, the panel “exercised [their] discretion” and “declined to reach the merits of the Examiner’s remaining rejection.” This, after the appellant had devoted nine pages of argumentation on the Section 112 rejection in the appeal brief and the reply brief.

To support its discretion not to reach the remaining issue on appeal, the Board cited to two Federal Circuit cases. In re Basell Poliolefine, 547 F.3d 1371, 1379 (Fed. Cir. 2008) (“Having concluded that the Board properly affirmed the rejection of claims 1-52 of the ‘687 patent based on obviousness-type double patenting in view of the ‘987 patent, we need not address the remaining issues raised by Basell regarding the §§ 102(b) and 103(a) rejections, as well as the additional double patenting rejections.”); Beloit Corp. v. Valmet Oy, 742 F.2d 1421 (Fed. Cir. 1984) (ITC having decided a dispositive issue, there was no need for the Commission to decide other issues decided by the presiding officer). Another interpretation is that the panel found a way to achieve the same credit for deciding this appeal without the work of deciding the second issue.

Ex parte MacArthur is certainly not the first to use this kind of discretion to decline the call to decide remaining issues on appeal. Another relatively recent case, Ex parte Palmer (PTAB Mar. 10 2016), summarily affirmed a 112 rejection and proceeded not to reach several 103(a) rejections. In this analysis, the Board justified not reaching the 103(a) rejections by expressing concern for managing the Board’s docket. It also cited to the same ITC case above.

To the defense of PTAB judges, often there are many fact-specific grounds of rejection to be decided on appeal, which require time to analyze and write up. Especially in Ex parte Palmer, it would have taken a lot of time for the panel to pore over multiple references in deciding several obviousness rejections. But even though this requires a lot of time, it’s what PTAB judges do. That is, these decisions that do not decide all contested issues are extremely rare compared with the overwhelming majority of decisions that decide every issue that is argued. Interestingly, both of the above-discussed decisions come from the same tech center of 1700.

True, the appeal backlog has historically forced the PTO to get creative and balance resources at the BPAI/PTAB. But this decision not deciding an issue on appeal comes amid plunging backlogs for ex parte appeals. For example, as we recently reported, in the past year the backlog for tech center 1700 has dropped from 22.8 months to 16.9. Thus, the concern for creatively using judge resources is less compelling.

Plus, a half-baked effort at the PTAB may do little to speed up efficiency at the USPTO anyway. After a rejection is affirmed at the Board, the applicant can still prevail on this issue after reopening prosecution, either through additional argumentation or amendments. And back in the Examiner’s docket, if the Examiner still digs into his/her position on the other issue that was never decided by the board, then it would require another appeal to resolve. Better to do the job right the first time, even if it is tempting to take the shortcut in the decision.

 

PTAB: Protein modeling software claims are patent-eligible, arguing preemption

It has been over a year since the Federal Circuit decided McRO v. Namco Bandai. In short, McRO decided that software models can be patent-eligible. This long-awaited case sent ripples of hope to many in the patent bar, especially to those reeling from the confusion and unpredictability of Alice decided two years prior. But the McRO message has still not made its way to all examiners, especially in the life sciences. Fortunately, the PTAB sees fit to correct and overturn such examiners, as shown in a recent case Ex parte Ohrn, Appeal No. 2017-003914 (PTAB Nov. 20, 2017).

In Ex parte Ohrn, the Examiner had argued that the claims simply used a computer as a tool, i.e., “converting one form of numerical representation into another by organizing information through mathematical concepts,” and were thus an abstract idea. In addition to holding that this was an overgeneralization of the claims, the Board used three main arguments to counter this assertion.

First, the Board found that the exact manner in which the modeling was implemented was novel, and thus the Examiner failed to provide evidence that the computer was used simply as a tool for generic activity. The Board found that the “claimed method uses a combined order of specific rules that render information into a specific format that is then used and applied to create desired results.”

Second, the specific, claimed features of rules permit the improvement realized by the invention. Claim 1 focused on a specific articulated improvement in protein modeling instead of a result of an abstract idea itself.

Third, the Board found the preemption argument persuasive that the specific method recited in the claims did not improperly monopolize the basic tools of scientific and technological work. It cited fairly specific characterizations made by the appellant of what the claims do not cover.

While the preemption argument can be a strong one, the savvy patent practitioner will tell you that this argument is not without consequence. For purposes of prosecution history estoppel, characterizations made on the record as to what the claimed invention does not cover greatly weakens or even destroys such equivalence coverage in litigation. But a granted patent narrowed by such prosecution history estoppel can be better than an application where the argument was not used, leading to an abandoned application. That being said, the preemption argument can be a double-edged sword.

Rare split panel at PTAB reverses abstract idea rejection

 

Rarely do the three-judge panels at the PTAB offer differing opinions in ex parte appeal decisions. It’s not necessarily that these judges all agree with each other all the time. Instead, it’s because the USPTO production quota system does not reward judges for separate concurrences or dissents. So any time that a judge decides to spend in writing a separate opinion is in essence off-the-clock work. But this does not deter some judges from branching out from the panel, as shown in a recent case that reversed an abstract idea rejection: Ex Parte Boucher et al, Appeal No. 2017-003484 (PTAB Oct. 31, 2017).

In Ex Parte Boucher, the majority reversal of the Examiner’s rejection under Section 101, authored by Joseph L. Dixon and joined by Larry J. Hume, was brief. It held that the Examiner had provided insufficient factual findings and analysis on patent eligibility. The Examiner’s asserted abstract idea “manipulating data for the purpose of fault detection” oversimplified the claimed invention, according to the majority.

The majority further agreed with the appellant’s arguments that the claims are directed to new and useful improvements for detecting or diagnosing faults of items or of functions implemented by the items of an aircraft. Thus, the claims were not solely directed to an abstract idea.

Judge Joyce Craig disagreed with the majority on Section 101. The dissent would have characterized the claim as existing information in a database, analogizing the claims to Intellectual Ventures I LLC v. Erie Indemnity Co., 850 F.3d 1315, 1327 (Fed. Cir. 2017). The dissent would have characterized a remaining part of the claims as using a mathematical algorithm to manipulate existing information to generate additional information, citing to Digitech Image Techs., LLC v. Elecs. for Imaging, Inc., 758 F.3d 1344, 1351 (Fed. Cir. 2014). Thus, the dissent would have concluded that the claims are directed to an abstract idea under the Step 1 analysis of Mayo/Alice.

Under step 2, the dissent looked at the claim elements taken individually and saw nothing more than “routine computer functions and amount to no more than the performance of well-understood, routine, and conventional activities in known to the industry.” Thus, the dissent would have agreed with the Examiner and sustained the rejection.

The Federal Circuit and district courts are not the only judicial bodies that are at odds with each other with regard to applying a consistent and cohesive framework for assessing the two-step analysis of patent-eligibility. It can thus be useful to have additional knowledge at to guide your chances for appeal.

With Anticipat Research, you can see which judges are deciding cases in your tech center to give you a better sense of what your chances on appeal are. For example, if you are appealing a Section 101 rejection, will you get a Judge Craig type of panel that tends to agree with the Examiner’s analysis, or will you get a Judge Dixon type of panel that sides with the appellant’s analysis. See below interface.

filters  Try Anticipat Research today to see which judges are on the reversed panel decisions, specific to a tech center of interest. Then you can search for how often these judges appear both in panels and as authoring judges in your tech center.

Will You Get C-Delay Patent Term Adjustment After Your Appeal?

An advantage of appealing a patent application is to avoid unnecessary and narrower claim amendments and prosecution history estoppel. So rather than seek to appease an Examiner in an effort to overcome a particular rejection (with no guarantee of an allowance), appellants can ask the Board to directly overturn the Examiner. But an appeal comes with a sometimes heavy cost of significant time spent in the appeal process. For this reason, PTA can compensate for this time if the appeal is successful. In some industries, this PTA translates into big money. But when exactly does an appeal result in an applicant getting the patent term adjustment?

While appeal outcomes come in varying degrees of wins and losses for the appellant, C delay is an all-or-nothing reward. In short, C delay is rewarded whenever the Board overturns an unpatentability finding of at least one claim. This is how the USPTO interprets the statutory and rule language of “delay due to the review reversing an adverse determination of patentability”. See 35 U.S.C. § 154(b)(1)(C) and 37 CFR § 1.702. When only one ground of rejection is being decided, this means that either an affirmed-in-part (at least one claim reversed) or a wholly reversed outcome (all claims reversed) will lead to the C delay. When the Board decides multiple grounds of rejection, as long as none of the Examiner’s rejections survives with respect to one claim, an appellant will get PTA C delay.

Another way of looking at it is that an applicant will get C delay as long as the decision is not designated “affirmed.” We previously reported how the USPTO’s designation of “affirmed” is misleading and overly simplistic, which means that the appellant must be aware of simple procedural techniques that could deprive of precious PTA.When considering an appeal with the best chance of securing C delay, you should use Anticipat.com to help you consider three things.

First, assess the rejection depth of the claims. By rejection depth, the number of rejections associated with each claim (the greater the depth, the more rejections for each claim on appeal). The higher the rejection depth, the more likely you’ll get an affirmance and no C delay. This is because if all claims stand rejected under multiple grounds of rejection, there is a high chance that one of the rejections will stick. While it is possible for the Board to overturn each and every ground of rejection, with more rejections applied to the claims, the less likely this happens. This is in part due to the grounds of rejection having remarkably stable reversal rates, whether the appeal includes one or more grounds. In a recent decision, where four grounds of rejection were on appeal, the 101 rejection was affirmed, which masked the Board’s reversal of the 112(b) indefiniteness rejection, the 102 anticipation rejection and the 103 obviousness rejection. This meant that the application is ineligible for C delay for this appeal. All it takes is one rejection to carry the day against C delay.

Second, look at the track record for your application’s specific appeals–whole reversals and partial reversals. Some rejections (such as Section 101 patent-eligibility and obviousness-type double patenting) are all or nothing: all claims get reversed or all claims get affirmed. This is reflected in the percentage of “affirmed-in-part” outcomes for these grounds of rejection. For example some rejections, such as 102 or 112, have a relatively large affirmed-in-part category, creating a wide spread of the likelihood of overturning at least one claim. Other grounds, such as a Section 101 rejection, have a relatively low chance of being overturned even including affirmed-in-part. And this also includes the affirmed-in-part spread. Because it only takes one reversed claim to avoid an affirmed outcome (and hence qualify for C-delay PTA), look to the total combined statistic between pure reversals and affirmed-in-part outcomes. See the below graphs to see the different spreads for overturning at least one claim. The thick orange sections add significantly to the overall reversal rate of the rejection. For Section 102 and 112, the overall reversal rate approaches 60%.

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Third, render moot grounds of rejection you do not plan to contest before appealing or argue all of your grounds of rejection in the appeal brief. For one reason or another, quite a few appellants choose not to argue an appealed ground of rejection. This can be because they plan to make a minor claim amendment (such as to overcome a 112 rejection), they plan to file a Terminal Disclaimer (to overcome a double patenting rejection), or they plan to make an amendment to avoid a nonstatutory subject matter rejection (such as by adding non-transitory). This can be a mistake. In these cases, if these non-substantive outcomes apply to all the claims at issue, the entire case is affirmed and there is no PTA C-delay. For example, in Ex Parte Le Bot et al, the appellant did not argue a Section 112(b) indefiniteness argument even though its arguments succeeded in reversing the 103(a) argument. The result was an affirmance for the appeal and no possible chance for C-delay. A practice tip is that if you have a loose end to wrap up, resist the urge to take care of this loose end before or after the appeal.

It is good practice to be strategic about appeals, especially when patent term is important. Since it is difficult to predict which patents will eventually find this added patent term to be precious, better to be safe than sorry.