PTAB Chief Judge Ruschke at PTAB Bar Association meeting: ex parte PTAB can develop Section 101 jurisprudence

The PTAB Bar Association has a committee called “PTAB Appeals” that scheduled a meeting on April 5, 2018 to discuss various topics with sitting judges at the PTAB. This meeting was set up in part because of interest in Chief Judge Ruschke to meet with practitioners to discuss ex parte appeals. Ex parte appeals is the less-discussed and less-focused on aspect of what PTAB does. The two-hour meeting was at the USPTO in Alexandria, VA and covered a lot of ground including Section 101.

At this meeting, Chief Judge Ruschke was optimistic about newly appointed director Andrew Iancu. According to Ruschke, Iancu has stressed that the USPTO has to do a better job of applying Section 101 in a more consistent, straightforward manner. And Iancu sees the corpus of decisions coming out of the PTAB as an important clue to this.

During the meeting, there was talk about how Examiners at the USPTO largely are not good at applying case law. And part of the challenge of overcoming Section 101 rejections is having the Examiners understand the legal arguments. But the Board comprises judges who are legally trained to entertain and apply case law. And as the judges are overturning Examiners’ 101 rejections, this becomes an additional way for Section 101 jurisprudence to develop (in addition to the federal court decisions). Because there are so many more decisions at the PTAB across more diverse technology centers, the PTAB seems to be an ideal forum for understanding the boundaries of patent-eligibility.

Anticipat.com is committed to tracking all the facets of decisions coming out of the ex parte PTAB. Stay tuned for continued developments as it relates to Section 101 among other areas.

 

Business method abstract idea rejections continue to get reversed at the Board, sparking form over substance debate?

In today’s Anticipat Recap email (March 22, 2018), three decisions at least partially reversed abstract idea rejections for business method claims. One of the decisions, Ex Parte Gershfang et al (PTAB Mar. 22, 2018), even included a dissenting opinion. Here, we report on an interesting decision pulled from another decision, Ex parte Beach (PTAB Mar. 22, 2018).

Before getting into Beach, some context behind the debate about form over substance of patent-eligibility. The Supreme Court in Alice v. CLS Bank struck down the method claims as abstract ideas, but also, importantly, struck down the computer system and computer readable medium claims for the same reason. The Supreme Court did not want clever practitioners to be able to get a claim based on the draftsman art. So just because a claim included computer recitations did not, by itself, make the claims more than an abstract idea. For this reason, it is very rare for the Board to split the claim set baby. For the most part, either all the claims are upheld as abstract or all the claims are reversed.

Ex parte Beach comes out differently than Alice because here the Board upheld the abstract idea rejection on the method claims but at the same time overturned the abstract idea rejection on the system claims. The representative method claim is here:

58. A method for processing coins, the method comprising:

receiving a plurality of randomly oriented coins in a coin counting machine;
dispensing a financial instrument from the coin counting machine in exchange for at least a portion of the coins;
receiving the financial instrument from a customer;
reading a code off the financial instrument with a machine;
sending at least a portion of the code to a database in a query for information to determine if the financial instrument is valid;
receiving the information from the database; and
redeeming the financial instrument for at least one of cash and merchandize [sic merchandise] when the information received from the database indicates the financial instrument is valid.

The Board found claim 58 to be a patent-ineligible abstract idea.

By contrast, the Board overturned the system claims as not an abstract idea. Here is a claim that was reversed:

91. A system for processing coins, the system comprising:

a coin counting machine, the coin counting machine having:

a coin input region configured to receive a plurality of randomly oriented coins from a user;
a coin discriminator configured to count the coins to determine a total; and
a dispenser configured to dispense a financial instrument to the user in exchange for at least a portion of the coins, wherein the financial instrument includes a code;

a database configured to receive information from the coin counting machine related to the financial instrument; and
a recognition subsystem configured to read the code off the financial instrument and send a related query to the database for information related to the financial instrument.

In its reasoning, the Board distinguished these system claims from the ineligible method claims because the structural elements of the system claims “simply do not recite an abstract idea.” According to the Board, these structural elements include a coin counting machine having “a coin input region configured to receive a plurality of randomly oriented coins from a user,” “a coin discriminator configured to count the coins,” “a printer configured to print a machine-readable code and a value on a voucher,” and “a dispenser configured to dispense the voucher.”

So here the Board holds that for a coin machine system claim, the structure of a coin input region, the coin discriminator to count the coins, the printer to print a voucher and the dispenser to dispense the voucher makes a claim patent-eligible.

Beach shows that the Board is willing to affirm some claims that were rejected as abstract ideas while reversing others. This is important because it shows that after Alice, the Board appears to be able to analyze the claims in a very much nuanced manner. Indeed, the extent that structural claim recitations can render a claim not abstract is far from over. But when it comes to a coin counting machine, these structural limitations were sufficient for the Board.

The Board will likely continue to render affirmed-in-part determinations on patent-ineligible judicial exception rejections only in rare cases. But we will report of any trends that develop.

Business methods making comeback on appeal at the Board–Citing Berkheimer PTAB panel holds Examiner must show evidence

We have previously reported on the very low reversal rates of abstract idea rejection within tech center 3600, home of business method art. Indeed, over the past few months, the reversal rate has been about 12%, as shown on the Anticipat Research database. But the Federal Circuit has recently pushed the Alice test closer toward patentees, and the Board appears to be following their lead. This is shown in a pair of recently-decided appeals involving business method applications.

In Ex parte Bhogal (PTAB Mar. 19, 2018), the Board found that the claimed method recited more than the alleged abstract idea by “adding a specific limitation other than what is well-understood, routine and conventional in the field.” The Board acknowledged that the claims at issue, like most business method claims, recites generic computer, network and Internet components. But citing Bascom, panel noted that the inventive concept can still be found in the non-conventional arrangement of these pieces.

Here, the appellant had argued that a claimed rendering order prioritization technique is not well-understood, routine, or conventional. The Board found this argument persuasive, noting that the Examiner did not set forth with sufficient specificity or provided any finding that this claimed technique is routine, conventional or well-understood. Importantly, the panel cited to Berkheimer v. HP Inc., No. 2017-1437, slip op. at 14 (Fed. Cir. Feb. 8, 2018) for the proposition that “[w]hether something is well-understood, routine, and conventional to a skilled artisan at the time of the patent is a factual determination.” Without such a factual finding by the Examiner, the Board found that the rejection was improper and reversed.

It is interesting to note that the Berkheimer Federal Circuit decision very recently issued: February 8, 2018. We have seen Board panels quickly adopt Federal Circuit in the past, as reported here. So the Board appears to be going out of its way to use the decision in its analysis. This may signal that the Board is eager to make patent-eligibility holdings at trial consistent with examination.

In another appeal decided the previous day, Ex parte Hoff (PTAB Mar. 16, 2018), the Examiner had argued that there is no requirement to provide “documentary evidence to demonstrate abstractness.” Answer 9. But the Examiner had only looked at the claim elements individually. In response, the Board quoted Bascom that “the inventive concept inquiry requires more than recognizing that each claim element, by itself, was known in the art.” In view of the Appellant’s explanation of the effect of coordinated claim elements, the rejection does not sufficiently establish that the combined activity of various claim elements, as identified by the Appellant, fails to constitute significantly more than the abstract idea itself.

Both decisions involved applications with claims that have generic, conventional hardware that individually were not inventive. But the Board found in both cases that the Examiner had failed to establish on the record that the unique combinations of the elements were merely conventional or routine. Without such findings, the rejections were reversed.

The PTAB will continue to side with Examiners in affirming many abstract idea rejections of business method applications. But the recent reversals show that a compelling argument lies in the novel arrangement of claim elements. This is especially compelling if the Examiner has not established on the record that these elements are conventional or routine.

PTAB finds encryption software claims not directed to abstract idea–Practice tips

How does the Board incorporate very timely case law in their decisions? How can you use this to your advantage? We consider these questions as we discuss a recent Board decision that reversed an abstract idea rejection while incorporating a very recent Federal Circuit into its analysis.

In a recent decision, Ex parte Jang (March 1, 2018) (available at https://anticipat.com/research?id=104015), the Board reversed an Examiner’s Section 101 rejection. In so doing, the Board panel found that the claimed software invention was not directed to an abstract idea under step 1 of the Alice/Mayo framework. Interestingly, the Board analogized to a Federal Circuit decision that had been decided not six weeks prior.

This recent Federal Circuit decision that the Board cited, Finjan, Inc. v. Blue Coat Sys., Inc., 879 F.3d 1299, 1303 (Fed. Cir. 2018), was not merely a cursory citation or a footnote. Rather, the Board specifically analogized to the patent in Finjan in holding that the claims at issue were similarly not directed to an abstract idea. How did the Board incorporate this legal authority into its own decision so quickly?

One thing that can be ruled out is any help from the appellant. Often times, the Board does indeed borrow persuasive arguments from the applicant (including persuasive legal authority). At times, you can see arguments literally lifted from appellants’ appeal briefs or reply briefs, as discussed in this blog post. Not so here. The reply brief was filed in September of 2016, long before Finjan was decided. Plus, the appellant choose not to pursue an oral hearing, which would have given the appellant a chance to address more recent case law. See 37 CFR 41.47 (“Upon a showing of good cause, appellant and/or the primary examiner may rely on a new argument based upon a recent relevant decision of either the Board or a Federal Court.”).

Instead it appears that PTAB judges keep very current on Federal Circuit case law and use it in their own decision drafting. This is somewhat different from examiners, who, in the face of a recent Federal Circuit decision, may have problems addressing the applicability of recent Federal Circuit decision. The Examiners may instead prefer the USPTO to interpret any new Federal Circuit decisions in an official USPTO guideline.

 

Now that we know that the Board analogizes to recent legal authority, how is this useful? How can you use the fact that the Board regularly cites to recent and relevant case law in reversing Examiner rejections? It turns out that this is most useful in fast-evolving areas of law, such as Section 101. For example, you can cite to the same legal authority that the Board uses to overturn your own Examiner rejections.

As we pointed out in a recent blog post, you can input any application number into the Anticipat Practitioner Analytics input field, and it will show the relevant legal authority for this application. Let’s say that you have an application in the software arts that is meeting stiff Section 101 headwinds. Perhaps, your application is even in the technical space of encryption. Let’s even say art unit 3621 (the same art unit that Ex parte Jang was decided).

After inputting art unit 3621 into the Analytics input field, you will see that the art unit field has legal authority for step 1 of the Alice/Mayo framework. There are three decisions where the Board relied on step 1 of the abstract idea test to reverse the rejection.

artunit3621

Within step 1, you see legal authority that the Board uses to support its reversal by the icon to the immediate right of the tag. This icon, which is clickable, provides all the decisions (and legal authority) for this art unit. It shows this popup for this art unit:

artunitlegal.png

In addition to Finjan, this Board decision used two other Federal Circuit cases in reversing the rejection: Enfish and Thales Visionix.

Chances are that if you have an application in this art unit and are facing a similar stubborn rejection, accessing legal authority that the Board found worthy of overturning an examiner can help guide strategy for what is persuasive. At best, the relevant legal authority is also found to be analogous and persuasive in your case. At worst, you are not completely off-base in citing to such a decision since independent judges in this art unit analogized to such legal authority.

The next column, tech center, has even more decisions and legal authority. Finally, the right-most column displays all the tags for this specific tag. This will provide all the legal authority Board decisions.

This practice tip is well-suited for responding to Office Actions as responses under 1.111 because you can quickly use recent legal authority. In theory, this same legal research could guide an applicant preparing for an appeal. This is especially relevant since if judges are using specific legal authority to overturn specific rejections, chances are they will be receptive to such legal authority in your brief. However, due to the substantial delay in reaching a final decision, and due to the volatility of Section 101, some of the cases may be outdated by the time the panel decides your case.

See what Practitioner Analytics can do for your practice. Feel free to give Analytics a 14-day free trial.

Let us know if you have any questions or if you would like a demo.

Anticipat Team

PatCon8 Conference: State of Patent-Eligibility of Medical Diagnostics Not Good

The eighth annual PatCon hosted by the University of San Diego School of Law included a wide range of speakers and presentations. Perhaps due to the largely academic audience, participants openly disagreed on various points. But one point had almost universal consensus: patenting medical diagnostics in the US is very bleak due to patent-eligibility. And it’s unlikely to change any time soon.

Since the Supreme Court decided Mayo v. Prometheus in 2012, the USPTO has shown a sharp decrease in finding good diagnostics claims to be patent-eligible. One session in particular focused on this: “Patentability of Medical Diagnostics” on March 2, 2018. This panel included Dirk van den Boom, CEO, Juno Diagnostics, former CEO of Sequenom; Brian Sun, Director, Intellectual Property, Prometheus Laboratories;  Matthew Bresnahan, Partner-Elect, Wilson Sonsini; Donna Shaw, UC San Diego;  Prof. Joshua Sarnoff, DePaul University School of Law; Prof. Jeffrey Lefstin, Hastings School of Law. We report on this session.

First off, Matthew Bresnahan shared statistics of decreased allowance rates and decreased filings in the 1630 art units. Matthew stated that the problem with diagnostics claims is not getting allowed claims, but rather getting good claims that do not suffer from divided infringement issues. He pointed out that the lone example claim deemed patent-eligible in the USPTO’s subject matter guidelines has a divided infringement issue. As a solution to fixing the patent-eligibility of diagnostics, Matthew suggested that the USPTO provide a “good” example claim in the guidelines that is deemed patent eligible.

Next, former CEO of Sequenom, Dirk van den Boom, talked about his experiences of having the courts take away all his company’s core IP based on patent-ineligibility. It was not planned, according to him. It was also not pleasant.

At one point audience member Mark Lemley tried to maintain an “All is well at the USPTO” attitude by pointing out that overall filings and grants in tech center 1600 may be up. Even if such data exists, which it wasn’t immediately clear to this correspondent, panelists agreed that certainly the types of claims currently granted are much different/worse than previously or in other tech centers.

Prof. Joshua Sarnoff then talked about a need to study the effects of the US choosing not to prioritize the patenting of diagnostics the same way that other countries do. To Professor Sarnoff, whether the US is correctly pursuing this policy is somewhat beside the point. With the proper data of what the patent-eligibility conundrum of diagnostics is doing to the economy, patent stakeholders can be in a better to know what to do.

While this session raised important problems about diagnostics, the solutions seemed unsatisfying. Outside of providing another patent-eligible example claim in the USPTO guidelines and gathering more data, there was some discussion on amending Section 101. For example, IPO and AIPLA proposals to amend Section 101 were generally deemed unrealistic in today’s congressional climate. Perhaps a more narrowly tailored amendment. But overall, all the solutions discussed seemed overly hopeful to change the status quo.

One solution not discussed relates to waiting for appeals currently percolating up the system. This blog has pointed out that the PTAB is currently doing a great job of reversing Examiners in tech center 1600 on Section 101, compared to other tech centers. This suggests that these Examiner rejections are not supported by precedent, and so the Board overturns. If the Board is showing an increase in not finding support in the case law, Federal Circuit panels will likely also find this with other cases. As some other diagnostics cases come up to the Federal Circuit, perhaps it is possible that a case can be distinguished over Mayo but still falls within the area of patent-eligibility.

Below is a photo of Carter G. Phillips, who did a wonderful job of opening the conference.

IMG_4002

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.

Abstract idea rejections in biotech/pharma are overturned far more than other technologies on appeal at PTAB

Since 2014, the USPTO has recognizably tried to come up with a holistic framework for determining subject matter eligibility for all sorts of patent applications. In particular, several subject matter eligibility guidelines have been issued in light of recent Supreme Court cases Myriad, Mayo, and Alice and subsequent Federal Circuit decisions. But this endeavor has not been easy. Especially in making a two-step solution for judicial exceptions work for all Examiners across all technology centers. Since appeals can be thought of as an ultimate mechanism for holding Examiner rejections accountable, here we look at how the Examining corps is doing with abstract ideas by looking at how the rate of reversing abstract idea rejections on appeal compares across tech centers.

By far the most common of the judicial exceptions—and the most elusive–is the abstract idea. Further to our recent report, abstract idea rejections are ubiquitous across all tech centers. They also get appealed in every tech center, but the reversal rate is far from uniform. The following shows the numbers and reversal rates of each tech center over the course of the past year and a half. We discuss two noteworthy tech centers.

techcenter

The first noteworthy tech center is 3600, where the bulk of the abstract idea appeals take place. This tech center, home to much of the USPTO’s business methods/software applications, has a very low reversal rate: 14%. In fact, the large volume of appeals in this tech center alone seems to substantially drag down the entire overall abstract idea reversal rate. See below graph.

The second noteworthy tech center is 1600. Even though the overall reversal rate has gone down since our last report (17% to 16%), tech center 1600, home to the biotech and pharma technical art, has actually solidified at a much higher rate. Specifically, this tech center’s reversal rate has increased from a rate of 28% to 37%. Even while having a limited sample size of 35 abstract idea decisions, this finding is significant. The probability that this reversal rate is higher just due to chance is quite low.

tech center

Why the higher-than-normal reversal rate in biotech? A couple possible reasons. First, possibly most intuitively, Examiners in the biotech/pharma technical space may be issuing and maintaining bad abstract idea rejections more frequently than Examiners in other tech centers, forcing the applicant to appeal. And the judges that are deciding these appealed applications are siding with the appellant more often than in other tech centers.

To the defense of Examiners in tech center 1600, the abstract idea doctrine is not as developed in the biotech/pharma space as other technologies. More prominent patent-eligibility cases in this technical space have focused on the other judicial exceptions: laws of nature (Mayo) and naturally occurring phenomena (Myriad). The lack of much abstract idea case law in biotech may create a blurry boundary line between patent-eligible inventions and patent-ineligible abstract ideas. Plus, with the infusion of computer-technology into life sciences, the applicability of other abstract idea case law has added further complexity to the analysis. Thus, Examiners may feel restricted in allowing a case, waiting for a Federal Circuit to provide a green light to support their position. But the Board seems not to be waiting around. Instead, the Board appears to be supporting the appellant’s position more often than in other tech centers, at least by saying that the Examiner has not met his/her burden of showing patent-ineligibility.

The second reason is that biotech/pharma applicants may have high stakes and/or resources to devote to pursuing broad claims than others (e.g., software applications). Compare these stakes and resources with where the bulk of abstract idea rejections on appeal come from, tech center 3600, where many of the business method applications reside. It is possible that biotech applicants are more motivated and less discouraged from winning on appeal. And as has been shown, not all appellants are equally successful in overturning abstract idea rejections on appeal. And perhaps the applicant or the counsel are driving strategy that fosters a more favorable appeal outcome for abstract ideas.

The USPTO will continue to struggle to strike the right balance between what is patent-eligible subject matter, but having the right appeals data from Anticipat Research can cut right to the heart of how specific grounds of rejection are being overturned on appeal. Even if the reason why remains elusive, biotech/pharma appears to be fertile room to appeal an unreasonable abstract idea rejection.

PTAB: Increasingly difficult to overturn abstract idea rejections on appeal

The latest data from Anticipat show that the effects of #AliceStorm are beginning to stabilize at the PTAB. At a webinar over the summer, we presented data on the reversal rates of abstract idea rejections. Month-to-month, we presented on a highly volatile, but overall low reversal rate for abstract ideas of about 17%. Now with several more months of data, the reversal rate appears to have stabilized around a lower overall reversal rate of 16%. See chart below.

monthly

To lower the overall reversal rate down to 16%, the past few months have seen low reversal rates: September at 15%; October at 11%; November at 14%; and December at 11%. This highlights a trend of eight months in which no monthly reversal rate has exceeded 20%.  See also below table.

Month 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
Reversal Rate 33% 27% 33% 29% 14% 28% 39% 20% 3% 11% 14% 15% 8% 15% 11% 14% 11%
Reversed 2 3 2 7 3 17 15 16 1 7 13 16 7 10 9 8 2
Total 6 11 6 24 22 60 38 81 31 63 94 108 93 68 83 56 19

The overall reversal rate means that for every appellant appealing an abstract idea rejection through to a final decision, less than one in six will be successful. While the data show this is a difficult rejection to overcome on appeal compared to other rejections, it also shows that appealing such rejections is not a completely futile endeavor.

As abstract idea rejections have grown in popularity among the Examining corps post-Alice, a low reversal rate may embolden Examiners to reject on abstract idea grounds. Technology that had previously rarely encountered abstract idea rejections is now seeing such rejections, making no art unit immune. Plus, computer technology infiltrating every technological sector makes abstract idea rejections even more likely to continue.

But each SPE of each art unit and each director of each tech center approaches Section 101 differently. Anticipat Research provides an ability to search for appeals-data for your particular art unit of interest to see the rates and the recent reversals. As will be seen in a forthcoming post on tech center rates, there are calms within the storm.