The PTAB backlog for ex parte appeals continues its plunge

Perhaps one of the most interesting speakers at the PTAB Bar Association annual conference on March 22, 2018 was Chief Judge Ruschke. Ruschke highlighted several statistics at the Board including the ever-diminishing backlog for ex parte appeals. Noticeably proud of this effort, which we report on below, Ruschke deserves credit for being at the helm of the PTAB during this time of a historic drop in appeals backlog.

Several months back, we reported on the dip in ex parte appeals backlog comparing fiscal year 2016 with fiscal year 2017. Since then, the USPTO recently released a chart, of which Chief Judge Ruschke spoke, that tracks a moving monthly average for February 2018 with February 2017. Here is the new chart available here at the USPTO.

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Any way you slice it, this chart with updated data shows that the PTAB appeals backlog continues its plunge. For biotech/chemical art, this decrease is pronounced. For example, for tech center 1600, which previously dipped all the way to 19.2 months as we reported previously, the backlog is now down to 18.3 months. For tech center 1700, which we reported as previously dipping to 16.9 months, is now down to an impressive 13.1 months.

For computer/electrical art, the backlog shows modest, but consistent declines. Tech center 2100 had previously dipped to 13.2 months. Now, it has decreased to 13 months. Tech center 2400, which had previously dipped its backlog to 12.7, now has a backlog of 12.5 months. Tech center 2600, previously at 13 months, now has the backlog lowered to 12.8. Finally, tech center 2800, which dipped to 16.9 months is now at 14.4 months.

The tech center with the most number of forwarded appeals is 3600, home of many business method applications. This tech center had previously decreased to 22.4 months. Now this backlog is all the way down to 19.3 months.

Finally, tech center 3700, home to mechanical and biomedical art, had previously decreased its backlog to 23 months. Now, the tech center’s backlog has decreased even further to 15.2 months.

The appeal backlog is calculated as the amount of time from when the appeal is forwarded to the Board (shortly after an Examiner’s Answer is issued) until a final decision is made. As this backlog increasingly shortens, the decision to pursue an appeal becomes more attractive. This, in combination with recent increases in USPTO fees that disproportionately makes more expensive pursuing continuing prosecution with RCEs. This also, knowing that some grounds of rejection statistically get overturned at higher levels than you might think. You can see for yourself how your specific grounds of rejection are handled at the Board to guide your particular prosecution strategy.

From all accounts, Chief Judge Ruschke does not intend to discontinue the work at cutting the backlog for ex parte appeals. We at Anticipat.com will continue to track this as well as other PTAB appeals statistics. Stay tuned for developments such as backlog that can affect the decision to pursue an ex parte appeal.

 

 

Upcoming Webinar on strategically using ex parte appeals in your patent prosecution practice

This blog has focused much on the advantages of pursuing an ex parte appeal during patent prosecution. We have pointed out that pursuing an appeal carries a number of unique advantages above alternative procedures in patent prosecution. In a free webinar hosted by Fitch Even on March 21, 2018 (with some CLE provided), panelists will discuss many of these advantages. The webinar’s title is “Avoiding Prosecution Churn: When Ex Parte PTAB Appeals Make Dollars and Sense.” Register by clicking here, as explained in the summary below.

  • FITCH EVEN WEBINAR: MARCH 21, 2018
Avoiding Prosecution Churn: When Ex Parte PTAB Appeals Make Dollars and Sense

Please join Fitch, Even, Tabin & Flannery LLP for a free webinar, “Avoiding Prosecution Churn: When Ex Parte PTAB Appeals Make Dollars and Sense,” on Wednesday, March 21, 2018, at 9:00 am PDT / 10:00 am MDT / 11:00 am CDT / 12 noon EDT.

During the process of acquiring patent rights through the patent application process, applicants sometimes wish to seek review of rejections by an examiner. The formal mechanism for achieving this review is an ex parte appeal to the Patent Trial and Appeals Board (PTAB). Some patent practitioners avoid the ex parte review process, viewing it as lengthy and expensive. But, data and experiences recently compiled by an AIPLA subcommittee suggest that this conventional thinking may be incorrect. It turns out that pursuing an appeal can be a more attractive option than other patent prosecution procedures.

During this webinar, we will explore how the AIPLA findings may provide guidance on

  • When to file ex parte PTAB appeals
  • How often to file these appeals
  • Which issues to choose to appeal

Additional topics will include

  • USPTO incentives
  • Working with the examiner
  • Patent term adjustment
  • Pre-appeal brief reviews
  • Other relevant statistics

Our speakers:
Thomas F. Lebens, a partner at Fitch Even, assists clients in preparing and prosecuting patent and trademark applications, including appeals, post-grant review, and interferences. He also counsels clients in IP and business strategy; licensing issues; infringement and validity analysis and opinions; and copyright matters.

Trent Ostler is in-house counsel for Illumina, Inc., where he helps protect the company’s software and informatics products and inventions through patent, copyright, and open source licensing. Trent is the founder of Anticipat.com, a PTAB appeals database.

CLE credit has been approved for California and Illinois and is pending in Nebraska. Other states may also award CLE credit upon attendee request. There is no fee to attend, but please note registration is required. To reserve your place, please REGISTER HERE.

The appeal outcome is one of the most telling metrics for patent prosecution analytics. Here’s why

Big data is slated to revolutionize all aspects society, and patent prosecution is no exception. But because of the complexity of patent prosecution, insights from big data must be carefully considered. Here we look at why appeals outcomes are one of the most telling metrics: it shows good insights with few misleading explanations.

Because much of patent data is publicly available, some companies are amassing troves of patent data. And some metrics that suggest insight are relatively easy to calculate.

Take the allowance rate. You can compare an examiner’s total granted patents to the total applications and voila. In some circles a high allowance rate is a good thing for both examiner and applicant. Under this theory, an Examiner with a high allowance rate is reasonable and applicant-friendly. On the same token, a law firm with a high allowance rate is good. This theory also holds that an examiner or law firm is bad because of a low allowance rate.

Another metric is the speed of prosecution. Take the average time it takes to grant an application either in months, office actions, and/or RCEs. Under a theory on speed, an examiner or law firm with a faster time to allowance is better.

While these theories could be true in certain situations, there are confounding explanations that arrive at the opposite insight. In sum, these are woefully incomplete insights for three reasons.

First, these metrics incorrectly assume that all patent applications are of the same quality. By contrast, examiners are assigned patent applications in a non-random manner. The same applicant (because of the similarity of subject matter) will have a large proportion of applications assigned to a single Examiner or art unit. This means that related applications from the same applicant (drafted with the help of counsel) can have very high quality or very low quality applications. Related low-quality applications can suffer from the same problems (little inventiveness, lack of novelty, poorly drafted applications) that is not dependent on the examiner. So an examiner, through no fault of his own, can get assigned a high percentage of “bad” applications. In these cases, a low allowance rate should reflect on the applications–not the examiner.

Correspondingly, clients of some law firms instruct to prosecute patent applications in a non-random fashion. Especially for cost-sensitive clients, some firms are assigned very specialized subject matter to maximize efficiency. But not all subject matter is equally patentable. So even when a law firm has a low allowance rate, it often times does not mean that the firm is doing a bad job. By contrast, the firm could be doing a better-than-average job for the subject matter, especially in light of budget constraints given by the client.

This non-random distribution of patentable subject matter undermines use of a bare allowance rate or time to allowance.

Second, the allowance rate or allowance time metrics likely show a poor quality patent. That is, one job of patent counsel is to advocate for claim breadth. But examiners will propose narrowing amendments–even if not required by the patent laws–because it makes the examiner’s job easier and the examiner does not want subsequent quality issues. So often times, a quick and easy notice of allowance merely signifies a narrow and less valuable patent. Often times, office actions include improper rejections, so a metric that shows a quick compromise can show that the law firm isn’t sufficiently advocating. Thus, using these metrics to evaluate good law firms could be telling you the opposite, depending on your goals.

Plus, getting a patent for the client is not always best serving the client’s needs. Some clients do not want to pay an issue fee and subsequent maintenance fees on a patent that will never be used because it is so narrow and limiting. So it’s a mark of good counsel when such clients are not given a patent just because a grant is the destination. The client is ideally brought in to the business decision of how this patent will generate value. The counsel that does this, and has an allowance rate that drops because of this, unfairly is portrayed as bad.

Third, these metrics lack substantive analysis. Correlating what happens with patent applications only goes so far without knowing the points at issue that led to the particular outcomes. Some applicants delay prosecution for various reasons using various techniques including filing RCEs. There are legitimate strategies that are benefitting the client in doing so.

All this is not to say that such metrics are not useful. They are. These metrics simply need a lot of context for the true insight to come through.

In contrast to the above patent prosecution metrics, Anticipat’s appeal outcome very directly evaluates relevant parties in substantive ways. The appeal outcome metric reveals what happens when an applicant believes that his position is right and when the examiner and his supervisor think that he is right. In such cases, who is right? The parties are forced to resolve the dispute with an independent judge panel. And because getting to such a final decision requires significant time and resources (eg filing briefs and one or more appeal conferences that can kick out cases before reaching the board), the stakes are relativity high. This weeds out alternate explanations for an applicant choosing to pursue an appeal. Final decisions thus stem from a desire and position to win a point of contention that the Examiner thinks he’s right on–not a whimsical exercise. And tracking this provides insights into the reasonableness of Examiner rejections and how counsel advises and advocates.

The appeal metric helps to evaluate the Examiner because if overturned on certain grounds of rejection (say, more often than average), this means something about the examiner and his supervisor’s ability to apply and assess rejections. After working with an examiner, there can come a point when the examiner will not budge. The PTAB then becomes the judge as to whether the Examiner is right or wrong. This same analysis works at evaluating whole group art units or technology centers.

With Practitioner Analytics, you can see the reversal rates of specific Examiners, art units, tech centers, but you can also look at the specific arguments used that have been found to be persuasive at the Board. This means that if you are dealing with a specific point of contention, say “motivation to combine” issue of obviousness, you can pull up all the cases where the PTAB overturned your examiner based on this point. The overall reversal rate and specific rationales can both validate that the Examiner is not in line with the patent laws and rules.

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The appeal metric also helps evaluate counsel because it shows the results of when counsel feels that their position is right even when the examiner will not budge. If counsel wins on appeal, this metric confirms the counsel’s judgment and their ability to make persuasive arguments in briefs.

Even a ninja can generate allowance rate metrics. But the savvy patent practitioner looks for more context to guide prosecution strategy. Insights from the data that are carefully analyzed avoid counter-intuitive explanations.

Is an appeal an underutilized patent prosecution procedure? Yes

In prosecuting a patent application, an appeal is not always the best option. But it also isn’t that bad an option. Currently, about 1-2% of applications go up for appeal. Based on the advantages that an appeal can provide, as well as the diminishing drawbacks, this low percentage of appeals means that many practitioners may be losing out. Here, we organize the eight advantages that appeals provide (either early in prosecution or late), as taken from previous blog posts.

Appeals help minimize unnecessary prosecution history estoppel – https://anticipat.wordpress.com/2018/01/30/how-appeals-can-stop-examiner-tricks-that-needlessly-undermine-patent-applications/

Appealing before an RCE gives you Patent term adjustment (PTA) B-delay regardless of the outcome on appeal – https://anticipat.wordpress.com/2018/01/18/how-appealing-a-patent-application-before-filing-an-rce-can-yield-big-b-delay-pta/

The ex parte PTAB backlog is plunging, meaning one of the biggest reasons not to appeal (speed of resolution) is less prohibitive. https://anticipat.wordpress.com/2017/12/13/the-ptab-ex-parte-appeals-backlog-is-falling-what-that-means-for-you/

Just by filing an appeal brief, you get another set of eyes in an appeal conference, giving you a chance that your application gets allowed or prosecution reopened even before a final decision from the Board – https://anticipat.wordpress.com/2018/02/12/appeal-conferences-can-advance-prosecution-by-giving-your-application-a-fresh-set-of-eyes/

Appealing an application generally is correlated with a more valuable patent. https://anticipat.wordpress.com/2017/11/28/does-appealing-a-patent-application-lead-to-a-more-valuable-patent/

Recent fee increases affected RCEs more than appeals. https://anticipat.wordpress.com/2017/11/15/uspto-increases-fees-for-ex-parte-appeals-less-than-initially-proposed-thanks-to-aipla-and-ipo/

You can recoup PTA C-Delay for entire appeal pendency when at least one claim is found not unpatentable on appeal: https://anticipat.wordpress.com/2017/11/03/will-you-get-c-delay-patent-term-adjustment-after-your-appeal/

Appealing to technically and legally trained judges can get your rejections overturned if your examiner is just not getting it. The high reversal rates may be higher than you think. https://anticipat.wordpress.com/2017/08/23/update-on-ex-parte-ptab-appeals-reversal-rates-high-reversal-rates-maintained-except-for-101-nonstatutory-rejections/

Are appeals underutilized? Perhaps. But some firms/companies are very strategic with appeals. They understand the value appeals give to their clients/themselves. More to come on that later.

 

 

Appeal conferences can advance prosecution by giving your application a fresh set of eyes

In filing a patent application at the USPTO, an applicant cannot choose its Examiner. Nor can it typically switch to a different Examiner once assigned. And since not all Examiners are equally agreeable or reasonable, being stuck with an Examiner sometimes puts the applicant at a serious disadvantage.

Two different appeal conferences provide applications with another set of examiner eyes. Here, we show that these fresh sets of eyes can have meaningful impacts on prosecution despite any built-in biases. This can happen even before the appeal reaches the PTAB judges’ desk.

The first procedure, pre-appeal brief request for review, is a relatively quick and inexpensive way to resolve “clear errors” in rejections. This brief is limited to 5 pages and is filed at the same time as filing a Notice of Appeal, with no extra fee for filing the request. A panel of three Examiners assesses the merits of the request for review, which guarantees that at least one examiner beyond the immediate examiner and his/her supervisor look at this application.

One might suspect that pre-appeal conferences should be ineffective because two of the three examiners on the conference may already be predisposed against the applicant’s position. That is, the examiner who issued the most recent Office Action typically will not admit that his work product is faulty. Nor will the examiner’s supervisor, especially when the working examiner is junior and the supervising examiner has been involved in overseeing the Examiner’s work. So common wisdom would suggest that a third Examiner, even if on the same side as the appellant, would have a hard time winning over the other examiners.

But these pre-appeal brief requests for review have significant effects on the state of prosecution of the application. One study showed that 6% result in a notice of allowance and 33% prosecution gets reopened (see www.ipwatchdog.com/2015/07/21/efficacy-pre-appeal-brief-conference-program/id=59937/). This means that almost 40% of the time the conference found that the Examiner’s Office Action was defective in some way.

Next is the appeal conference. Here, similar to the pre-appeal request for review conference, three examiners meet to evaluate the application in light of the appeal brief. Interestingly, a study showed that 19% receive notices of allowance after appeal brief. And 21% of these cases have prosecution reopened with an Office Action. (see www.ipwatchdog.com/2016/03/21/ex-parte-appeals-quickallowances/id=67297/) This shows that 40% of the time, the appeal conference examiners did not feel comfortable sending this appeal to the Board.

These data show that even before having patent judges at the PTAB give an application a fresh look, having other a pair of fresh eyes from examiners leads to meaningful results. The take home lesson is that having another pair of fresh eyes to evaluate an Examiner’s rejections is very important. Then, if necessary, the judges can also give the application a fresh look. That is, if it clears either of the 40% filters.

How appeals can stop Examiner tricks that needlessly undermine patent applications

Patent Examiners are tasked with a daunting task of checking each patent application for compliance with all the patent laws and rules. Most importantly, the Examiner must show that the claims are not unpatentable, including being free and clear of prior art. And they must do all this within the time expectations that the USPTO offers.

But sometimes it seems like Examiners are engaged in a sophisticated game of cat-and-mouse. Some Examiner tricks, which aren’t expressly prohibited by the rules and incentives offered by the USPTO, cut corners to make their jobs easier. And some might say that the frequency of these games has increased in recent years. But left unchecked, the consequences of these tricks can undermine applications in serious ways.

To their defense, Examiners are allotted only a limited number of hours in the day to reach the bi-weekly expectation levels (or a bonus for ambitious Examiners). This expectation is driven by a simple formula:

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Source. As an example provided by the USPTO, let’s say that an Examiner works 36 hours a week. If the Examiner is starting out at GS7 in the complex field of satellite communications, this examiner is required to perform enough work to generate about 3.6 production units (or 7.2 counts) every bi-week (72 x 0.7)/27.7. That is the equivalent of 3 Non-Final Office Actions (1.5 counts each), 14 Final Office Actions (.25 counts each), 2 first-time RCEs (1.75 each), or 7 Notice of Allowances (.5 each) per week.

An Examiner drafting three Office Actions in a week would have 12 hours per Office Action. This is not quite two days of work for each application, to perform the search, consider the prior art, and draft the Office Action. No small task, especially with this complex subject matter.

On top of this, Examiners are cautious about allowing cases for fear that an allowed patent application does not meet a patent quality assurance threshold. In this case, an allowed case could get referred back to the Examiner to try again.

With these incentives in mind, it is easy to understand the first examiner trick: cutting corners on a quality first Office Action. Good examiners understand that a good initial prior art search sets the stage for the entire prosecution of an application. It’s best to conduct the best and most thorough search once, right at the get-go, applying the closest prior art references to the invention. Once this prior art search is done well, the Examiner can really just slightly modify the rejection as the applicant attempts to distinguish the claims.

But based on the allotted time given to examiners, it might take an examiner more than a few days to familiarize oneself with the claimed invention, perform the search, consider the prior art and draft the Office Action. Some Examiners cut corners with this initial search, applying references that are easiest to find, but not very related to the invention. But because the references may have snippets that can be arguably broadly interpreted to disclose aspects of the claims, the Examiner applies them and moves on. And because often times applications go through several rounds of prosecution, the Examiner may think to perform a better search down the road, with potentially more relevant prior art. This is bad for applicants for a number of reasons.

For one, it wastes money and time. Some Examiners become attached to their own work product and refuse to see error in the first Office Action. Thus, it can be difficult to persuade the Examiner to withdraw a rejection through argument alone. This behavior is reinforced by the USPTO not granting counts for a Non-Final Rejection do-over. So if claim amendments are not introduced, Examiners–hungry for RCE counts–typically issue a Final Rejection with little change to the original analysis.

Sometimes, Examiners offer to cut a deal where a claim amendment is introduced to distinguish the applied prior art references. Applicants, incredulous at being required to distinguish from very different prior art references, may take this option. But no proposed claim amendment is guaranteed to result in an allowance. Examiners may commit to overcoming the current rejection, but a revised rejection with perhaps a different prior art reference can easily be manufactured.

Thus, “working with” the Examiner may give the applicant false hope, leading the applicant to continue to try different claim amendments without committing to allowance. These Examiner-appeasing amendments carry no guarantee of advancing prosecution, and instead often drag out prosecution even through the RCE process, so that the Examiner can get more counts.

Besides expense and wasted time, each argument and/or clarifying amendment used to distinguish a prior art reference makes up the prosecution history estoppel. This is disadvantageous because it narrows the scope of coverage of the claims during enforcement of the patent. As the Supreme Court made clear in Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., an applicant that makes a claim amendment to comply with the Patent laws automatically assumes surrender of the territory between the original claim and the amended claim. This means that there is a presumption of surrendering all equivalents for the particular claim limitation that was narrowed by the amendment. For an application that has many amendments over many Office Action responses, the consequences can be substantial.

The second trick is the examiner requiring narrower claims than is required by the law. Even when an Examiner performs a very exhaustive search in the prior art, there is still no guarantee that a killer prior art reference is just around the corner. That is partially why Examiners will almost always want more narrow claims than are needed to overcome prior art so they can pass a patent quality assurance threshold. In general, the more features and claim elements the better for the Examiner to pass scrutiny. It can be tempting to pursue a strategy that pursues narrower claims to get a quick notice of allowance. But unless an Examiner can show why a more narrowing claim amendment must be made in a prima facie rejection, it is not a legally proper rejection.

The savvy patent practitioner knows that the fewer the claim amendments and the shorter the prosecution history, the better. An appeal early in prosecution (upon receiving a Final Rejection) can shortchange the negative implications of prosecution history estoppel. Rather than distinguishing and amending against a circulating set of unreasonable prior art rejections, the Board can decide the first unreasonable set. And if completely successful (no other grounds of rejection affirmed and no new rejections by the Board), a Notice of Allowance should issue. Plus, with Anticipat Research, you can see the reversal rate for your specific ground of rejection for your specific Examiner, art unit, tech center, etc.

Quit playing games and instead be strategic. That is why appealing can be a good solution.

How Appealing a Patent Application Before Filing an RCE Can Yield Big B-Delay PTA

Patent prosecution has a bevy of procedural options for a wide range of preferences. For those who want to maximize the life of the patent and aren’t impatient in getting the grant, some strategies promote maximum patent term. Here, we discuss how appealing a patent application can promote patent term adjustment (PTA), even if the appeal is unsuccessful.

We recently reported on how a successful appeal (not unpatentable for at least one claim) can result in C-Delay PTA. This gives all the time wasted in getting a favorable disposition from the Board back to the patent’s term. But if the appeal is unsuccessful (i.e., the decision comes back upholding a rejection with respect to all claims), and the application does eventually get granted, B-Delay can still replenish this lost time as PTA. But to do so, it must follow a certain timeline.

In general, B-delay is available when the USPTO does not grant a patent within 36 months. That is, every day over the 36-month mark that it takes to grant your application goes into your B-delay PTA. But B-delay is unavailable for the time after an RCE is filed. This point has implications for deciding when to appeal a decision, especially since the appeal process can be long and since not every appeal will be successful.

Under this approach, appeals are used strategically rather than as a procedure of last resort. Instead of filing an RCE to continue examination, an appeal is filed. Many applicants, do indeed use appeals strategically. If the appeal is affirmed, and if an RCE is filed to continue examination and the application eventually does get granted, then does the

An example shows this approach in action. US Patent No. 9,701,462 was recently issued with a whopping 2,230 days of PTA. The secret to over six years of PTA? Appeals. After receiving a Final Office Action, the applicant straightway appealed. The Board affirmed the Examiner, but introduced a new rejection. Subsequently, the applicant responded with an Amendment. The Examiner responded with a Final Rejection, after which the applicant appealed again. This time on appeal it was affirmed-in-part. Because an RCE was never filed, it qualified for 1231 days of B-delay.

pta b delay

This appeal-before-RCE strategy is difficult to pursue in practice—not a trivial or whimsical exercise. It takes preparation to make sure all the necessary evidence is on the record and that the claims are just the way they should be for appeal (before a Final Office Action closes prosecution). Indeed, you may want to front-load much of the back-and-forth work with the Examiner with at least one interview.

Another difficulty is more psychological. Some examiners may confuse the situation by offering a hope (sometimes a false hope) that prosecution is close to concluding. Then the practitioner believes that just one more narrowing amendment is needed. But is this one little amendment needed to allow the case? Or is it needed to overcome the current rejection? Or will the Examiner not even commit to that one narrowing amendment overcoming the current rejection? Many cases with long prosecution histories are made through a series of small amendments.

However difficult it is to front-load the work at the first response, and however difficult it is to weed through the hopeful assurances of the Examiner, appealing early on can pay off big dividends in the form of PTA.