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.

graphanticipat

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.

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.

 

The PTAB Ex Parte Appeals Backlog Is Falling: What that means for you

There are several good reasons for not appealing a patent application, even in the absence of progress with the Examiner. One such reason stems from the lengthy PTAB backlog—the period of time it takes for the Board to decide appeals. By the time it takes for the Board to overturn an Examiner’s rejections, investment and PR opportunities directly tied to a patent issuing can wither. Not to mention, a lot can change within the business during this time, such as the viability of stopping infringing activity. So it is often desirable for an applicant to move fast to issuance. And outside of post-grant trials, the PTAB has not been known for speed.

But as the USPTO has aggressively hired PTAB judges to meet demand for post-grant trials, an interesting side-effect has been that the backlog for deciding appeals has fallen to historic lows. For this reason, filing an appeal can result in a disposition sooner than you might think.

As shown in the most recent statistics by the USPTO, pendency of decided appeals is considerably lower compared to last year. See below figure. As can be seen, each tech center that decides patent application appeals saw a substantial reduction in backlog from the previous year. Some technology centers, including electrical and computer arts, are experiencing almost 50% reductions in the backlogs in a single year’s time.

pendency

The PTAB backlog is calculated from the time that the appeal is forwarded to the Board until a decision is made. Another way of measuring the appeal time is the total amount of time from the notice of appeal. For this, simply add the many more additional months that account for the time it takes to file the appeal brief, wait for an Examiner’s Answer, and file a Reply Brief, if applicable. Assuming that these steps that precede the appeal forward take less than a year, these data show that for even the slowest tech centers (or most busy with the number of appeals), the total appeal time for most applications will be under three years total.

These backlog reductions at the PTAB in only one year’s time are significant. Compared with data from FY2013 (before the AIA was even enacted), current pendency is significantly lower in every tech center. See below graph from FY2013.

2013

The PTAB shows no signs of slowing the reduction in the backlog. We will continue to monitor whether the backlog continues to decline.

In conclusion, the most recent USPTO statistics show that an appeal can relatively speedily get resolved (less than two years from notice of appeal in certain technology centers). So rather than filing one or more RCEs with further amendments, an applicant could consider an appeal for potentially a broader claim set. As we’ve previously discussed, if successful, the applicant gets the patent term adjustment back in the form of C-delay. Sometimes, it pays to be patient.