Board Reverses Abstract Idea Rejection for Improper Oversimplification; Board Should Evaluate Examiner Rejections, Not Conduct Own Examination

In continuing to monitor high interest areas at the PTAB, today’s Anticipat Recap email included a recently issued decision that reversed the Examiner’s abstract idea rejection. We go over why the Board reversed and discuss an interesting point raised related to the scope of Board activism. 

In Ex Parte Grokop et al., Appeal No. 2016-003047, the Board disagreed with the Examiner’s conclusion of step 1 that the claims were directed to an abstract idea. The Board cited Enfish and McRO to establish two important points that touch on judicial exception rejections: the claims cannot be oversimplified and specific requirements of the claims must be considered.

According to the Board, the Examiner’s characterization of the claim as directed to “generic audio analysis” oversimplified the claims and failed to account for the specific requirements of the claim. This included claim features of capturing only a single frame from each block, analyzing the collection of captured frames, and determining a characteristic of an ambient environment based on that analysis.

Interestingly, at the end of this analysis, the Board made a point to establish that the Board need not examine the claims. Instead, the Board’s job is to evaluate whether the Examiner’s rejection was proper. To support this, the Board cited to the MPEP (“The Board’s primary role is to review the adverse decision as presented by the Examiner, and not to conduct its own separate examination of the claims.” MPEP § 1213.02). It also cited to the statutory code (“An applicant for a patent, any of whose claims has been twice rejected, may appeal from the decision of the primary examiner to the Patent Trial and Appeal Board.” 35 U.S.C. § 134(a); and “The Patent Trial and Appeal Board shall. . . review adverse decisions of examiners upon applications for patents pursuant to section 134(a).” 35 U.S.C. § 6(b)).

This last point is important because often times rejections (including abstract idea rejections) get affirmed under a new theory or analysis, requiring that the rejection be designated as new. Or claims that were previously unrejected under Section 101 are found to be patent-ineligible by the Board as an entirely new ground of rejection. It seems like this panel would focus entirely on whether the Examiner’s pending rejections are proper and not examine the claims by itself. 

There may be advantages and disadvantages to Appellants under this approach. Advantageously, the appellant need not fear an unfriendly Board panel that seemingly arbitrarily introduces a new 101 rejection. Additionally, the appellant need not fear a bad Examiner rejection getting strengthened by the Board as an affirmed as new outcome. But the downside is that if the Board purely evaluates the Examiner rejections, the Examiner could simply turn around a more well-articulated rejection once the application makes it back. So on the flip side, under the approach where the Board more actively evaluates the claims, if the appellant survives such an approach without a new rejection, the Examiner may be less likely to simply flip around a more well-articulated rejection.

Presentation Recap on Abstract Idea Developments at the PTAB

Trent Ostler did a deep dive on abstract idea developments at the PTAB yesterday at the AIPLA Joint Committee Hot Topics Presentation (Patent Law Committee and ECLC). He used data from Anticipat.com for all his results. In case you missed it, here it is:

I’m going to talk about Section 101 developments at the PTAB of ex parte appeal decisions. As many are aware, ex parte appeal decisions involve those applications that have been twice rejected, appealed, and gone all the way to a written decision by a panel of judges at the PTAB.

pic1

Now, the umbrella of Section 101 nonstatutory subject matter includes a variety of rejections. But as Theresa indicated, the most activity is in the abstract idea space. So here, we’re going to exclusively focus on developments of abstract ideas at the Board.

Before we get in too deep, I’m going to lay a foundation for an important point on appeals.

pic2

Typically when we think about outcomes for these decisions, we think of the following pie chart put out by the PTO. This pie chart shows that most of the time, the Examiner gets upheld (called here as affirmed at 56%). The pie chart indicates that a much smaller percentage of the time the Examiner gets overturned (called reversed at 29%), and the remaining chunk is a mix between the two (called affirmed-in-part).

A big problem with this chart is that this treats every appealed application the same. In reality, some grounds of rejection are much more likely to be overturned by the PTAB than others, as has been shown by the ex parte PTAB subcommittee of AIPLA.

pic3

Here is an illustration of rates of rejection for the past year and a half taken from Anticipat.com, a relatively new website that keeps track of all grounds of rejection and outcomes for ex parte appeals. Plus, it offers free academic use and steeply discounted Examiner use. The graphs show reversal rates with the blue being a rejection wholly reversed and the orange being reversed in part.

Some of these results are surprising. Section 102 anticipation rejections and Section 112 rejections are entirely reversed about 50% of the time. We’ve found these rates to be remarkably consistent even with multiple grounds of rejection being decided.

101 rejections are reversed about 21%. If we drill down into abstract ideas, the rate is even lower: about 17%. This is one of the lowest reversed ground of rejection. But at the same time, this also goes to show that it is not a completely futile endeavor. Almost a fifth of the time the Examiner’s abstract idea rejection gets overturned.

pic4

Within the past year and a half, abstract ideas rejections have been reversed throughout each tech center. Some tech centers have higher reversal rates than others. The rate is especially low in the business method art units. In the biotech tech center 1600, the rate is higher.

pic5

Over the course of the last year and a half, there have been about 100 reversed abstract idea rejections. Some time periods are reversed at a higher rate than others. This may be due to the board perhaps correcting an overreaction of abstract ideas directly after Alice. It may also be as a result of Federal Circuit decisions that are either favorable to patent-eligibility or unfavorable depending on the time.

These PTAB decisions follow three different general arguments for reversals. Each of these arguments can stand alone in reversing a rejection and can be used in combination.

  • Prima Facie Case (17 decisions) – The Examiner did not provide sufficient articulation
  • Step 1 (76 decisions) – Not “Directed To” Abstract Idea
  • Step 2 (44 decisions) – Claim Elements Alone or in Combination Transform Abstract Idea into Something More

We’ll briefly step through what these different abstract idea arguments look like in practice.

First, the prima facie case. 

pic7

(see https://anticipat.com/research?id=86526) Many of us practitioners, especially who work in the computer arts, have seen this: a rejection that doesn’t meet the minimum threshold required for a prima facie case. This decision shows the Board overturn the Examiner’s rejection for not making that case. Can’t be conclusory, has to analogize to a case with an abstract idea, has to explain why it’s not more than the asserted abstract idea. If the Examiner doesn’t do this, reversed.

Next, step 1.

pic8(https://anticipat.com/research?id=92479) This is the most frequent category for overturning abstract ideas. This is in part due to recent decisions that hold that technological improvements are relevant in step 1, even if the guidelines suggest otherwise. Here, the Board breaks down the Examiner’s asserted analogous abstract idea. The Board then recharacterizes the claimed invention as an improved device rather than an abstract idea. Importantly, the Board supports its conclusion using the specification of the application including the background. 

Finally, step 2. 

pic9(https://anticipat.com/research?id=91985) This is often times used, as is shown in the following example, in conjunction with step 1. Here, the Board deconstructs the difference or delta between the Examiner’s asserted abstract idea and what is actually in the claims. As is often the case, there’s more to the claim than how the Examiner characterizes them. Here the Board recognizes that the examiner failed to show that the claim elements do not amount to significantly more or add meaningful limitations. This step here can bleed somewhat in to the prima facie analysis. The Board can either disagree with the Examiner’s assertion or rule that the examiner’s assertion does not provide the necessary analysis.

Anticipat has a lookup tool where you can put in the specific argument (e.g., step 1, step 2, prima facie case) and you can retrieve all the relevant decisions, mapped to your particular art unit or Examiner. Having relevant decisions can guide your strategy in responding to Office Actions or in your appeal brief strategy for including the most successful arguments. 

Next, which are the best legal authority for each type of argument? Here we discuss what judges rely on in reversing the various steps under the abstract idea rejection. These are not just legal authorities that appear in the decision somewhere, but rather these are cases where the PTAB either explicitly analogized to these cases or cited the authority in deriving its holding. Anticipat Analytics allows for looking up the legal authority for each type of argument used.

For step 1, the clear leading cases cited when reversing are DDR Holdings and Enfish.

pic10

For step 2, the clear leading legal authority used in reversing rejections is Bascom.

pic11

The PTAB decisions show similar volatility as the courts in deciding abstract idea rejections. Here are some of the more contentious areas that are being decided both in reversing and in affirming.

First, what is a technological improvement? To what extent does the Examiner need to provide evidence of assertions of routine/conventional activity? How close does the Examiner need to analogize to a similar case for showing the claim “directed” to an abstract idea? To what extent must the Examiner look to the specification to interpret the abstractness of the claims? These questions do not have clear answers, but the PTAB at least has more answers than the Federal Circuit – just out of sheer volume of decisions.

Another consideration is that when considering appealing an application, even if the application currently does not have an abstract idea rejection, the judges may introduce one sua sponte.

It is relatively rare, but it does happen.

pic14

It can happen in one of three ways:

First, the panel formally introduces a previously unapplied abstract idea rejection. Second, the panel can strengthen an existing rejection with additional analysis and designating the rejection as new. Third, the Board sometimes suggests that the Examiner consider 101 without issuing a formal, new 101 rejection. Keep this in mind as you consider an appeal. You don’t want to open up a can of worms if you don’t have to.

Conclusion

In sum, you can see the reversal rates for 101 rejection directly related to your area of interest. You can see the arguments used in overcoming other rejections (including the legal authorities relied upon) and incorporate it into your own practice.

Rates for New Rejections on Appeal

Opening up a can of worms is good practice on the lake–not in front of a PTAB judge panel. But when appealing a twice-rejected patent application, a can of worms can very well be opened when the Board newly introduces rejections. These new rejections are not extremely frequent, but understanding the risk of these new rejections is an important part of deciding to take a case on appeal.

In deciding rejections on appeal, the Board has discretion to sua sponte introduce a new rejection to the pending claims. In other words, an appeal is made to the Board seeking to overturn one rejection and in return the Board slaps a different, additional rejection. The Board can also designate existing rejections as new by using a different rationale than the Examiner, but this article focuses on the purely new type of rejection.

These entirely new rejections are introduced somewhat unpredictably. Thankfully, our appeals decisions data can help predict the risks of these new rejections.

A sample of 12,376 decisions over the past four years shows that purely new rejections are relatively rarely applied (1.7%). Data was gathered using Anticipat’s beta research database. It turns out that the Board overwhelmingly prefers to introduce some grounds of purely new rejection over others. Here is the breakdown:

graph

As can be seen, §112(b) is the most frequent purely new rejection with 78 decisions. Second place goes to §101 nonstatutory subject matter rejections with 74. Next are all the §112(a) rejections with 29. Then obviousness with 16, followed closely by §102 anticipation with 11, and then §112(d) with 3. Finally,  there is one obviousness-type double patenting new rejection.

Some of these numbers are intuitive. As seen from a previous post on the frequency of appealed rejections, §103 rejections are on appeal in 92% of the decisions. Thus it would not be expected that too many more new §103 rejections would be applied by the Board to cases that do not already have them.

Section 101 is an increasingly more frequent new rejection. Many of the newly issued appeals decisions were for cases with appeals filed before the Supreme Court decided Alice v. CLS Bank. The Board appears to be thinking about patent-eligibility much more proactively. In addition to formally issuing a new §101 rejection, we have seen the Board suggesting in its decisions in a number of cases that the examiner consider §101 as a possible new rejection.

Also important to note, even the most frequent of these purely new rejections are fairly rare. The most frequent, §112(b), is newly introduced in only 0.63% of the cases. However, even with this low possibility, getting a new ground of rejection from the Board is still a risk practitioners should consider when taking a case on appeal.