Number of abstract idea rejections decided at PTAB for August 2018 higher than ever, but reversal rate treads water

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Recently at the IPO Annual meeting on September 24, USPTO director Andrei Iancu acknowledged the obvious: Section 101 is making folks’ lives difficult. The director also had some strong words about the abstract idea patent-eligibility doctrine. Calling into question the established framework, the director asked: “How can a claim be novel enough to pass 102 and nonobvious enough to pass 103, yet lack an ‘inventive concept’ and therefore fail 101?” It does not look like a fix to 101 is coming anytime soon. But it does look like this struggle is increasingly making its way to the Board.

August 2018 saw a record-number of abstract idea rejections decided at the Board. The PTAB decided 209 abstract idea rejections. And even with such a high number of cases, the reversal rate only slightly dipped compared to prior months. See previous post on recent months abstract idea decisions. For August, 30 of 207 decisions were entirely reversed, yielding a complete reversal rate of 14.5%.

As examiners and applicants grapple with the abstract idea doctrine of patent-eligibility, the trend seems to be that applicants will increasingly seek the PTAB judges to adjudicate in their favor. And if recent months are any indication, that gamble is paying off more than ever before. But still with reversal rates in the teens, it’s still one of the most difficult of all rejections to overturn on appeal. Plus with the director’s strong words, the reversal rate should continue to trend upward.

Check out additional information at Anticipat.com. You can look up, for example, all the decisions where the board reversed specific examiner rejections. Try out a trial for Anticipat Research today.

Another Section 101 lack of utility rejection bites the dust

As reported in today’s recap email, in Ex Parte GELFAND et al (Aug. 2, 2018), the Board reversed a lack of utility rejection. This continues a longstanding trend of the Board frequently reversing such rejections.

In rejecting the claims as lacking utility under Section 101, the Examiner had asserted that the claims were not supported by a specific, substantial, and credible asserted utility, or a well-established utility. For support, the Examiner relied on MPEP § 2107.01 B(C), which states that “[a] method of assaying for or identifying a material that itself has no specific and/or substantial utility” is not considered to have a substantial utility.”

On appeal, the appellant argued “The present invention relates to the field of nucleic acid detection” and that nucleic acid detection has numerous uses including diagnostic uses and research uses–a specific utility.

While acknowledging the Examiner’s cited MPEP section, the Board rejected the Examiner’s reasoning. That identifying the presence of target nucleic acid sequences is a method for assaying “a material that itself has no specific and/or substantial utility.”

According to Anticipat Research, this type of rejection (Section 101 – Lack of Utility) has a very high reversal rate. Over the past two years, the PTAB has reversed 14 of 19 of these rejections, a relatively incredible 74% reversal rate. This may stem from the rejection being applied less frequently with other rejections and Examiners hence not having much experience with properly applying it.

With a reversal rate so low for lack of utility rejections, when struggling with an Examiner with such a type of rejection, it may be helpful to go straight to the Board on appeal to overcome such a rejection.

The PTAB quietly hit a milestone in June in reversing Alice Section 101 rejections

As we have pointed out in a previous post, for more than a year, reversal rates for abstract idea (Alice) rejections have been extremely low. We are finally seeing an uptick of reversals likely due to Berkheimer and other Federal Circuit case law and recent guidance by the USPTO. As we’ve previously predicted, this reversal rate should continue (and may even go up). But until leadership at the USPTO clarifies its policies, it remains to be seen by how much.

As we’ve previously reported, from August 2016 to April 2017, the PTAB had months where it reversed abstract ideas in the 20 and 30 percentage range. That is, if a month had 100 abstract idea decisions, the Board would reverse the examiner on 20 or 30 of those cases. But May 2017 saw a dismal change in appellant fortunes: the reversal rate for abstract idea rejections tanked. For this period of over a year ago, many months saw only single digit reversal rates. Indeed, no month during this time exceeded a 15% reversal rate. The period was bad for Alice appellants.

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But all this may be starting to change. Last month (June) saw a high number of abstract idea appeals decided, 176. Of those, 29 were wholly reversed, yielding a complete reversal rate of 16.5%.

It may be premature to characterize June as a watershed moment for patent eligibility at the PTAB. But there are three reasons for such hope.

First, June had a sizable number of reversals. In other words, the PTAB did not exceed a 15% reversal rate through a blip attributable to a small sample size. For some context, the number of reversals for the single month of June (29) was almost double the number of reversals for the six months between July 2016 and December 2016 (19).

Month Jul-16 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 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18
Reversal Rate 33% 33% 27% 33% 29% 14% 28% 39% 20% 3% 11% 14% 15% 8% 15% 11% 14% 11% 14% 11% 10% 12% 9% 16%
Reversed 2 2 3 2 7 3 17 15 16 1 7 13 16 7 10 9 8 2 9 8 21 16 15 29
Total 6 6 11 6 24 22 60 38 81 31 63 94 108 93 68 83 56 19 64 73 203 137 172 176

Second, the number of decisions where the Board partially reverses an abstract idea rejection is increasing as well. In June, two decisions partially affirmed such rejections, pushing up the total rate with at least one claim reversed to 17.6%. March saw seven such decisions. These nine decisions for these months are more than the previous 9 months. The partial reversal rate tells a more complete story about how the Board is treating abstract idea rejections. As seen, the Board’s trend is toward increasing both the number of complete reversals and partial reversals. This means that the Board appears more willing to entertain dependent claims as patent-eligible, giving the appellant some options.

Finally, the Board is recently more holistically relying on both steps for reversing. We are starting to see a return to previous months where the PTAB has been more aggressive in reversing these types of rejections. Part of this is due to case law, which the Board follows. Berkheimer and Vanda guidelines may play a role. We previously noted that Berkheimer temporarily changed the way in which panels reverse. That is, whereas before panels primarily relied on Step 1 to overturn an abstract idea rejection, for a few months it was about even as to whether the Board uses Step 1 or Step 2 of the Alice/Mayo framework to reverse. June saw a return to the disproportionate reliance on Step 1 vs Step 2 reversal rationales (2:1). This goes to show that the Board may not be limiting itself to reversing cases just because of a single Federal Circuit decision (Berkheimer), but is developing a less erratic and more cogent way of deciding such rejections.

Why did the PTAB quietly hit this milestone in June? The PTO’s FOIA website, from which a majority of Anticipat’s data comes, has recently been delaying the time it takes to upload decisions to its page. Before a normal data upload would be a few business days and Anticipat Recap emails would play it safe by waiting until two weeks after a particular date to send a recap of a day’s decisions. So while we typically keep users updated on reversals using Recap emails after two weeks, for many days there have been no decisions to report on. Instead, we accessed this information by using the Research page.

After speaking with the USPTO’s webmaster, we were assured that the decisions will be more quickly uploaded going forward. This did not entirely assuage our concerns. So in the meantime, we are updating our Recap email functionality so that a user can modify the email settings to be sent in whatever way is most helpful to one’s practice. Stay tuned for updates very soon.

Anticipat Education Part 3: Find reversal rates for an examiner, art unit, tech center

Today, we showcase part of Anticipat Practitioner Analytics, a tool we believe will help you succeed in your practice.

Before we get too deep, a brief foundation is in order. A “reversal rate” for a particular ground of rejection is how often the Board overturns an Examiner’s rejection on appeal. A reversal rate can be used for a given Examiner, art unit, tech center or global USPTO levels.

Anticipat Practitioner Analytics provides you with these reversal rates for any application number.

Simply input an application number at the top of the page, and the engine takes care of matching up the Examiner, art unit, and tech center for this application. See below image.

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After clicking “GO”, the reversal rates for this application’s Examiner, art unit and tech center are displayed.

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This captures some interesting insights. The first relates to the graphs, where the blue color represents the percentage completely reversed and orange represents the percentage partially reversed. The higher the reversal rate for the Examiner compared to other higher-up levels, the less reasonable this type of rejection for this Examiner in general. This is because the more often an Examiner issues unreasonable rejections, the more likely the Board will overturn on appeal.

Take Examiner Borissov above as it relates to Section 101 patent-ineligible subject matter. Having a wholly reversed rate of 50%, this Examiner has a much higher reversal rate than his art unit, which has a wholly reversed rate of 12%. If the Board is overturning the Examiner on this ground that much higher than his art unit, the Examiners Section 101 rejections may not be as sound.

The second interesting insight relates to the numbers of decisions (including the hyperlinked parentheticals). These numbers provide greater context at each level of hierarchy. Plus, by clicking on these decisions, you can find the very decisions that the Board overturned (either partially or completely) for this particular Examiner, art unit, or tech center.

While only Section 101 – patent-ineligible subject matter is shown, this breakdown is available for every ground of rejection.

If you would like to do a lookup for only Examiner or art unit, the fields allow for more targeted lookups. Plus, if you are curious about a particular window of time, you can use the date range to narrow the results. This can come in handy as in some areas the laws can change rather quickly.

Please reach out to us with any questions or comments. We’re standing by for any questions or comments. If you would like for us to demo the product to a group, we are more than happy to do so.

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.

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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.

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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.

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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.

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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.

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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. 

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(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.

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

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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.

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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.

Update on ex parte PTAB Appeals Reversal Rates: High Reversal Rates Maintained Except for 101 – Nonstatutory Rejections

About six months ago, the AIPLA ex parte subcommittee published a paper that showed the reversal rates across various grounds of rejection. Some of the findings were very surprising, including over 50% reversal rates for Section 102 and 112 rejections. Here, we provide an update to this paper, which doubles the data set from the time of the AIPLA publication. We find that the reversal rates have not budged from these initial rates, outside of a downtick in reversal rates for Section 101 non statutory rejections. This signals that the surprising results were not a sample size anomaly.

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Section 101 – Non statutory

Of the 629 decisions, 130 were reversed and 7 affirmed-in-part. This translates into 21% pure reversals and 22% at least partial reversals.

Section 102 – Anticipation 

Of the 2187 Section 102 decisions, 1065 were reversed and 177 affirmed-in-part. This translates into 49% pure reversals and 57% at least partially reversed.

Section 112(a)

Enablement

Of 203 decisions, 104 were reversed and 8 affirmed-in-part. This translates into 51% reversed and 55 at least partially reversed.

New Matter

Of 27 decisions, 13 were reversed. This translates into 48% reversal rate.

Written Description

Of 531 decisions, 276 were reversed and 19 were partially reversed. This translates into 52% reversal rate and 56% at least partially reversed.

In total, out of 761 decisions, 393 or 52% were reversed and 55% were at least partially reversed.

Section 112(b) – indefiniteness

Of 806 decisions, 390 were reversed and 34 were partially reversed. This translates into a 48% reversal rate and 53% at least partially reversed.

Section 112(d)

Of  38 decisions, 16 were reversed and 1 was partially reversed. This translates into a reversal rate of 42% and 45% at least partially reversed.

Section 103 Obviousness

Of 9329 decisions, 3139 were reversed and 907 were partially reversed. This translates into a reversal rate of 34% and an at least partial reversal rate of 43%.

Obviousness type double patenting

Of the 418 decisions, 67 were reversed and 13 were partially reversed. This translates into a 16% reversal rate and a 19% at least partial reversal rate.

Data Set

The above data was pulled using Anticipat Research in the range of 7/25/2016 to 7/25/2017. You can perform legal research for these grounds of rejection and others on Anticipat Research. Click here for a free trial to give it a try.

Conclusion

The past six months have shown that the high reversal rates for Sections 102 and 112 rejections reported previously are here to stay. While Section 102 reversal rates dropped some, 49% is still very high. Given the large number of decisions, especially for obviousness, it is interesting to note that the reversal rates are as stable as they are.

Meanwhile, the past six months have experienced far fewer 101 non statutory rejections. Specifically, a reversal rate drop of 4% based on six months of additional decisions seems significant.

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Section 101 – nonstatutory subject matter decisions: different categories = different reversal rates

One of the sexiest topics in all of patent law has become §101, specifically, patent-eligible subject matter. Part of the recent appeal stems from high volatility and uncertainty in the law. But not all categories of patent-eligibility grounds are in such flux. Some §101 nonstatutory grounds of rejection (e.g., reciting a propagated signal) are relatively predictable and stable while the so-called judicial exceptions are more unpredictable. So we drilled deeper into the types of §101 rejection to get a more complete picture of reversal rates. We found a big difference in the observed reversal rates of particular categories.

The following chart shows a breakdown of the past seven months of decisions on grounds of §101 – nonstatutory subject matter. Data for this chart was pulled from the past seven months using Anticipat’s research database. Anticipat keeps track of issue-specific tags to allow for better identification of sub-issues within issues. So while the Examiner and PTAB may decide a particular issue on §101 – nonstatutory subject matter grounds, Anticipat goes a step further to delineate the specific type of §101 – nonstatutory subject matter ground.

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  1. Statutory Classes

Section 101 nonstatutory rejections include the statutory class variety (e.g., does the claimed invention fall within the statutory classes? recite more than one class? claim a human?). This is otherwise known as step 1 of the Mayo/Alice framework. Of the 186 substantively decided §101 decisions since July 25, 2016, these step 1 types accounted for 38 or 25%. Twelve were wholly reversed, a reverse rate of 32%.

This higher reversal rate for classes makes intuitive sense. Administrative patent judges must understand that statutorily, patent-eligibility is broad. A process, machine, manufacture, and composition of matter originally allowed almost any human innovation at that time of the enactment of the 1952 Patent Act to be patent-eligible. As technology has since changed, not all inventions fit into this framework, such as propagated signals and software per se. But for the most part, the courts have fit inventions into these categories—from non-transitory computer readable media to engineered bacteria. The observed reversal rate indicates that judges may reverse the Examiners in an attempt to be more faithful to the statute and to case law than the Examiners are.

  1. Judicial Exceptions

The judicial exceptions to patent-eligibility, such as abstract ideas, law of natures, and natural phenomena, have surged in popularity in recent years. And the appealed decisions show it. Of the 186 decisions within the past seven months, 146 have been judicial exceptions. The most popular of the exceptions is the abstract idea.

Of the 119 abstract idea cases, 30 were wholly reversed and two were reversed in part, or a complete reversal rate of 25% and an at least partial reversal rate of 27%. This falls squarely within the overall §101 rates that we previously reported. Natural phenomena/product of nature types are slightly higher at 31% while the law of nature ground reversal rate is markedly lower at 7%.

  1. Analysis

The number of decisions for some of these categories should be more reliable as the number of decisions increase, but some take-home lessons are clear. A judicial exception rejection has a lower chance of getting reversed than the statutory rejections. The PTAB judges are likely averse to overruling an Examiner’s finding of a judicial exception, especially when there is a great deal of uncertainty in the courts.

Furthermore, law of nature rejections are very infrequently reversed. Part of this may be a lack of positive case law to specifically support law of nature rejections being erroneous. By contrast, several Federal Circuit decisions have been decided within the past year that are positive for the patentee/applicant in showing that the claims are not an abstract idea.  Because of this, the judges have more material to work with in finding a particular claimed invention passes the Alice framework.