In recent months, PTAB judges have reversed Section 101 rejections based upon arguments having several common features. Studying this information can be useful for prioritizing Section 101 arguments for ex parte appeals and can improve the chances of being persuasive before the board.
Board reversals of Section 101 rejections remain rare. For recent cases decided in the last six months or so, at least 90 to 95 percent of Section 101 rejections are affirmed on appeal. This phenomenon is partially due to self-selection bias, in that cases having weak eligibility positions are more likely to be appealed. Another factor is that due to the two- to three-year appeal backlog, the appeals being decided today were briefed before many influential eligibility cases were decided (including Enfish, BASCOM and McRO).
However, analysis of recent decisions also seems to indicate that the Board is willing to rescue flawed examiner rejections if the applicant cannot establish a persuasive eligibility position. Therefore, the primary takeaway is that applicants should take special care to prioritize and emphasize arguments on the merits of eligibility rather than on perceived weaknesses or omissions in the examiner’s analysis. In addition, before committing to an appeal, applicants should ensure that the claim language provides a solid foundation upon which to build a successful argument.
As a quick refresher, determining patent-eligibility under the Mayo/Alice framework is a two-step analysis. First, under Alice step 1, the claims are analyzed to determine if they are directed to a judicial exception—the two most significant being natural phenomena and abstract ideas.
If the claims are directed to a judicial exception, under Alice step 2, the claims are analyzed to determine whether they contain an “inventive concept”—which is “an element or combination of elements that is ‘sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.’”
Technical Improvements and Unconventional Features
A first tier of persuasive arguments that were effective in reversing Section 101 rejections on appeal are arguments that highlight a technological improvement conferred by the claims or unconventional features in the claims. These two factors can be conceptualized as roughly corresponding to the two steps of the Alice analysis, with technological improvements not being abstract ideas under Alice step 1 and with unconventional features supplying an inventive concept under Alice step 2. While this is a useful shorthand, in practice, the analysis is not so rigid, and either of these factors can support a reversal on either step of the Alice analysis.
As a result, applicants tend to have the most difficulty on appeal when they are unable to demonstrate either a technological improvement or unconventional features. Therefore, it would be a mistake to undertake an appeal without first having a clear and persuasive story in mind about what the technological improvement is as well, as which parts of the claims are unconventional.
When crafting a story about a technological improvement, it should be noted that a distinction is emerging in the case law between “technological improvements” and other improvements that arise merely due to using computers in their ordinary capacity. See, e.g., Move, Inc. et al. v. Real Estate Alliance Ltd., slip op. at 12 (Fed.Cir. Feb. 1, 2018) (“While the ideas of storing available real estate properties in a database and selecting and displaying a particular geographic area may well be improvements in the identification of available real estate properties, there is no evidence that these ideas are technological improvements.”) Therefore, applicants should carefully consider whether the claims fall under a technological improvement or a nontechnological improvement.
Regarding unconventional features, the Board will attempt to identify features in the claims that are generally not inherent to practicing the judicial exception. These features tend to be features that are unusual, counterintuitive, or clever. In this context, it is useful to consider what engineering trade-offs were involved in making the invention. Claims that reflect such technology-driven choices are less likely to be viewed as preempting an abstract idea under the policy considerations that undergird the reasoning of Alice.
Insufficient Analysis or Conclusory Fact-Finding
A second tier of persuasive arguments are those that highlight the examiner’s insufficient analysis or conclusory fact-finding. These arguments are second tier because they are usually persuasive only to the extent that they speak to the failure of the examiner to address technological improvements or unconventional features in the claims (the arguments in the first tier). In other words, these second-tier arguments are most successful when used to show that the examiner’s insufficient analysis or conclusory fact-finding do nothing to rebut applicant’s arguments that the claims have technological improvements or unconventional features.
Thus, an examiner’s insufficient analysis or conclusory fact-finding about other aspects of the rejection can often be insufficient, on their own, to warrant a reversal. In this situation, the Board will often simply affirm the rejection by supplying their own reasoning rather than punting the rejection back to the examiner for a do-over.
With this data in mind, the following arrangement of priorities is recommended:
- Before appealing at all, applicants should ensure that the language of the claims is ready for appeal by reciting features that reflect a clear technological improvement as well as features or a combination of features that clearly feel unconventional in the field.
- During the appeal, applicants should emphasize the technological improvements conferred by the claims. Applicants should also bolster this argument with second-tier arguments showing how the examiner’s rejection has not rebutted the existence of a technological improvement or has relied only on conclusory fact-finding to do so. This is usually fairly straightforward, because examiners often do not take the time to fully explain why something would not be considered a technological improvement.
- Applicants should also emphasize the features of the claims that are unconventional and not inherent to practicing the alleged abstract idea. As mentioned above, this can be accomplished by discussing unusual, clever or counterintuitive features or discussing the engineering trade-offs that were involved in making the invention. Applicants should then bolster this argument with second-tier arguments showing how the examiner has not sufficiently demonstrated that the claim elements are conventional or that the examiner has relied only on conclusory fact-finding to do so.
- Lastly, a third tier of arguments that are often made, but that are often summarily swatted away in ex parte appeals, are those that point out the various ways that examiners have failed to adhere to internal Patent Office policy documents—which include the various eligibility memos, examples and related internal Patent Office materials. The Board is unlikely to give these types of arguments much weight and is often quick to point out that Patent Office policy documents are not controlling authority. In other words, an examiner’s failure to adhere to the directives of a memo is a reversible error only if the conclusion is inconsistent with the law. And if the Board determines that the conclusion is not consistent with the law, the Board will affirm even imperfectly crafted rejections while supplying their own improved reasoning.
In conclusion, the raw statistics of affirmed Section 101 rejections may make appealing a Section 101 rejection seem like somewhat of a hopeless endeavor. But in reality, the chances of successful a Section 101 appeal can be significantly increased with the right preparation—by setting up the claims to support winning arguments and by the right prioritization of arguments—by emphasizing the factors that the Board finds persuasive when deciding patent eligibility.
Michael P. Shepherd is a principal in the Silicon Valley office of Fish & Richardson. His practice emphasizes client counseling and patent prosecution in the areas of software and other computer-related technologies. He can reached at firstname.lastname@example.org.