The Most Likely Art Units for Alice Rejections

By James Cosgrove
December 14, 2015

rejected-335Since Alice Corporation Pty. Ltd. v. CLS Bank International, 573 U.S. ___ (2014) was handed down over a year ago, there has been intense speculation about the future of software and business methods patents and heavy scrutiny of the courts in their application of the Alice framework. The case sent shockwaves not just across the courts, but across the USPTO as well, with many alleging that the decision provided too little guidance to patent examiners on how to evaluate software and business methods claims. Some patent attorneys even believe that certain examiners simply reject everything that may present an Alice issue, preferring that the PTAB or the courts handle the issue instead.

The Supreme Court held in Alice that claims directed to abstract ideas must have additional elements that are capable of rendering them “significantly more” than the abstract ideas themselves and that recitation of implementation on a generic computer is not sufficient for this purpose. This decision has had a particularly strong effect on software and business method patents, many of which, like those at issue in Alice, concern economic activities implemented on computers. These patents are still being granted after Alice, but are being granted at lower rates than before, and some assignees are better at obtaining them than others.

Because Alice concerned abstract ideas implemented on general-purpose computers, tech centers and art units touching on business methods patents have been particularly affected by Alice, most notably TC 3600, home to the e-commerce art units. As we reported in August, Alice has already had a profound effect on assignees operating in the 3600s, with the overall average allowance rate dropping from 79.8% before Alice to 44.7% since Alice. However, the 3600s are not the exclusive province of Alice rejections, as they can be found with varying frequency across almost all tech centers at the USPTO. In fact, the only technology center with no Alice rejections is 2900, which handles design patents. See Figure 1 for a breakdown of Alice rejections across the USPTO.

Figure-1

While Alice rejections can be found all over the USPTO, roughly two-thirds of them are found in TC 3600. As the home of art units covering business methods, Alice hit this technology center particularly hard. Looking further into the 3600s, the vast majority of Alice rejections (92.4%) are in the 3620s, 3680s, and 3690s e-commerce art units, with almost half (40.4%) being found in the 3620s alone. See Figure 2 for a breakdown of the distribution of Alice rejections in the 3600s.

Figure-2

Looking deeper into the 3620s, 3680s, and 3690s, the reach of Alice becomes apparent. Using Juristat’s data, we counted all rejections in these art units since June 19, 2014, the date Alice was decided. We then calculated the percentage of those rejections that cited Alice, focusing only on examiners that have issued at least ten rejections since the Alice decision. As shown in Figure 3, roughly three-quarters of all rejections in these art units are Alice rejections, with several examiners having a 100% Alice rejection rate. This data tends to confirm many patent attorneys’ suspicions that the decision is being applied to almost all software and business method patent applications.

Figure-3

While applicants throughout the 3620s, 3680s, and 3690s can likely expect an Alice rejection, the Alice rejection rate does vary by art unit. The average Alice rejection rate across all art units in the 3620s, 3680s, and 3690s is 75.2%. The art unit with the highest Alice rejection rate is 3625, at 85.8%. The art unit with the lowest Alice rejection rate is 3685 at 41.41%, which is quite a bit below the average for these art units. For a full ranking of the top 10 art units with the highest Alice rejection rates, see Figure 4.

Figure-4

As Figure 4 demonstrates, the reach of Alice is staggering, accounting for well over three-quarters of all rejections in the top 10 art units. The data becomes even more staggering when looking at the individual examiner level. Of examiners operating in the top 10 art units, seven have 100% Alice rejection rates, indicating that every rejection he or she has issued since June 19, 2014 has cited Alice, and many more have rates of over 95%. While no single art unit had a 100% Alice rejection rate, as some have suspected, the data indicates that most applicants in the above art units are almost guaranteed to get an Alice rejection.

The Author

James Cosgrove

James Cosgrove is a Legal Analyst at Juristat, a legal tech company that develops predictive models of the behavior of judges, patent examiners, attorneys, and other entities. He is a 2014 graduate of St. Louis University School of Law. A member of Juristat’s marketing team, he has written extensively about big data in the law, including Juristat’s first white paper on the effectiveness of data in patent prosecution and an e-book charting the effects of the Alice decision on the USPTO.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 10 Comments comments.

  1. Curious December 14, 2015 4:01 pm

    we counted all rejections in these art units since June 19, 2014, the date Alice was decided.
    Probably not the best date to use. Better dates would be:
    June 25, 2014 (interim guidelines published)
    December 2014 (worksheet published)
    July 30, 2015 (July update on subject matter eligibility)

    Regardless of the dates, the 3600 tech center (as usual) is pushing the boundaries of the law.

  2. FExa December 15, 2015 9:54 am

    While it is no surprise to me that the Business Methods AU’s have the highest Alice rejection rate, I do find it curious that TC2100 comprises only 2% of the rejections. Since 2100 is mostly software applications, I would have expected a higher portion of rejections from there.

    I also agree with the comment made by Curious above, that studying the statistics after some of the key milestone dates would prove helpful. I believe that many examiners issued Alice rejections almost on a “we will see” basis, as they did not fully understand the confusing interim guidance, and wanted to “kick the ball down the road” a bit in hopes that the guidance would become clearer as the prosecution moved forward.

  3. Night Writer December 15, 2015 10:24 am

    A good article could be written on how to get your application out of 3600.

  4. Night Writer December 15, 2015 10:33 am

    >>Of examiners operating in the top 10 art units, seven have 100% Alice rejection rates, indicating that every rejection he or she has issued since June 19, 2014 has cited Alice, and many more have rates of over 95%.

    I think some examiners haven’t allowed a claim in over a year in 3600.

  5. Gene Quinn December 15, 2015 10:34 am

    Night Writer-

    That article would be very short.

    “Apply for a design patent instead.”

    That seems to be the only way to ensure that Alice isn’t used (or over used) by examiners.

    -Gene

  6. A Rational Person December 15, 2015 11:29 am

    It will be interesting to see if the number of 101 rejections ever begin to significantly increase in some of the chemical and biotech art units, because the USPTO’s Mayo/Alice guidelines, including the July 2015 Update make it much easier to reject claim under 35 USC 101 than under 35 USC 103.

    Following the USPTO guidelines an Examiner who believes he/she is on shaky ground with respect to a 35 USC 103 rejection of a method claim can recast the 35 USC 103 rejection as a 35 USC 101. This potential strategy is particularly useful in situations where the Examiner cannot find a reference that shows that a particular claimed feature was known in the art. Under 35 USC 103, this would be a problem since even the KSR decision requires some evidence to support a 35 USC 103 rejection.

    In contrast, the USPTO believes that such evidence is not required for a 35 USC 101 rejection, as pointed out in the ABA’s comments on the 2015 Update. From the Interim Guidelines:

    “Courts have not identified a situation in which evidence was required to support a finding that the additional elements were well?understood, routine or conventional, but rather treat the issue as a matter appropriate for judicial notice.”

    Relying on this reasoning from the USPTO, an Examiner can, if the Examiner so chooses, quite easily turn the Examiner’s potentially weak Section 103 obviousness rejection into a strong Section 101 patent eligibility rejection by merely asserting that the claimed features that the Examiner could not find in the prior art are “well?understood, routine or conventional”.

  7. David Stein December 15, 2015 2:29 pm

    A nice article (and a definite improvement in relevance over some past articles).

    One point of clarification:

    > While no single art unit had a 100% Alice rejection rate…

    One art unit (something involving “Business Processing”) did have a 100% rejection for the month of May 2015.

    http://www.bilskiblog.com/blog/2015/10/update-on-uspto-e-commerce-patent-applications.html

  8. Night Writer December 15, 2015 5:03 pm

    >That article would be very short. >“Apply for a design patent instead.”

    Not sure about that. There are a lot of efforts to recast applications trapped in the Alice trap into software applications.

  9. Patent lawyer December 18, 2015 6:06 pm

    High Alice rejection and low allowance rates do not necessarily translate to poor or lazy examination. My experience has been that, although examiners may give an Alice rejection in a majority of their cases, their “why” explanation follows the established 2-step test and draws parallels to previous court cases. The Office has provided substantial material to examiners and attorneys to help both understand the contours of this new issue. You may not agree with the examiner’s rationale, but at least there is reasoning you can argue against. In addition, some examiners look for and recommend material in the specification that attorneys can use to amend to overcome Alice.

  10. step back December 20, 2015 8:29 am

    Patent lawyer @9,

    Which statute(s) passed by Congress gives an administrative agency like the USPTO the legal authority to violate laws such as 35 USC 112 (what the inventor regards ..), laws like 35 USC 101 (ANY new and useful ..) and like 5 USC 706 (arbitrary and capricious … not in accordance with law)?

    http://patentu.blogspot.com/2015/12/astute-alicemayo-judges-rise-of.html