Defeating Alice with Data

By James Cosgrove
February 24, 2016

time-for-success-watchIt seems like all anyone hears these days in the patent blogosphere is “Alice.” The case, Alice Corp. v. CLS Bank was decided well over a year and a half ago, but seems to have fundamentally changed the way patent attorneys and scholars think about, and talk about, software and business methods patents. The general consensus is that Alice has thrown a wrench into several practice groups at the USPTO and that the courts, as well as the USPTO itself, are not entirely sure how to interpret or apply the decision with any consistency. As such, we at Juristat are constantly being asked whether and how big data can simplify the process of applying for a business method patent in the post-Alice era. The most honest answer is that nothing in the law is absolutely predictable, but there are tools and strategies available to practitioners to at least clarify the process and help them make sense of the effects Alice is having on the USPTO.

Predicting Examiner Behavior

Another key strategy for attorneys prosecuting applications in Alice-effected art units is to know how their examiner has applied Alice in the past. The rate at which examiners issue Alice rejections varies widely from examiner to examiner, and it is advantageous to know where one stands with an examiner right from the start. Most patent analytics services offer some sort of examiner rejection history tool, wherein applicants can view their examiner’s previous rejections to figure out how he or she interprets the decision. Several questions every patent attorney should be asking before responding to an Alice rejection are:

  • How many Alice rejections has the examiner issued?
  • What does he or she consider to be the sticking points of the decision?
  • How many applications that received an Alice rejection were eventually allowed?

Once an attorney has the answers to these questions in hand, the path to success in responding to an Alice rejection is considerably clearer.

In addition to examiner rejection history tools, many patent analytics services also offer a breakdown of the best way to respond to rejections. For example, some examiners rarely allow applications after RCEs, but are almost always reversed on appeal. In certain situations, it might be more advantageous to choose the more costly appeal process than filing several unsuccessful RCEs. Thus, an attorney’s chances of success in overcoming an Alice rejection can be significantly increased merely by knowing the examiner’s history from the beginning. With this information in hand, attorneys should then interview their examiner after the first rejection to find out exactly what he or she is looking for so that they can tailor their prosecution strategy to meet that examiner’s unique preferences.

Managing Client Expectations

It is no secret among patent attorneys that it is now increasingly difficult to obtain software and business methods patents. However, how and why this is the case may not always be immediately clear to clients and their patience in dealing with (and financing) a more complex prosecution is not without limits. They may not understand exactly why their application keeps getting rejected, and if they are going to blame anyone for this, it will most likely be their attorney. Just as an examiner’s rejection history can make prosecution more transparent for attorneys, the same information can also assist attorneys in managing their clients’ expectations regarding the difficultly and probability of obtaining their patent. Once an application has been assigned to an art unit and examiner, an attorney can lay out quite clearly to a client what the challenges will be.

For example, in e-commerce art units, Alice rejections make up the vast majority of all rejections issued, approaching as high as 80% in the 3690s. See Figure 1 (“Percent Alice Rejections in TC 3600”) for a breakdown of the percentages of Alice rejections in these art units. If your client’s application lands anywhere in the 3620s, 3680s, or 3690s, it is safe to say that prosecution is going to be a long, uphill battle and all patent attorneys should want to share this information with their clients up front. This will allow the attorney to explain the unique challenges that prosecution in these art units requires and reduce the risk that a client will blame the attorney for an unfavorable outcome.

Figure 1

Aligning Your Expertise with Clients Who Need It

The final, and perhaps most important, key to overcoming the effects of Alice is for attorneys to know how well their firms perform in prosecution of Alice-effected technologies. Using data, attorneys can uncover key metrics of success in these areas, such as their firm’s allowance rate, average speed to disposition, average number of office actions, and average independent and dependent claims lost, among others. See Figure 2 below for an example of how these indicia of success can be used to assist clients suffering from the effects of Alice.

Figure 2

 

As shown above, a hypothetical user can see his or her firm’s prosecution metrics in Alice-effected art units compared to that of a potential assignee client. The hypothetical user’s metrics in average office actions, average speed to disposition, and allowance rate are all an improvement over the results being delivered to the assignee by its current counsel. The attorney’s firm can use this information to establish itself as a more skilled firm for prosecuting software and business methods applications.

By having this information at their disposal, law firms can avoid wasting time and resources pursuing business opportunities that are not going to be profitable in the long run. Instead, they can more accurately tailor their business development strategies to attract more lucrative clients whose bottom lines may have been negatively affected by the effects of Alice. More than the typical hot air that is all too common in the world of law and business, firms can use data to actually prove to their prospective clients that they are the best choice for prosecution of applications for Alice-effected technologies.

While all patent attorneys would like for Alice to be applied with consistency and predictability across all examiners and art units, the application of law is rarely predictable due to the personal experiences and preferences of individual examiners. However, there are tools that patent attorneys can use to at least get a head start on prosecution of software and business methods applications and market their expertise to clients who are looking for it. No strategy is going to guarantee a positive outcome in every prosecution, but patent attorneys can certainly increase their chances of success through careful study of the relevant data available to them.

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 22 Comments comments.

  1. Bud February 24, 2016 12:45 pm

    Most of the time, Examiners and APJs are more clueless than mountain gorillas with a Rubix Cube when it comes to Alice/Mayo rejections. I do salute APJs Bahr, Kerins and Woods for their February 11th decision in Ex Parte Hickle (Appeal 2014-000204) for actually applying law and demanding something more than empty, conclusory statements from an examiner. I suspect the PTAB’s newfound appreciation has to do with Nathan Kelley taking over the helm of the PTAB.

  2. Appearance of ... February 24, 2016 12:58 pm

    I have mixed feelings about this. On the one hand, Juristat is providing a valuable service. On the other hand, a more open and “honest” USPTO would provide the same information for free. Let the poor applicant know up-front that their class 705, art unit 36XX assigned application has a snowball’s chance in hell of succeeding; or that their assigned examiner has a 1% allowance rate. This would save time and money, and lead to more efficient patent prosecution. A win for everyone!

    The article also helps expose the intellectual bankruptcy of the USPTO’s present practices. Great — let’s stalk the examiners and produce examiner-customized “Alice” arguments for each one.

    As a “modest proposal” in spirit of Jonathan Swift, perhaps we should have an even more comprehensive “Alice+” service that probes even deeper into the details of the examiner’s thought processes. Here additional information could be listed. I will leave “additional” to the imagination, but note that these days, not much is private any more.

    Alternatively, oh what the heck, the USPTO could revert back to that old tired “due process of law thing”. Even use written laws and rules and everything. If the law is unclear, perhaps don’t try to randomly enforce it? Just a crazy idea here.

  3. Curious February 24, 2016 2:30 pm

    I suspect the PTAB’s newfound appreciation has to do with Nathan Kelley taking over the helm of the PTAB.
    I cannot begin to tell you how many fingers and toes I have crossed in the hopes that Nathan Kelley will force the PTAB to hold Examiner’s feet to the fire when it comes to making the proper findings and analysis before rejecting a claim (as opposed to finding any excuse to ignore the deficiencies in the Examiner’s analysis. e.g., by nit picking Appellant’s arguments). I also hope that Nathan Kelley’s experience, as solicitor, in defending dubious decisions by the Board results in him cracking down on the Board’s loose application of the case law.

    art unit 36XX assigned application has a snowball’s chance in hell of succeeding
    As someone who has dealt with the 3600 Tech Center (and had the opportunity to compare their work product to a multitude of other Tech Centers), one doesn’t need Juristat to know that TC 3600 is the least desirable place to have your application examined (BTW — this has been true for at least a decade).

    While I appreciate Juristat’s sale pitch (this article is more of an info-commercial than anything), the facts of every application are different, and once you’ve got your Alice rejection, you have to deal with it regardless of the Examiner’s history. Additionally, the fact that one (or multiple applicants) may have been able to amend around an Alice rejection is not very material since they have different applications.

    The information provided by Juristat would likely be better used by USPTO management to find aberrant behavior by Examiners.

  4. Pulled Authority? February 24, 2016 4:21 pm

    A careful review of numerous 101 / Alice-rejected apps points to the possibility that the Patent Office recently (in the last 90 days or so) pulled 101-allowance authority from the primary examiners in at least TC 3600.

    Though just exactly who (a new “second-set-of-101-eyes”?), or multiple whoms, is now making such decisions is unknown, such a drastic change / directive could only come from the highest levels of the PTO.

    Maybe something you could check with your sources on Gene?

  5. Michael e. Zall February 25, 2016 8:25 am

    As a sole practitioner who tends to pride his relationship with his client and deals with midlevel clients, I am upfront with them on Alice cases…do not waste your money. If they insist on proceeding, I refer them to a large firm that will gladly prosecute the case for the next 5 years. Surgeons do not like operating on patients that will not survive or cannot be saved.

  6. Gene Quinn February 25, 2016 9:40 am

    Pulled-

    Can you give me any other information? How or why did you come to the conclusion that authority has been taken away from primary examiners? What have you seen in rejected applications that leads you to this conclusion?

    If you prefer you can use this form to contact me directly: http://www.ipwatchdog.com/about/gene-patent-attorney/#F

    -Gene

  7. B February 25, 2016 10:00 am

    “Though just exactly who (a new “second-set-of-101-eyes”?), or multiple whoms, is now making such decisions is unknown, such a drastic change / directive could only come from the highest levels of the PTO.”

    I have a 101 Alice rejection completely devoid of evidence and legal authority (other than mentioning Alice) with the Part 2 analysis being 54 words. It was a new grounds of rejection in the Examiner’s Answer and co-signed by a SPE, an “appeal specialist” and a TC3600 director. It was affirmed by the PTAB with the PTAB’s Part 2 analysis being 44 words. For anyone interested, the Solicitor’s Opposition Brief is due Friday the 26th. I’ll forward it to any requesting party.

  8. FExa February 25, 2016 10:59 am

    One thing to remember when considering analyzing trends down to the 101 rejection behavior of a particular examiner is that the 101 guidance post-Alice to the examining corps has changed or been updated several times over the past year and a half. For instance, there was interim guidance shortly after the SCOTUS ruling in June, 2014. That was updated in December 2014, then again in January 2015 (perhaps with more examples, but it always results in additional training for examiners, which can change their method of evaluation), July 2015, and most recently this month, Feb. 2016. So, it does not seem beneficial to base a strategy on an examiner’s past action when those actions are likely to change as the guidance is updated.

  9. Pulled Authority? February 25, 2016 12:25 pm

    Gene — in order to protect my clients, I have to be careful here. What’s happened in the last 90 or so days is that several of the primaries I regularly work with in TC 3600 had — after initially issuing 101 / Alice rejections — thereafter verbally agreed with my rebuttal written and verbal interview arguments that my clients’ claimed inventions were 101 / Alice eligible and would be receiving notice of allowances in due course.

    Yet within 45 days what I received instead were advisory notices for each app informing me that my args had not traversed the 101 / Alice args; with both notices containing brand new alleged abstract concepts and new args. Given my familiarity with their respective writing styles after many years of working with these examiners, I could tell right away that these advisories had not been written by them.

    When I called to ask about the advisories, it was like talking to completely new and different examiners; and they seemed almost angry that I was even asking about these surprise advisories. Summarizing our very short conversations, they both said they didn’t remember telling me they were going to allow these applications, and that if I didn’t like it, I should appeal.

    After hanging up the phone from the second primary, I researched a number of other firms’ TC 3600 apps and discovered that — while I of course am not privy to their own discussions with their primaries — many of them are also now “prosecution stuck” after having to file their own opening appeal briefs. None of these apps I found have yet to receive examiner answers.

    Something’s changed; something the patent office is keeping from all the stakeholders.

    As I’m sure you can appreciate, this is all I’m able to say.

  10. Gene Quinn February 25, 2016 1:41 pm

    Pulled-

    Thanks for your explanation.

    Very interesting. I read something just today about an interview Michelle Lee recently did where she did not rule out second pair of eyes review. I wonder if they are connected.

    -Gene

  11. B February 25, 2016 1:42 pm

    “Something’s changed; something the patent office is keeping from all the stakeholders.”

    Pulled — a woman in my office told me that one of her fellow law school classmates (a TC3600 examiner) did a mini-seminar and stated during said seminar that no examiner in his art unit had allowed an application in over a year. I’m currently dealing with an examiner who hasn’t allowed an application in 2.5 years. I was told by a SPE many years ago that he’d never allow any claim to ever issue from the application at issue, and know of another attorney who was told the same thing by another SPE. Respectfully, I don’t think that there’s anything new here.

  12. Curious February 25, 2016 3:04 pm

    I am upfront with them on Alice cases…do not waste your money. If they insist on proceeding, I refer them to a large firm that will gladly prosecute the case for the next 5 years.
    That may or may not be good advice. My recommendation is to appeal the rejection (amending doesn’t appear to work to get around Alice rejections) and see how the case law shakes out in 3 or 4 years.

    CLEARLY, the USPTO is overreacting to Alice. I’ve seen Alice rejections on “business method” type claims (set aside that the Supreme Court twice declined to deem business methods as non-statutory subject matter) and seen Alice rejections on claims that were unmistakably technical in character (but for whatever misfortune found their way into TC 3600).

    I recall the advice I got from a very experienced patent prosecutor after KSR came out, which was basically “don’t get worked up to much over it, things will get better over time.” As it turned out, KSR wasn’t the death knell of patents that it could have been.

    Regardless, most Alice rejections come nowhere close to presenting the type of analysis described by the USPTO’s own guidelines. Appeal; make your arguments; and wait and see what happens. No need to give up at this point.

    So, it does not seem beneficial to base a strategy on an examiner’s past action when those actions are likely to change as the guidance is updated.
    Very good point.

    I read something just today about an interview Michelle Lee recently did where she did not rule out second pair of eyes review.
    Where is NWPA? He’ll be saying that the second pair of eyes are Google’s in-house attorneys. Just joking … about Google’s in-house attorneys … at least I hope.

  13. Curious February 25, 2016 3:09 pm

    no examiner in his art unit had allowed an application in over a year. I’m currently dealing with an examiner who hasn’t allowed an application in 2.5 years. I was told by a SPE many years ago that he’d never allow any claim to ever issue from the application at issue, and know of another attorney who was told the same thing by another SPE.
    It is a sad state of affairs (over at the USPTO) that none of this surprises me in the least. As I inferred in Curious @3, this type of stuff has been going on for a LONG time in TC 3600.

  14. Pulled Authority? February 25, 2016 3:19 pm

    B — appreciate your own experiences, info, and thoughts.

    Yes — I’ve heard of terrible stories such as yours regarding what is best described as outlier examiners / spes (sorry that you have to deal with such).

    But what I’m referring to is that the patent office may have recently issued a blanket directive that NO primary’s (at least in TC 3600) are to issue 101-allowances on their own volition.

    That that decision is no longer theirs to make.

    The primary’s I’m talking about are not outliers — both had been issuing 101-allowances up until about 90 days ago. But no more.

    Something’s changed. And not for the better.

    p.s. Since you’ve offered to supply the Solicitor’s Opposition Brief, would you mind posting your appeal case # here? It may help me (and others) with my cases; and I’ll contact you privately with any ideas I may have for your reply brief.

  15. Anon February 25, 2016 3:27 pm

    Pulled Authority and Gene,

    Are we forgetting the admission by the Patent Office when the SAWS program had its meltdown under the shining spotlight of public scrutiny?

    The Office plainly admitted that SAWS was but one of many similar programs at the Office.

    One of many.

    To oddly appeal to Gene’s Star Trek meme, the “flavor” of SAWS is like the Borg. Sure, one drone was dismantled, but does anyone really think that what was so distasteful about SAWS is really gone?

    Anyone so inclined to believe that, please contact me for a great deal that I have for you for some Nebraska ocean front property.

  16. B February 25, 2016 6:10 pm

    In re Villena, CAFC Appeal 16-1062.

    FWIW, I talked to several other attorneys on the Alice 101 issues who were also hit by conclusory PTAB’s decisions. I not only referenced those decisions in my Opening Brief, but filed a Motion for Judicial Notice so as to show a pattern of abusive behavior by both TC3600 examiners and the business methods APJs. The panel I dealt with actually had the nerve to falsely accuse me of “irresponsibly” taking evidence out of context, which annoyed me to no end given that, during oral hearing, one of the APJs entered a new non-dictionary internet reference (what appears to be derivative of a Wikipedia page), would not provide a copy of it to me, and misrepresented its contents by refusing to read the entire “definition.” When I called the PTAB on it with an RFR, they gave a nonsensical non-answer.

    I was so mad at the PTAB’s false accusation (basically calling me a liar) I called the Virginia Bar on the best way to address the matter. The PTAB changed their position on RFR to something less offensive but completely nonsensical. Had they not, I planned to file a suit in equity in the E.D. NoVa to have the entire decision pulled.

    Just another gem for this case. There were 102/103 rejections based on the idea that an abstract database is a type of physical memory. The PTAB refused to address the issue, and upon RFR, falsely stated that I didn’t raise the issue in my opening brief.

    I claim that there is the probability that my Clients’ case will have more legal and factual errors than all other 2016 appeals from the PATO combined.

  17. Curious February 25, 2016 7:33 pm

    I claim that there is the probability that my Clients’ case will have more legal and factual errors than all other 2016 appeals from the PATO combined.
    I would take that bet — not to diminish your claims, but if you could only see what I have seen … It is sad to say, but your case is not exceptional.

  18. B February 26, 2016 5:57 pm

    For those who wish, the USPTO’s Opposition Brief came in about 45 minutes ago for In re Villena. The 101 argument is about 11 pages long, and starts out by citing the USPTO Guidelines as authority followed by a statement that evidence isn’t necessary as long as there is a reasoned argument – then ignores that there was no reasoned argument set forth by the examiner.

  19. Anon February 26, 2016 6:46 pm

    Not seeing it, B.

    Do you have a direct link or is it in your file wrapper? Which application number is this one for?

  20. B February 26, 2016 7:02 pm

    Anon – my personal email address is budmathis@yahoo.com

    Send me a request – I’ll send you both my Opening Brief and the PTO’s Opposition.

  21. Anon February 26, 2016 7:20 pm

    Sorry B – I protect my anonymity – perhaps Mr. Quinn could serve as an exchange agent.

  22. B February 26, 2016 7:23 pm

    That’s fine and I understand. Appeal 16-1062 at the CAFC if you have access