§ 101 Rejections in the Post-Alice Era

By James Cosgrove
March 7, 2017

In October of last year, we published an article titled “Section 103 Rejections: How Common Are They and How Should You Respond?” In it, we studied the frequency of § 103 in final rejections from the USPTO, as well as how applicants responded and how successful those responses were. Continuing in that vein, we replicated our previous study by applying it to § 101 rejections. However, § 101 jurisprudence has undergone dramatic change through a line of cases beginning with Bilski in 2010, Mayo in 2012, Myriad in 2013, and Alice in 2014, so it was necessary for us to split our analysis into two groups: pre-Bilski and post-Alice.

To do this, we studied all rejections issued by the USPTO in the Juristat Database from 2005 to 2016 (January 1, 2005 – December 31, 2016). We then calculated how many § 101 rejections there were in that sample, where they were most common, the frequency of applicant responses to them, and the relative success of those responses. We then split the results into the two groups mentioned above and compared the results.

Below is a summary of our findings.

Arrangement of § 101 Rejections

Before the recent flurry of § 101 cases, § 101 was the least-frequently cited section of the Patent Act among USPTO rejections, accounting for just 8.5% of all rejections issued before Bilski. In the post-Alice era, however, that number has risen to 12.2% of all rejections, meaning that § 101 has now risen through the ranks to become the second least-frequently cited section after § 112(a). The technology center where § 101 rejections make up the highest percentage of rejections is TC 3600, where 32% of rejections cite § 101. Because these rejections are generally so rare at the USPTO and technology center levels, it makes more sense to examine them at the work group level to get a better understanding of how they operate.

See Figures 1, 2, and 3 for an overview of the arrangement of § 101 rejections at the USPTO.

As shown in Figure 3,  the § 101 rejection rate for patent applications in the e-commerce work groups (3620, 3680, and 3690) approaches 100%, then drops precipitously for the remaining seven of the top ten work groups with the greatest percentage of § 101 rejections. Before Bilski, the § 101 rejection rate in the e-commerce work groups hovered around around the 30% mark, but has now tripled. The remaining work groups have also seen their § 101 rejection rates rise by 200-300%, although they make up a significantly smaller proportion of total rejections than in the e-commerce art units. While it did not surprise us that these work groups were at the very top of the list for § 101 rejections, we also wanted to know what other technologies are particularly prone to § 101 rejections.

See Figure 4 for a breakdown of the technology sectors for the ten work groups that receive the highest proportion of § 101 rejections.

How Applicants Respond

There are several ways to respond to a rejection, most notably a Request for Continued Examination (RCE), an interview, and an appeal. Anecdotally, we know that RCEs are a very common way to respond to rejections, while appeals are much less common due to the time and expense involved, especially if the appeal goes to the PTAB. What we wanted to know was the exact breakdown of how applicants have responded specifically to § 101 rejections both before and after the recent § 101 cases. Those findings are outlined below in Figure 5.

(Note: Because almost all successful responses to final rejections also include a subsequent amendment, we did not consider an amendment to be a distinct response to a final rejection, and thus we calculated how applicants responded whether or not that response included an amendment. For applications in which there were multiple responses (i.e., an RCE and an interview), we did not determine the chronological order of those responses, but merely that each response was made to the rejection at some point prior to a subsequent rejection or an allowance.)

As shown in Figure 5, RCEs are by far the most common response to § 101 rejections both before and after the § 101 cases, just as they are with all types of rejections. We speculate that RCEs are the most common response because they are what most applicants file when they simply need to keep prosecution going. While interviews and appeals require a greater degree of preparation (depending on the circumstances), an RCE is a simpler administrative document that the applicant will file with an amendment just to keep prosecution moving. Thus, their ease of use makes them exceedingly popular, but this ease of use comes at an expense.

Response Success Rates

After we calculated the frequency of the various types of applicant responses to § 101 rejections, we determined how successful those responses were in overcoming the rejection during the two different periods. For this study, we narrowed the results from the Juristat Database to instances where the highlighted response was the only response to that rejection. Focusing on specific responses in this way allows us to measure the effectiveness of each of these responses on its own, unaffected by other responses that could be influencing the outcome. See Figure 6 for a breakdown of how successful each applicant response was at overcoming § 101 rejections both before and after the § 101 cases.

(Note: For the purposes of this study, A rejection is “successful” if the next office action is either a Notice of Allowance or another rejection that does not cite the same rejection basis as the previous office action. For example, assume that an applicant receives a final rejection that cites §§ 101 and 103, she responds with an RCE, and the next rejection only cites § 103. We assume that the RCE was successful at overcoming the §101 rejection, since it was not raised again in the subsequent rejection.)

As shown in Figure 5, Bilski, Mayo, Myriad, and Alice have all taken their toll on the effectiveness of applicants’ ability to overcome § 101 rejections, as the success rates went down across the board for every type of response. While RCEs are by far the most common applicant response, they are not terribly successful in the post-Alice era, with only a 41.1% effective rate. Before Bilski, an interview paired with an RCE was the most successful way to overcome a § 101 rejection, with a very respectable 72.8% effective rate. After Alice, however, it seems like the most effective strategy to overcome a § 101 rejection is now simply an interview.

Where to Go From Here

Due to the relative rarity of § 101 rejections, it is unlikely that you’ll receive one unless you’re working with a handful of very specific technologies. However, if you are working with those technologies, the Bilski, Mayo, Myriad, and Alice decisions have made it quite a bit more difficult to overcome a § 101 rejection. Responding to one of these rejections becomes even more complex if the rejection cites Alice, which is almost guaranteed if your application lands anywhere in the 3620s, 3680s, or 3690s. We’ve extensively covered responding specifically to Alice rejections elsewhere, but, on balance, an in-depth interview with your examiner is the most effective way to respond to a § 101 rejection in the post-Alice era.

 

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 3 Comments comments.

  1. jn31 March 7, 2017 12:29 pm

    What do you mean just an “interview” is the most effective way to over come an Alice rejection? Do you mean, that an interview occurred, then the Examiner did something on his/her end to allow the case? Usually an interview occurs, the examiner pretends to listen, then just issues the same old “nah, I already made my mind up, the entire claim set is directed towards ___________” (insert financial word in blank). Then we have to file an RCE or Appeal anyways.

    What’s just “an interview?” How did you deduce that only an interview is what got it allowed (because no RCE/Appeal was filed after the interview?)

    Great info though, thanks for posting!

  2. Mark Nowotarski March 8, 2017 2:12 pm

    Interesting data. I like the way you’ve split out “pre Bilski” and “post Alice”.

    Have you thought about breaking down the RCE success rate by work groups? You may see some dramatic differences.

    Regarding the “success rate” of appeals, I’m not sure what your numbers mean. There is about a three year backlog at the PTAB, so we really haven’t seen many decisions on Post Alice appeals. The post Alice appeal decisions we are seeing now are on 101 appeals filed before Alice.

  3. Mark Nowotarski March 8, 2017 2:16 pm

    You also might want to dig deeper into the class/subclass divisions within the work groups. I suspect, for example, that the 101 rejection rate in computer implemented games (as opposed to mechanical games) might rival the 101 rejection rate in business methods.