First PTAB Reversals Under New Subject Matter Eligibility Guidance

By Aseet Patel & Craig Kronenthal
February 14, 2019

“In less than two weeks since the Revised Guidance, the PTAB has already issued two decisions reversing examiners’ 35 USC § 101 rejections based on the Revised Guidance.”

https://depositphotos.com/153672170/stock-photo-businessman-using-smartphone.htmlSince having been sworn in as the new director of the U.S. Patent and Trademark Office (USPTO) in February 2018, Andrei Iancu has led the charge to improve predictability of patent-eligible subject matter. In his speech at the Intellectual Property Owners’ (IPO) Association’s annual meeting in Chicago in late September 2018, the director told IPO’s membership that the USPTO is “contemplating revised guidance to help categorize the exceptions [to patent eligibility]—and indeed to name them—and instruct examiners on how to apply them.”  Moreover, Director Iancu had created a new post that coordinates between the Patent Trial and Appeal Board (PTAB) of the USPTO and the examining corps, and he installed former PTAB Chief Judge David Ruschke to that post in August 2018.

True to his word, on January 7, 2019, Director Iancu issued “2019 Revised Patent Subject Matter Eligibility Guidance,” which explains how U.S. Patent Examiners should analyze patent-eligibility questions under the judicial exception to 35 U.S.C. § 101. See 84 Fed. Reg. 50-57 (Revised Guidance). With former Chief Judge Ruschke in a new post tasked with eliminating inconsistencies in the interpretation and implementation of the two-part Alice test among different branches of the USPTO, unsurprisingly the PTAB also seemingly embraced the Revised Guidance. In less than two weeks since the Revised Guidance, the PTAB issued two decisions reversing examiners’ 35 USC § 101 rejections based on the Revised Guidance—ex parte Rockwell, Appeal No. 2018-004973, Jan. 16, 2019; and ex parte Fanaru, Appeal No. 2017-002898, Jan. 22, 2019.

Ex Parte Fanaru

In ex parte Fanaru, Microsoft had filed a U.S. patent application titled “Extensibility Model For Usage Analytics Used With A System” on November 2, 2011. As explained in the appeal brief, the application describes methods and systems for configuring usage events to collect usage information and integrating the usage information into a system to provide, for example, a search service that provides search results based on the collected usage information.

During prosecution, the applicant overcame rejections under 35 U.S.C. §§ 101, 102, and 103, and a notice of allowance was issued on April 7, 2014. Then, following the Supreme Court’s Alice Corp. Pty. Ltd. v. CLS Bank Intern. decision on June 19, 2014, the examiner issued a non-final Office Action withdrawing the allowance on July 30, 2014. The Office Action included only a new Section 101 rejection alleging that the claims were directed to an abstract idea under Alice.  After several additional amendments and office actions, the applicant filed a notice of appeal, on May 17, 2016, appealing the Section 101 rejection as to all claims.

Representative claim 1 recites:

In the Examiner’s Answer to appellant’s appeal brief, the examiner asserted that “[t]he claims are directed towards a method for collecting usage information which includes an abstract idea” and “[t]he claims do not include limitations that are ‘significantly more’ than the abstract idea.” The PTAB disagreed.

On January 22, 2019, a panel of three judges of the PTAB issued its Decision on Appeal overturning the examiner’s rejection. The PTAB’s analysis begins with an in-depth look at patent eligibility, including a detailed discussion of the two-part Alice/Mayo framework. The PTAB then, sua sponte, turned to the Revised Guidance. Under the Revised Guidance, step 2A of the previous framework has been revised to include two prongs:

  • Prong One: evaluate whether a claim recites a judicial exception including identifying specific limitation(s) that are believed to recite an abstract idea and determining whether the identified limitation(s) fall within an enumerated abstract idea grouping
  • Prong Two: evaluate whether the claim integrates the judicial exception into a practical application.

The PTAB took note of these new prongs, and in particular, the three abstract idea groupings: (i) mathematical concepts, (ii) certain methods of organizing human activity, and (iii) mental processes. The PTAB then found that “[i]n light of our guidance, because collecting usage information is not a mathematical concept, an identified method of organizing human activity, or a mental process, we conclude ‘collecting usage information’ it [sic] is not an abstract idea.”  Accordingly, the PTAB reversed the Section 101 rejection as to all claims.

Ex Parte Rockwell

In ex parte Rockwell, which predates ex parte Fanaru by about one week, the PTAB also reversed the examiner’s 35 USC § 101 rejection as to all claims. In that case, Ford Global Technologies, LLC, had filed a patent application relating to a module interface, as illustrated in figure 3 (below) from the patent application, for facilitating wireless over-the-air software updates to modules of a receiving vehicle.

The PTAB reasoned that the patent claims were not directed to an abstract idea under the Revised Guidance because “the claims as a whole integrate the asserted abstract ideas (i.e., updating software and organizing human activity) into specific practical applications of those ideas.” See ex parte Rockwell, Appeal No. 2018-004973, p. 8 (PTAB Jan. 16, 2019). Applying the second prong of step 2A of the two-part Alice/Mayo framework, the PTAB explained that “claim 1 is directed to a practical application of updating software specifically for a vehicle module, in which user consent is required and in which lack of receipt of user consent is communicated to a user via an icon within the gauge cluster of a vehicle.” And in addition, “[c]laim 1 also is directed to providing in a head unit display of the vehicle an indication of an optional status of the software update and a request for consent to install the optional update and upon receipt of user consent sends an update command over the vehicle bus and installs the update to a memory of the vehicle module.”  Accordingly, the PTAB reversed the 35 USC § 101 rejection as to all claims.

The ex parte Rockwell and ex parte Fanaru decisions mark the first times that the PTAB has reversed a 35 USC § 101 rejection under the recently issued Revised Guidance. In future PTAB opinions, we await a decision reversing an examiner’s Section 101 rejection in which the PTAB finds the first and second prongs of step 2A of the Revised Guidance to have not been satisfied, yet still holds the claims to be patent eligible subject matter based on an analysis of step 2B under the Revised Guidance. Notably, none of the USPTO’s hypothetical examples #37 – 42, which were published immediately subsequent to the Revised Guidance, cover the aforementioned reasoned outcome.

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The Author

Aseet Patel

Aseet Patel is a partner in the Chicago office of the intellectual property law firm of Banner & Witcoff. Aseet concentrates on patent prosecution, counseling, licensing, and litigation matters, for a wide range of industries including electrical, computer, IoT, cybersecurity, medical, financial, and apparel industries. He provides opinion counseling services to clients, including various types of clearance opinions on both utility and design patents. Aseet relies on his experience as a former U.S. Patent Examiner at the U.S. Patent and Trademark Office when representing clients. Before serving at the USPTO, Aseet was a consultant and programmer for an e-Commerce software start-up, where he helped develop and deploy multi-million dollar software products for Fortune 500 clients using HTML, SQL, Java, Javascript, and other web technologies.

For More information or to contact Aseet, please visit his Firm Profile Page.

Aseet Patel

Craig Kronenthal is a partner in the Washington, DC office of Banner & Witcoff. Mr. Kronenthal devotes his practice to all areas of patent law and has extensive prosecution and litigation experience. Mr. Kronenthal also specializes in trials before the Patent Trial and Appeal Board (PTAB), including inter partes review proceedings. His technical background and experiences allow him to work on a wide range of subject matter. In particular, Mr. Kronenthal has extensive experience in matters related to semiconductors, computer networks, software, electronic circuitry, telecommunications, antennas, data encryption, e-commerce, and nanotechnology. Before joining Banner & Witcoff, Mr. Kronenthal was a patent examiner at the USPTO, where he examined image processing applications.

For More information or to contact Craig, please visit his Firm Profile Page.

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Discuss this

There are currently 8 Comments comments. Join the discussion.

  1. BP February 15, 2019 9:19 am

    As it’s looking better at PTAB, consider D. Delaware following the lead of the Fed Cir in a “novel” Rule 36 approach, from SEARCH AND SOCIAL MEDIA PARTNERS v. FACEBOOK, INC. February 13, 2019. Good luck appealing this “pro forma” decision:

    I’m going to rule on all of the motions that were argued today. I will not be issuing written opinions in any of the cases on the motions that were argued today . . . .

    So really the only thing that I haven’t done is take the time to write an opinion . . . . So even though I am ruling from the bench and not writing an opinion, I hope it won’t be mistakenly thought that we haven’t put the time and the effort and the thought into reaching these decisions.

    I am not going to read into the record my understanding of Section 101 law.

    [S]pecifically. I’m [adopting] by reference the discussion . . . of 101 law that can be found in my September 28th 2018 opinion in the SSMP case. [3]

  2. Anon February 15, 2019 10:54 am

    I am curious…

    Compare and contrast the typical treatment of Electric Power Group with:

    The PTAB then found that “[i]n light of our guidance, because collecting usage information is not a mathematical concept, an identified method of organizing human activity, or a mental process, we conclude ‘collecting usage information’ it [sic] is not an abstract idea.” Accordingly, the PTAB reversed the Section 101 rejection as to all claims.

  3. Anon February 15, 2019 10:56 am

    …and again, compare and contrast Electric Power Group with:

    … into specific practical applications of those ideas.

  4. Curious February 15, 2019 10:59 am

    It seems like this judge is giving lip service to Berkheimer and Aatrix and doesn’t understand his own circuit’s standard for ruling on Rule 12 motions.

    With TC Heartland pushing so many cases into Delaware, it seems that the District Court of Delaware has decided that 12b6 + 35 USC 101 = the flame-thrower by which they are going to cut down their docket. It is a shame that plaintiffs are getting denied justice because these judges are being so overwhelmed with work that they are blatantly disregarding the law.

  5. John Paul Archuleta February 15, 2019 11:31 am

    Mental process is scientific method to prove facts

  6. BP February 15, 2019 5:05 pm

    A watch-out, some examiners believe that the PTAB does not need to follow the new 101 guidance.

    @ 4 “it seems that the District Court of Delaware has decided that 12b6 + 35 USC 101 = the flame-thrower by which they are going to cut down their docket”

    Well said, literally placing plaintiff’s patents on the “back burner”.

  7. B February 16, 2019 7:54 pm

    Gentlemen, excellent article,

    However, there has always been a small group of APJs at the PTAB who look for any excuse to overturn an Alice/Mayo rejection, but a majority of APJs don’t care right from wrong. They lie in their decisions. They rubber-stamp the most stupid of rationales. Most APJs rubber-stamp every Alice/Mayo rejection before them.

    When you get 3-4 of these APJs overturning an Alice/Mayo decision — tell me.

  8. Moshe Tritel February 17, 2019 3:21 am

    Can someone please provide the serial number or publ. no. of the Ford Global case?

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