The PTAB has been slow to respond to business-method eligibility appeals, such that decisions are frequently issued after applicable case law has shifted relative to the filings of the correspond appeal briefs.
Appealing a rejection to the Patent Trial and Appeal Board (PTAB) may seem desirable to many Applicants who have reached an impasse with their examiner. Appealing may seem especially desirable when the prospects of reaching an allowance are low with a particular examiner. This is often the case when sudden landmark court decisions radically alter the prosecution landscape. Thus, new case law that materially affects allowance prospects might cause a sharp increases in the number of appeals filed. The steep increase in appeals may put significant pressure on the PTAB.
The recent Alice v. CLS Bank decision is an excellent example of landmark Supreme Court decision that materially affected the allowance prospects for large number of applications. After Alice, there was large increase in the number of subject matter eligibility rejections, especially in the business-method art units. Applicants subject to persistent eligibility rejections may find appealing to be the only remaining desirable option. For these applicants, appeal provides two potential benefits: an opportunity to reach a new decision-maker and putting prosecution on hold. Applicants interested pausing prosecution are typically hoping that more favorable case law would develop while their appeal is awaiting resolution.
Although Alice was decided in 2014, post-Alice appellate decisions have only recently been issued. In 2016, we first requested from the United States Patent Office (USPTO) an identification of each published application for which (1) an appeal brief was filed after September 1, 2014 (a date in which Alice was likely to be considered by the Applicant), and (2) a decision by the PTAB was issued from the USPTO. As of July 2016, only 162 ex parte appeal decisions satisfied our criteria. Our analysis of the 162 decisions revealed that only 20% of the decisions included a subject matter eligibility rejection.
Last year (in July 2017) we requested an updated set of PTAB decisions using the same two criteria and received over 10,000 ex parte appeals. We manually reviewed decisions to obtain a sample of the 10,000 ex parte appeals to determine whether similar statistics characterize the larger data set. Specifically, we reviewed 500 decisions, 125 decisions from four computer related Technology Centers (TCs), 2100, 2400, 2600, and Business Methods art units. Our goal was to identify particular rejection types at issue and the decision issued for each rejection type.
We reviewed an additional sample data set from the larger set that included decisions with more recently filed appeal briefs. This second data set included decisions in which an appeal brief was filed after October 2015 for business method art units and since July 2016 for the other TCs, so as to provide similar sample sizes (n=68 for the business method art units, n=48 for TC 2100, n=56 for TC 2400 and n=42 for TC 2600). Since the these appeal briefs were filed more recently, we reviewed the second sample set to determine what affect, if any, of any additional favorable case law on the appeal.
Relatively Few Decisions have been Rendered on Post-Alice Appeals
Across the entire dataset for computer related appeals (e.g., from TCs 2100, 2400, 2600, and business-method art units), 62% of the appeals resulted in full affirmances of the examiner’s rejections. (FIG. 1.) Full affirmances were much more common for applications assigned to a business-method art unit (full affirmances=78%) as compared to TC 2100 (61%), TC 2400 (58%) or TC 2600 (64%). The most notable difference among the TCs is that the PTAB issued three times as many decisions from each of TCs 2100, 2400, and 2600 then from the business-method art units.
Fig. 1: The number of decisions affirmed, split, and reversed from various Technology Centers.
But the Business-Method Technology Center is Sending the Most Appeals to the PTAB
One potential explanation is that the business-method art units having less total art units than the other TCs. Nevertheless, the number of appeals filed in the TC of the business-method art units (TC 3600) trounces the appeal count in the other computer-related TCs (with TC 3600 having had 2967 appeals filed in fiscal year 2017, as compared to TC 2100, 2400 and 2600, which had a mere 1164, 1238 and 1024 appeals filed). (See FIG. 2.) Further, the business-method technology center is the only technology center for which the number of appeals received has sizably increased in recent years. (See FIG. 2.)
Fig. 2: Volume of appeals received by the PTAB from various Technology Centers.
The Business-Method Technology Center has the Highest Appeal Backlog
So how can we reconcile the relatively low number of business-method appeal decisions with the relatively high number of business-method appeals? The answer lies with our criteria for the decisions: the decisions must have corresponded with an appeal brief filed after August 2014. Though many appeals corresponding to the business-method TC are decided each year (n=2700 in fiscal year 2017), these decisions merely were not based on recently filed appeals. Rather, TC 3600 has the largest backlog of unprocessed appeals (n=4317). (Table 1.)
Table 1: Number of unprocessed (pending) appeals from various Technology Centers.
This backlog may be explainable due to the business-method art unit’s distinguishably low allowance rates and/or frequent eligibility-rejection issuance.
Conclusions about Eligibility Appeals
The low allowance rates and the nearly blanket eligibility-rejection issuance in the business-method art units is not without consequence. Beyond disincentivizing innovation, the examination of business-method applications is protracted as the workload at the PTAB is increased. Not only do these results affect the PTO’s operation of handling matters currently at issue, but it results in an unjust postponement of guidance. After the recent adjustments of the eligibility thresholds, examiners and applicants alike are awaiting more precedence to know what can be patent eligible in this space as new patent applications are filed. However, the PTAB has been slow to respond to business-method appeal briefs (surely due to the high volume of appeals), such that decisions are frequently issued at a time when the applicable case law has shifted relative to the filings of the correspond appeal briefs. Perhaps the areas most needing guidance based upon the backlog should be prioritized to provide guidance more quickly to break this cycle.
 Gaudry et al., Ex Parte Appeals in the Post-Alice World, 2016 IPWatchdog.com, http://www.ipwatchdog.com/2016/08/02/ex-parte-appeals-post-alice/id=71562/
See also Kate Gaudry, Post-Alice, Allowances are a Rare Sighting in Business-Method Art Units, IPWatchdog.com, http://www.ipwatchdog.com/2014/12/16/post-alice-allowances-rare-in-business-method/id=52675/
 Patent Trial & Appeal Board Receipts and Dispositions by Technology Centers Appeals, 2017, USPTO, https://www.uspto.gov/sites/default/files/documents/fy2017_sep_e.pdf
 Kate Gaudry, Post-Alice, Allowances are a Rare Sighting in Business-Method Art Units, 2014, IPWatchDog.com, http://www.ipwatchdog.com/2014/12/16/post-alice-allowances-rare-in-business-method/id=52675/
See also Gaudry et al., Ex Parte Appeals in the Post-Alice World, 2016, IPWatchdog.com, http://www.ipwatchdog.com/2016/08/02/ex-parte-appeals-post-alice/id=71562/
 Hayim et al., Nearly All Post-Alice Eligibility Rejections are Affirmed in Whole by the PTAB, 2018, Lexology, https://www.lexology.com/library/detail.aspx?g=b5dcb8ae-3478-4e4b-b344-38258b910431;
See also Hayim et al., Nearly All Post-Alice Eligibility Rejections are Affirmed in Whole by the PTAB, 2018, JDSupra, https://www.jdsupra.com/legalnews/nearly-all-post-alice-eligibility-74926/;
See also Hayim et al., Nearly All Biz-Method Appeals Contest Eligibility Rejection, 2018, Law360, https://www.law360.com/articles/1017405