Don’t Give Up: Section 101 Allowances Are Up at USPTO

By Eileen McDermott
March 14, 2019

“My approach doesn’t vary; regardless of the subject matter I’m working on, I want to recruit the examiner as a colleague.” – John White

The data shows that Section 101 allowances at the USPTO are on the rise after a long period of decline, but the 101 situation still remains “alarming,” said panelists during IPWatchdog’s webinar—”A Tale of Different Software Innovations: The Uneven Impact of Alice“—last Thursday, March 7.

While Congress is currently considering ways to address the patent eligibility problem, the likelihood of a legislative fix this year is slim, said Bob Stoll of Drinker Biddle. “I believe we will see introduction of legislation on 101 as early as this summer, but I don’t anticipate anything being enacted,” Stoll said. “There’s a lot more going on to occupy their interests on the Hill.”

USPTO Director Andrei Iancu’s guidance to examiners on patent eligibility has been heralded by the IP community as a promising fix, but Stoll said he fears that it won’t be enough. “The majority [of the Federal Circuit] in Athena said they couldn’t allow the claims based on Supreme Court precedent. I have significant concerns about what happens to these guidelines in the courts.”

Gene Quinn, Founder and CEO of IPWatchdog, agreed that the situation is worrisome and said that the best thing Congress could do would be to expressly overrule Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S.Ct. 1289 (2012), though he agreed that’s unlikely to happen in the short term. Still, he said that “just the submission of legislation is going to matter to courts” and urged IP stakeholders to “get involved now” in the conversations taking place on the Hill if the issue is important to them.

Allowances After Alice

Kate Gaudry of Kilpatrick Townsend presented data compiled by her firm that showed the chances of any given office action being a 101 rejection are very high. “However, the allowance rate is getting better,” Gaudry said. “I think we’re seeing signs of improvement.”

Gaudry’s firm recently delved into data in the burgeoning field of bioinformatics, which demonstrates that the initial Alice effect is similarly reversing. Gaudry and her colleague Samuel Hayim wrote:

“Our data indicates that Alice had a short-term effect of making it harder to patent bioinformatics innovation, which is a change that may have resulted in stunting R&D in this area and stunting progress. However, the allowance prevalence soon after began to gradually recover to levels now exceeding pre-Alice levels. We hope this trend continues to improve to promote and protect new bioinformatics innovations.”

Stoll attributed the uptick in allowances under 101 to two factors: 1) the culture under Director Iancu and 2) better applications coming in. “We draft a lot of artificial intelligence applications and, over the years, we’ve learned to modify the way we draft them and show the subject matter. That type of practice is also reducing the problems,” Stoll said.

But Quinn noted that many have experienced uneven application of Alice and Mayo by examiners. He noted that sources at some larger companies have expressed shock about the surge in rejections under Section 101 post-Alice. “They’re not getting rejections. Is it because of who they are, because the applications are written better, or is it because of the section of the patent office they’re getting assigned to?” asked Quinn.

Gaudry said there could be a lot of reasons applicants have different experiences. There is variability across examiners, even in the same art unit. But the name of a big company “psychologically starts out that conversation differently,” Gaudry said.

Stoll, who once worked as a USPTO examiner, disagreed with this assertion. “I don’t’ think the company name makes a difference. I didn’t look at the assignee when I was examining applications at the USPTO. I think people steeped in AI have learned what they can get patents on, and they’re crafty.”

Stoll added that larger companies may also be increasingly turning to trade secrets to protect inventions they feel are unlikely to be granted a patent in the current 101 atmosphere, and thus are only submitting applications that are more likely to be allowed.

Sharing Strategies

John White of Berenato & White said that his strategy for combating 101 rejections is the same across the board. “My approach doesn’t vary; regardless of the subject matter I’m working on, I want to recruit the examiner as a colleague,” White said.

All four panelists emphasized the importance of telling a story via the patent specification, which they said some attorneys tend to dismiss. Quinn said that recent conversations he had during the Utah IP Summit reminded him that many patent attorneys still see claims as the most important factor in getting patents granted.

“If you have no story in the specification, you’re going to lose in examination or later on,” Quinn said. “People outside the Beltway who don’t hear from the decision makers on a regular basis don’t get the same message.”

“You have to tell the story and get buy-in with the examiner, and, of course, the claims have to then reflect that reality,” White agreed.

Asked for final thoughts, Gaudry urged applicants to keep watching the data coming out of the patent office in order to appropriately adjust strategies, while Stoll stressed the need for public and examiner education on patentable subject matter. “I think that, no matter what’s going on, sharing the importance of innovation to the U.S. is something we should be doing anyway,” said Stoll. “We should keep the mainstream papers flooded with that message.”

White delivered a message of hope for applicants still facing a slew of 101 rejections. “The message is don’t give up. Write good applications that have plenty of ‘there’ there. This problem will be solved because it has to be solved.”

Listen to the full archived webcast here, and join us today, Thursday March 14, at 12:00 PM EST for IPWatchdog’s latest webinar, “Discovering Prior Art Before It Bites You in the Backside.” IPWatchdog Founder and CEO Gene Quinn will be joined by Alan Kasper, Senior Partner at  Sughrue Mion and Gavan Farley, Chief Operating Officer at Ambercite, to discuss the complexities of patent searching in the 21st century.

The Author

Eileen McDermott

Eileen McDermott is the Editor-in-Chief of IPWatchdog.com. Eileen is a veteran IP and legal journalist, and no stranger to the intellectual property world, having held editorial and managerial positions at several publications and industry organizations. She has acted as editorial consultant for the International Trademark Association (INTA), chiefly overseeing the editorial process for the Association’s twice-monthly newsletter, the INTA Bulletin. Eileen has also served as a freelance editor for the World Intellectual Property Organization (WIPO); as senior consulting editor for the Intellectual Property Owners Association (IPO) from 2015 to 2017; as Managing Editor and Editor-in-Chief at INTA from 2013 to 2016; and was Americas Editor for Managing Intellectual Property magazine from 2007 to 2013.

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 2 Comments comments.

  1. ZPAUL March 14, 2019 10:03 am

    Let’s pick STRIKEFORCE TECHNOLOGIES, INC., Plaintiff – Appellant, v. SECUREAUTH CORPORATION, Defendant – Appellee for the sake of discussion.

    The whole point of Alice ( Step 1/2 ) is mute considering plaintiff Strikeforce has gone through a rigorous review process by USPTO.

    The rigorous review of the Asserted Claims by the USPTO Office both during initial prosecution and after the patents was granted confirms that the Asserted Patents are inventive.

    The original prosecution of the Asserted Patents was extensive. The patents each claim priority to U.S. Appl. No. 09/655,297, first filed September 5, 2000. Prosecution of that application and the Asserted Patents collectively included a total of 22 office actions and responses, including a PTO Appeal Brief.

    In post-issuance challenges, the USPTO has repeatedly confirmed the inventiveness of the Asserted Patents. For example, in 2011, the ’599 Patent underwent ex parte reexamination, emerging with every claim found patentable and seven additional claims added.

    Then, other infringers for same patents in parallel litigation in New Jersey filed two petitions for inter partes review, challenging 30 claims of the ’698 Patent on three separate grounds.

    In two detailed decisions, the Patent Trial and Appeal Board (“PTAB”) denied institution, finding petitioners had not established even a reasonable likelihood that they would prevail in showing any challenged claim unpatentable.

    So, how a federal court of appeal judges Alice 101? Well, considering many such scenarios, the role of USPTO is nullified by Federal Courts. Why USPTO even exists?

  2. Ternary March 14, 2019 3:18 pm

    This is another Rule 36 decision.Just reading the claims, I see no immediate connection with abstract ideas. In fact an “authentication channel” is claimed, which requires quite some physical equipment to be formed and used. Humans, whatever we have, authentication channels are not among them.

    Unfortunately, the application was filed well before Alice. One has to assume that all patents related to computer implemented inventions that were prosecuted and issued before Alice have potentially become worthless.

    It puts Director Iancu Guidance in doubt. One way to strengthen the eligibility of an issued patent is for an Examiner to carefully assess all potential 101/Alice issues, identify these issues in writing and provide a written statement why the Examiner considers the claims in the application to be patent eligible and a solution to a technical problem. I have seen it done once in a case. It provides at least somewhat of a barrier to reverse a conclusion of patent eligibility.

    What this decision (and others) by CAFC does, is being an incentive to challenge any valid and tested patent that survived previous challenges, to give it a Hail Mary shot by claiming that the claims are “directed to an abstract idea.” You never know. Make something up. Claim that a physical process is really something that humans have long done. Or that technical activities are “abstract ideas.” You may find a court, naive, uneducated and gullible enough to accept unscientific arguments. Because, as it turns out, there are enough of these courts. And infringers get away free with their bad behavior. We really do not need the Chinese as the bogeyman who steal our IP.