Get the 411 on Section 101…as of Today

Patent Definition

“…unequivocally that patent professionals vastly under-appreciate this erosion at the foundation of the patent system.”


Nick Gross IPWire Profile Picture by: Nick Gross, special guest contributor | July 6, 2017

The confusing legal mess referred to generally as Alice § 101 jurisprudence is well-known to patent stakeholders and covered extensively – see e.g., Bilski Blog. In any given week, we get 3-4 decisions that as IP professionals we parse through the § 101 “Enigma” machine to see if we can finally glean what secret code the Courts are using to process these cases, only to realize that the result is almost always completely arbitrary.

But what is less known, aside from these litigated decisions, is the much larger growing number of agency decisions rendered weekly by the Patent & Trademark Appeals Board (PTAB). For example as of 6/23/1017 – and using a simple search query at the PTAB site – the number of decided cases mentioning both “Alice” and “§ 101 ” is approximately 938. This is almost double the number of decisions reported by other commentators from all Federal Courts (district courts and CAFC) combined.

As a 30 year attorney practicing in both litigation and prosecution arenas, I can report unequivocally that patent professionals vastly under-appreciate this erosion at the foundation of the patent system. By my assessment, the number of cases where the Applicant managed to not lose on § 101 in the set of 938 is approximately 64, which translates into an astonishing loss rate of 93% as compared to 330/488 or 67.6% in the case of litigated decisions. This obliteration of incredible of inventor rights is not even the subject of a single major IP news story!

Why is the PTAB using § 101 so frequently? The answer is simple: its EASY – well, at least the way the PTAB applies it. Unlike 35 USC §102, §103 and §112 – which require the Examiner to use facts, logic, and evidence in rejecting the claims – the PTAB has unabashedly declared that such requirements are simply not necessary for a §101 rejection.

As practitioners well know, a rejection under §102 requires the Examiner to actually map the claim language to a real prior art reference, and identify precisely how each limitation is found in the reference. This type of rigorous analysis requires extensive research by the Examiner accompanied by several pages of discussion. An obviousness rejection under §103 is even more complex of course as it requires evidence of motivation, skill in the art, analogous art, etc.

In contrast, under the current §101 “analysis” as adopted by the PTO and ratified by the PTAB, the Examiner is not required to do a search, look at any prior art or even peruse the inventor’s disclosure. Instead he/she simply summarizes the claim at a high level and states that “the claim is directed to the abstract idea of {X}” followed by the magical incantation “and there are no limitations which transform the abstract idea into a patent eligible invention” and Presto! they are done with the case. As the PTAB has recently stated:

“….to the extent Appellants argue that the Examiner erred in adequately supporting this determination by providing analysis (see Appeal Br. 2–4; see also Reply Br. 2–3), Appellants’ argument is unpersuasive. There is no requirement that examiners must provide evidentiary support in every case before a conclusion can be made that a claim is directed to an abstract idea”

See e.g. Ex Parte Fei et al., Appeal No. 2016-001302 SN 13/417,853 (emphasis added).   Similar statements can now be found in a number of PTAB decisions. In my opinion, this interpretation/extrapolation of Alice – which effectively creates a new PTO self granted right of “Official Notice” is a violation of Zurko and other precedent, but for the time being it proceeds unimpeded.

Given this carte blanche an Examiner can pretty make up whatever excuse they want to reject a claim, and be upheld, because the PTAB’s newest application of Alice does not require providing an “analysis” let alone “evidentiary support.” With this kind of amorphous, unbounded, fact-free, unchallengeable analysis, is there any doubt why an Examiner would pick §101 as their rejection of choice? Unlike substantive examination under §102/§103 the whole exercise can take less than a page of prose, and can be done in a few hours, making the issuance of the Office Action extremely easy and useful to Examiner “productivity” metrics.

The PTAB’s Robesperian fanaticism for all matters § 101 also means that it is not content to simply review Examiner rejections anymore. Rather, it is aggressively reviewing even cases where there is no § 101 rejection, and then either “suggesting” to the Examiner that he/she issue such rejection, or more blatantly issuing their own invented “new rejection” under § 101.   As with its attractiveness for artificially improving Examiner productivity metrics, the appeal of this convenient form of patent application destruction for cutting down on PTAB caseloads is readily apparent.

This massacre is going almost entirely unrecognized because the PTAB’s decisions – while far outnumbering the rest of the §101 jurisprudence – are not well publicized or compiled for review or scrutiny. Furthermore, institutional barriers impede criticism of the PTAB because most practitioners fear being singled out for PTO retaliation, or worse, jeopardizing their client’s interests.

The unpredictable decisions and lack of accountability of the PTO are some of the main reasons § 101 needs significant reform. The cost to applicants (particularly small inventors) to pursue cases that are commercially valuable is prohibitive when review is arbitrary and untethered to rigorous, predictable standards.

Until the role of § 101 is restored by Congress to its original scope patent applicants will require expert assistance to navigate the jurisprudence “traps” being set by the PTAB.   In coming posts I will give specific examples of some of the recent PTAB § 101 “tricks”, as well as some suggested tactics that I believe can be employed to blunt some of these new changes in their game to improve one’s chances of success in this complex arena.

About the author:

J. Nicholas (Nick) Gross is a Berkeley based solo IP law practitioner with 30 years of experience representing high technology companies in Asia, Europe and Silicon Valley, including in the areas of patent prosecution, patent assessment, brokering, licensing and enforcement matters. His PTO experience encompasses all phases of patent procurement including drafting, PTAB appeals, post grant challenges and appearances at the Federal Circuit. He has worked with inventors in a number of complex technologies, including xDSL communications, mobile applications, magneto-electronic devices, flash memories, solar modules, semiconductor processing, epitaxial materials, speech recognition, Internet/e-commerce, microprocessor architectures and computer software.

Nothing posted at this site should be construed as legal advice or an offer for legal services. Should you need assistance on an IP matter, feel free to contact me at via email here.

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