Since our last update in June 2017, all the invalidation averages for decisions finding lack of subject matter eligibility have trended slightly downward in the federal courts. Specifically:

  • The overall percentage of decisions invalidating patents under § 101 since we started tracking statistics in July 2014 has fallen slightly—from 67.5% to 66.0%—year over year.
  • The 12-month and three-month average invalidation rates have likewise fallen (from 64.7% to 61.9%, and from 72.1% to 48.4%, respectively).
  • The three-month average recently hit its lowest rate—48.4%—falling below 50% for the first time.

Presumably Berkheimer and its progeny (Aatrix and Exergen)—which held that the “well-understood, routine and conventional” inquiry of Step 2B is a question of fact—have contributed to the declining rates by making courts less inclined to invalidate patents at early stages of litigation. (Of course, as subsequent cases such as Voter Verified v. Election Systems, SAP v. Investpic, and Interval Licensing v. AOL, make plain, successfully establishing the genuine issue of material fact needed for a patentee to survive early dismissal is by no means as simple as it may appear.) Of the 70 post-Berkheimer decisions through the end of June 2018, there were 25 decisions containing at least one citation to Berkheimer; 20 decisions containing at least one citation to Aatrix; and five decisions containing at least one citation to Exergen. Ironically, however, of the 25 decisions citing Berkheimer, 15 found invalidity, with only 10 finding validity, a higher invalidation rate than that of the recent cases not citing Berkheimer. Apparently courts primarily cite Berkheimer in order to acknowledge it before distinguishing it! On the Federal Circuit-watching front, Judge Moore now has the sole distinction of being part of the greatest number of Section 101 decisions (35), as well as the greatest number of pro-eligibility decisions (7). Judges Clevenger, Mayer and Schall, in contrast, have yet to join a pro-eligibility decision in any of the cases that we’ve analyzed.

In my own prosecution practice I’ve noted a recent uptick in the allowance rate of many examiners in the 36XX art units, with several examiners that had hitherto never allowed a single case allowing multiple cases during calendar year 2017.  This piqued my interest, and I decided to conduct a more robust statistical evaluation to see whether my personal experience would bear out more generally.

Signs of Recovery

My evaluation computed the aggregate allowance-to-abandonment ratio in each of the 36XX art units in calendar years 2013 through 2017.  As expected, the allowance-to-abandonment ratio plunged precipitously in calendar year 2015—the first year that the effects of Alice truly began to be felt—and continued to decline in 2016.  However, the ratio begins to increase again in 2017, with a year-over-year ratio change of 1.62 (a 62% increase) across all the 36XX art units, following a ratio change of 0.9 (a modest decline) the year before.  Perhaps more tellingly, the art units entitled “Data Processing: Financial, Business Practice, Management, or Cost/Price Determination”—traditionally the hardest-hit by Alice—experienced a mean ratio change of 2.68 (a significant increase) from 2016 to 2017, after a ratio change of 0.67 (a moderate decline) the prior year.  The hard-hit 2680s and 2690s experienced even greater recoveries.

Continue Reading Thawing in the 3600s? An Updated Look at Allowance Rates Post Alice