This third article in the “Surviving Alice” series examines how the USPTO’s Patent Trial and Appeal Board has responded to the U.S. Supreme Court’s June 2014 Alice decision. It also shows how applicants can use the PTAB’s recent decisions to substantially increase their chances of success before the board. We look at appeals coming out of the USPTO’s business method work groups 3620, 3680 and 3690. Applicants have had a difficult time getting business method patents allowed since Alice. The Alice decision firmly established the two part “Alice/Mayo test” as the standard for determining whether a patent’s claims were statutory under 35 U.S.C. 101. The two steps in the Alice/Mayo test are:
- “Determine whether the claims at issue are directed to a patent-ineligible concept” (e.g. abstract idea or fundamental economic practice); and
- If the claims are directed to a patent–ineligible concept then “search for an ‘inventive concept’-i.e., an element or combination of elements that is ‘sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself. “ (e.g. an improvement to another technology)
The business method work groups at the USPTO implemented the Alice/Mayo test right after the Alice decision. Allowances in some work groups (e.g. 3690 finance) plunged by a factor of 10 within a month of the decision. Even three years later, there is still over a 90% chance that an office action on a business method patent application will have a 101 rejection. In response to these repeated § 101 rejections by the examiners, many applicants have appealed their rejections to the PTAB. We are just now seeing these appeals being decided by the board, and overall the results have not been good for applicants. Only about 20% of the 101 rejections are being reversed. Nonetheless, we are gaining a significant and rapidly growing body of PTAB decisions which we can learn from. These decisions are discussed below.