On Thursday, April 23, the USPTO released a new study entitled “Adjusting to Alice: USPTO patent examination outcomes after Alice Corp v. CLS Bank International.” The report illustrates the dramatic impact of two developments in the application of § 101 law: first, the Supreme Court’s Alice decision in June 2014, and—second and more recently—promulgation to patent examiners of the USPTO’s internal documents providing more specific guidance for how to apply the doctrine of Alice.
Although the illustrated results are hardly unexpected to anyone following the developments of § 101 law over the years, the study provides intuitive graphical summaries of the trends over time, specifically with respect to the metrics of (a) percentage of first actions with a § 101 rejection, and (b) variability of the issuance of § 101 rejections by examiners. (Metric (b) is of note, since it tracks the level of uncertainty, which—as the USPTO mentions in the introduction—tends to reduce investment as it rises.) Specifically, Figures 1 and 2 (reproduced below) illustrate how Alice led directly to dramatically elevated levels for both metrics; similarly, Figures 3 and 4 illustrate how the USPTO’s January 2019 Patent Subject Matter Eligibility Guidance (PEG)—and to a lesser extent its earlier Berkheimer memorandum—led directly to equally dramatic reductions in the metric levels.
Significant as the changes in the illustrated metrics are, it seems to me that the impact of Alice was likely far greater than these numbers reflect. The USPTO statistics appear to be based purely upon the percentage of first actions with a § 101 rejection, but this metric appears to fail to take into account the distinction between true substantive Alice-based § 101 rejections and other more formalistic and easily-overcome § 101 rejections, such as those based on the Federal Circuit’s In re Nuijten. As any practitioner practicing pre-Alice recalls, it was common in the software arts to receive § 101 rejections to computer-readable medium (CRM / Beauregard) claims, but such rejections could easily be overcome simply by prefacing the CRM language with the term “non-transitory.” Such rejections are not comparable to many Alice-based § 101 rejections, which in contrast remain, clinging limpet-like in office action after office action despite the practitioner’s best efforts to shake them off. If this latter class of purely formalistic § 101 rejections were filtered out of the statistics, I suspect that the impact of Alice would be illustrated even more starkly.
*Note: We know that in addition to developments in the patent eligibility space, our readers are likely closely watching the significant impacts that the COVID-19 pandemic has had on patent law and IP law more broadly. To help readers stay updated, we’ve also prepared this article that outlines a number of the changes and provides links so you can keep track of the latest news. Also see our COVID-19 Resource Center for additional insights.