Source: https://www.knobbe.com/news/2018/10/how-unpredictable-alice-analysis
Timestamp: 2019-04-24 16:22:42+00:00

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If § 101 decisions were not just difficult but truly indeterminate, one might expect such decisions to be reversed more frequently than decisions involving other legal issues. Indeed, appellate judges should have no trouble reversing § 101 decisions that they regard as incorrect, because such decisions are mostly reviewed de novo.[vi] But the data indicates that § 101 decisions are affirmed more frequently than other types of decisions. Thus, the data does not seem to support the premise that § 101 decisions are indeterminate.
The data regarding Federal Circuit affirmance rates is summarized in the following table. As the table shows, the affirmance rates in § 101 cases consistently exceed the overall affirmance rates for all types of patent cases.
Additional data on the predictability of § 101 decisions is available in the context of PTAB appeals. These appeals arise from examiners’ rejections of pending patent applications. Juristat’s patent analytics platform tracks the outcomes of such appeals.
Juristat also tracks the types of rejections issued in each application. Thus, it is possible to compare the PTAB’s affirmance rate in applications with Alice rejections to the overall affirmance rate for a class (here, USPC 705). One such comparison is shown below. Note, however, that even when an application has faced an Alice rejection, that rejection may not have been at issue on appeal. Thus, the data presented below provides only a rough approximation of the PTAB’s affirmance rate for Alice rejections.
The Juristat data suggests that, in PTAB appeals as in Federal Circuit appeals, the affirmance rate for Alice rejections exceeds the overall affirmance rate.
The empirical data presented above belies the notion that it is impossibly difficult to predict the ultimate outcome of the Alice analysis. Such predictions may be difficult in many cases and uncertain in some, but the same is true for many issues in patent law, such as obviousness and claim construction. Whatever flaws the Alice analysis may suffer from, the data above regarding likelihood of affirmance does not show a clear basis for the widely held sense that Alice outcomes are especially unpredictable.
[i] Smart Systems Innovations, LLC v. Chicago Transit Authority, 873 F.3d 1364, 1377 (Fed. Cir. 2017) (Linn, J., concurring-in-part and dissenting-in-part).
[ii] Interval Licensing LLC v. AOL, Inc., 896 F.3d 1335, 1348 (Fed. Cir. 2018) (Plager, J., concurring-in-part and dissenting-in-part).
[iii] Id. at 1354 n.22 (citing Paul R. Gugliuzza & Mark A. Lemley, Can a Court Change the Law by Saying Nothing?, 71 Vand. L. Rev. 765, 777 n.70 (2018)).
[iv] The authors thank Juristat for providing access to this data.
[v] Interval Licensing, 896 F.3d at 1351.
[vi] E.g., Voter Verified, Inc. v. Election Sys. & Software LLC, 887 F.3d 1376, 1384 (Fed. Cir. 2018) (“Patent eligibility under § 101 ‘is ultimately an issue of law we review de novo.’”).
[vii] Smart Systems, 873 F.3d at 1376; Interval Licensing, 896 F.3d at 1348.
[viii] Further, most § 101 decisions at the Federal Circuit hold the patent claims at issue invalid. At the PTAB, all of the § 101 decisions on appeal are rejections. In both tribunals, the burden is on the party challenging the patent claim to show that the claim fails to satisfy § 101. If an appellate judge truly believed that objectively correct decisions were impossible under § 101, the judge should arguably vote to reverse all § 101 rejections because no challenger could conceivably carry its burden.
[x] There is an ambiguity in Gugliuzza and Lemley’s data. They report on page 783 of their article that the Federal Circuit found patents invalid under § 101 in 26 out of 33 precedential decisions. In footnote 91 on the next page, they specify the affirmance rate for only 24 of these 26 decisions. Thus, two decisions are unaccounted for. The table provided here assumes that these two decisions were affirmed-in-part and reversed-in-part (i.e., “mixed”). Such decisions are not counted toward the affirmance rate.
[xi] The data regarding the overall affirmance rate is taken from the following article: https://www.perkinscoie.com/images/content/1/8/v4/184121/Fed.-Circ.-s-2017-Patent-Decisions-A-Statistical-Analysis.pdf (Page 2).
[xii] https://www.gibsondunn.com/wp-content/uploads/2017/11/Federal-Circuit-2016-2017-Year-in-Review-1.pdf (“2016/2017 Study”) and https://www.gibsondunn.com/wp-content/uploads/documents/publications/Federal-Circuit-2015-2016-Year-in-Review.pdf (“2015/2016 Study”).
[xiii] 2015/2016 Study, p. 9.
[xiv] 2016/2017 Study, p. 9.
[xv] The art units with the most Alice rejections are identified in the following article: http://www.ipwatchdog.com/2015/12/14/the-most-likely-art-units-for-alice-rejections/. Those art units correspond primarily to Class 705, as described here: https://www.uspto.gov/patents-application-process/classes-arranged-art-unit-art-units-2914-3715.
[xvi] Alice was decided in the middle of 2014 and PTAB appeals often take three or more years to fully resolve (from the time of the examiner’s appealed rejection to the notice of allowance following a successful appeal). Including applications with disposition dates before 2018 would therefore capture appeals that arose from pre-Alice rejections. Such applications may have faced Alice rejections later, but the rejections likely would have been issued after the appeal. Thus, the Alice rejections would not have been before the PTAB and the PTAB’s decision could not shed any light on the predictability of the Alice analysis.

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