Appeal of Patent Claim Rejections

by
Robert J. Yarbrough
July, 2008

I. Revised rules before the Board of Patent Appeals and Interferences

A. Introduction

   Appeals from decisions of patent examiners rejecting patent applications are specifically authorized by 35 U.S.C. §134. If a patent applicant’s claims are twice rejected by a patent examiner, the applicant can appeal to the Board of Patent Appeals and Interferences (“BPAI,” or “Board”). The rules of the Board control those appeals and are found at 37 CFR Part 41.

   On June 10, 2008, the PTO promulgated amended regulations governing procedures of the Board at 73 Fed. Reg. 32938-32997. The new rules provide detailed and extensive requirements for pursuing an patent appeal. An patent appeal is an appeal from a final rejection of a claim by a patent examiner. The new rules are effective for all patent appeals in which an appeals brief is filed on or after December 10, 2008. A patent applicant dissatisfied with a final Board decision may file a further appeal to the Court of Appeals for the Federal Circuit (“CAFC”) under 35 U.S.C. § 141.

   This article addresses appeals to the Board and the new amendments to 37 CFR Part 41. Appeals to CAFC are beyond the scope of this article.

B. Recommendation

I strongly recommend that any patent practitioner contemplating an patent appeal review existing and amended 37 CFR Part 41 and the regulation preamble cited above. The preamble provides examples and detailed pre-approved language for many of the required steps of the appeals process.

C. Number of pending cases

In the recent rulemaking, the PTO states that the number of appeals has increased substantially in the last few years. The PTO reports that the Board received 3,349 patent appeals in 2006 and 4639 appeals in 2007. The PTO projected 6000 appeals in fiscal year 2008.

In keeping with recent practice, the PTO is down-streaming the burden of preparing the appeal to the applicant to reduce the government workload and to maintain the (relatively) low Board pendency.

D. Notice of appeal

Rule 41.31(a) provides that the first step in appealing an action of the examiner is to file a notice of appeal. The notice of appeal is not complicated, but must specify the action appealed from, must be signed, must include the necessary fee, and must be timely. The time for filing the notice of appeal is the same as for filing a response to an office action under Rule 1.134. The period can be extended under rule 1.136 to a total of six months from the final action of the examiner upon filing a petition and fee.

E. Matters that are not appealable

In a new definition Rule 41.31(e), non-appealable matters are anything over which the Board does not have appellate jurisdiction. The examples provided in the regulation preamble include the examiner’s refusal to enter a response or amendment after final rejection, refusal to approve an appeal or reply brief, and refusal to withdraw a restriction requirement. If an issue is not appealable, then the examiner’s decision will not be reviewed by the Board and any objection to the examiner’s decision is waived. The applicant’s remedy to address a non-appealable decision of the examiner is to file a petition under Rule 1.181 (invoking the general supervisory authority of the Director), to file a petition under Rule 1.144 (relating to restrictions), to file a request for continuing examination (“RCE”) under Rule 1.114 to continue prosecution, or to file a divisional application to address restricted claims.

This is a change from current practice. The PTO reports that unresolved preliminary issues now frequently require remand to the examiner from the Board, slowing the appeals process.

F. Petitions to the Chief Administrative Patent Judge

The Chief APJ has jurisdiction over certain requests arising during an appeal under Rule 41.3; namely, a petition to exceed a page limit or to exceed a period of time.

G. Amendments and evidence submitted after the notice of appeal and before the appeals brief is filed

After filing the notice of appeal, the applicant can file amendments to cancel claims or place a dependent claim in independent form. Submission by the applicant does not equal acceptance by the examiner, however. The applicant also can submit new evidence. The examiner may accept the new evidence if it overcomes a rejection, but only if ‘good cause’ exists why the evidence was not submitted earlier. The PTO has announced that it intends to strictly enforce the ‘good cause’ requirement. If the examiner declines to admit the new amendment or new evidence, the applicant cannot include that refusal in the appeal and cannot rely on the new amendment or new evidence.

If the applicant is disappointed by an examiner’s refusal to allow the amendment or the new evidence, the applicant’s remedy is to file a petition under Rule 1.181 asking the director to reverse the examiner’s decision or to file an RCE under Rule 1.114 and bring the new amendments and evidence to the examiner’s attention in the continuing application. If the applicant still is displeased with the examiner’s decision in the RCE, then the applicant can appeal the examiner’s rejection of the RCE to the Board.

H. Passing of jurisdiction from the examiner to the Board

   The Board assumes jurisdiction over an appeal after the notice of appeal is filed and after the matter is fully briefed by the applicant and by the examiner. The Board will issue a docket notice formally accepting jurisdiction. This is contrary to usual appellate practice where jurisdiction passes immediately upon filing a notice of appeal. The delay in the passing of jurisdiction has two effects.

   First, because the applicant submits his or her brief to the examiner, the examiner determines initially whether the brief meets the technical requirements of the regulations. Examiners can (and frequently do) conclude that an appeal brief does not meet the standards. If the examiner refuses to accept the appeal brief, the examiner generally will give the applicant one or more opportunities to correct the brief. If the examiner still is not satisfied with the brief, the examiner will find that the applicant has failed to file a brief in a timely fashion and that the appeal and application are abandoned. The applicant can (a) petition to have the abandoned appeal and application revived under Rule 1.137 (for unavoidable or unintentional abandonment) coupled either with an improved brief or with the filing of an RCE under Rule 1.114, or (b) can petition the Director under Rule 1.181 that the examiner’s decision be reversed under the Director’s supervisory authority.

    Second, because the examiner still has jurisdiction over the application, the examiner may be persuaded by the brief that the original rejection was not correct and that the patent should be allowed or the rejection otherwise withdrawn. If the examiner is so persuaded, the examiner avoids the task of preparing the answering brief. As noted below, many appeals are resolved as between the examiner and the applicant long before the matter ever reaches the Board. The opportunity to convince the examiner of the error of his or her rejection is a valuable part of the appeals process.

I. Release of Jurisdiction by the Board

The Board relinquishes jurisdiction by issuing a final decision or a remand of the appeal. The Board will remand where an applicant elects further prosecution in response to a new ground of rejection or where the Board determines that clarification of facts or law is required. The Board also loses jurisdiction when an express abandonment or an RCE under Rule 1.114 is filed. Of interest, the applicant may file an RCE up until the time of filing an appeal from a final decision of the Board to the Federal Circuit. This allows the applicant to present new evidence and argument to the examiner where the applicant receives an unfavorable decision in an appeal, or the applicant determines that his or her position would be strengthened by additional evidence or argument.

J. Appeal Brief

The heart of the applicant’s appeal is the appeal brief. The appeal brief was an expensive undertaking prior to the rule changes and will continue to be so. The PTO states that a reason for the changes is that in many instances the examiner will conclude that a brief meets the technical requirements of the rules but the Board concludes that the brief is not adequate, forcing a remand for correction of the brief. The new requirements are even more rigid and formulaic than prior practice. We can only hope that the PTO will publish clear templates for the preparation and filing of appeal briefs.

The appeal brief must be filed within two months of the date of the filing of the notice of appeal, but the time period can be extended up to a total of six months by filing a petition and paying a fee under Rule 1.136.

K. Contents of the Appeal Brief

The amended rules specify that the appeal brief include many specific sections in a designated order and with designated headings. The brief must contain:

    1. Statement of the real party at interest (to allow Board members to determine whether a conflict exists requiring recusal of a Board member)

    2. Statement of related cases (to identify other cases that would affect the Board’s decision, such as a continuation application that would have the effect of withdrawing the appeal)

    3. A statement of the source of the jurisdiction of the Board (to catch, for example, cases that are abandoned)

    4. Tables of contents and authorities

    5. A statement of the status of amendments filed after final rejection (that is, either accepted or rejected by the examiner)

    6. Grounds for rejection to be reviewed. This section will identify the specific determinations of the examiner to be reviewed by the Board. Any rejection not specifically identified is waived.

    7. Statement of facts. The facts necessary to support the appeal must be set forth in separate numbered sentences, each including only one fact. Each fact must be supported by reference to the record. The regulation preamble gives as an example a §103 obviousness rejection under review. The preamble states that for an obviousness rejection the statement of facts should include at least the scope and content of the prior art, any differences between the claim at issue and the prior art, and the level of skill in the art. As an aside, facts as to the ordinary level of skill in the art are unlikely to exist in an application unless affidavits have been submitted to establish that level of skill.

    8. Argument. The argument section must address each ground for rejection to be reviewed for each contested claim. The applicant can group several claims together where the same ground for rejection applies to the several claims. In this event, the Board will select one claim to review and all of the several claims will live or die based on the Board’s review of the single reviewed claim. The applicant can rely on arguments that were not presented to the examiner, but must identify those arguments as not previously presented. The purpose of the notification is to provide the examiner with the opportunity to withdraw the rejection based on the arguments not previously raised. If an argument was previously considered by the examiner, the argument section must cite chapter and verse as to where the argument was submitted and considered. The reason is not entirely clear, other than that the procedure is borrowed from interference practice.

    9. A claims section of an appendix. The claims section must list ALL claims, including rejected, withdrawn, objected to, cancelled and allowed claims.

    10. A ‘claim support’ and ‘drawing support’ section in an appendix. The claim support and drawing support section is new and is a claims map showing where each element of the claims under appeal is supported by the specification and drawings. The purpose is to allow the Board to consider any definitional or other limitations of the specification and drawings in interpreting the terminology of the claims. Note that ONLY claims included in the claim support and drawing support section AND addressed by the argument section will be considered by the Board.

    11. Means plus function or step plus function analysis in an appendix. The means plus analysis is a description with citations to the specification and drawings of the means disclosed in the application for each claim under appeal.

    12. An evidence section in an appendix. The evidence section will include its own table of contents and all evidence that the applicant relies on, including affidavits and evidence. Only evidence in the evidence section will be considered by the Board.

    13. A section describing related cases in an appendix.

    14. The brief must be double spaced with 14 point type. The grounds for rejection, statement of fact and argument cannot exceed 30 pages. These page limitations are onerous and will require the applicant to engage in triage of the application to reduce the issues argued to a bare minimum. The applicant can petition the Chief APJ to allow extra pages.

L. Examiner’s Answer

Once the examiner determines that the appeal brief meets the technical requirements of the rules, and if the examiner is not persuaded by the arguments of the applicant, the examiner will file an “examiner’s answer.” In a change from prior practice, the examiner cannot identify new grounds for rejection in the examiner’s answer. Although not specifically discussed, the examiner’s recourse if the examiner identifies a new ground for rejection would be to reopen prosecution to give the applicant an opportunity to respond to the new ground.

M. Applicant’s reply brief

The applicant can file one reply brief addressing issues raised in the examiner’s answer.

II. Pre-Appeal Brief Conference

In OG Notice of 12 July 2005, the PTO allowed an applicant to request a “pre-appeal brief conference’ as a pilot program beginning in 2006. The pilot program was extended indefinitely by OG Notice of 07 February 2006 and is still in effect as of this writing (July, 2008). The requirements for the pilot program are considerably less involved than preparation of an appeals brief under the rules and the applicant’s arguments are limited to five pages in length.
Under the pilot program, the applicant may request at the time of filing a notice of appeal that the pending rejections be reviewed by a panel of examiners knowledgeable in the art. The panel of examiners can elect to reopen prosecution, to allow the pending claims while leaving prosecution closed, to allow the application to remain on appeal, or to reject the request on procedural grounds.

The Pre-Appeal Brief Conference offers a relatively low cost mechanism to obtain review of an examiner’s decision by someone other than the examiner. As noted in the following sections, the filing of an appeal brief can be a powerful inducement for the examiner to reconsider his or her rejections and reach a resolution within the context of the appeals process. The Pre-Appeal Brief Conference would appear to be most useful where the applicant does not believe that the examiner is competent or willing to evaluate fairly the applicant’s arguments.

III. Board Statistics

A. Pendency before the Board

Dennis Crouch in his PatentlyO blog compiled pendency results for 100 BPAI decisions in 2007. He found that the average time from the filing of a notice of appeal to the conclusion of the appeal process averaged slightly less than eighteen months, but with significant variation among the individual cases.
Mr. Crouch concluded that briefing occupied the majority of the time, with an average of eleven months required to complete briefing. The Board required an average of seven months to resolve an appeal once briefing was completed and jurisdiction passed to the Board. This is an admirably short pendency for appellate review.

B. Resolution of cases

   In 2007, Dennis Crouch published an article in his ‘PatentlyO’ blog examining a sample of 10,000 patent applications published in 2003. The intervening four years allowed the applications to proceed through the prosecution and appeal process. He found the following:

   1. Of the 10,000 published applications, the applicant filed a notice of appeal to the Board in 729 cases.

    2. Of the 729 cases in which a notice of appeal was filed, a ‘Pre-Appeal Brief Conference’ was requested in 82 cases. In 29 of the 82 cases (35%), the applicant was at least partially successful at the conference level. In 45 of the 82 cases (55%), the examiner panel decided to proceed with the appeal, indicating that the panel agreed with the examiner on at least one grounds for denial. The remaining 10% of cases were either procedurally deficient or were still in process at the time of the study.

    3. Of the 729 cases in which a notice of appeal was filed, an appeal brief was filed in 363, or about 50% of the cases. Mr. Crouch attributes the 50% ‘drop out’ rate as indicating the practice of filing a notice of appeal to preserve the applicant’s options in determining whether to appeal, continue prosecution, or abandon the application.

    4. Of the 363 cases in which an appeal brief was filed, the examiner rejected the appeal brief as defective or incomplete in 90 cases, for about a 25% rejection rate. Mr. Crouch did not report whether amended appeal briefs ultimately were accepted and whether those appeals reached the Board.

    5. For the cases in which an appeal brief was filed and accepted by the PTO, the examiner filed an answering brief in less than 50% of the cases. Mr. Crouch speculates that the reason is that the remaining cases were settled prior to the submission of the examiners’ briefs through withdrawal of the rejections and reopening of prosecution.

    6. Mr. Crouch reviewed reversal rates for the period of February 2007 through February 2008. For the cases actually submitted to and decided by the Board, the applicant is successful and the Board reversed the examiner’s rejection about 22% of the time and reversed in part about 12% of the time. The examiner is affirmed about 59% of the time. The actual reversal rate varies by technology center. Of particular note, TC3600, which includes e-commerce and business method patents, has a substantially higher reversal rate with the examiner reversed in 30% of cases and reversed in part in 16% of cases.

    Of course, Mr. Crouch's statistics are based on applications likely decided under pre-KSR v. Teleflex standards for §103 obviousness. Subsequent settlement and reversal rates are likely to be lower.