PTO guidelines won’t reduce uncertainty

The revised Sachs-Kappos dataset further corrected for false positives of applications that were rejected under § 101 but for reasons other than the judicially created Alice-Mayo inquiry in assessing the patent eligibility of an invention or discovery. The revised dataset confirms that 1,310 applications were abandoned following either initial or final rejections under the Alice-Mayo inquiry for lack of patent eligible subject matter, and yet had issued patent family members in either China or Europe. Even accounting for the correction (1,310 versus the originally reported 1,694), the number of patent applications that fell victim to the Alice-Mayo inquiry, while being granted in foreign jurisdictions, is significant. It calls into question the “gold standard” status of the U.S. patent system as a driver of next-stage innovation. Even after the USPTO adopted the 2019 patent eligibility guidelines, which has had a positive effect on the examination of patent applications under the Alice-Mayo inquiry,79 innovators know that a patent will still be challenged in the courts, where they face the same uncertainty or even high probability of invalidation.

Another important finding in the 2019 revised Sachs-Kappos dataset is the stark overlap in legal grounds of rejection in the 1,310 applications that confirms an oft-repeated point that the AliceMayo inquiry conflates different patentability requirements in the different provisions of the Patent Act. Coding for different types of rejections in §§ 101, 102, 103 and 112 confirmed that the “inventive step” inquiry in step two of the Alice-Mayo inquiry blends the nonobviousness inquiry under § 103 with the patent eligibility inquiry under § 101. The largest single overlap in legal grounds for rejection was between §§ 101 and 103, with 379 (29%) of the total 1,310 applications. If the rejection(s) combined §§ 101, 103 and 112, the percentage jumps to over 50%, confirming that nonobviousness and overbreadth are being conflated with patent eligibility in significant numbers. This data reinforces the importance of the provisions in PERA that prohibit courts from conflating the separate patentability assessments under the different provisions of the Patent Act.