Where Have All of the Ex Parte Appeals Gone?

Once a rejection by the U.S. Patent and Trademark Office (USPTO) is designated as at least one “final” office action (which typically occurs when the office action is at least a second office action issued after filing), the applicant has the opportunity to engage with a different decision-maker. That is, the applicant can appeal a pending rejection to the Patent Trial and Appeal Board (PTAB), and at least three PTAB judges will then evaluate the rationale provided by the examiner and applicant (referred to as an “appellant” when the PTAB is handling a matter). Alternatively, the applicant can continue to engage with the examiner (which may require filing a Request for Continued Examination and paying the associated fee) or can let the application go abandoned.

Ex Parte Appeals are in Freefall

To evaluate the extent to which applicants choose to appeal rejections to the PTAB, we analyzed PTAB statistics from the USTPO. Specifically, we tracked (for each fiscal year between 2001-2021): the number of appeals received by the PTAB for each year, decision breakdowns for each year, and appeal pendency.

FIG. 1 shows the number of appeals received by the PTAB across years. The highest number of ex parte appeals received in a year was in 2009, with 15,483 ex parte appeals received at the PTAB. Thereafter, the number of appeals filed has generally been in steep decline. From 2013 to 2016, the number of appeals fell from 11,090 to 8,688. After a jump to 11,776 appeals in 2017, the number of appeals filed has been dropping sharply, to 9,284 in 2018; 7,025 in 2019; 6,836 in 2020; and 4,280 for 2021 to date. That is, the number of appeals received by the PTAB in 2021 was a mere 28% of the number of appeals received in 2009.

FIG. 1 – Ex Parte Appeals Received at PTAB per Year

The reason for the decrease in ex parte appeals is not clear. The reversal rate at the PTAB has been relatively steady since 2009, as shown in FIG. 2. Thus, there is no apparent change in PTAB reversal rates over the last 10 years that would dissuade applicants from appealing. In fact, the percentage of reversals rose from 2009 to 2011 (42.9% to 49%), while the number of appeal filings dropped (from 15,483 to 13,740). More recently, the reversal percentage has been steadily around 40% (42.6% in 2017; 39.2% in 2018; 40.6% in 2019; 39.6% in 2020; and 43% in 2021 to-date), while the number of appeals filed dropped significantly.

FIG 2. – Percent of Ex Parte Appeals Reversed or Reversed in Part per Year

 To investigate whether delays in appeal processing were anti-correlated with appeal counts, we calculated an approximate delay metric. The USPTO annual reports on Appeals Receipts and Dispositions identified in which fiscal years the vast majority of appeals were received that were being decided by the PTAB (at the end of the reported fiscal year). These years were separated by technology area (e.g., biotechnology, chemistry, etc.). As a very crude metric for delay, for each of the technology areas, the authors subtracted the received-by year from the year of the report. These differences were then averaged across technology areas.

FIG. 3 shows the approximate delay between the receipt and decision years. For example, in 2019, the PTAB was processing appeals received in 2017, and there was a delay of approximately two years. Meanwhile, in 2015, the PTAB was processing appeals received in 2013 and there was a delay of approximately two years. From 2005-2009, there was little delay between year of receipt and the decision. During that point, the number of appeals filed was rising. Potentially the reduced delays encouraged applicants to appeal during this period. However, from 2009 onwards, there is no apparent correlation between delays and ex parte appeal filings. In particular, while the delay decreased significantly between 2018 and 2019, the number of appeals filed also decreased significantly between 2018 and 2019, as well as between 2019 and 2020.

FIG. 3 – Approximate Appeal Time per Year

It is possible that changing USPTO guidance and case law dissuaded applicants from appealing in certain art units across the last decade. However, there does not appear to be a correlation between the number of appeals filed and the major changes in USPTO guidance and case law.

For example, in 2014, the USPTO issued new instructions based on Alice Corp v. CLS Bank Int’l, and made the standard for Section 101 much more difficult for applicants, particularly for business methods and certain biological inventions. Further, in 2019, the USPTO issued a revised subject matter eligibility guidance, which made the 101 analysis a bit more applicant-friendly.

However, as shown in FIG. 1, the downward trend in appeals began before the Alice decision. In 2019, the revised guidance (which supported various types of eligibility arguments) was instituted. Nonetheless, the downward trend in appeal filings continued. Thus, the changes in USPTO guidance did not appear to explain the downward trend either.

Given that the number of applications filed each year has steadily increased, the drop in appeals is not explained by any decreases in patent filings. The percentage of pending cases on appeal exhibits a similar pattern of increase and decrease as the total number of cases on appeal.

It’s a Mystery

Thus, appeals have been declining in popularity over the last decade, with no apparent explanation. No other trends at the USPTO appear to explain the reduced number of ex parte appeal filings. There is no clear correlation between the drop in appeals and affirmation rates or delays at the PTAB. Nor do changes in USPTO guidance seem to explain the decrease in appeal filings. Assessing appeal and examination statistics for specific technology sectors may provide a potential explanation for the dramatic plunge in appeal filings.

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Author: bloomua
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