Alice Brings a Mix of Gifts For 2016 Holidays

Like the odd aunt whose holiday gifts can range from the wonderful to the recyclable, in 2016 Alice brought both good and bad tidings. Let’s start with the nice ones.

The numbers here are through December 22, 2016. The big picture is that the overall rate of district court ineligibility decisions* has declined each year since Alice, while the total number of decisions has increased each year. This may be an indication of several factors. First, plaintiffs are being more careful in selecting which patents to assert. Thus, clear losers do not get picked for litigation. On the other hand, defendants continue to push the envelope on what they can challenge under Section 101, and in doing so, have overreached. As a result, the overall invalidity rate has fallen.

Drilling down to the monthly numbers, the news is a little more mixed:

As I previously reported, the monthly data showed a drop in the number of invalidity decisions as well as an overall downward trend in the invalidity rate for district court decisions. In December thus far there’s been an uptick in such invalidity decisions (seven thus far) and a few more may issue in the before the year is out. The dotted line above shows the invalidity over three month periods, to smooth out the monthly fluctuations; overall the trend has been downward. Nonetheless, in October, I cautioned that “I would prefer to see these numbers hold for several months,” because the Federal Circuit “continues to affirm more invalidity decisions than it reverses.” This fact still holds true: there have been nine decisions by the Federal Circuit since October, and they have affirmed ineligible subject matter in seven of them (77%). Here are the overall Alicestorm numbers:

PTAB continues its remarkable streak of invaliding patents in CBMs. While the numbers above show less than 100% kill rate, that only because there have been three cases in which the Board split, invalidating some claims, but not others. To date, there is not a single CBM final decision in which the Board reversed the institution decision on § 101 and found all of claims patent eligible. While the number of final decisions is up, on the bright side, the number of institution decisions on § 101 is down from last year:

The drop in institutions more has more to do with the behavior of litigants filing less CBM’s than PTAB itself. Returning to the courts, the rates on motions on the pleadings in the district courts appear to be levelling off. The three month average success rate for motions on the pleadings (JOP and MTD) has been steadily declining over the past five months:

The most active judges in Section 101 continue to be those in Delaware and E.D. Texas:

Here’s the current Federal Circuit § 101 Scorecard

Finally, software patents continue to bear the brunt of § 101 challenges:

The good news however, is that the percent of software patents invalidated has dropped a bit from 61% in 2015 to 54% in 2016.

review the impact of Alice in the USPTO in an upcoming blog. Finally, I'll send you off with the following wish:

May your toasts this season always be novel,
Your gifts non-obvious,
And most importantly of all,
your holidays enjoyment-eligible.


* An ineligibility decision is one in which the court finds at least one claim invalid under Section 101.

*The perspectives expressed in the Bilski Blog, as well as in various sources cited therein from time to time, are those of the respective authors and do not necessarily represent the views of Fenwick & West LLP or its clients.