Practice Tips:

Go Ahead, Jump In the USPTO Appeal Pool. The Water’s Fine.

By Thomas A. Miller - September 30, 2013

Few things are apt to frustrate applicants more than the seemingly endless punch and counterpunch of obviousness prosecution.

US patent applications which receive three, four or more Office Actions have become routine, along with the one or more Requests for Continued Examination (RCE) which are required for the simple right to be heard. Applicants amend their claims to overcome the prior art of record time and again, only to have the Examiner agree, but then embark on another wide band search for other prior art on which to again reject the claims. Where does it end?

Appeals, that’s where. If the prosecution of your US patent application is not going as planned or, more likely, as even reasonably expected, perhaps you should considering appealing your case to the Board of Patent Appeals at the US Patent & Trademark Office. This notion is not news, appeals happen all the time. The point we are advocating in this paper, however, is that applicants are too often overly slow to pull the trigger on filing an appeal. A stronger hand, with a more consistent approach to filing appeals, and filing them earlier in the prosecution process, should be the goal.

When I began prosecuting patent applications nineteen years ago, the obviousness standard was on a much more level playing field than it is today. The argument of disparate arts had actual teeth and precluded Examiners from citing art which was clearly far afield from the subject matter at hand. Unfortunately, that standard has slowly eroded and ever since KSR, and its progeny, has essentially been all but neutered. Now, Examiners are largely free to seek out art, particularly in mechanical cases, which simply shows one element in isolation, and are emboldened to do so knowing most prosecutors will not challenge them, at least not as they once did.

The result is that a first Office Action will often cite one set of prior art to reject the claims as obvious. If necessary, the applicant may then amend the claims to overcome that art. The Examiner may then issue a second Office Action citing new art. The Applicant may then file an RCE, with another amendment again amending the claims to distinguish over that second set of art, and so on. The cycle continues from there. Often times, the Applicant may end up continuing to amend the claims, but of course each time he or she does, prosecution history estoppel is created with respect to that amended claim. By the time, multiple amendments and RCEs are filed, not only are thousands of dollars spent, but many months or years have transpired. Perhaps more importantly, the resulting claims allowed may be little more than picture claims as the tortured prosecution may have limited the ultimate claim construction to no range of equivalents as the claims were amended for purposes of patentability.

We suggest it would be better to avoid that and appeal more aggressively after the first final office action. The reasons are multiple:

  1. Appealing the claims sooner will avoid the cost of protracted prosecution. An average amendment, on mechanical subject matter, costs $3,1971. Of course two amendments thus cost $6,394. If an RCE is filed, a third will run the total to $9,591, plus $1,200 in USPTO fees for the RCE. Once an RCE is filed, on average another Office Action will be issued prior to issuance, meaning another amendment and another $3,197, bringing the cost of prosecution to $13,988.

    Contrast that with appealing the case after the first final Office Action without oral argument. The arguments for the appeal brief will be largely set forth in the amendment or amendments filed. The AIPLA indicates the average cost for an appeal brief is $4,5832. In addition, USPTO fees of $800 will be incurred, bringing the total to $8,580 – much less than that of the continued prosecution route.
  2. Appealing the case will make for a cleaner prosecution history with less estoppel and more range of equivalents.
  3. Appealing the case more quickly will avoid the tendency to surrender scope simply to get the case issued.
  4. If you are prosecuting a large portfolio of cases in a given art unit or art units, you will likely continue to see the same Examiners and SPEs. If you routinely appeal cases after a first final Office Action, those Examiners are more likely to think twice about continuing to find new art and issue new actions knowing that they will need to prepare Answers and explain their positions to their superiors.

Arguments in favor of prosecution as opposed to appeal have always been centered around two main themes: cost and time. However, the former is shown above to actually be in favor of appeals for the majority of cases given the protracted manner in which prosecution now proceeds at the USPTO. With respect to the latter, appeals do take longer, but even there the trend is toward a wash. The Appeal Board has been hiring administrative law judges at a fast clip and the pendencies for appeals are accordingly dropping.3 In fact, the average time for a mechanical case spent in the appeal queue is now only two years. This sounds like a long time, and in many ways is, but when contrasted to the average case taking four Office Actions to find allowance, with each Office Action and volley sequence taking roughly 6 months, it can be seen to be a negligible difference in many instances.

Finally, proponents of continued examination will no doubt point to the respective success rates of appeals versus prosecutions. On average, 32% of appealed cases get reversed.4 By contrast, roughly 44.2% of cases get allowed through normal prosecution.5 This is a significant disparity in raw numbers, but also misleading. Studies have not been done to show what percentage of normally prosecuted cases would have been allowed if not amended. As that is ultimately the number needed for an apples to apples comparison, we posit that if that number were ever ascertained, it would look a lot closer to the appeals rate. One reason for this is that the Appeal Board is much more likely to apply the art in a reasonable manner, consistent with current case law. The result is a claim set much closer to the actual breadth to which the Applicant is entitled, rather than the diminished scope actually attained after acquiescing to the Examiner and making further amendments simply to bring prosecution (and the excessive expense thereof) to a merciful close.

One other concern should also be addressed. Applicants sometimes ask what happens if the Appeal is dismissed. Will they be forever precluded from further fight without resort to the courts? The answer is no. Further amendments to overcome the reasoning of the Board, and/or continuations, can be filed if needed to further pursue prosecution if desired. Coverage for claims comparable to those that might have been achieved if not appealed will therefore likely still be available.

If any of the foregoing sounds of interest to you, please let us know. The attorneys of Miller, Matthias & Hull LLP focus entirely on patent prosecution. As such, we file and win appeals on a regular basis. We would be happy to counsel you on your appeal strategy as well. For more information, please call us at (312) 977-9902.

1 See Report of the Economic Survey, American Intellectual Property Law Association, page I-116, 2013. While the costs reflected in the AIPLA survey reflect the average national cost for such a service, it should be noted that the average cost for an amendment prepared at MMH is considerably less.
2 Id, page I-117.
3 See Kappos on Patent Trial and Appeal Board Trial Proceedings, IPWatchdog, March 27, 2013. (“The Board backlog crested at over 27,000 cases in October 2012, but has since come down and is now on a noticeable downward trajectory.”)
4 See Ex Parte Appeal Outcome by Assignee 2005-2013, Patently-O Blog, Dennis Crouch, Page 2, 2013.
5 See USPTO Report on Allowance Rate, United States Patent & Trademark Office, 2012.