Many Paths to Patent Issuance

by Dennis Crouch

Daedalus's labyrinth was so complex that even its creator needed Ariadne's thread to find his way out.  I would suggest that the pathways through USPTO patent prosecution are at least as intricate and manifold. While prosecution statistics reveal some common routes through the maze—each application charts its own course through a complex network of non-final rejections, final rejections, RCEs, and after-final practice. Even experienced practitioners sometimes need their own version of Ariadne's thread.

I wanted to identify the most "typical" pathways for recently issued patents and so parsed through USPTO file wrapper data looking for rejection-response cycles as applications navigate their way to issuance. This post examines the most common prosecution pathways, accounting for 95% of issued patents.  My sample here: The two million issued patents granted from applications filed 2016-2020.  A separate post will bring-in patent families that continue to be an integral aspect of patent strategy and USPTO timelines.


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Thorner and the (Not So) Bright Line Rules of Claim Construction

by Dennis Crouch

The Federal Circuit’s 2012 decision in Thorner v. Sony Computer Entertainment America LLC, 669 F.3d 1362 (Fed. Cir. 2012) has become one of the court’s most cited cases from the past 15 years.  In fact, the decision has over 9,000 citations since being released 12 years ago (according to Westlaw search).  The case did not really make new ground, but is most often cited for Judge Moore’s statement of the clear boundaries for when courts can permissibly deviate from the “plain and ordinary meaning” of claim terms. While the decision presents these as bright-line rules, I would argue that the reality is much more nuanced. (more…)

The Next USPTO Director: Duffy’s Four Factor Test

by Dennis Crouch

In a prior post, I focused on President Elect Trump's nomination of Howard Lutnick as Commerce Secretary, but the most direct impact for the patent system will be the upcoming nomination of the next USPTO Director. Dennis Crouch, Howard Lutnick and the Patent System, Patently-O (November 25, 2024).  Like the Secretary of Commerce, the Director (who is also Undersecretary of Commerce) must also be nominated by the President and confirmed by the Senate under 35 U.S.C. § 3.

Professor John Duffy (UVa) recently outlined four essential qualities for the next USPTO Director. [Part 1][Part 2].  Duffy was my law professor at UChicago back in 2002, and I have deeply respected his work since then - both as a scholar and teacher.  Back then we were at the apex of broad patent eligibility doctrine.  The landscape has shifted dramatically then, with decisions like Alice and Mayo fundamentally reshaping what inventions qualify for patent protection. Duffy and I align in thinking that eligibility scope has been unduly narrowed.  We also align on another axis - that the obviousness should be robustly examined at the USPTO as the central patentability doctrine. Recall here that Duffy was one of the key forces behind KSR v. Teleflex that eliminated the Federal Circuit's more rigid "TSM" test.  As I get into this post, I also want to recognize the background that - despite these major changes to the patent system seemingly making it more difficult to obtain patent protection - the allowance rate is higher than anytime in the past 15 years. Dennis Crouch, USPTO Patent Grant Rate and Growing Backlog, Patently-O (Nov. 29, 2024).

Duffy's Four Part Framework for USPTO Leadership: First, Duffy argues that the new Director "should be open to a more reasonable, expansive, and text-based approach to patentable subject matter." As he notes, this is particularly important given the rapid advancement of information-based technologies in the 21st century. He rightly recognizes that the patent system must adapt to embrace new technological fields while maintaining its fundamental principles.

Second, the Director must possess familiarity with emerging technologies, particularly in areas like cryptocurrencies and artificial intelligence. As Duffy explains, the Director's role as Under Secretary of Commerce for Intellectual Property demands leadership across all IP fields—a scope that continues to expand with technological advancement.

Third, and perhaps most pragmatically, Duffy emphasizes the need for bureaucratic reform. Managing over 10,000 patent examiners requires not just administrative skill but also the vision to "rethink the PTO from the ground up." This is particularly relevant given the agency's evolution into what Duffy describes as a "complex Rube Goldberg machine" of initial examinations and administrative reviews.

Fourth, Duffy insists on rigorous enforcement of the nonobviousness requirement, calling it "central to the proper functioning of the patent system." This point deserves particular emphasis and expansion.


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USPTO Patent Grant Rate and Growing Backlog

by Dennis Crouch  The USPTO utility patent grant rate data reveals an interesting narrative of policy shifts and administrative changes over the past fifteen years. The graph shows a clear upward trajectory from a notable low point around December 2009, when the grant rate bottomed out near 50%, to recent levels hovering around 75-80%. This dramatic shift beginning in 2010 coincided with Director David Kappos taking the helm at the USPTO, marking a decisive break from the more restrictive patent policies of his predecessor Jon Dudas. Under Kappos’s leadership, the office embraced a more applicant-friendly approach, focusing on working with inventors to achieve allowable claims rather than pursuing multiple rounds of rejection.

More recent data points to subtle but noteworthy changes in USPTO practice. Since Director Kathi Vidal’s confirmation in April 2022, the grant rate has shown a modest decline from its peak levels of around 80-85% during 2020-2021. While the current grant rate remains substantially higher than the pre-Kappos era, this recent downward trend suggests a potential recalibration of examination practices under Vidal’s leadership.

The grant rate shown in the graph represents a monthly calculation derived by dividing the number of issued patents by the total number of resolved patent applications for each month, but with an important limitation: the analysis includes only published patent applications. This restriction is necessary because the USPTO does not publicly release abandonment dates for unpublished applications. Thus, for each month, the rate reflects the number of patents granted divided by the total number of published applications that were either granted or abandoned. While this methodology provides valuable insights into USPTO practices, it notably excludes applications that were maintained as secrets through non-publication requests under 35 U.S.C. § 122(b)(2)(B) and the small number that issued too quickly to be published.

As the allowance rate has slipped, the backlog of unexamined applications has risen sharply in recent years — reaching 804,658 applications in October 2024 which is a concerning increase from approximately 526,000 applications in early 2018.  Pendency and backlog issues reached a crisis point in 2008, but we are now above that high point.  To be clear, these numbers report what the USPTO calls the “unexamined patent application inventory” which includes applications awaiting a First Office Action by the patent examiner (limited to utility, plant, and reissue (UPR) applications).  The backlog of all pending applications also recently reached an all time high at over 1.2 million. (more…)

Two Decades and Counting: The Never-Ending Section 101 Battle Over Financial Analytics

Application No. 10/028,284, filed in December 2001, provides a fascinating window into the evolution of patent eligibility jurisprudence. This application – assigned to GE Financial and prosecuted by folks at Hunton and Williams – is still pending 23 years after its original filing date. Filed pre-Bilski and still pending post-Alice, the application claims a “waterfall tool” that analyzes financial product pricing by tracking how actual revenue “cascades down” from list price through various deductions (like underwriting errors, discounts, commissions, and bonuses) to arrive at the final “pocket price.”

The system integrates data from multiple sources, including actuarial, commission, and bonus systems, to identify and manage “revenue leaks” in financial products like insurance policies. The tool specifically measures metrics like underwriting error rates and premium leakages (caused by risk reclassification), and implements automated control plans when metrics hit predetermined trigger levels. I expect that in the decades since it was filed, these methods have become widely used in the industry.

Why is the application still pending?: This is one of the rare cases that folks complaining about the patent system can point to regarding zombie patent applications. The examiner has issued dozens of rejections, including 15 final rejections.  The applicant took the case to the PTAB – and lost – and has kept the application pending by filing RCE-after-RCE.  The most recent Request for Continued Examination (number 14) was filed in June 2024 after yet another final rejection on eligibility grounds. I should note here that I did not randomly identify this application bout identified it as one of the oldest applications still pending at the USPTO. (more…)

Genius, Gratitude, and the Patent System

I want to wish everyone a happy Thanksgiving 2024 from Columbia, Missouri. While I write about inventors and inventions daily, I rarely pause to express gratitude for their profound contributions to our lives. Though patent law often dwells on technical minutiae and legal boundaries, today I want to recognize the remarkable human elements that drive innovation forward.  Thank you!

I extend special thanks to the innovators who purposefully work to transform our society in a positive direction; to those who bring forth new knowledge and understanding from the ether; and to those who dedicate their creative energies to solving humanity’s most pressing challenges. Their work transcends mere technological advancement to serve higher purposes. The patent system’s genius lies in how it channels individual creativity toward collective benefit—promoting the progress of science and useful arts.

I have found inspiration in mythologist Michael Meade’s perspective on genius. Rather than viewing it as the exclusive domain of celebrated inventors, Meade, drawing from ancient philosophy, suggests that each person carries within them an innate genius—a unique gift waiting to unfold. Finding and expressing one’s genius becomes an act of self-discovery, akin to finding one’s dharma or true calling. When uncovered, this genius enables individuals to contribute meaningfully to society. Yet in our current era, many find themselves constrained by perceived limitations and inner doubts. As we gather with family and friends this holiday, I encourage each of us to reflect on how we might better harness our own innovative capacities while creating space for others to discover and express their own genius.

Happy Thanksgiving!

Dennis Crouch

Howard Lutnick and the Patent System

by Dennis Crouch

The USPTO's position within the Department of Commerce means that Commerce Secretary nominees warrant careful attention from the patent community. President-elect Trump's nominee for Secretary of Commerce, Howard Lutnick, brings particularly relevant experience to the role, shaped by extensive involvement with the U.S. patent system both as a prolific inventor and as CEO of Cantor Fitzgerald, a company that has operated on multiple sides of patent disputes.


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The Federal Circuit’s Oracle: When Silence Speaks Louder Than Words

by Dennis Crouch

The Supreme Court currently has two cases that each provide opportunity to address a longstanding problem with the Federal Circuit’s practice of issuing no-opinion summary affirmances in patent cases. In ParkerVision v. TCL Industries Holdings Co., No. 24-518, and Island Intellectual Property LLC v. TD Ameritrade, Inc., No. 24-461, the petitioners challenge the Federal Circuit’s use of Rule 36 judgments – where the court simply affirms the lower tribunal’s decision without any written opinion. Both petitions are well drafted by expert counsel and both have recently received strong amicus support.

The cases present the issue from different angles. ParkerVision focuses on appeals from the Patent Trial and Appeal Board (PTAB), arguing that the Federal Circuit’s use of Rule 36 violates 35 U.S.C. § 144’s explicit requirement that the court “shall issue . . . its mandate and opinion” when deciding appeals from the Patent Office. The case arose after the Federal Circuit summarily affirmed PTAB decisions invalidating ParkerVision’s wireless communication technology patents. Island IP, on the other hand, challenges a Rule 36 affirmance of a district court’s summary judgment invalidating its patent under 35 U.S.C. § 101. Island IP argues that the one-word affirmance masked the district court’s failure to properly apply summary judgment standards to disputed factual issues underlying the eligibility determination.

Both cases highlight how the Federal Circuit’s frequent use of Rule 36 undermines transparency and accountability in patent law. In ParkerVision’s case, the practice allows the court to sidestep its statutory duty to oversee administrative patent judges through reasoned decision-making. For Island IP, the summary affirmance obscures whether the court properly reviewed the district court’s handling of disputed factual evidence in the summary judgment context.

The timing of these petitions is particularly significant, as both cases have recently received substantial amicus support highlighting distinct but complementary concerns about the Federal Circuit’s Rule 36 practice. In ParkerVision, two friend-of-the-court briefs filed on November 20, 2024, emphasize national security implications and statutory interpretation. Meanwhile, in Island IP, three briefs amici were filed on November 22, 2024, along with a responsive brief on opposition. These parallel sets of briefs provide the Court with robust arguments for why intervention is needed to address what many view as a troubling lack of transparency in patent appeals. (more…)

Supreme Court Requests Response in Edwards Safe Harbor Case

Dennis Crouch

Following my recent post examining the Edwards v. Meril safe harbor challenge, the Supreme Court has requested a response from Meril after initially receiving only a waiver. The Court's November 20, 2024 request suggests that at least one Justice sees potential merit in Edwards' challenge to the Federal Circuit's broad interpretation of Section 271(e)(1)'s safe harbor provision.  It's important to note that a request for response does not guarantee that the Court will grant the petition. In fact, the case still has a <50% odds of being granted certiorari.

The case has garnered my attention for its potential to reshape how courts interpret the "solely for uses reasonably related" language in Section 271(e)(1). The dispute arose from what might seem like a minor incident - two transcatheter heart valve systems that were brought to San Francisco from abroad for a medical conference but, as the Federal Circuit noted, ended up spending their week-long U.S. visit sitting unused in a hotel closet and storage room before heading to Europe.  Still importation is a form of infringement.


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The Art of Attribution and Three Unlikely Theories of AI Authorship

by Tim Knight and Dennis Crouch.

In 2018, Dr. Stephen Thaler, creator of the ‘Creativity Machine’ AI system, sought copyright registration for an AI-generated image, listing the Creativity Machine as author. The Copyright Office rejected the application, citing the necessity of a human author under copyright law. After two failed requests for reconsideration, Thaler sued to compel registration. United States District Judge Beryl Howell ruled against Dr. Thaler. The case is now pending before the D.C. Circuit Court of Appeal, with the parties recently presenting oral arguments before Judge Patricia Millett, Judge Judith Rogers, and former patent litigator Judge Robert Wilkins. The graphic work itself is undeniably original and fixed in tangible form – key traditional elements for copyright protection. 17 U.S.C. 102 (“Copyright protection subsists, in accordance with this title, in original works of authorship fixed in any tangible medium of expression”).  And unlike naturally occurring beauty, the work exists only because of human creative endeavors. The rub though is that Dr. Thaler’s human creativity was directed toward developing the AI system, a major step removed from originating the artwork itself.

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Senate Committee Advances PREVAIL Act

by Dennis Crouch

In a tight 11-10 vote, the Senate Judiciary Committee approved the PREVAIL Act (Promoting and Respecting Economically Vital American Innovation Leadership Act) that would make substantial changes to Patent Trial and Appeal Board (PTAB) proceedings. The bill addresses perceived anti-patentee imbalances in the current inter partes review (IPR) system. However, a number of Senators raised concerns and were seeking assurances about a negative impact on generic drug prices. The Bill as adopted by the Judiciary Committee included a friendly amendment by the Bill's co-sponsor Sen. Coons that attempted to address some of the drug-pricing concerns by expanding the scope of who can file IPR/PGR petitions. In particular, the original bill allowed only those sued or accused of infringement to challenge patents. As discussed below, the new approach is designed to enable petitions by generic-drug makers and non-profit patient groups. The major changes in the bill include raising the burden of proof to "clear and convincing evidence," implementing strict timing requirements for PTAB decisions, requiring greater independence of PTAB judges, establishing a "single forum" rule preventing parallel validity challenges, and strengthening estoppel provisions against repeat challenges.


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Paws and Effect: Federal Circuit Rejects Indirect Causation Theory in Furbo Infringement Case

by Dennis Crouch

The Federal Circuit has affirmed summary judgment of non-infringement in DoggyPhone LLC v. Tomofun LLC, agreeing to narrowly construe the claim as requiring direct rather than indirect causation. The case involves U.S. Patent 9,723,813, which covers an "Internet Canine Communication System" that allows pet owners to remotely interact with and deliver treats to their dogs. DoggyPhone accused Tomofun's popular Furbo device of infringement, but both the district court and Federal Circuit found the accused product operates differently than what was claimed. Writing for the unanimous panel, Judge Hughes focused particularly on one key limitation requiring that the system "begins transmission to the remote client device of at least one of the audio or video of the pet in response to input from the pet."

At the heart of the dispute is a basic infringement question - whether Furbo's notification system satisfied the "begins transmission" limitation. When a dog barks, the Furbo sends a text notification to the owner's phone, but critically, no audio or video transmission begins until the owner actively clicks on that notification.  The Federal Circuit agreed with the district court that this setup does not meet the claim limitation because "transmission begins not in response to the pet's activity, but in response to the user's decision to click on the notification—making transmission responsive to the user's input, not the pet's."


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USPTO Implements Substantial Fee Increases for 2025: Revenue Needs and Behavioral Incentives

by Dennis Crouch

The USPTO has issued the final rules that include significant fee increases for patent applicants (and patent challengers), all set to take effect January 19, 2025 -- the final day of the Biden Administration. While some changes appear purely driven by inflation and cost recovery, others seem designed also to modify applicant behavior in controversial ways.

Because of the timing, I believe there is some chance that parties will challenge aspects of the fee increase in court -- particularly the increased fees for late-filed continuation applications.  In my opinion, the key purpose of such an action would be to postpone implementation of the fees in order to allow a Trump appointed director to reconsider their application.

A key aspect of the America Invents Act of 2011 (AIA) provided the USPTO with fee setting authority.  Section 10 of the AIA. Every USPTO patent fee change since then has stated that the AIA fee setting authority "includes flexibility to set individual fees in a way that furthers key policy considerations."  (Citing Section 10).  If it exists, that flexibility is purely implicit.  The law itself states: "Fees may be set or adjusted . . . only to recover the aggregate estimated costs to the Office for processing, activities, services, and materials relating to patents."

Barring delayed implementation, applicants (and patent challengers) will save some dollars by ensuring that their filings beat the January 19, 2025 deadline.


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The NHK-Fintiv Saga Continues: USPTO and Amicus Defend Discretionary Denials

by Dennis Crouch

The Federal Circuit is poised to address a significant administrative law question in Apple v. Vidal regarding whether the USPTO's NHK-Fintiv framework for discretionary IPR denials required notice-and-comment rulemaking under the APA. The case comes after the Federal Circuit's 2023 decision finding the procedural challenge reviewable while affirming dismissal of substantive challenges to the framework. Apple Inc. v. Vidal, 63 F.4th 1 (Fed. Cir. 2023).  The case takes on added significance given Director Vidal's recent resignation announcement. Her likely Trump appointee replacement may return to former Director Iancu's more aggressive approach to discretionary denials.

Under the AIA, the USPTO director has discretion to deny IPR petitions, even in cases where the case otherwise meets the statutory requirements for an inter partes review.  The Director has delegated authority to the PTAB to decide these issues, including discretionary denials. The NHK-Fintiv framework emerged through two precedential PTAB decisions that guide discretionary denials of IPR petitions when parallel district court litigation is pending. In NHK Spring Co. v. Intri-Plex Technologies, Inc., IPR2018-00752, Paper 8 (P.T.A.B. Sept. 12, 2018), the Board first articulated that the advanced state of parallel district court proceedings could justify denying institution. Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (P.T.A.B. Mar. 20, 2020) then established six factors for evaluating such situations: (1) whether a court stay is likely; (2) proximity of the court's trial date to the Board's projected statutory deadline; (3) investment in the parallel proceeding; (4) overlap between issues raised in the petition and in the parallel proceeding; (5) whether the petitioner and the defendant in the parallel proceeding are the same party; and (6) other circumstances and merits. Director Vidal later modified (and somewhat weakened) this framework through guidance emphasizing merits-based considerations and limiting denials based solely on trial scheduling. See Interim Procedure for Discretionary Denials in AIA Post-Grant Proceedings with Parallel District Court Litigation (June 21, 2022).  However, this guidance was issued without notice-and-comment rulemaking.

Apple v. Vidal: APA Compliance in IPR Discretionary Denial Rules


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Safe Harbor at a Crossroads: Examining Regulatory Development Shield of 271(e)(1) in Edwards v. Meril

by Dennis Crouch

The Federal Circuit's divided ruling in Edwards Lifesciences Corp. v. Meril Life Sciences is now before the U.S. Supreme Court -- focusing on the scope of the Hatch-Waxman Act's safe harbor provision. At issue is whether 35 U.S.C. § 271(e)(1)'s regulatory development shield extends to activities conducted for both regulatory and commercial purposes. The statutory text excuses certain acts that would otherwise be considered patent infringement if conducted "solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products." While Congress intended to ensure competitors could efficiently prepare for post-patent market entry through necessary regulatory compliance work, an expansive reading arguably erodes patent rights by immunizing activities far beyond pure regulatory preparation. The safe harbor thus sits with the uncomfortable tension of promoting timely competition and protecting innovation incentives.

The case is currently proceeding through the Supreme Court's certiorari process, with Edwards having filed its petition in October 2024.  As is common in Supreme Court practice, respondent Meril waived its right to respond to the petition, and the case has been distributed for the Justices' conference on December 6, 2024, where they will consider whether to grant review.  This is a case where I expect


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The Team-Based Reality of Modern Innovation: Average Patent Now Lists More Than Three Inventors

by Dennis Crouch

New data from the USPTO shows that the amazing transformation in patent inventorship continues: the average number of inventors per utility patent has reached 3.2 in 2024, nearly double the 1.7 inventors per patent seen in 1976. This steady rise in team-based inventing reflects fundamental changes in how innovation occurs and how the patent system operates.


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Patent Claim Count

The updated patent claim count data through 2024 reveals a continuing trend toward standardization in claim counts, with both the median and mean hovering around 16-17 claims per patent. The perhaps the most striking feature of this longitudinal data is the dramatic reduction in variance – from a standard deviation of about 15 claims in the mid-2000s to just about 7 claims today. This compression suggests that patent drafting has become increasingly standardized, likely driven by USPTO fee structures that discourage exceeding 20 claims and the professionalization of patent prosecution practice that pushes up on the claim count. Particularly notable is the steady rise in the median claim count from 7 claims in the 1970s-80s to today’s 17 claims, while the mean has shown more modest growth over the past decade — and a drop from the highs in the early 2000s where many patentees were seeking jumbo patents with hundreds of claims.

Read more here:

Central Tendency in US Patent Claim Counts

 

 

USPTO Timeliness Slipping: Patent Term Adjustment Data Shows Growing Examination Delays

by Dennis Crouch

The USPTO has two traditional functions: (1) quality examination to ensure applications satisfy the demanding statutory requirements of patentability; and (2) timely and efficient processing of those applications. Recent data suggests the Office is struggling with the second of these mandates, as reflected in a sharp uptick in Patent Term Adjustment (PTA) awards. [Charts below]


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The Rise of ‘Non-Transitory’ Claims: How a Single Word Became Key to Software Patent Eligibility

by Dennis Crouch

Recent patent prosecution data reveals a striking trend: the percentage of utility patents containing "non-transitory" software claims continued to increase -- from virtually zero 15 years ago to nearly 22% in 2024. This dramatic rise illustrates both the central role of software in our patent system and the peculiar formalistic requirements that have emerged around software patent eligibility under 35 U.S.C. § 101.

The story behind this trend begins with


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Raw Story v. OpenAI: The Constitutional Hurdle That Tripped Up Raw Story’s AI Lawsuit

by Dennis Crouch

In my view, some of the weakest anti-AI copyright claims have fallen under 17 U.S.C. § 1202(b)(1) – an element of the Digital Millennium Copyright Act (DMCA) that prohibits intentional removal or alteration of copyright management information (CMI).  The statute broadly defines CMI to include not just copyright notices, but also titles, author information, owner information, terms of use, and other identifying information conveyed with copies of works.  Any violation also requires proof that the CMI-remover had “reasonable grounds to know” that such removal would enable or conceal copyright infringement.

In Raw Story v. OpenAI, the online news organization alleged that OpenAI violated § 1202(b)(1) by removing copyright management information (CMI) from thousands of their news articles when incorporating them into training datasets for ChatGPT. Notably, the plaintiffs did not bring direct copyright infringement claims, instead focusing solely on alleged CMI removal. The articles in question were published online with author, title, and copyright information, which plaintiffs claimed OpenAI stripped away when creating its training sets. While OpenAI has not published the contents of these training sets, plaintiffs relied on “approximations” suggesting their articles appeared without CMI. They argued this evidenced intentional CMI removal, reasoning that if ChatGPT had been trained on articles with intact CMI, it would output such information when generating responses.

The most recent news in the case is that S.D.N.Y. Judge Colleen McMahon has dismissed the claims brought by Raw Story (and AlterNet Media) — holding that the plaintiffs lacked Article III standing to pursue the case.

(more…)