Evidence Based Prosecution V: Business Method Rejections

BusMethodRejections

Using a random sample of issued patents examined by the “business method” art units, I counted the number of issued patents that had received non-final and final rejections and also those where the applicant had filed a notice of appeal.  The results show that about 95% of business method patents were subject to non-final rejections as compared with about 80% of patents taken from the general population. The differences between the groups for final rejections and appeal notice filings are even greater. The conclusion here is the same as in Part-IV: Business method patent applications receive a higher level of resistance than do other technologies.

This study focuses on business methods, but I’m gathering data for other areas. Any guesses of which technologies have relatively high (or low) rates of rejection before issuance?

Notes:

  • For the purposes of this study, Business Method Art Unit 3620 includes Art unit 3621–3629. 
  • Patent range from 6,500,000 – 6,999,999.
  • Sample size 49,905 patents from the general population and 296 patents in the business method category.
  • There is some selection issues here because we are looking only at issued patents. Presumably, patents that did not issue are even more likely to have been rejected.

Evidence Based Prosecution:

11 thoughts on “Evidence Based Prosecution V: Business Method Rejections

  1. With regards to the first comment (by Mr. Noonan and those from other people below (including Mr. Lemley) I have some concerns with the apparent focus on allowance rates when observing the rejected rates. This was first brought to my attention in looking at Mr. Lemley’s research in Rational Ignorance at the Patent Office and subsequent works by him and Mrs. Moore. It would seem in practice that rejections serve to further limit the claimed subject matter of the material. In this case, I can’t fathom a technique of grasping the entirety of the allowed claimed subject matter carved from the public realm vs the number of allowed cases. If we can assume for a moment that claims are initially filed broad and gradually narrowed during prosecution, then additional rejections have an analogous effect to lowering the actual allowance rate of patents in some measurable way. Yet, I haven’t seen any evidence that this has been considered in the scholarly work or even in the public discourse. While allowance and rejection rates are interesting and might provide some prosecution trend information in various units of the PTO (specifically on trends towards 101 vs art rejections), I can’t agree at this time that they provide a realistic measure of the patented subject matter in those fields.
    -M

  2. I would be interested to know if anyone has the statistics for applications involving stem cells (especially human).

  3. Interesting observations.

    I’ve taken an informal look at recent office actions for published applications in class 705/004 (insurance business methods). I looked at a random selection of 22 published patent apps. that have had office actions in the past 12 months. Here’s what I observed.

    All office actions were rejections. No allowances.
    Range of filing dates for applications under examination: 11/30/2000 – 5/20/2002. Applications with filing dates after 5/20/02 are awaiting first office actions.

    Breakdown of rejections:

    101 23% (i.e. 23% of all office actions had a 101 rejection)
    102 36%
    103 95%
    112 1 18%
    112 2 64%

    Comments?

  4. Mark:

    The type of data you describe is consistent with a patent practitioner’s impressions, that the frequently-cited statistics that >90% of applications grant as patents is incorrect. I look forward to seeing your paper.

  5. Some of my colleages report that even previously allowed claims that are considered a business method claim have been subsequently sua sponte withdrawn for further prosecution.

  6. I look forward to reading Prof. Lemley’s paper.

    To respond to “an examiner,” I think “mel b’s” comment could just as easily be construed to mean that business method patents were more likely than other types of patents to be invalid for reasons beyond just statutory subject matter. I think most people would concede that the PTO shouldn’t drag its heels on business method patents because it disagrees with State Street.

  7. Per the first comment you received, Bhaven Sampat and I are tracking the dispositions of all applications in all technology areas first filed in January 2001. One of the most striking statistics is that only about 5% of applications in class 705 (those subject to SPER) have issued after 5 1/2 years. A significant percentage are totally dead, and the majority are still pending, either on appeal, continuation, or still in initial prosecution.

    We’re still working on the paper, but should have a draft for everyone to see in a month or two.

    Mark Lemley

  8. Mel b’s comments seem to speak to whether or not business method patents are statutory subject matter. However, since the CAFC has said they are, we here at the office should consider them to be so until told otherwise. I can’t see a reason not to allow them just because they smell funny. We’re stuck with what the courts and Congress give us.

  9. dennis,
    your studies are nice, but they just prove the obvious. an anonymous friend of mine that works in the business methods area of the patent office admits that there is pressure not to allow.

    a better question is, is there really anything wrong this resistance? do we really want patents on tax strategies?

  10. Kevin, Thanks for the suggestion. I will be breaking-out the numbers on RCE’s & Continuations in a later post. With this dataset, it will be difficult to calculate a grant-rate because I’m looking only at issued patents, and I don’t have corresponding data on those patents that were abandoned.

  11. Dennis:

    You would do the patent bar a favor if you would look at the number of business method patents published in the time frame of the filing dates of the 296 patents you’ve reviewed, and calculated the number abandoned, appealed and subject to RCE/continuation. It might be a real world snapshot at the “grant rate” of these patents (of course, a comparison with all other technology patents would generalize the data).

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