The Federal Circuit and Appeals from the Patent Office

By Jason Rantanen

As expected, for the fiscal year ending on October 31, 2016, the Federal Circuit docketed more appeals arising from the U.S. Patent and Trademark Office than from the district courts.  This result will almost certainly hold true for the calendar year as well: from January through October of this year, the Federal Circuit received 471 appeals arising from the district courts and 560 appeals arising from the PTO.

The below chart is an updated version of a chart I’ve posted before.  It shows the annual number of appeals docketed at the Federal Circuit per fiscal year (which runs from the beginning of October to the end of September.

Appeals filed at CAFC (Fiscal Year)

Changes over smaller periods of time:  To get a sense of whether appeals from the PTO are continuing to rise, I created a chart of the number of appeals arising from the PTO on a monthly basis.  Although there’s substantial  month-to-month variation, the overall trend for the last year does not suggest to me that the appeals from this source are continuing to increase.  However they remain at a much higher level as compared with the period before 2014.

Appeals filed at CAFC (monthly)

Makeup of appeals arising from the PTO: Using data from the USPTO’s annual Performance and Accountability Report, I constructed the below pie charts to illustrate how the composition of appeals from the PTO has changed over the last several years.  These graphs provide a vivid image of how dramatically that composition has changed in a short period of time.

2012 appeals from PTO2014 appeals from PTO2016 appeals from PTO

Note that this data is not an exact reflection of the appeals that reach the Federal Circuit due to a few limitations in the underlying reported data.  In particular, there are a handful of appeals (my understanding is <10) that might be counted in multiple years due to the way the data is reported for 2016.  In addition, the data is reported for all appeals to federal appellate courts, not just appeals to the Federal Circuit.  Due to variations in appeal pathway, a handful will end up in the regional circuits (especially trademark cases for which review is sought in the district court.  Pro-Football v. Blackhorse is an example).

What will the future bring? Going forward, I’d expect the number of appeals arising from the PTO to decline to some—but not a great—extent.   Data from the USPTO’s annual Performance and Accountability Report indicates that the number of newly filed inter partes review proceedings has remained roughly constant over since 2014, with 1310 cases filed in FY 2014, 1737 cases filed in FY 2015, and 1565 cases filed during FY 2016.   (Source: USPTO Performance and Accountability Reports, Table 15).  Since most of the appeals are from inter partes review proceedings (as there are relatively few of the other types of inter partes proceedings), a modest decline in the broader pool will likely result in a modest decline in the subset.  In addition, as attorneys obtain greater information about the probability of outcomes at the Federal Circuit, it is likely that appeals will fall as parties choose not to incur the expense of an appeal, at least in cases at the extreme.

24 thoughts on “The Federal Circuit and Appeals from the Patent Office

  1. New D.C. patent suits are dropping, due to the recent expansions of “unpatentable subject matter” [especially Alice] defenses, attorney sanctions, the elimination of FRCP Form 18, etc. The number of such suits going to trial is necessarily further reduced by IPRs, more than 80% of which are filed in response to being sued. [Although the number of IPRs filed per year is still far less than the number of D.C. suits filed per year.] [If the new discovery rules were really enforced might that reduce some of the high percentage of D.C. suits settled pre-trial?]
    But overall it does seem likely that the number of D.C. final decisions being appealed to the Fed. Cir. should be decreasing.

    As to Fed. Cir. total caseload, it is obviously up. But on the other hand appeals from D.C. patent suit decisions typically involve far more Fed. Cir. time consuming issues from a very much larger record than an IPR appeal, which is almost always merely a 102 or 103 issue based solely on patent or publication published content prior art. I.e., not comparable, on a case by case basis, in Fed. Cir. workload.

    1. Paul, I doubt that people are bringing business method patents to court anymore. CBMs may actually be an anachronism given the time an expense to get through the CBM vs. a motion under 12(b)(6).

  2. Jason In addition, as attorneys obtain greater information about the probability of outcomes at the Federal Circuit, it is likely that appeals will fall as parties choose not to incur the expense of an appeal, at least in cases at the extreme.

    One really has to wonder what an “extreme” (and, thus, non-worthy of an appeal) case looks like given the incredibly ridiculous junk that is regularly appealed to the CAFC (arising from both PTAB and District Courts).

    In any event, the CAFC deliberately created this mess, for reasons that we can only guess at. And they seem intent to keep the bubble from deflating quickly, which means that the mess is going to continue for another decade at least. Heckuva job!

    1. “And they seem intent to keep the bubble from deflating quickly, which means that the mess is going to continue for another decade at least. Heckuva job!”

      MM, I don’t see this. I think they are genuinely trying to implement Alice as opposed to trying to thwart it.

  3. Speaking of appeals, oral arguments are taking place this morning in Voxathon LLC v. FCA US LLC.

    Voxathon is a Plano-based patent tr0ll who sued a dozen or so companies in East Texas. Here’s the junk claim:

    1. A method for recovering calls using an attendant telephone set having a predetermined number of call appearance buttons comprising:

    receiving a plurality of incoming telephone calls from calling parties;

    identifying a telephone number of the calling party of each incoming telephone call;

    assigning each incoming telephone call to a next available call appearance button of said predetermined number of call appearance buttons;

    storing the identified telephone number associated with each incoming telephone call in a memory device; and

    automatically redialing, in response to the attendant’s selection of one of the call appearance buttons, the stored telephone number of the calling party of the incoming call assigned to the selected call appearance button.

    In other words, it’s “redial …. on a computer!”. And, oh yes, those fantastic “call appearance buttons”! Wowee zowee!

    This will be Rule 36’d into oblivion.

    Serious question: what on earth would possibly motivate anybody to waste money on this appeal?

    1. Another fun one:

      Personalized Media v. Amazon.com Inc.

      Judges: Hughes, Schall, & Stoll

      13. A method of providing data of interest to a receiver station from a first remote data source, said data of interest for use at said receiver station in at least one of generating and outputting a receiver specific datum, said method comprising the steps of:

      storing said data at said first remote data source;

      receiving at said remote data source a query from said receiver station;

      transmitting at least a portion of said data from said first remote data source to said receiver station in response to said step of receiving said query, said receiver station selecting and storing said transmitted at least a portion of said data and;

      transmitting from a second remote source to said receiver station a signal which controls said receiver station to select and process an instruct signal which is effective at said receiver station to coordinate presentation of said at least a portion of said data with one of a mass medium program and a program segment presentation sequence.

      Deep, deep stuff! S00per d00per techn0! Signals! And lookie at that last bit about the “mass medium program” and a “program segment presentation sequence.” This is like some sort of rocket science!

      This bit from the District Court decision (tanking under 101) is pretty funny:

      link to casetext.com

      This Plaintiff argues that there is more than just combining data, because it involves combining mass media programming with user-specific information and creating a coordinated presentation.

      Ah, yes: the “coordinated presentation”! Totally not abstract. Super techno! Because “signals.” LOL

      Kiss it goodbye.

      1. Super techno is not a requirement of patentabilty.

        Coordinating the premier release/delivery of a movie in a world or varying bandwidth availability is not trivial and is important to movie distributors. The ability to transmit early to avoid a traffic jam at the moment of release, while at the same time preventing people from redistributing the movie and viewing it early is non trivial and this is one solution. Your arrogance knows no bounds.

        1. Super techno is not a requirement of patentabilty

          I didn’t say that it was.

          Some tiny miniscule amount of actual technology recited in your patent claim is, however, a pre-requisite if you want to avoid your claim being righteously tr@shed.

          Now tell everyone a super awesome story about the Wright Brothers or the cotton gin, Les. You’re a very serious person!

        2. The ability to transmit early to avoid a traffic jam at the moment of release, while at the same time preventing people from redistributing the movie and viewing it early is non trivial…

          In fact it’s totally trivial and it takes like two seconds to come up with a solution. Even less if the best you can come up with is this:

          a signal which controls said receiver station to select and process an instruct signal

          Use a “control signal”! Really deep, serious stuff.

    2. Great moments in US patent history:

      “You’re teaching the button what to do.”

      (patentee, during oral argument in Voxathon LLC v. FCA US LLC.)

  4. Jason,

    Do you know if the appeals from district court litigation are near constant because of lag in response to IPR popularity? E.g., District court cases pending long enough that were not stayed due to IPR activity and thus are still subject to appeal to resolve the matter as compared to recently filed actions that are more likely to be subject to IPR stays. My point being, should we expect a corresponding decrease in district court action to the CAFC?

    Or, is there a certain “min” amount of district court action that gets appealed to the CAFC that is relatively not dependent on PTAB outcomes? That’s hard to believe.

    I wonder if clients/counsel may be more interested in either (1) pursuing CAFC appeal on items they normally wouldn’t because they have already invested resources in defending a PTAB action (and therefore are fighting non-102/103 issues); or (2) Conversely, we will see even less appealing due to the risen total cost?

  5. In contrast to what the proponents of IPRs and PGRs said (either in their naivete or their duplicity) at the time the AIA was passed, IPRs and PGRs have become adjuncts to, rather than replacements for, district court litigation, and their popularity among litigants has soared as their utility as patent guillotines has become apparent. So it makes sense that the absolute number of CAFC appeals coming out the PTO has risen substantially in recent years. Two corollaries to that are that appeals from the PTO have also risen as a percentage of the number of appeals filed at the CAFC, and, as Anon noted, that the total number of appeals to the CAFC has risen. Although I would expect that since most district court judges will now stay patent infringement litigation when an IPR/PGR is instituted, and since most of those result in cancellation of at least some claims by the PTAB, we will continue to see some decrease in the number of appeals from district courts, as fewer infringement suits will proceed to a decision.

    1. Quite right Atari Man,

      While indeed the graph is for the Federal Circuit (and not the district courts), the panacea promised by the AIA has not (and will not, in my view) occurred.

      Of course, one aspect that may be induced in this heightened workload is that the Federal Circuit may seek an improvident treatment of the subject matter, such as treating patents not as Congress explicitly dictated (personal property), but as a public right to be entirely dispensed with by an executive agency.

    2. Atari Man: In contrast to what the proponents of IPRs and PGRs said (either in their naivete or their duplicity) at the time the AIA was passed, IPRs and PGRs have become adjuncts to, rather than replacements for, district court litigation, and their popularity among litigants has soared as their utility as patent guillotines has become apparent.

      LOL. I don’t recall any IPR proponents suggesting that they wouldn’t be popular. Can you provide an example where that suggestion was made?

      Also: this post doesn’t show how many IPRs are not appealed, nor does it show how many district court cases are never even filed because of the mere availability of IPRs or because the potential licensee simply informs the patent owner “If you try to assert this, we will IPR you back to the b0ttom of the sw@mp where you belong.”

      The fact that IPRs are filed after infringement suits are filed, resulting in the stay of the infringement suit, was also predictable. I don’t recall anyone suggesting that wasn’t going to happen.

    3. ? If the claims in suit are cancelled in a PTAB proceeding triggered by that suit, that greatly decreases, not increases, all parties costs as compared to the vastly higher legal and other costs of D.C. suit discovery, trial and appeal.
      If the PTAB proceeding is NOT successful, the defendant would normally be foolish to think that it could win a jury trial on that same defense, and drop litigating that issue even if not fully precluded from doing so by any applicable estoppels.

      1. And yet, Mr. Morgan, the Federal Ciruit is being gobbled up with just such appeals (from IPRs, if I read the implication of the graph)…

        1. the Federal Ciruit is being gobbled up with just such appeals

          Thankfully there’s a straightforward and reasonable solution to that “problem”: earnestly fix the massive gaping hole that the CAFC punched in the system when they began cheerleading junky logic and “do it on a computer” patents.

          1. Talk about tinfoil hats – b-b-b-blame the CAFC for the type of innovation so prevalent today (and the type that is most affordable outside of the 1%ers).

            1. b-b-b-blame the CAFC for the type of innovation so prevalent today

              I’m not blaming the CAFC for fake news targeted at low-IQ sxckers surfing the Internet in their pajamas.

              I’m blaming the CAFC for actively facilitating the creation of a massive sw@mp of junky logic and “do it on a computer” patents.

  6. So starting from 2013, we have basically DOUBLED the workload….

    Hmmm, what else happened at that time (and was preached to lessen the workload)…

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