On Using Patent Claims to Predict the Prospects of Success in Examination

In a recent article, I presented an analysis of US Patent and Trademark Office (USPTO) data demonstrating that success rate for so-called ‘business method’ patent applications has fallen dramatically since the US Supreme Court issued its Alice decision in June 2014.  While the difference between ‘business methods’ and other more ‘traditional’ fields of technology is particularly stark, it is more generally the case that average allowance rates at the USPTO vary considerably across the various examination Art Units (i.e. the groupings of examiners assigned to specific technical subject matters).  For example, an article published by IP Watchdog in 2015, Austin Underhill of Juristat demonstrated that allowance rates across all Art Units range from less than 10% in some of the ‘business method’ units to nearly 100% in Art Unit 3659 (which covers aspects of material and article handling).

It follows that if it were possible to predict, in advance of filing, to which Art Unit a US patent application would likely be assigned, this could go some way towards predicting the prospects of success in examination.

As also mentioned in my earlier article, the USPTO Office of the Chief Economist has published the Patent Claims Research Dataset, comprising six data files containing individually-parsed claims, claim-level statistics, and document-level statistics for all US patents granted between 1976 and 2014 and US patent applications published between 2001 and 2014.

Having this large data set available caused me to wonder: are patent claims a good predictor of the Art Unit to which an application may be assigned?  On the one hand, it seems logical that might be the case.  After all, Art Unit assignments are based on technology, and it is generally necessary to refer to technical features of the invention in the patent claims.  On the other hand, claim language is often broader and more abstract that the specific field of technology to which the claimed invention may be directed, and the allocation to an Art Unit is, in practice, based upon an initial review of the patent specification as a whole, and not just the claims.

There is, however, only one way to find out whether there is a sufficiently strong correlation between claim language and Art Unit to enable prediction, and that is to conduct some experiments using the available data.

My initial results are promising.  By employing some relatively straightforward text processing techniques, I have successfully predicted the Technology Centre to which an application is assigned in just over 70% of cases, the correct group of 10 Art Units in over 40% of cases, and the individual Art Unit in around 24% of cases.  This is certainly sufficient to encourage me to persevere with some more sophisticated techniques, to see if it is possible to make further improvements.

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Tags: Patent analytics

What IP Australia Does Not Tell You: If You Want a Patent, You Should Hire a Patent Attorney!

The next time anybody asks me what they need to do to obtain a patent for something they have invented, I shall tell them just one thing: first, find yourself a patent attorney.  Not me, obviously, since I am not currently providing patent attorney services to inventors... but a patent attorney nonetheless.  If they query the cost, I shall simply say that if they cannot afford a patent attorney, then maybe they should forget about patenting their invention.  If they object that there must surely be something they can do without the assistance of a patent attorney, I will reiterate that they need to engage a patent attorney, and that is the one and only piece of advice I have for them.

This is not the advice I have always given in the past.  When working as a patent attorney in private practice myself I would sometimes encounter people who were clearly unwilling or unable to pay for an attorney.  Taking the view that self-help is better than no help at all, I might have directed them to IP Australia’s web site and other resources designed to help them to get started by themselves.

Never again will I encourage potential self-filers in this way.  It is a great disservice to them, and runs directly contrary to their interests.  As a rational person, I have allowed my views to be changed by actual evidence!  Specifically, I have crunched the numbers to assess how self-represented applicants actually fare at the Australian Patent Office, and the statistics are not merely bad, they are appalling.  In a nutshell:

1. self-represented ‘small entity’ applicants file about half as many provisional applications in Australia as do applicants with external or in-house attorneys, but less than 7.5% the number of standard patent applications claiming priority from those provisional applications;
2. the same category of self-represented applicants file 15% more innovation patent applications than applicants with attorneys, but seek certification of those patents in only around 17% of cases, of which over 60% are rejected and cease as a result;
3. innovation patent applicants with attorneys request certification at double the rate of self-represented applicants, and successfully achieve certification in 83% of those cases; and
4. when self-represented applicants file standard patent applications, these result in accepted claims just under 23% of the time, compared with a little over 53% of applications filed by applicants with attorneys.

Overall, when I look at Australian patent applications filed by small, self-represented, applicants, I see at least 90% of all provisional applications, 77% of all standard patent applications and 95% of all innovation patent applications ultimately resulting in absolutely no enforceable rights whatsoever.  And this does not account for the fact that even where enforceable rights are ultimately obtained, they may be of minimal commercial or legal value, considering that the applicant may have had only a limited comprehension of what they were doing in the course of examination.

All of this is not only wasteful and harmful to the individual applicants involved, it is associated with a social cost representing a negative contribution to the Australian innovation system.  I therefore cannot understand why IP Australia, which states that its vision is ‘to have a world leading IP system that builds prosperity for Australia’, provides only the most minimal suggestion that applicants might benefit from engaging professional assistance.  It is clear that Australia’s patent-issuing authority should take a leaf from the playbooks of its peers in (at least) the USPTO, European Patent Office, UK Intellectual Property Office, and Canadian Intellectual Property Office, and clearly inform prospective applicants that hiring a patent attorney is practically essential, or at least highly recommended, in order to obtain a commercially worthwhile outcome.

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Tags: Australia, Innovation policy, IPGOD, Patent analytics, Patent attorney profession, Patent Office, Public policy

USPTO Board Terminates CRISPR Patent Interference

On Wednesday 15 February 2017, the US Patent and Trademarks Office (USPTO) Patent Trial and Appeal Board (PTAB) handed down its much-anticipated decision in the patent interference proceedings initiated by the University of California (‘UC’) against the Broad Institute of MIT and Harvard (‘Broad’) in relation to CRISPR/Cas9 gene editing technology.  That decision, in short, is that there is ‘no interference in fact’.  That is to say, the three judges making up the PTAB panel have determined that Broad’s development of the CRISPR/Cas9 system for use in eukaryotic cells (i.e. complex cells with, among other characteristics, distinct nuclei) was a non-obvious advance over UC’s development of the system for use in simpler prokaryotic cells (specifically, bacteria), and that there is thus scope for both parties to hold distinct patents.

In its full decision [PDF, 412kB], the PTAB summarises its findings as follows:

Broad has persuaded us that the parties claim patentably distinct subject matter, rebutting the presumption created by declaration of this interference. Broad provided sufficient evidence to show that its claims, which are all limited to CRISPR-Cas9 systems in a eukaryotic environment, are not drawn to the same invention as UC’s claims, which are all directed to CRISPR-Cas9 systems not restricted to any environment. Specifically, the evidence shows that the invention of such systems in eukaryotic cells would not have been obvious over the invention of CRISPR-Cas9 systems in any environment, including in prokaryotic cells or in vitro, because one of ordinary skill in the art would not have reasonably expected a CRISPR-Cas9 system to be successful in a eukaryotic environment. This evidence shows that the parties’ claims do not interfere. Accordingly, we terminate the interference.

This is a considerable win for Broad which, subject to a potential appeal, has for now delivered a fatal blow to UC’s hopes of invalidating a number of Broad’s CRISPR-related patents and applications.  Unsurprisingly, Broad has reacted to the decision by declaring its full agreement with the PTAB, while UC maintains its belief that the evidence is on its side.  The stock market also reacted quickly to the news, adding US$200 million to the value of the Broad-connected biotech company Editas Medicine Inc.

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Tags: Biotechnology, CRISPR, Genetic technology, Interference, US

Is This The Exact Day That IP Australia Turned on ‘Business Method’ Patents?

On 30 October 2008, the US Court of Appeals for the Federal Circuit (CAFC) handed down its en banc decision in In re Bilski, affirming the rejection of patent claims directed to a method of hedging risks in commodities trading.  I have analysed IP Australia patent examination data, which provides reason to believe that this specific event triggered an unacknowledged change in examination practice within the Australian Patent Office.  This change subsequently resulted in a number of published decisions in which claims to computer-implemented ‘business methods’ were found to be unpatentable, and two appeals that went as far as a Full Bench of the Federal Court of Australia.  It is also reasonable to suppose that numerous further applications simply lapsed without fanfare following objections raised by patent examiners.

Most readers would be aware that the Bilski case went on further appeal to the US Supreme Court, which again confirmed the rejection in an opinion issued on 28 June 2010.  The Supreme Court decision was almost immediately cited by an Australian Patent Hearing Officer, who found that a claimed method for commercialising inventions does not constitute patentable subject matter under the Australian ‘manner of manufacture’ test: Invention Pathways Pty Ltd [2010] APO 10.

The Invention Pathways decision resulted in an official change to Australian Patent Office practice whereby a claimed invention, to be patent-eligible, would not only need to involve a ‘concrete effect or phenomenon or manifestation or transformation’ (as per Grant v Commissioner of Patents [2006] FCAFC 120), but one that is ‘significant both in that it is concrete but also that it is central to the purpose or operation of the claimed process or otherwise arises from the combination of steps of the method in a substantial way’.

Invention Pathways was the first of a series of Patent Office decisions refusing or revoking patents for so-called computer-implemented ‘business methods’ based on this logic, including Iowa Lottery [2010] APO 25, Research Affiliates, LLC [2010] APO 31 and [2011] APO 101, Myall Australia Pty Ltd v RPL Central Pty Ltd [2011] APO 48, Discovery Holdings Limited [2011] APO 56, Network Solutions, LLC [2011] APO 65, Jumbo Interactive Ltd & New South Wales Lotteries Corp v Elot, Inc. [2011] APO 82, Sheng-Ping Fang [2011] APO 102, and Celgene Corporation [2013] APO 14.  The Research Affiliates and RPL Central matters both ultimately ended up on appeal before a Full Bench of the Federal Court of Australia, which confirmed that the claims in each case were not patent-eligible, albeit for reasons somewhat different from the Patent Office’s ‘centrality of purpose’ test.

While published reasons are the most visible and detailed outcomes of Patent Office decision-making, they typically have their genesis some months – or even years – earlier, with one or more reports issued by examiners.  The original Research Affiliates application, for example, was first rejected by a patent examiner on 28 October 2009, eight months prior to the Invention Pathways decision.  It is also notable that this type of ex parte hearing, i.e. involving only the patent applicant ‘appealing’ an examiner’s decision, has historically been relatively rare.  Prior to Invention Pathways, I count a total of just 11 published decisions of this type under the Patents Act 1990 (which commenced on 1 April 1991).  This number roughly doubled in the three years following Invention Pathways, driven by rejections of ‘business method’ applications.  It is therefore difficult to avoid inferring that something changed in the prior period that led to this unusual spike in hearings.

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Tags: Australia, Business processes, Computer programs, IPGOD, Patent analytics, Patent Office, Patentable subject matter

Publicly-Listed Firms Account for Half of the Australian Market for Patent Services

According to my analysis of patent data made available by IP Australia, nine firms of Patent and Trade Marks Attorneys now owned by the three Australian publicly-listed holding companies IPH Limited (ASX:IPH), Xenith IP Group Limited (ASX:XIP) and QANTM IP Limited (ASX:QIP) account for around 48% of patent services provided to Australian companies and individuals.  Furthermore, following its acquisition of Griffith Hack, Xenith now commands a leading market share at around 19%, with IPH and QANTM at around 15% and 14% respectively.

The top 20 Australian firms overall now collectively account for nearly 80% of all patent services provided to Australian clients.  The market is, however, more fragmented when it comes to ‘small entity’ clients (i.e. individuals and small businesses), with the top 20 firms in this segment handling about 75% of patent work.  For larger clients, the market is more highly-concentrated: the top 20 firms in this segment handle nearly 95% of patent work for non-‘small entity’ organisations.

Prior to the consolidation of the market resulting from the acquisition of firms by public companies, the top 20 ‘independent’ firms overall covered just under 75% of the market.  In the ‘small entity’ segment, the top 20 firms handled a little under 70% of patent work, whereas the figure was around 92% for patent services to larger organisations.

While all of this suggests that the recent spate of acquisitions has resulted in a reduction in competition for patent attorney services (as one would expect during consolidation in a market of any kind), it is important to keep in mind that the true position is more nuanced.  As I have explained previously, all of the firms acquired by IPH, Xenith and QANTM continue to operate independently and in competition with one another.  Each firm maintains its own client files and record-keeping systems.  Attorneys and other staff have no access to information held by the other firms within the commonly-owned group.  For most practical purposes, therefore, there has been no change in the competitive landscape for patent services in Australia.

However, the consolidation in the Australian market has been of sufficient concern for the Professional Standards Board for Patent and Trade Marks Attorneys to commission Professor Andrew Christie of the University of Melbourne to examine the issues and advise on whether any changes to the regulation of the profession are required in light of these developments.  It is therefore timely to look a little more closely at the extent of the effect of the changes within the Australian market for patent services.

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Tags: Australia, IPGOD, Patent analytics, Patent attorney profession