March 2, 2021
As previously reported, the U.S. Patent and Trademark Office inaugurated a one-year “Fast-Track Appeals Pilot Program” for ex parte appeals last July. This pilot program aims to reduce the average pendency for an appeal to the Patent Trial and Appeal Board (PTAB) from an average of about 24 months to 12–18 months. Further, PTAB’s goal is to issue a decision within 6 months from the date when the petition to request fast-track review is granted and the appeal is entered. The pilot program is set to conclude on July 2, 2021, after which the USPTO will evaluate it and decide on the next steps, including whether to renew or to modify it. As discussed below, so far it appears to be on track.
Shortening pendency at the PTAB before decision to 6 months or less means cutting in half the average pendency at the PTAB versus appeals not fast-tracked via the pilot program. Statistics from March 2019 to May 2020 show that once the PTAB had jurisdiction, the overall pendency of appeals at the PTAB before decision averaged 14.8 months. Although pendency in appeals not being fast-tracked is now down to about 12 months as of February 18, 2021, this remains over twice as long as the PTAB’s goal for the pilot program.
In launching the pilot program, the USPTO sought to avoid adversely affecting the PTAB’s ongoing efforts to reduce the inventory of pending ex parte appeals. The USPTO set a limit of 500 total cases admitted for the pilot program from July 2, 2020 to July 2, 2021, with a cap of 125 cases per quarter. Applicants can check the USPTO website for the number of petitions filed, granted, and denied per quarter.
During a recent webinar presented by the USPTO, the PTAB published statistics that summarize the benefits and popularity of the pilot program. The statistics report an average pendency at the PTAB to decision of 1.9 months, which is well within the pilot program’s goal of less than 6 months to decision. A total of 122 petitions for the pilot program have been granted in the three quarters beginning July 2, 2020, through February 12, 2021 (partial third quarter). As of December 31, 2020, the PTAB reported 104 petitions filed, 99 granted petitions, and 69 appeals decided. The PTAB conducted an oral hearing in 19 of those 69 cases. About 76% of the granted petitions through December 31, 2020, concern appeals from art units handling electrical/computer or business method/mechanical cases.
Statistics from May 31, 2020, show the PTAB affirmed rejections in 59.9% of the cases, but the PTAB’s report does not indicate whether the reversal rate is significantly improved in cases in the pilot program.
To be eligible to petition for fast-tracking an appeal in the pilot program, the patent application must be an original utility, design, or plant nonprovisional application that is not already designated as special based on the inventor’s age or health and must be at the appeal stage when the PTAB takes jurisdiction. Thus, an appellant should file a petition for the pilot program (along with the $420 nonrefundable fee) only after filing a notice of appeal, all briefing is completed (appeal brief, an examiner’s answer, and a reply brief, if any), the appeal processing fees are paid, and an appeal number is assigned. A premature petition will be rejected, but re-petitioning later is permitted. The petition form (Form PTO/SB/451), found on the USPTO website, must be filed via the USPTO’s electronic filing system. Petition fees cannot be reduced for small-entity or micro-entity status. Decisions on a petition come quickly. According to its website, the USPTO decides whether to grant a petition for the pilot program on average within 1.5 days.
Oral arguments are permitted in cases in the pilot program. A request for oral argument will result in a hearing date at a time and location announced by the PTAB. Inconvenient locations can be addressed by a request for a video or telephonic hearing. Due to COVID-19, oral arguments are currently telephonic by default. A request to reschedule a hearing results in eviction from the pilot program and being placed in the regular queue for appeals awaiting decision. The oral hearing can be waived (renounced) without affecting participation in the pilot program.
Notwithstanding the pilot program, the reduced pendency to decision does not include the time it takes from a final office action to jurisdiction passing to the PTAB. According to the PTAB webinar materials, for cases not in the pilot program, the time consumed from final rejection until the PTAB takes jurisdiction typically averages 11.5 months, with a reported maximum of 19 months, and the total elapsed time to decision averages about 23.5 months in typical appeals. The PTAB envisions, however, that focused diligent prosecution of an appeal without extensions followed by entering the pilot program may shorten the total elapsed time to as short as 12 months.
Applicant actions may affect pendency time before a case becomes ripe for petitioning to enter the pilot program. Such actions include a request for the After Final Consideration Pilot 2.0 program, a notice of appeal with a request for pre-appeal conference, extensions of time for filing an appeal brief, and filing or waiving a reply brief. Applicants cannot control how long it takes for an examiner to issue an answer or whether the examiner withdraws the rejections and enters new grounds of rejection in their answer or reopens prosecution. The PTAB reports, perhaps optimistically, that approximately 95% of examiners issue an examiner’s answer within 4 months, with the average being approximately 2.5 months. Those PTAB numbers regarding examiner answers are baked into the pilot program’s goal of reducing the pendency from final rejection to PTAB decision from an average of 23.5 months to 12–18 months.
The Fast-Track Appeals Pilot Program may be suitable for cases in fast-moving technology since potentially shaving months off pendency could be valuable in fending off competitors or having IP in place for another round of funding. The pilot program may also be an alternative to a request for continued examination (RCE) for those applicants who have already invested the USPTO fees for expedited patent prosecution under Track One priority examination. Track One status does not extend to any appeal and is lost by filing an RCE.