Why Strategically Filing Appeals Makes More Sense After AFCP 2.0 and the Increase in RCE fees

Stop trying to negotiate with unreasonable patent examiners. It will only hurt your client. Plenty of patent examiners at the U.S. Patent and Trademark Office (USPTO) have standards of patentability that are higher than the average Patent Trial and Appeal Board (PTAB) panel. Strategically filing appeals against these unreasonable examiners will help secure better results for your clients.

This is not an article to rant against patent examiners. I respect patent examiners and almost always recommend examiner interviews to try and reach an agreement with the examiner. But if an examiner’s position is unreasonable, ex parte appeals are an effective tool to achieve optimal results for your clients.

If you take every patent application you work on personally, you want to get the optimal results for your clients. Narrowing claims in response to an unreasonable rejection is usually not the best way to achieve these optimal results. Instead, you should convince your client to appeal.

Be Selective

You should selectively file appeals because, in addition to saving potentially valuable claim scope, appeals are useful for efficient prosecution when used strategically. While results can vary, it is my experience that appeals will often cause an unreasonable patent examiner to allow a patent application more quickly than continuing to amend the claims and file requests for continuing examination (RCEs).

Faced with an unreasonable rejection, you should be realistic about the patent examiner’s views of patentability. Instead of being optimistic that the examiner will become more reasonable, consider whether different sets of eyes provide a better chance of obtaining the claim scope that helps your client the most.

Plain and simple – examiners have varying standards of patentability. For example, in art unit 2183, the average allowance rate is historically 76% (all statistics are from LexisNexis PatentAdvisor), but the most difficult examiner has an allowance rate of 58.6% and the easiest examiner has an allowance rate of 93.2%. Other art units have even wider ranges of examiner allowance rate variation.

You should especially file appeals against examiners who have elevated standards of patentability. Anyone who has dorked out with me discussing patent prosecution, or follows me on LinkedIn, would not be surprised to know that I appeal more than twice as often at the USPTO as the average patent practitioner, often against these unreasonable examiners. For example, I have won appeals against examiners who have allowance rates of 28%, 23%, 16%, 14%, 11% and 9%.

For the 91 appeals I have filed since 2016, appealing led directly to an allowance 67% of the time, which is considerably higher than the 33.7% average combined allowance rate for the examiners I have appealed after the applicants filed 1 or 2 RCEs. These appeals also removed the rejection (prosecution reopened) 24% of the time, and the examiner was only affirmed 9% of the time. In other words, 91% of the time, appeals have been effective for my clients.

I expect that my clients will be appealing more often due to the end of USPTO’s After Final Consideration Pilot Program 2.0 (AFCP 2.0) and the further increase of RCE fees.

Most Appeals Do Not Result in a Decision Affirming the Examiner’s Rejection

When you appeal a rejection at the USPTO, the appeal can be resolved at three different stages: (1) Pre-Appeal Brief Conference, (2) Appeal Conference, or (3) PTAB decision. If you file the Notice of Appeal with a 5 page or less Request under the Pre-Appeal Brief Conference Pilot Program, a three-examiner panel (including the supervisor and examiner of record) decides whether to allow the application, reopen prosecution or proceed to appeal. The Appeal Conference follows the three-examiner process in response to the full Appeal Brief. If the Appeal Conference decides to proceed to appeal the Examiner will issue an Examiner’s Answer to the Appeal Brief. At that point, the applicant can file an optional Reply Brief and pay the $2,535 (large entity) to forward the appeal to the PTAB, which will issue a decision by three administrative patent judges (APJs) around 9 months to 1.5 years later.

Statistics presented by the USPTO at the PTAB Ex Parte Appeals Road Showsay that from 2010 to 2020 only 43% of appeals result in an Examiner’s Answer. The other 57% were resolved at (1) the Pre-Appeal Brief Conference or (2) the Appeal Conference, where the application was either allowed or prosecution was reopened.

I cannot find stats directly from the USPTO on reopening and allowance rates in response to Appeals, but I ran some numbers from Patent Advisor, as shown in the below table. These numbers are for applications disposed since 2016, and show that, without taking abandonments and RCEs during the appeal process into account, 54.7% of appeals make it to the PTAB for a decision, 22.4% result in reopening prosecution and 22.9% are allowed without a PTAB decision. For the PTAB decisions, 39.9% are wins, and 60.1% are losses. The numbers also vary a decent amount by art unit, with a higher percent of TC 1600 (Biotechnology and Organic Chemistry) and TC 3600 BM (Business method groups 3620, 3680, 3690) appeals resulting in a PTAB decision, and a lower percent of TC 2800 (Semiconductors/Memory, Circuits/Measuring and Testing, Optics/Photocopying, Printing/Measuring and Testing) appeals resulting in a PTAB decision.

While reopening prosecution can be frustrating to the client, especially where the examiner introduces stronger prior art, it beats amending your claims in response to an unreasonable rejection, which does not necessarily strengthen the resulting patent from a prior art validity perspective. In contrast, amending the claims in response to a strong prior art rejection strengthens the resulting patent from a prior art validity perspective. If reopening prosecution results in another unreasonable rejection, call the Supervisory Patent Examiner (SPE). In my experience, this is what every high level USPTO employee recommends. Explain to the SPE that such serial unreasonable rejections harm the patent system and are unnecessarily costing your client real money. I have found this strategy to be effective.

In any event, these numbers show that around half the time you file an appeal, the rejection will be pulled. Providing this objective evidence to your clients can help your clients better understand the possibilities of the appeal process and can make it seem less daunting. Based on the above statistics, appealing removes a rejection 67.1% of the time, is resolved by filing a request for Pre-Appeal Brief Conference Review 18.3% of the time, and is resolved by filing an appeal brief 27% of the time.

The End of AFCP 2.0: Will this Result in More Appeals or RCEs?

On December 14, 2024, the USPTO allowed the AFCP 2.0 program to expire. Since 2013, this program allowed Applicants to file amendments after a Final Rejection without filing a RCE and gave the Examiner three hours to consider these amendments. While this program was only effective in obtaining a Notice of Allowance in a small percentage of applications (~5 to 6% of allowances), the premise of the program was to avoid applicants from having to file RCEs. Applicants will thus only have three options for responding to a Final Rejection: (1) amend the claims and file a RCE, (2) submit arguments without substantively amending the claims, and (3) appealing. In reality, submitting arguments without substantively amending the claims is rarely effective, so applicants will be faced with 2 options: RCE or Appeal.

RCE Fees Have Increased Substantially Over the Last Decade

Filing a RCE has become more expensive over the years in comparison to appealing, as shown in the below table, with the biggest increase by far being the increase in second and subsequent RCEs.

Ten years ago, filing a Notice of Appeal was $400 less expensive than an RCE, and now it is $595 less expensive. That’s not a big deal, but if you end up with an unreasonable examiner, there is a decent chance that you will have to file two RCEs, which in 2015 was around the same price as a full appeal ($2,900 vs. $2,800) but now is $920 more expensive ($4,360 vs. $3,440). While that change might not be considerable when you consider attorney fees, it is non-negligible.

This is especially important when you consider, as discussed above, that only around half of appeals go to full appeal. This means that, for around half of Appeals, the applicant only incurs the $905 Notice of Appeal fee, and not the $2,535 appeal forwarding fee. If you end up with an unreasonable examiner, and you have clear and concise arguments supporting your client’s position, you should always try to convince your client to appeal. While this will require filing a Pre-Appeal Brief Request for Review and/or an Appeal Brief, attorney fees for preparing such a filing should not be much more expensive than filing a Response to Final Office Action, and they should be less expensive than two or more Responses, which is likely with an unreasonable examiner. Most importantly, you won’t have to sacrifice claim scope, which could be extremely important down the road for your client.

Use Examiner Analytics as Part of Your Decision Making

Examiner analytics are available from different platforms and should be used to help determine the reasonableness of the examiner. While the unreasonableness of the examiner can sometimes be apparent from the language of a rejection or from an examiner interview, it is not always straightforward unless you have prosecuted multiple applications in front the same examiner. You still need to evaluate the rejection on its face, but examiner analytics such as allowance rate in comparison to the examiner’s art unit, number of office actions per patent, allowance rate with and without an examiner interview, and appeal statistics, can be useful in judging whether the examiner is likely to grant a patent of reasonable scope without an appeal. They are also useful in conveying information to your clients. It is one thing to say, “The examiner’s position is unreasonable, and I recommend to appeal.” It can be far more convincing to say, “The examiner’s position is unreasonable and based on the examiner’s allowance rate being 30% lower than the art unit, his average office actions per patent being 3.5 and his loss rate on appeal being 70%, I recommend to appeal.” Sometimes the next step in prosecution is a difficult decision, and examiner analytics can make this decision easier.

Image Source: Deposit Photos
Author: Frank-Peters
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