Source: https://www.jdsupra.com/legalnews/federal-circuit-decisions-raise-bar-for-30926/
Timestamp: 2019-07-17 07:36:34
Document Index: 511197906

Matched Legal Cases: ['§ 101', '§ 101', '§ 101', '§ 103', '§ 102', '§ 101', '§ 101', '§ 101']

Federal Circuit Decisions Raise Bar for Invalidating Patents on Section 101 Grounds Before Trial | Dechert LLP - JDSupra
Patent-Eligibility Challenges Under Alice
In 2014, the Supreme Court established a two-prong test for determining whether a patent is directed to patent-eligible subject matter under 35 U.S.C. § 101: first, courts ask whether the claimed invention is directed to patent-ineligible concept—i.e., to a law of nature, natural phenomenon, or abstract idea; and if it is, they then search the claims for an “inventive concept” that is “sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.” Alice Corp. v. CLS Bank, Int’l, 134 S. Ct. 2347, 2355 (2014). Under the second prong, if the limitations of the claims only involve “well-understood, routine, [and] conventional activity previously engaged in by researchers in the field,” they lack the required “inventive concept.” Id. at 2359. Since Alice, district courts have been invalidating patents on § 101 grounds at an unprecedented rate, and they have nearly always done so at the pleadings stage or on summary judgment.
Aatrix and Berkheimer, however, raise the bar for district courts to resolve patent-eligibility challenges under Alice without a trial.
In Berkheimer, the Court held that although patent-eligibility ultimately is a question of law, application of the Alice test may implicate underlying issues of fact. In particular, it held that “[t]he question of whether a claim element or combination of elements is well-understood, routine and conventional to a skilled artisan in the relevant field is a question of fact,” and that “[a]ny fact, such as this one, that is pertinent to the invalidity conclusion must be proven by clear and convincing evidence.” Slip op. at 12. On that basis, the Court reversed the grant of summary judgment of patent-ineligibility as to four asserted patent claims, finding that “[w]hether claims 4–7 perform well-understood, routine, and conventional activities to a skilled artisan is a genuine issue of material fact making summary judgment inappropriate with respect to these claims.” The Court explicitly cautioned, however, that patent-eligibility challenges may still be resolved before trial in appropriate circumstances (id. at 13), and it affirmed the invalidation of four other asserted claims on summary judgment as failing to implicate any genuinely disputed fact issues.
The court also held that “[t]he mere fact that something is disclosed in a piece of prior art, for example, does not mean it was well-understood, routine, and conventional.” Slip op. at 14. This suggests that the level of “unconventionality” required to pass muster under § 101 may be lower than the inventiveness required for non-obviousness under § 103, or even for novelty under § 102.
In Aatrix, decided six days later, the Court reversed the invalidation of a patent under § 101 at the pleadings stage. It noted the general rule that “plausible factual allegations may preclude dismissing a case under § 101 where, for example, ‘nothing on th[e] record … refutes those allegations as a matter of law.” Slip Op. at 5. It then held that allegations in the proposed second amended complaint that the claimed invention improved the functioning and operation of computers in ways that went beyond well-understood, routine, or conventional activity had to be accepted as true at the pleadings stage, at least so long as they were not contradicted by the specification or other matters of record. Accordingly, the Court vacated the dismissal of the patentee’s infringement claims under Rule 12(b)(6) and remanded the case back to the district court.
Judge Reyna dissented in part. He argued that the majority opinion “attempts to shift the character of the § 101 inquiry from a legal question to a predominately factual inquiry,” which he viewed as both improper and not necessary to the Court’s decision.
The Berkheimer and Aatrix decisions provide a one-two punch that patentees will use to try to stem the tide of patents being invalidated by district courts without a trial. Accused infringers, however, will still have a long line of cases they can point to where the Federal Circuit has affirmed the invalidation of patents at the pleadings or summary judgment stage, and in Berkheimer, the Court noted that nothing in its decision “should be viewed as casting doubt on the propriety of those cases.” Slip Op. at 13. Time will tell the extent to which these cases change existing practice at the district court level.