Supreme Court Refuses Another 101 Patent Eligibility Appeal

By Steve Brachmann
November 11, 2018

United States Supreme Court Pillars of Justice and Law

On Monday, November 5th, the U.S. Supreme Court denied a petition asking the Court to take up Real Estate Alliance Ltd. v. Move, Inc., et. al. on appeal from the Court of Appeals for the Federal Circuit. The case becomes just another example in a long line of patent appeals involving questions of patent eligibility the Supreme Court has decided to sidestep instead of offering clarity for what some believe has become an unintelligible test for patent eligibility

In its petition for writ, Real Estate Alliance (REAL) had asked the Supreme Court to take up the question of whether an ordered combination of elements in a patent claim is “well-understood, routine and conventional” to a skilled artisan in the relevant field under Alice step two a question of fact. Guidance on this issue from the Supreme Court would have been helpful as some Federal Circuit judges have found that this Section 101 analysis is a purely a question of law, while others have found that it is a question of law that requires fact-finding.

The patents-at-issue in this case cover inventions in the early 1980s by Mark Tornetta, who developed a way to take real estate information from multiple listing systems and, using his personal computer, created a new and useful way of locating available properties in the databases with the use of maps showing areas of interest to potential buyers. At the time of Tornetta’s invention, conventional multiple listing services allowed real estate professionals to search databases by an index number or property characteristics, providing results as text-based lists and requiring searches of different databases for each county.

This particular case stems back to 2007 when Move filed a complaint for declaratory judgment in the Central District of California; Move was seeking a declaration that both U.S. Patent No. 5032989 and U.S. Patent No. 4870576, both titled Real Estate Search and Location System and Method, were invalid and not infringed by Move’s websites such as realtor.com. REAL then sued Move and the other defendants for patent infringement. The case was appealed twice to the Federal Circuit, which remanded back to the district court which granted a motion to invalidate the ‘989 patent under Section 101 after a motion filed by Move. The summary judgment filed by the court explicitly stated that “we do not decide” whether the ‘576 is invalid but, after REAL joined a status report filed with defendants believing that it was preserving its claims to infringement of the ‘576 patent, the district court entered a judgment that both of the patents were invalid under Section 101. A fourth appeal to the Federal Circuit resulted in an affirmation of the lower court’s invalidation of the asserted patents.

REAL argued in its petition that step two of the Alice test used to determine invalidity under Section 101 requires questions of fact that were never asked by the district court. To invalidate without asking those questions contradicts the Federal Circuit’s recent holdings in Berkheimer v. HP and Aatrix Software v. Green Shades Software. REAL’s appeal to the Federal Circuit was decided by a panel including Circuit Judges Alan Lourie, Evan Wallach and Kara Stoll, a trio where the majority has held that step two of Alice is a pure question of law, which is a misapplication of the Alice standard. REAL further contended that both the district court and the Federal Circuit disregarded the factual record in their Alice analysis; that the patents-in-suit claim patentable improvements to computer user interface technology; and that the district court found that there were material facts in dispute while also finding that the claims were well-understood, routine and conventional.

REAL also argued that the record lacked any findings sufficient to invalidate the ‘576 patent, which was never analyzed under Alice but was simply invalidated pursuant to REAL’s decision to join the status report submitted to the district court. This stripped REAL of valuable patent rights without affording any due process to REAL. “It strains credulity that REAL would, or could have knowingly conceded invalidity, and waived infringement claims that it had pursued for more than eleven years, without addressing the many issues attending summary invalidation of the earlier of its patents,” the petition reads.

 

Image Source: Deposit Photos.

The Author

Steve Brachmann

Steve Brachmann is a writer located in Buffalo, New York. He has worked professionally as a freelancer for more than a decade. He has become a regular contributor to IPWatchdog.com, writing about technology, innovation and is the primary author of the Companies We Follow series. His work has been published by The Buffalo News, The Hamburg Sun, USAToday.com, Chron.com, Motley Fool and OpenLettersMonthly.com. Steve also provides website copy and documents for various business clients.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 19 Comments comments. Join the discussion.

  1. Ternary November 11, 2018 4:26 pm

    Why would an invention be directed to an abstract idea because it is well-understood, conventional and routine? The answer to that is of course an ideological one: a process performed by a human translated into a technical (computerized) invention is not acceptable as a patent eligible invention to this court because it is related to “simple software.” There is no technical or rational explanation for this ideological opinion, only a “feeling” and no rational guidance is even remotely possible. Especially, because many other patent eligible inventions were/are directed to mechanize and/or automate what was previously done by humans. The Supreme Oracles will not take up that question from REAL, because they cannot and will not answer it without becoming exposed as total Luddites. And they know this. Any reasoning around that question will expose the Alice decision as being rationally indefensible and technologically and scientifically nonsense. No case that will require an explanation of the Alice decision will be taken up by SCOTUS.

    We would be better off if SCOTUS dropped their attitude of being infallible and admit that they don’t know why, but they don’t like or even understand computers and math and tell Congress this needs to be resolved by them. Are we really more stupid than the Europeans in this? I guess the answer must be: Yes!

  2. Joachim Martillo November 12, 2018 3:24 am

    Is there really anything more to this invention than computerization of a method that property hunters have been doing without computerization? Computerization of an existing method is praxis (“well-understood, routing, or conventional activity”).

    What factual determination has to be done in this case? Berkheimer referred to the creation of an in-memory data structure. A well-defined in-memory data structure would represent “significantly more.” Is “significantly more” recited in the claims to this invention? Or is there nothing more than praxis?

    I address patent-eligibility and patentability of an in-memory data structure in Patent-Eligibility and Patentability of a Data Structure Stored in Memory.

  3. concerned November 12, 2018 6:06 am

    Joachim Martillo:

    What about the computerization of a solution that each claim was never performed individually or in combination by experts and professionals, is that praxis? And the solution was sought for 62 years since the inception of the administrative program.

    My examiner called it routine, well understood and conventional even though the hard evidence on record proved him wrong, nobody has done my solution or even had a solution. The examiner simply side step the evidence and quoted court cases outside my field of technology that slapped a generic computer on known solutions.

    Review patent application 14/450042. More going on than meets the eye.

  4. EG November 12, 2018 7:47 am

    Hey Steve,

    Frankly, SCOTUS is too arrogant and cowardly to fix the mess they’ve created with the nonsensical, broken and unworkable Mayo/Alice framework.

  5. Ternary November 12, 2018 8:47 am

    Joachim, you should probably read the REAL petition on this. They make a convincing case that aspects of the invention at the time the invention was made, were unknown.

    Furthermore, implementing a series of steps on a computer, no matter what these steps mean, is a technical activity.

    Many technically well educated people look upon patent eligibility as being a matter of an invention being “deserving.” That is, if asked to build the system as specified, many techies believe that they probably could have done it. What you call “praxis.” Perhaps you could, but perhaps you couldn’t. That is why the scientific method based on verifying by evidence is such a great thing. One should not discard that method because it doesn’t fit a certain narrative.

    “Patentability shall not be negatived by the manner in which the invention was made.” It seems that this needs to be amended to: “Patentability and patent eligibility shall not be negatived by the manner in which the invention was made.”

    The issue at hand though, seems to be the strategic mistake by REAL in its approach to get the case to appeal. SCOTUS is not going to revisit Alice and certainly not for a case so like one for which they created Alice.

  6. Anon November 12, 2018 8:49 am

    Computerization of an existing method is praxis

    Absolutely not.

    You’ve bought into the great LIE that has been repeated over and over and over.

    Look up the XKCD cartoon on tasks.

    By the way, it is unhelpful to be trying to make “praxis” into a 101 position.

  7. Mark Nowotarski November 12, 2018 8:52 am

    concerned @3

    I looked at your application. It’s not just you. Your examiner has only allowed 2 cases in the past 12 months. His other 112 office actions were all rejections. Unfortunately, appeal is not a realistic option. Appeals in this art unit are currently failing (i.e. examiner affirmed) at a rate of 95%.

    Feel free to contact me at “survivingalice” if you want more details on the situation. This will help you and your counsel understand what the best way forward is.

  8. B November 12, 2018 10:04 am

    “Guidance on this issue from the Supreme Court would have been helpful as some Federal Circuit judges have found that this Section 101 analysis is a purely a question of law, while others have found that it is a question of law that requires fact-finding.”

    Even the one’s siding with fact-finding waffle on the issue depending on the time of day. The CAFC is patethic

  9. B November 12, 2018 10:58 am

    @ Ternary “There is no technical or rational explanation for this ideological opinion, only a “feeling” and no rational guidance is even remotely possible.”

    Correct. Perform processing using discrete logic or with analog components – patent eligible. Use a computer and the courts go insane. All that said, the SCOTUS is too arrogant to clean the mess they created, and the Federal Circuit is populated with incompetents.

    BTW, it’s time for everyone to re-read Graham v. Deere, which recognized that “invention” is a meaningless term. Perhaps I’ll cite Deere to the SCOTUS to see if anyone there ever heard of the case.

  10. B November 12, 2018 11:20 am

    I also note that Judge Stoll, who signed on to Berkheimer and Exergen, wrote the CAFC decision, which was contemporaneous with Berkheimer and Exergen. The woman’s intellectual consistency and honesty are non-existent.

  11. Concerned November 12, 2018 12:59 pm

    Mark @ 7:

    Thank you for your comments.

    I guess that was the gist of this article. Do facts and the truth matter on patent prosecution or is the examiner’s word the de facto “law”?

    During my phone interview, the examiner was apologetic and stated 3 times he saw patentability. No kidding. Then rejected in writing with statements that are not factual on the surface.

    The author who reached out to me for my story for his upcoming book was equally amazed and strongly questioned the routine, conventional, well understood position taken by the examiner on a process never performed as documented by the evidence.

    Truth should always set us free, especially in a legal process.

  12. Jason Lee November 12, 2018 1:25 pm

    @ Ternary

    I agree with your post 1000%, well said!!

  13. Mark Nowotarski November 12, 2018 1:57 pm

    concerned @11

    “Do facts and the truth matter on patent prosecution or is the examiner’s word the de facto “law”?” Based on the data I’ve looked at, 90% of the 101 examination is based on the art unit your case is classified into and once that’s done, the particular examiner in that art unit you are assigned to. Some examiners are willing to consider 101 arguments, others are not.

    “During my phone interview, the examiner was apologetic and stated 3 times he saw patentability. No kidding. Then rejected in writing with statements that are not factual on the surface.” I’ve had similar experiences. The answer is to redraft and refile the case to get classified into an “Alice safe” art unit where most examiners are willing to consider an applicant’s legitimate 101 arguments.

    “The author who reached out to me for my story for his upcoming book was equally amazed and strongly questioned the routine, conventional, well understood position taken by the examiner on a process never performed as documented by the evidence.” I’ve been studying this phenomenon for quite a while. If your author needs more background, I’d be happy to provide it.

    “Truth should always set us free, especially in a legal process.” Yes, and right now the truth is that the 101 inquiry is subjective (e.g. “I know it when I see it”). Some art units generally consider the subject matter they examine to be statutory, others do not. Within either of those art units, there are individual examiners that generally consider the subject matter they are examining to be statutory, others do not. That means that the most important step is to have a prospective classification done before you file and then check to see if the art unit examining cases in that class is allowing cases under Alice or not. If not, then redraft and do the prospective classification again.

  14. Concerned November 12, 2018 2:45 pm

    Mark @ 13:

    What examiner, what art unit and what judge a person gets is a horrible process. Submitting 10 of the exact same applications to different units and different judges get 10 different results. Sickening that it is what it is.

    The author seemed pretty informed: 6 books, lectures across the world and has been on CNBC, Bloomberg, quoted in the Wall Street Journal, etc.

    Putting lipstick on this pig still makes the mature smell. SCOTUS did a number with Alice. Legislation should come from Congress, not the bench.

    Mark, your work arounds may produce great results. We should not have to resort to the same to clean up their mess.

    My process saves the federal government a ton. Nice consolation: They get screwed by a sister agency also. Priceless.

  15. Mark Nowotarski November 12, 2018 3:21 pm

    Concerned @14.

    I completely agree. It’s a horrible process and Congress needs to fix it.

    In the meantime, being a pragmatic engineer type, I do what’s needed now to protect my client’s interests with an eye towards how the law HAS to change in order for the US patent system to survive.

  16. finley November 12, 2018 4:55 pm

    Ternary at 1

    “Why would an invention be directed to an abstract idea because it is well-understood, conventional and routine?”

    I agree that this is an idealogical decree, no common sense involved.

    Say I try to patent a wheel with certain features (tread pattern/material/composition/etc.). I honestly wouldn’t know what to do if I got a 101 rejection because the gist of my invention was the abstract idea of a “wheel” which has been “well-understood, conventional and routine” since the time of the late cavemen.

  17. CJW November 12, 2018 10:42 pm

    Ya’all, be honest. What part about “communism” and “abolition of property rights” did you miss ? You think all the cases against individual patent ownership are by chance? PTAB, etc. ?? Totally unpopular for me to write this, to the “sensitive” classes, but seriously… If free speech is still permissible here, I’d ask, why have you not seen the nexus btw destruction of property rights and what’s happening politically ? Most patent lawyers are weak, its apparent. Hope the website has the guts to not engage in censoring this :))

  18. concerned November 13, 2018 3:14 am

    Mark:

    A couple points which I am sure you are in agreement:

    As you noted, the examiner only approved 2 out of 114 applications the past 12 months. Are the patent attorneys around the country that incompetent or is the USPTO structurally flawed?

    In my IP watchdog article “Can I hold on long enough until the madness stops?” I asked the question if other applicants would even have a chance for a patent with less evidence then mine? My evidence: 2 university studies, documents from the administering agency and documents from every possible end user (all 50 states); all proving my solution is used by no one. My solution is not routine, conventional or well understood. It makes me curious: How did the 2 applications get approved? Was it an attempt to make the examiner look legitimate? After all, an 100% rejection rate would be too obvious as to the real story behind the scenes and why have an examiner or a USPTO in the first place?

    The author that reached out to me pick up on the same themes. To common folks, this mess does do compute. And I agree, my appeal may have little chance based on what the courts are doing, but not based on the actual s101 law or based on fact, truth and evidence. My appeal would be a slam dunk in front of a jury of common folks. I can imagine the solicitor’s closing arguments to a jury of my peers as follows: I ask this jury to forgot the long standing problem he solved, I asked that you completely ignore all the evidence or facts the applicant supplied, I ask that you overlook that we offered no evidence to refute, I ask that you forget that the SCOTUS refuses to define terms for you, I ask that you find in favor of the USPTO and do as the courts say.

    To fully appreciate the folly of it all: “Alice” as in Alice in Wonderland. We are all wondering what is going on when in fact we are all at the madhatter’s tea party!

  19. Anon November 13, 2018 8:12 am

    CJW,

    Not sure if you thought that you were being provocative or what, but your post either states the obvious (while pretending to be illuminating) or gets things wrong. An interesting mix that leaves me wondering why you “dare” your post to not be “censored.”

    Most all professionals not only understand the attack on property rights, but have provided cogent commentary on the same. By the way, property rights are not only under attack from the Left (the “commune” group), but are also under attack from the “Right” (the Big Corp Efficient Infringers who would rather compete on non-innovation factors).

    As to “most patent lawyers are weak” — how do you mean this? Is this comparative to non-patent lawyers? To ordinary non-lawyers? To yourself? This only comes across as rather empty namecalling. Is that what you think will place your post in jeopardy of being “censored?”

    Your post reminds me of the fact that anyone can have an opinion, while here we strive for informed opinions. I hope that you take a moment and realize which of these you showcase with your post.

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