The coupling of § 101 and § 112, and what it means for patent practitioners

Patent LawIn our first installment, we explored the evolving relationship between Sections 101 and  112, and how they can work at both complementary and cross purposes. Both § 101 and § 112 limit the scope of patent protections, but they do so in different ways and in recent years, the relationship between the two has grown more complex.

In this second and final installment, we examine some recent cases from Federal Circuit and district courts that illustrate how the coupling between § 101 and § 112 continues to change—and what those changes mean for patent practitioners.

Cases from the Federal Circuit

  1. Affinity Labs of Texas, LLC v., Inc.

In Affinity Labs of Texas, LLC v., Inc., the Federal Circuit analyzed a § 101 challenge in terms that were remarkably similar to those used in a typical § 112 analysis.  838 F.3d 1266 (Fed. Cir. 2016).  Considering a representative claim that the court described as “directed to a network-based media system with a customized user interface, in which the system delivers streaming content from a network-based resource upon demand to a handheld wireless electronic device having a graphical user interface[,]” the court undertook a Mayo/Alice inquiry.  Id. at 1268-69.  The court held that “the concept of delivering user-selected media content to portable devices is an abstract idea,” and moved to the second step of the analysis.  Id. at 1269.

The court found that neither the claims nor specification supplied the “inventive concept” necessary to survive a § 101 challenge.  Id. at 1271 (quoting Alice, 134 S. Ct. at 2355; Mayo, 132 S. Ct. at 1294.)  According to the court, the patent lacked the required “concrete implementation of the abstract idea” under Mayo/Alice.  Id.  The court found instead that these claims were directed to “the general concept of streaming user-selected content to a portable device[,]” and that the patent neither solved a technological problem nor improved computer or network functionality.  Id. at 1272.  The court rejected aspects of express functionality written into the claims, such as network streaming and a customized user interface, as insufficient to take the claim outside of the realm of the abstract.  Id. at 1271-72.

Notably, the patent at issue had a priority date of 2000, despite issuing in 2014.  Id. at 1269.  The wireless streaming of media to a handheld device was not widespread at the time of invention.  Indeed, few would argue that such an invention would have been considered “abstract” in 2000.  Regardless, the court’s analysis makes more sense when viewed through the lens of § 112.  Indeed, the court’s criticism of the vague and generic nature of the claims is entirely consistent with the disclosure requirements of § 112.  In one instance, the court considered the claim limitation of “a customized user interface page for the given user[,]” but found that “neither the claim nor the specification reveals any concrete way of employing a customized user interface.”  Id. at 1271.  This analysis appears more at home under § 112 than § 101.

  1. McRO, Inc. v. Bandai Namco Games Am. Inc.

The Federal Circuit has openly acknowledged the overlap between §§ 101 and 112 as means for policing claim scope.  In McRO, Inc. v. Bandai Namco Games Am. Inc., the court examined a § 101 challenge to two related patents directed to methods of animating lip synchronization and facial expressions of 3-D characters.  837 F.3d 1299 (Fed. Cir. 2016).  The district court in that case found that these claims were broadly preemptive of the “field of such lip synchronization using a rules-based morph target approach,” and that the novel aspects of the invention were claimed too broadly to satisfy § 101.  Id. at 1309.

The Federal Circuit reversed.  In conducting the first step of the Mayo/Alice inquiry, the court framed the issue as one of preemption – namely whether the claims would improperly result in the complete “preemption of all processes for achieving automated lip-synchronization of 3–D characters.”  Id. at 1315.  The court characterized such preemption as “the primary concern driving § 101 jurisprudence,” and that such risk “arises when the claims are not directed to a specific invention and instead improperly monopolize the basic tools of scientific and technological work.”  Id. at 1314 (quotation omitted).  Ultimately, the court found the asserted claims contained specific rules-based limitations to the method of automated lip-synchronization.  Id. at 1315.  The court then held that the claimed genus of rules represented a specific implementation that was not directed to an abstract idea.  Id. at 1316.  Because the court determined that the claims were not directed to ineligible subject matter, it did not reach the second Mayo/Alice step.  Id.

Interestingly, the court recognized the traditional role of § 112 in policing claim scope:

Patent law has evolved to place additional requirements on patentees seeking to claim a genus; however, these limits have not been in relation to the abstract idea exception to § 101. Rather they have principally been in terms of whether the patentee has satisfied the tradeoff of broad disclosure for broad claim scope implicit in 35 U.S.C. § 112.

Id. at 1313-1314 (citing Carnegie Mellon, 541 F.3d at 1122).  Thus, the court appears to acknowledge that, even though § 101 is increasingly used to challenge overbroad claims, it has not subsumed the role of § 112.  Therefore, while § 112 limits claims to the breadth of possession held by the applicant, § 101 serves as a check against claims that are so broad as to preempt an entire field of research.

  1. Additional Guidance or Confusion Through Concurrences

Despite what appears to be useable guidance in McRO, individual judges on the Federal Circuit have written separate concurrences outlining very different visions of § 101 in the post-Mayo/Alice landscape.  For example, Judge Mayer, concurring with the court’s invalidation of a patent on § 101 grounds, describes § 101 as a “sentinel, charged with the duty of ensuring that our nation’s patent laws encourage, rather than impede, scientific progress and technological innovation.”  Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 718 (Fed. Cir. 2014) (Mayer, J., concurring) cert. denied sub nom. Ultramercial, LLC v. WildTangent, Inc., 135 S. Ct. 2907 (2015).  In Judge Mayer’s view, § 101 remains a “gateway” or “threshold test” that should be satisfied before courts consider traditional validity issues such as those embodied within §§ 102, 103, or 112.  Id.  Judge Mayer compares § 101 to a court’s “jurisdictional inquiry,” placing the burden on courts to ensure that “claimed subject matter is even eligible for patent protection before addressing questions of invalidity or infringement.”  Id.  While this perspective ensures the divide between §§ 101 and 112, it is a maximalist interpretation of the role of § 101 in patent jurisprudence.

Compare Judge Mayer’s position with that of Judge Newman, who outlined a more holistic view of § 101 in a concurrence rejecting a motion to dismiss on § 101 grounds.  Bascom Glob. Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1352 (Fed. Cir. 2016) (Newman, J., concurring).  She “urge[s] a more flexible approach to the determination of patent eligibility, for the two-step protocol for ascertaining whether a patent is for an ‘abstract idea’ is not always necessary to resolve patent disputes.”  Id. at 1352-1353.  Judge Newman suggests that the abstract idea analysis may be better handled as a patentability analysis under §§ 102, 103, or 112.  Id. at 1353.  Considering § 112 specifically, Judge Newman points out:

The process, machine, manufacture, or composition of Section 101 must comply with Section 112. Subject matter that complies with Section 112 averts the generality or vagueness or imprecision or over-breadth that characterize abstract ideas. These are conditions of patentability, not of eligibility. The “conditions and requirements of this title” weed out the abstract idea.

Id. at 1354 (emphasis added).  Judge Newman also argues that §§ 102 and 103 could be similarly pressed into service to dispatch “abstract idea” challenges associated with § 101.  Id.  Naturally, this approach would erode the distinction between § 101 and the requirements of patentability (i.e., §§ 102, 103, and 112).

Judge Newman’s opinion on § 101 contrasts with the panel in Bascom, which stated “[t]he Supreme Court has also consistently held that § 101 provides a basis for a patentability/validity determination that is independent of—and on an equal footing with—any other statutory patentability provision.”  Id. at 1347.

Cases From District Courts

District courts have grappled with § 101 and § 112 analyses in different ways.

  1. Intellectual Ventures I, LLC v. Canon Inc.

One district court openly expressed frustration with the recent shifts in § 101 jurisprudence, and questioned how they could be squared with traditional patentability standards such as § 112.  See Intellectual Ventures I, LLC v. Canon Inc., 143 F. Supp. 3d 143 (D. Del. 2015).  In Intellectual Ventures, the court was presented with multiple motions for summary judgment, including one for patent ineligibility under § 101.  The patent at issue related to an image scanning method for a scanner that resulted in an improved scanning rate.  Id. at 168.

Considering the § 101 challenge, the court observed that, because of the moving standards under § 101, a computer-implemented invention “would have survived such challenges if mounted at the time of issuance, [but] these claims are now in jeopardy under the heightened specificity required by the Federal Circuit post-Alice.”  Id. at 172.  The court continued:

Moreover, it is less than clear how a § 101 inquiry that is focused through the lens of specificity can be harmonized with the roles given to other aspects of the patent law (such as enablement under § 112 and non-obviousness under § 103), especially in light of the Federal Circuit’s past characterization of § 101 eligibility as a “coarse” gauge of the suitability of broad subject matter categories for patent protection.

Id. (footnote and quotation omitted).  The court settled on an implementation of the Mayo/Alice test articulated in DDR Holdings, LLC v., L.P., 773 F.3d 1245, 1258-59 (Fed. Cir. 2014):

[T]he claims (informed by the specification) must describe a problem and solution rooted in computer technology, and the solution must be (1) specific enough to preclude the risk of pre-emption, and (2) innovative enough to “override the routine and conventional” use of the computer.

Id. Applying this framework, the court found that the claims neither claimed an underlying mathematical formula nor the implementation of a formula and, therefore, the claims were not directed to an abstract idea.  Id. at 173.  The court also evaluated whether the asserted claims posed a risk of preempting the use of the claimed mathematical relationship in any scanning device, but concluded that the “claimed solution is described with enough specificity to place meaningful boundaries on the inventive concept.”  Id. at 174.

The district court’s focus on the specificity of the claims, necessarily requiring consideration of their scope in view of the disclosure as understood by one of ordinary skill at the time of invention, overlaps significantly with the patentability considerations of § 112.  Therefore, while the court appears to describe the §§ 101 and 112 inquiries as separate and distinct analyses, the court’s § 101 analysis is in essence a § 112 determination.

  1. Perdiemco, LLC v. Industrack LLC

Another court has taken a much more discrete approach to §§ 101 and 112 analyses.  In Perdiemco, LLC v. Industrack LLC, the district court was faced with motions for judgment on the pleadings on both §§ 101 and 112 grounds for claims directed to conveying user location information to a third party.  No. 2:15-CV-1216-JRG-RSP, 2016 WL 5719697, at *4-5 (E.D. Tex. Sept. 21, 2016), report and recommendation adopted, No. 2:15-CV-727-JRG, 2016 WL 5475707 (E.D. Tex. Sept. 29, 2016).  The court proceeded to analyze the questions of eligibility and patentability posed by these two sections entirely separately.

Considering § 101, the court relied heavily on Alice and McRO in finding that the asserted claims were not patent ineligible.  The court narrowly focused on “whether the claims in these patents focus on a specific means or method that improves the relevant technology or are instead directed to a result or effect that itself is the abstract idea and merely invoke generic processes and machinery.”  Id. at *6 (quoting McRO, 837 F.3d at 1314).  This approach avoided the concerns of § 112, even when considering whether the asserted claims threatened preemption.  Id.  Despite how McRO itself acknowledged the overlap between §§ 101 and 112 when searching for preemption, the court in Perdiemco was most concerned with whether the claims “inhibit further discovery by improperly tying up the future use of laws of nature . . . [or] the basic tools of scientific and technological work[,]” in other words, strictly the concerns of § 101.  Id. (quoting Mayo, 132 S. Ct. at 1301).  The court then proceeded to conduct a separate analysis of § 112 (one that was minimal given the procedural posture) before finding no issue of unpatentability for “this fact-intensive defense.”  Id. at *8.

The Uncertain Future

A recent opinion by the Federal Circuit suggests that there will be considerable uncertainty about the respective boundaries of §§ 101 and 112 in the years ahead.  In Trading Technologies Intl. Inc. v. CQG, Inc., Judge Newman wrote on behalf of a unanimous panel, following up on her concurrence in BascomTrading Technologies Intl., Inc., v. CQG, Inc., et al., No. 2016-1616, 2017 WL 192716, — Fed.Appx. —- (Fed. Cir. Jan. 18, 2017).  The case involved § 101 challenges to patents that:

[D]escribe and claim a method and system for the electronic trading of stocks, bonds, futures, options and similar products. The patents explain problems that arise when a trader attempts to enter an order at a particular price, but misses the price because the market moved before the order was entered and executed. It also sometimes occurred that trades were executed at different prices than intended, due to rapid market movement. This is the problem to which these patents are directed.

Id. at *1.

Judge Newman wrote that the asserted claims were “directed to a specific improvement to the way computers operate,” and was thus patent eligible.  Id. at 4 (quotation omitted).  Of particular interest is her continued endorsement of a flexible approach to § 101 and the traditional measures of patentability, such as § 112.  Judge Newman wrote that the “threshold level of eligibility is often usefully explored by way of the substantive statutory criteria of patentability,” and that this approach is in harmony with the Supreme Court’s reasoning in in AliceId. at 4.

Judge Newman went on to say that the public interest favors considering close questions of eligibility:

[A]long with the understanding flowing from review of the patentability criteria of novelty, unobviousness, and enablement, for when these classical criteria are evaluated, the issue of subject matter eligibility is placed in the context of the patent-based incentive to technologic progress.

Id.  Thus to Judge Newman and the rest of the panel, the § 101 inquiry remains closely linked to traditional questions of patentability, including those within § 112.  And remember her concurrence in Bascom, where a proper analysis would render moot the § 101 determination.  District courts looking to the Federal Circuit for guidance on this issue will likely continue to see different approaches to analyzing § 101 for the foreseeable future. Practitioners also likely will be faced with defenses or rejections somewhere in between eligibility and patentability.



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Join the Discussion

9 comments so far.

  • [Avatar for step back]
    step back
    March 17, 2017 09:42 pm

    @6 Cowboy:

    “Appeal to authority” is one of the classic fallacies in logical reasoning.
    All you are doing is appealing to authority.

    SCOTUS is not authorized to say black when the statute says white.
    I don’t care who they are.
    If they say white is black they are idiots
    If you decide to go along with them, you are one too.

    p.s. Ad hominem attacks are also logic fallacies. We humans are full of hypocrisy of course. 😉

  • [Avatar for Night Writer]
    Night Writer
    March 17, 2017 09:00 am

    Meanwhile, the statistics keep getting worse with 90% invalidity rate at the CAFC.

    The other thing that people are missing is that the PTO is extending 101 to new areas out of the business method area. Lee has been using business method as an experiment to then push Alice into more AUs.

    Man, it is incredible what you can get away with if you just don’t admit it and pretend you aren’t doing it.

  • [Avatar for Anon]
    March 16, 2017 01:05 pm

    American Cowboy,

    Interpretation does not mean re-writing.

    Gap-filling is not always permissible with statutory law.

    The option of the Court when confronted with statutory law that evidences an unconstitutional flaw is NOT to rewrite the statutory law as they, the Court, would like it to read for their own policy reasons.

    You appear to make too many excuses for what are plainly ultra vires actions.

    The founding fathers (rightfully) feared a too-powerful judiciary.

    If we as attorneys act not in accord with our actual oaths and treat the judiciary (and in particular, the Supreme Court) as “Supreme” (in the manner of denying separation of powers and the limitations on the Court, including no advisory opinions – which is what you have when you ar making subjective forecastings of what merely may happen), then such attorneys share the blame for the abysmal state of law that patent law finds itself.

  • [Avatar for American Cowboy]
    American Cowboy
    March 16, 2017 10:54 am

    Eric and Anon, I agree with you in general terms, but the American legal system is build on the English tradition and adds its own traditions. The result is that for over 200 years we have had judges have the need to interpret what the legislature meant and fill in gaps that the legislature left or, as is more frequently the case, could not foresee. And, when the legislature acts unconstitutionally. judges negate the legislation.

    I agree that in recent years the courts have gotten out of hand, since their limiting principal is judges’ good judgment and institutional respect for the other branches. As humans, they are not endowed with such things in unlimited quantities.

  • [Avatar for Eric Berend]
    Eric Berend
    March 16, 2017 08:55 am

    @ 2. and 4., ‘Anon’:

    This analysis is Constitutionally correct. There is a separation of concerns that is essential to the structure of the Founders’ design, as embodied in the U.S. Constitution. Thank you for making such a clear and cogent interpretation of this part of U.S. law.

  • [Avatar for Anon]
    March 15, 2017 11:00 pm

    There is nothing wrong with common law, and common law is alive and well – in its appropriate place.

    Patent law is by Constituional design NOT common law.

    This means something.

    Ask yourself what does that “something” entail, and why would you draw lines any different than what I have stated (and importantly, under what authority).

  • [Avatar for American Cowboy]
    American Cowboy
    March 15, 2017 04:30 pm

    Anon, I generally agree that judges should not be making law…. until I think about the common law tradition. The common law was judge-made law. Many of the current statutory provisions are codifications of judge-made law: Obviousness, born in 1854’s Hotchkiss v Greenwood; a patent is a reference as of its filing date born in Alexander Milburn Co. v. Davis-Bournonville Co.
    270 U.S. 390 (1926).

    Were the courts that applied that law acting ultra vires until Congress ratified their positions?

    Having said all that, I still don’t think appointed judges should toss out elected legislator’s work unless it really stinks up the Constitution.

  • [Avatar for Anon]
    March 14, 2017 09:49 am

    Any “coupling” by the judicial branch amounts to an ultra vires re-writing of statutory law. It is simply not up the judicial branch to “interpret” the law in such a manner to arrive at the Ends that they may desire.

    The application of any such “common law” tactics – unless directly and unequivocally shared by the legislative branch of the government, as has been done in the past with other shared powers – is a violation of the separation of powers aspect of the Constitution.

    There is a reason why the writing of patent law was NOT a power granted to the judicial branch in the Constitution.

    It is about time that ALL attorneys look at their oath of office and realize that the Supreme Court is not placed above the Constitution in that oath.

    If anyone has a State oath that does otherwise, please provide a link to that oath.

    (it is time that we stopped the “just folllowing orders” mindset)

  • [Avatar for Mark Nowotarski]
    Mark Nowotarski
    March 14, 2017 09:09 am

    Fascinating analysis. Thanks in particular for the reference to Trading Technologies. To the best of my knowledge, these are the first business method patents (class 705) that the Federal Circuit has found to pass muster under 101. It remains to be seen whether or not USPTO management will instruct examiners to give this decision any weight since it is nonprecedential.