Posts Tagged: "§ 101"

How the Federal Circuit could rule that Alice did not change the law governing § 101 is a bit of a mystery. Applying the same two-step test seems a convenient way of dodging reality. At a time when there is real momentum gathering for a legislative solution to § 101 why did the Federal Circuit choose to perpetuate a myth that Alice did nothing to change the law? Outcomes are unquestionably different as the result of Alice, and if outcomes are different how exactly is it possible that the law did not change? If the law remained the same why was Alice a clear pivotal moment in software patent history? Saying Alice did not change the law shows just how out of touch and insulated from reality the Federal Circuit has become.

Yesterday the USPTO issued subject matter eligibility guidance to its examining corps in a memorandum that changes how examiners approach their Alice Step 2B analysis. Specifically, the memo recognizes the Federal Circuit’s recent decision in Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018) and instructs examiners to abide by its holding. Berkheimer itself held that the question of whether certain claim limitations represent well-understood, routine, or conventional activity under Alice Step 2B is a factual issue, with Berkheimer precluding summary judgment that all of the claims at issue were not patent eligible. This principle was then reaffirmed by the Federal Circuit a week later in Aatrix Software, Inc. v. Green Shades Software, Inc., 882 F.3d 1121 (Fed. Cir. 2018) in the context of a judgment on the pleadings and judgment as a matter of law.

In Exergen Corporation v. Kaz USA, No. 16-2315 (March 8, 2018), the Federal Circuit, in a split non-precedential opinion, affirmed a holding that Exergen’s claims directed to methods and apparatuses for detecting core body temperature were directed to patentable subject matter under 35 U.S.C. § 101… The majority held that the district court did not clearly err in finding that it was unconventional to use temperature scanning technology to measure arterial temperature beneath the skin… Judge Hughes dissented, arguing that the majority erred by relying on the natural law in determining inventiveness at step two… Judge Hughes seems to suggest that the correct step-two inquiry should be whether, assuming the natural phenomenon were known, it would have been conventional to combine that phenomenon with existing technology to practice the asserted claims.

In 2017, 48 percent of the world’s entire equity funding for AI startups was located in China. The U.S. was in second-place, lagging behind at 38 percent of global equity funding for AI startups. Although the U.S. still held the lead in total AI funding as well as the largest number of AI firms, this indicates that the Chinese will be a huge player in the AI sector in the coming years and could even surpass our nation’s research and development in the field.

“One thing that I find curious is that Cloudflare claims to have 150 patent assets on the same type of technology,” Verlander said. Such assets include U.S. Patent No. 9342620, titled Loading of Web Resources, and U.S. Patent No. 9369437, entitled Internet-Based Proxy Method to Modify Internet Responses. “It seems to me that Cloudflare should be quite concerned. If the technology covered by the ‘335 patent isn’t patent-eligible, all of Cloudflare’s patent assets may be worthless and I imagine that their investors must be worried about that. They may have won the battle but they could lose the war because if they’re correct, competitors could jump right into the market and copy Cloudflare’s technology.”

In Atrix Software v. Green Shades Software, Aatrix sued Green Shades for infringement, and Green Shades moved to dismiss. The district court granted the motion, holding: (1) claim 1 of the ‘615 patent was not directed to any tangible embodiment and was not patent-eligible subject matter under § 101; and (2) under the Alice/Mayo two-step analysis, the remaining claims were for abstract ideas without inventive concepts and were also ineligible. Aatrix appealed. The Federal Circuit vacated the district court’s decision, reversed its denial of Aatrix’s motion for leave to file a second amended complaint, and remanded for further proceedings… Allegations in a patent infringement complaint that create a factual dispute about whether the claimed invention contains an inventive concept will defeat a motion to dismiss under § 101. For software inventions, such allegations include improvements in how a computer functions. An amended complaint to make such allegations should generally be allowed.

“The Aatrix ruling is significant because when deciding a motion to dismiss all factual allegations made by the plaintiff (i.e., the patent owner) in the complaint are supposed to be taken as true,” explained patent attorney Gene Quinn. “The Federal Circuit has not always seemed to apply basic, fundamental procedural rules when reviewing cases dismissed for lack of patent eligibility on a motion to dismiss. Returning patent litigation to the status quo required by the Federal Rules of Civil Procedure will make it much more difficult for defendants to prevail on motions to dismiss if complaints are properly worded.”

When going through the list of patents that have been deemed valid in district court and then invalidated through PTAB proceedings, there are 58 cases where the patent is invalidated at the PTAB on the same statutory grounds asserted at district court and which did not lead to invalidity. So, contrary to any notion that any data we’ve published fails to pass muster, there is plenty of evidence that the activities of the PTAB present an unfair playing ground for patent owners who are dragged before it, often after those patent owners have already been victorious in district court in proceedings where Article III federal judges have confirmed the validity of those patents.

It is that time once again when we look back on the previous year in preparation to close the final chapter of 2017 in order move fresh into the year ahead. 2017 was a busy year in the patent world, although change was not as cataclysmic as it had been in past years, such as 2012 when the PTAB and post grant challenges began, in 2013 when AIA first to file rules went into effect, or in 2014 when the Supreme Court decided Alice v. CLS Bank. It was, nevertheless, still an interesting year… To come up with the list below I’ve reviewed all of our patent articles, and have come up with these top 10 patent stories for 2017. They appear in chronological order as they happened throughout the year.

On December 8, 2017, the U.S. Court of Appeals for the Federal Circuit issued a precedential decision in Inventor Holdings, LLC v. Bed Bath & Beyond, Inc. (2016-2442) that provides some useful language to practitioners dealing with patent ineligibility rejections having Alice as their basis… “Like the claims at issue in Mortgage Grader, the [claims at issue] are directed to an ‘economic arrangement’ implemented using ‘generic computer technology.’ These issues were significant, if not determinative, of the Court’s holding in Alice.”

In Inventor Holdings, LLC v. Bed Bath & Beyond, Inc., the Federal Circuit affirmed an award of attorneys’ fees in the lower court because “following the Alice decision, IH’s claims were objectively without merit.”  Alice issued two months after the filing of suit.

If there was a theme that emerged in 2017 it is the necessity to have what is specifically innovative disclosed in the claims. While not a particularly new concept, there were cases in 2017 where the Federal Circuit acknowledged that a patent eligible innovation may well have been disclosed in the specification, but which was not found in the claims. With many legacy software patents the description of the technology (if one actually existed) was only in the specification while the claims were written to be quite broad. The Federal Circuit requires both a thick technical description of the innovation and why it is an improvement (see Enfish) and incorporation of what is innovative into the claims… What follows picks up where my 2016 article left off and provides summary and analysis of the notable software patent eligibility cases decided by the Federal Circuit in 2017.

When a rule becomes a target, it ceases to be a good rule.  In the three years since the Supreme Court issued its opinion in Alice, there have been positive changes to patent applications, but there remains a long-term risk that patent practitioners will use tricks to beat the Alice test.  Here, we focus on the changes to patent applications by drafters, as well as changes to patent applications that have issued since Alice… Previous analyses have reported that patent specification length has been increasing since long before 2010. As shown in Figure 3, from 2010 to 2013, the average patent application length was approximately 12,417 words. However, from 2015 and 2017, the average patent application length increased to over 14,700 words… Alice appears to have resulted in positive developments, such as narrowing the scope of claims and increasing disclosure of technical benefits of inventions in the specification.

Section 101 of the Patent Act was codified as part of the 1952 Patent Act.  At the same time, Congress set forth in Section 282(b) a list of available defenses that may be asserted in a patent infringement action brought in court.  While Congress has tinkered with Section 282 a number of time since its enactment in 1952, including identifying other invalidity defenses, such as failure to comply with some portions of Section 112 (see 35 U.S.C. § 282(b)(3)), Congress has never added “Inventions Patentable” (35 U.S.C. § 101) as an available enumerated defense.

Specifically, the petition presents the question: is patent ineligibility under 35 U.S.C. § 101, which Congress did not codify in 35 U.S.C. § 282(b), not a cognizable defense in a patent litigation? The question presented parallels that of the one recently decided by the Supreme Court in SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, 137 S. Ct. 954 (2017). In SCA Hygiene, the Supreme Court examined 35 U.S.C. § 282(b), which enumerates the defenses that may be raised in a patent litigation, and held that laches, which is not recited in § 282(b), is not a defense to patent damages within the statute of limitations set forth in 35 U.S.C. § 286. RPost’s petition asks the Court to again examine § 282(b) in order to determine whether patent ineligibility under 35 U.S.C. § 101, which, like laches, is not recited in § 282(b), is similarly not a defense that may be raised in a patent litigation.