The per curiam US Court of Appeals for the Federal Circuit denied petitioners' requests for en banc review in the Berkheimer and Aatrix Software, Inc., cases, holding that the issue of whether a claim element is well understood, routine and conventional to a skilled artisan in the relevant field at a particular time is a fact question to be answered under normal procedural standards. Berkheimer v. HP Inc., Case No. 17-1437 (Fed. Cir., May 31, 2018); Aatrix Software, Inc. v. Green Shades Software, Inc., Case No. 17-1452 (Fed. Cir., May 31, 2018) (reh'g denied).
In February 2018, the Federal Circuit vacated a grant of summary judgment for patent ineligibility in Berkheimer and vacated a district court's grant of a motion to dismiss in Aatrix for patent ineligibility ( IP Update, Vol. 21, No. 3). In both cases, the Court emphasized the factual disputes underlying the § 101 analysis.
Appellees HP and Green Shades Software both petitioned for rehearing en banc at the Federal Circuit in their respective cases, and they presented the issues to the Court as follows:
Berkheimer
- Is the threshold inquiry of patent eligibility under 35 USC § 101 a question of law without underlying factual issues that might prevent summary judgment?
- Is the appropriate inquiry under Alice step 2 whether the claims transform an abstract idea into a patent-eligible application, or merely "whether the invention describes well-understood, routine, and conventional activities"?
- Is a statement in a patent specification reciting that the invention is new and improves upon the prior art enough to create a genuine issue of material fact that precludes summary judgment as to patent eligibility under 35 USC § 101?
Aatrix Software, Inc.
- Is the threshold inquiry of patent eligibility under 35 USC § 101 a question of law without underlying factual issues based on compliant allegations pled to avoid dismissal under Fed. R. Civ. P. 12(b)(6)?
In the concurring opinion authored by Judge Moore (and joined by four additional judges), the Court answered the primary issue in both petitions in the opening sentence: "Berkheimer and Aatrix stand for the unremarkable proposition that whether a claim element or combination of elements would have been well-understood, routine, and conventional to a skilled artisan in the relevant field at a particular point in time is a question of fact." In answering that fact question, the Court noted that it may be necessary to weigh evidence to determine whether additional limitations beyond the abstract idea would have been well understood, routine and conventional to a person having ordinary skill in the art.
With respect to the evidence itself in an Alice step 2 inquiry, the Court noted that the challenger bears the burden of demonstrating a lack of patent eligibility, and there must be evidence supporting that position. The Court held that relying on the specification alone may support such a position where the specification "admits" that additional claim elements are well understood, routine and conventional. In such a situation, it will be "difficult, if not impossible for a patentee to show a genuine dispute," the Court noted.
Moore's concurring opinion also made clear that normal procedural standards for fact questions apply to the underlying fact question(s) in an Alice analysis, and if the patentee's evidence showing that aspects of the invention at issue are not well understood, routine and conventional does not pertain to the invention as claimed, it will not create a factual dispute as to those claims. The Court also reiterated that a conclusion—such as that in Aatrix—that the claims at issue survive a motion to dismiss challenge is not a holding that they are patent eligible. Similarly, the Court reiterated the sentiment from the Berkheimer opinion that the decision in that case should not cast doubt on the propriety of previous cases resolving patent eligibility on motions to dismiss or summary judgment.
Judges Lourie and Newman together concurred in the denial of the petition for rehearing en banc. Lourie wrote separately to stress that § 101 law needs clarification by a higher authority, such as Congress. Additionally, Lourie posed the question of why Alice step 2 in an abstract idea analysis is necessary at all. According to Lourie, if a claim recites "something more," such as an inventive physical or technological step, it is not an abstract idea and can be examined under the anticipation or obviousness statutes. Therefore, the step 2 prohibition on identifying the "something more" from elements that are well understood, routine and conventional is the equivalent of a §§ 102 and 103 inquiry.
Judge Reyna wrote separately to dissent from the denial of the petition for rehearing en banc. According to Reyna, the Aatrix and Berkheimer decisions alter the § 101 analysis in a significant and fundamental manner by departing from the inquiry as a question of law to presenting the analysis "as predominately a question of fact." One of Reyna's concerns moving forward is that "the court offers no meaningful guidance to the bar, the government, or the public on how to proceed on these new grounds." He further posed the following questions:
- To what extent will discovery be allowed to prove or disprove a fact that has been placed in contention?
- Does this new factual inquiry extend to other aspects of the § 101 inquiry, such as whether a claim is directed to an abstract idea or a natural phenomenon?
- Can expert opinion supplant the written description?
- Does the court or jury determine the factual issue?
- What deference is due to the fact finder?
According to Reyna, the Aatrix decision removes the inventive concept inquiry from the claims and specification, and moves it to extrinsic evidence. Further, transforming a legal inquiry into a factual dispute will cause § 101 disputes to carry-through to trial as opposed to being resolved early in a given case.
Practice Note: Time will tell if Judge Reyna's concerns come to fruition, but in the meantime, litigators should be aware that a factual inquiry in a § 101 dispute may not necessarily be a straightforward exercise.
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