On May 31, 2018, the Court of Appeals for the Federal Circuit issued two per curiam orders denying petitions for en banc review. Berkheimer v. HP Inc.,[1] and Aatrix Software, Inc. v. Green Shades Software, Inc.,[2] were decided by a smaller Fed Circuit panels earlier in the year. Both per curiam orders were heard before Chief Judge Prost, and an expanded panel of Judges Newman, Lourie, Dyk, Moore, O’Malley, Reyna, Wallach, Taranto, Chen, Hughes, and Stoll, and denied petitions for rehearing and rehearing en banc. Berkheimer dealt with patent eligibility under 35 U.S.C. §101 disposed of in a motion for summary judgment, and the case details were discussed earlier on this blog. Aatrix dealt with patent eligibility under §101 disposed of in a motion for failure to state a claim under Rule 12(b)(6), of which the case details were also discussed on this blog.
Judge Moore wrote a concurring opinion, joined by Judges Dyk, O’Malley, Taranto, and Stoll. She begins her opinion with a strong pronouncement of the two cases:
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.[3]
Her opinion, while well-reasoned was very dry, and focused on the procedural aspects of a §101 analysis. She noted that Mayo allowed disclosures in the specification to be used to consider certain claim techniques were routine or well-known in the art.
In a situation where the specification admits the additional claim elements are well-understood, routine, and conventional, it would be difficult, if not impossible, for a patentee to show a genuine dispute.[4]
She noted that where there is a genuine dispute of fact, Federal Rule 56 requires that a motion for summary judgment be denied. Further, if a §101 eligibility is challenged at the pre-discovery stage, Rule 12(b)(6) requires accepting the complaint’s factual allegations as true and construing them in a light most favorable to the plaintiff. She went further to state:
We cannot adopt a result-oriented approach to end patent litigation at the Rule 12(b)(6) stage that would fail to accept as true the complaint’s factual allegations and construe them in the light most favorable to the plaintiff, as settled law requires. The conclusion that the patent claims in Aatrix survived the motion to dismiss is not a holding that they are eligible. And the mere fact that there were sufficient allegations in the pleading to state a claim for patent infringement does not mean that the case need go to trial.[5]
Judge Moore did note that Berkheimer and Aatrix were narrow decisions; that is, to the extent that a particular claim element or combination was at-issue, whether that claim element or combination were well-understood, routine, or conventional is a question of fact. As such, in step 2 of the Alice test, a factual may be utilized to determine eligibility.
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, and Berkheimer and Aatrix merely hold that it must be answered under the normal procedural standards, including the Federal Rules of Civil Procedure standards for motions to dismiss or summary judgment and the Federal Rules of Evidence standards for admissions and judicial notice.[6]
Judge Lourie concurred, joined by Judge Newman. He indicated early in his opinion the common refrain amongst patent practitioners of their frustration with the §101 legal framework:
[T]he law needs clarification by higher authority, perhaps by Congress, to work its way out of what so many in the innovation field consider are §101 problems. Individual cases, whether heard by this court or the Supreme Court, are imperfect vehicles for enunciating broad principles because they are limited to the facts presented. Section 101 issues certainly require attention beyond the power of the court.[7]
He recited the §101 case law starting with Chakrabarty through to Alice. The Alice test, he understood, was problematic for practitioners and inventors because:
We are now interpreting what began, when it rarely arose, as a simple §101 analysis, as a complicated multiple-step consideration of inventiveness (“something more”), with the result that an increasing amount of inventive research is no longer subject to patent. For example, because the Mayo analysis forecloses identifying any “inventive concept” in the discovery of natural phenomena, we have held as ineligible subject matter even meritorious inventions that “combined and utilized man-made tools of biotechnology in a way that revolutionized prenatal care.”[8]
He continues to make the case for Congressional intervention because of the growing differentiation between abstraction and innovation:
Abstract ideas indeed should not be subject to patent. They are products of the mind, mental steps, not capable of being controlled by others, regardless what a statute or patent claim might say.[9] [However,] [s]tep two’s prohibition on identifying the something more from “computer functions [that] are “well-understood, routine, conventional activities” previously known to the industry[10] is essentially a §§102 and 103 inquiry . . . . I therefore believe that §101 requires further authoritative treatment. Thinking further concerning §§101, but beyond these cases, steps that utilize natural processes, as all mechanical, chemical, and biological steps do, should be patent-eligible, provided they meet the other tests of the statute, including novelty, nonobviousness, and written description. A claim to a natural process itself should not be patentable, not least because it lacks novelty, but also because natural processes should be available to all. But claims to using such processes should not be barred at the threshold of a patentability analysis by being considered natural laws, as a method that utilizes a natural law is not itself a natural law.[11]
Judge Reyna appeared to be to sole dissenting judge. Filing identical dissenting opinions in both en banc review cases,[12] he was concerned that the earlier Berkheimer and Aatrix decisions went against well-established Fed Circuit precedent that held that the §101 analysis was a question of law. He emphasized that “ a §101 patent eligibility determination can be resolved without the need to look beyond the four corners of the patent.”[13] As such, it becomes a question of law for which a court would be adequately positioned to decide. Introducing facts, Judge Reyna posited, would muddy the waters between what could be properly disposed of on the pleadings at the Rule 12(b)(6) stage, or even at summary judgment before a lengthy and expensive trial.
As we discussed earlier in this blog reporting on both panel decisions of Berkheimer and Aatrix, these cases are important in the §101 dialogue because they expand the realm of patentable inventions through the inclusion of factual findings in the §101 analysis, as opposed to a strict legal assessment of eligibility. Because of the importance of these cases, expect petitions for writ of certiorari before the U.S. Supreme Court in both cases in the coming months.
[1] Berkheimer v. Hewlett-Packard Co., 2015 WL 4999954 (N.D. Ill. Aug. 21, 2015), aff-in-part, vacated-in-part, and remanded, 881 F.3d 1360 (Fed. Cir. 2018), en banc denied, ___F.3d___ (Fed. Cir. 2018) (slip op.).
[2] Aatrix Software, Inc. v. Green Shades Software, Inc., Case No. 3:15-cv-00164-HES-MCR (M.D. Fla. Feb. 5, 2015), rev’d, vacated and remanded, 882 F.3d 1121 (Fed. Cir. 2018), en banc denied, ___F.3d___ (Fed. Cir. 2018) (slip op.).
[3] Berkheimer, supra (slip op. at 1) (Moore, J., concurring); Aatrix, supra (slip op. at 1) (Moore, J., concurring).
[4] See Berkheimer, supra (slip op. at 4) (Moore, J., concurring).
[5] See Aatrix, supra (slip op. at 7) (Moore, J., concurring).
[6] Id. (slip op. at 10) (Moore, J., concurring).
[7] Id. (slip op. at 2) (Lourie, J., concurring).
[8] Id. (slip op. at 3) (Lourie, J., concurring), citing Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015).
[9] See Gottschalk v. Benson, 409 U.S. 63, 67 (1972) (“mental processes, and abstract intellectual concepts are not patentable, as they are the basic tools of scientific and technological work.”).
[10] See Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S.___, 134 S. Ct. 2347, 2359 (2014).
[11] See Berkheimer, supra (slip op. at 3-4) (Lourie, J., concurring).
[12] See Aatrix, supra (slip op. at 1-2, fn.1) (Reyna, J., dissenting).
[13] See Berkheimer, supra (slip op. at 13) (Reyna, J., dissenting); Aatrix, supra (slip op. at 13) (Reyna, J., dissenting).