Fed Circuit Watch: Another §101 Decision, Different Rationale, May Signal Future Changes to Patent-Eligibility Analysis

As of February 14, 2018, at last count, there have been six substantive opinions rendered by the Court of Appeals for the Federal Circuit relating to 35 U.S.C. §101, creating an unusually large body of §101 jurisprudence within only six weeks of the calendar year.  Two of these opinions, Move, Inc. v. RE/MAX Int’l, Inc., and Zuili v. Google LLC, were disposed as non-precedential authorities.  Four, however, have been deemed as precedential.  Of these four, in three the Fed Circuit has found the claims to be of patent-eligible subject matter.  The fourth, this case, Berkheimer v. HP Inc.,[1] the Fed Circuit found some claims were patent-eligible, and some others were not.

The facts are as follows.

Steven Berkheimer sued HP for patent infringement of U.S. Patent No. 7,447,713, directed to “System and method for archiving and outputting documents or graphical items.”  HP moved for, and was granted, summary judgment based on the patent-ineligible subject matter under §101, for which Berkheimer appealed.

Claims 1 and 4 of the ‘713 patent recite:

1. A method of archiving an item comprising in a computer processing system:
presenting the item to a parser;
parsing the item into a plurality of multi-part object structures wherein portions of the structures have searchable information tags associated therewith;
evaluating the object structures in accordance with object structures previously stored in an archive;
presenting an evaluated object structure for manual reconciliation at least where there is a predetermined variance between the object and at least one of a predetermined standard and a user defined rule

4. The method as in claim 1 which includes storing a reconciled object structure in the archive without substantial redundancy.

Patent-eligibility analysis begins by applying the Alice test.  First, the claim must be determined to be directed toward one of the judicially-excluded exceptions: law of nature, natural phenomenon, or abstract idea.[2]  If so, the claim’s elements are then reviewed to determine if additional elements transform the claim into something “significantly more” than the abstract idea itself.[3]

Before embarking on its patent-eligibility analysis, the Fed Circuit panel, comprised of Judges Moore, Taranto, and Stoll, first discussed the indefiniteness issue under 35 U.S.C. §112(b).[4]  “A lack of definiteness renders the claim invalid,” and “claims viewed in light of the specification and prosecution history, must inform those skilled in the art about the scope of the invention with reasonable certainty.”[5]  Specifically, the term “archive exhibits minimal tendency” was deemed under intrinsic evidence at trial, and determined as leaving the POSITA with a “highly subjective meaning of ‘minimal redundancy’.”[6]  The panel found the expert’s testimony, who testified that “minimal tendency” would not have been understood by a POSITA, supported a finding of indefiniteness.  Further, the specification and the prosecution history were both unclear as to the definition of “minimal tendency.”  As a result, the panel held claims 10-19 were invalid due to indefiniteness.

Moving on to the §101 analysis, as to step 1, the panel found the patent-eligibility of the claims as follows:

Claims 1-3 and 9, directed to the “abstract idea of parsing and comparing data”;

Claim 4, directed to the “abstract idea of parsing, comparing, and storing data”; and

Claim 5-7, directed to the “abstract idea of parsing, comparing, storing, and editing data.”[7]

The panel found analogies with previous Fed Circuit rulings which had held extracting, comparing, and storing data were abstract ideas.[8]  Further, the “parsing and comparing” of data in claims 1-3 and 9 were similar to the “collecting and recognizing” of data in Content Extraction.[9]  In addition, the panel noted Berkheimer’s own admission that parsers “existed for years prior to his patent.”[10]

The panel then analyzed step 2 by reviewing whether the “claim limitations involve more performance of well-understood, routine, and conventional activities previously known to the industry,”[11] and specifically noted that a POSITA’s knowledge of an element as well-understood, routine, and conventional is a question of fact.

Whether a claim recites patent eligible subject matter is a question of law which may contain disputes over underlying facts.[12]

Here, the panel found that the district court erred in finding no underlying factual issues relevant to the §101 analysis.

Whether something is well-understood, routine, and conventional to the skilled artisan at the time of the patent is a factual determination.  Whether a particular technology is well-understood, routine, and conventional goes beyond what is known in the prior art.  The mere fact that something is disclosed in a piece of prior art [] does not mean it was well-understood, routine, and conventional.[13]

(Emphasis added.)

The panel specifically analyzed the wording of the ‘713 specification, noting that there was a description of an inventive feature storing parsed data in a “purportedly unconventional manner.”  The parties disputed whether these improvements to the computer’s functionality were actually captured in the claims.  This procedural fact demonstrated there was a factual dispute between the parties as to what was determined to be well-understood in the art.

As a result, the panel determined claims 1-3 and 9 were ineligible under §101, and affirmed the lower court’s decision.  However, the panel found claims 4-7 as containing limitations referencing the purportedly unconventional concept as described in the spec.  Therefore, the panel held that claims 4-7, at the very least, were arguably eligible under §101, and vacated and remanded for further determination the district court’s decision.

The takeaway of Berkheimer is of important consequence.  §101 analysis had been, up until now, a somewhat confusing but rather staid analysis of law relating to patent-eligibility.  Now, with this holding, future litigants arguing a §101 eligibility issue may need to further support their ineligibility arguments with actual factual evidence.  This, in turn, may make it more difficult to invalidate a patent under §101.

[1] 881 F.3d 1360 (Fed. Cir. 2018), aff’g-in-part, vacating-in-part, remanding Berkheimer v. Hewlett-Packard Co., 2015 WL 4999954 (N.D. Ill. Aug. 21, 2015).

[2] See Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347, 2354-55 (2014); Berkheimer, supra (slip op. at 6).

[3] See Alice, supra, at 2355; see also Mayo Collaborative Servs. v. Prometheus Labs, Inc., 132 S. Ct. 1289, 1294 (2012).

[4] A claim must “. . . particularly point[] out and distinctly claim[] the subject matter which the inventor . . . regards as the invention.”

[5] See Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120, 2125, 2129 (2014).

[6] Berkheimer, supra (slip op. at 3).

[7] Id. (slip op. at 10).

[8] Id.  See In re TLI Commc’ns LLC Patent Litig., 823 F.3d 607, 613 (Fed. Cir. 2016); Content Extraction & Transmission LLC v. Wells Fargo Bank, 776 F.3d 1343, 1347 (Fed. Cir 2014).

[9] Berkheimer, supra (slip op. at 11); Content Extraction, supra, 776 F.3d at 1347.

[10] Berkheimer, supra (slip op. at 11).

[11] Id. (slip op. at 12); see also Content Extraction, supra, 776 F.3d at 1347-48 (citing Alice, supra, 134 S. Ct. at 2359).

[12] Berkheimer, supra (slip op. at 13).

[13] Id. (slip op. at 14).