Federal Circuit Vacates And Remands District Court’s Decision For Failing To Construe Claims Before Ruling On Patent Eligibility
09/04/2019On August 16, 2019, the Court of Appeals for the Federal Circuit (CAFC) issued an opinion vacating and remanding the United States District Court for the Northern District of California’s decision granting a Rule 12(c) motion for judgment on the pleadings. MyMail, Ltd. V. ooVoo, LLC, __ F.3d __ (Fed. Cir. Aug. 16, 2019). The CAFC held that the district court erred by declining to resolve a claim construction dispute prior to its ruling that the patents asserted by plaintiff MyMail are directed to unpatentable subject matter.
Section 101 of the United States patent laws prescribes the categories of inventions and discoveries that can properly be the subject of a patent: “any new and useful process, machine, manufacture, or composition of matter.” These categories are limited by judicially-created proscriptions against patenting abstract ideas, laws of nature, and natural phenomena.
The Supreme Court has set out a two-step framework for determining patent eligibility:
- determine whether the claims at issue are directed to one of the patent-ineligible concepts (such as an abstract idea); and, if so, then:
- determine whether the elements of the claim, considered both individually and as an ordered combination, recite an “‘inventive concept’—i.e., an element or combination of elements that is ‘sufficient to ensure that the practice amounts to significantly more than a patent upon the [ineligible concept] itself.’”
Patent eligibility may be determined on a Rule 12(c) motion, but only when there are no factual allegations that, if taken as true, prevent resolving the eligibility question as a matter of law. Aatrix Soft-ware, Inc. v. Green Shades Software, Inc., 882 F.3d 1121, 1125 (Fed. Cir. 2018).
MyMail’s patent infringement suits against ooVoo and IAC Search & Media (“IAC”) were originally filed at the end of 2016 in the Eastern District of Texas, and were transferred on motion to the District of Northern California in July 2017. The suits allege infringement of two related patents directed to methods of modifying toolbars on internet-connected computing devices. In October 2017, ooVoo and IAC each filed identical motions for judgment on the pleadings, asserting that the MyMail patents are directed to patent-ineligible subject matter under 35 U.S.C. § 101. MyMail opposed both motions, arguing that the claimed inventions are patent eligible, as evidenced by the construction of the claim term “toolbar” rendered in the Eastern District of Texas in an earlier proceeding involving one of the two asserted patents. ooVoo and IAC opposed the adoption of that construction. Without addressing this dispute, the district court for the Northern District of California issued orders granting ooVoo’s and IAC’s motions for judgment on the pleadings finding the asserted patent claims failed both steps of the Supreme Court’s Alice test.
At Alice step one, the district court found that the MyMail patent claims “are directed to a process for updating toolbar software over a network without user intervention,” and that such process corresponds to the abstract ideas of (1) transmitting data, analyzing data, and generating a response to transmitted data, and (2) using communications networks to update software stored on computers. At Alice step two, the district court noted that the specifications of the asserted patents confirmed prior widespread use of toolbars, and it concluded that the claimed adding or changing of a toolbar button based on data stored in a toolbar-defining database is routine and conventional, and as a result, that the MyMail patents are ineligible under § 101. MyMail appealed.
The CAFC vacated the district court’s decision and remanded the proceedings with instructions for the district court to address the parties’ dispute as to the construction of the term “toolbar.”
The CAFC reasoned that, because a patent eligibility determination requires a full understanding of the basic character of the claimed subject matter, if the parties raise a claim construction dispute at the Rule 12(c) stage, the district court must either adopt the non-moving party’s constructions or resolve the dispute to whatever extent is needed to conduct the § 101 analysis. See Aatrix Software, Inc. v. Green Shades Software, Inc., 882 F.3d 1125 (Fed. Cir. 2018). According to the CAFC, the district court for the Northern District of California did neither. It failed to resolve the parties’ dispute regarding the “toolbar” claim term, and it did not, for the purposes of its analysis, adopt the prior construction in the Eastern District of Texas advocated by MyMail. That construction, based on definitional language in the specification, was a “button bar that can be dynamically changed or updated via a Pinger process or a MOT script,” i.e., not a generic toolbar.
Judge Lourie dissented from the CAFC’s decision, and would have affirmed the lower court’s decision on the legal question of patentability, even under MyMail’s proposed construction of “toolbar.”