Federal Circuit Emphasizes Factual Nature Of Section 101 Determinations
06/05/2018On May 31, 2018, the United States Court of Appeals for the Federal Circuit (CAFC) denied a request for en banc rehearing of its Berkheimer patent-eligibility panel opinion. Berkheimer v. HP Inc., Appeal No. 2017-1437. (See our prior post on the CAFC’s Berkheimer opinion here.) Eight of the Court’s twelve judges who decided the issue signed opinions concurring in or dissenting from the decision declining en banc rehearing. The concurring opinion filed by five of the judges (Judges Moore, Dyk, O’Malley, Taranto, and Stoll) is of particular interest because of its emphasis on the fact issue the Court recently found to be underlying the question of patent eligibility under 35 U.S.C. § 101.
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.
In the wake of the Supreme Court’s Alice Corp. v. CLS Bank opinion, 134 S.Ct. 2347 (2014), section 101 defenses have appeared more and more frequently, often in the context of computer-implemented inventions. District courts had settled on addressing these defenses via motions to dismiss or for judgment on the pleadings, a procedure the CAFC had generally endorsed.
As discussed in our prior post, in the Berkheimer panel opinion issued in February of this year, the CAFC ruled that one question frequently involved in section 101 analyses—whether certain elements of the patent claim were “well-understood, routine, and conventional” at the time of the invention—is a question of fact, thus barring judgment on the pleadings when that question is at issue.
In their opinion concurring in the denial of rehearing, the five judges emphasized that this fact issue must be decided on the same basis as any other fact issue, and that the burden of proof is on the patent challenger to show conventionality. A genuine dispute about conventionality thus could not be decided on summary judgment.
The judges noted that to begin with, any well-pleaded allegations in the complaint must be taken to be true, absent evidence to the contrary. Interestingly, the judges also appeared to hold that statements in the patent specification should also be assumed to be true, regardless of whether those statements are harmful or helpful to the patent owner’s position. It is unclear as yet how much evidentiary weight the Court will give to such statements as compared to, for example, expert testimony, but going forward, patent drafters should consider including in their specifications explicit statements about unconventionality, and excluding background statements about conventionality of any claim elements.
The critical question that the Court has not yet answered is whether the fact issue of conventionality is for the judge or for the jury. The fact questions of anticipation under 35 U.S.C. § 102 and the fact questions underlying obviousness under 35 U.S.C. § 103 are both matters for the jury, but any fact questions underlying claim construction are not. The CAFC will soon have to decide whether the issue of conventionality is more like claim construction, in which case it could be decided by a judge, for example as part of a Markman claim-construction hearing, or more like other invalidity decisions, in which case it would be an issue for the jury. However, there will often be considerable overlap between the fact questions pertinent to a section 101 analysis and those pertinent to other validity issues, which would appear to make it likely that at least in such cases the section 101 issue will go to the jury.
The CAFC’s decisions and opinions in this case mean that in many cases, a section 101 defense will no longer be a silver bullet that an accused infringer can use to end a case at the pleading stage. Indeed, a section 101 defense may not even be amenable to decision at the claim-construction stage of a litigation. Of course, as the CAFC has emphasized, whether there is a genuine issue of material fact pertinent to a section 101 defense will be a case-by-case decision, and in any particular case a patent owner may not be able to produce evidence sufficient to create such an issue.