Knobbe/Martens: Intellectual Property Law

Invalidating Patents Under §101 in the Early Stages of Litigation Still Possible Post-Berkheimer and Aatrix

By Suyoung Jang and Cheryl T. Burgess December 3, 2018

Patent eligibility challenges under 35 U.S.C. §101 have been effective tools for defendants to obtain early dismissal of a case without extensive fact finding since the Supreme Court ruling in Alice. Whether a claim recites patent eligible subject matter is a question of law.[1] Thus, defendants can challenge patent eligibility at the outset of the case, either through a motion to dismiss under 12(b)(6) or on a motion for summary judgment, with the goal of concluding the litigation without incurring the expense of discovery and trial. 

However, recent Federal Circuit decisions have emphasized the role of factual questions in determining patent eligibility. In Berkheimer v. HP Inc., the Federal Circuit vacated a grant of summary judgment under § 101, finding that the claims arguably contained an unconventional inventive concept as described in the specification, which accordingly raised a “genuine issue of material fact making summary judgment inappropriate.”[2] Similarly, in Aatrix Software v. Green Shades Software, the Federal Circuit vacated and remanded a decision invalidating claims under §101 on a 12(b)(6) motion to dismiss. The majority stated that patent eligibility can be decided on a motion to dismiss “only when there are no factual allegations that, taken as true, prevent resolving the eligibility question as a matter of law.”[3] These cases have led many to speculate a decrease in early decisions based on §101 challenges.

Nevertheless, the Federal Circuit noted in Berkheimer that “not every § 101 determination contains genuine disputes over the underlying facts material to the § 101 inquiry.”[4] As demonstrated by the recent district court case CardioNet, LLC v. Infobionic, Inc, early patent eligibility decisions may still be an effective tool in the right circumstances despite the recent emphasis on factual questions underpinning patent eligibility.

In CardioNet, LLC v. Infobionic, Inc., CardioNet brought a patent infringement suit in the District Court of Massachusetts and asserted U.S. Patent 7,941,207, which covers a device configured to monitor cardiac activity and detect heart arrhythmia.[5] But the case was dismissed when District Court Judge Talwani granted a 12(b)(6) motion to dismiss on grounds that the ’207 patent was invalid under §101.[6]

Under Alice, a court applies a two-step framework to ascertain patent eligibility, asking (1) whether the claims are directed to a patent-ineligible concept and (2) whether the elements of each claim considered both individually and as an ordered combination transform the nature of the claim into a patent eligible application.[7]Applying Step 1 of Alice, Judge Talwani found that the claims were directed to the “abstract idea of measuring the variability of heartbeats.”[8] The court distinguished the ’207 patent from patents previously found eligible that were directed to improvement in computer technology.[9]  Though CardioNet argued that the ’207 patent was not directed to an abstract idea because the claims recited an improvement to the function of cardiac monitoring devices through the use of programmed rules, the court chose to table CardioNet’s argument for the second step of Alice.[10] Finding that the claims were directed to an abstract idea, the court moved on to Step 2 without invoking factual inquiries.[11]

Applying Step 2 of Alice, Judge Talwani found that the claims did not recite an inventive limitation to make them patent eligible.[12]  First, the court noted that the cardiac monitoring equipment and computer hardware as recited in the claims were performing their usual functions.[13] Next, though CardioNet argued that using “determination logic” to identify heart arrhythmia from heartbeat patterns recited an inventive concept, the court found that “determination logic” was broadly described without meaningful limitation.[14] The court concluded the that the asserted claims would preempt other technological systems directed to the abstract idea of monitoring and analyzing ventricular beats and thus the court held that the claims were patent ineligible.[15]

Berkheimer suggests that Step 2 of Alice may require fact inquiries when a court considers whether claims recite well-understood, routine, and conventional activities.[16] Moreover, in a 12(b)(6) motion, a court determines patent eligibility after accepting the factual allegations of the complaint and other allowable sources of information as true and adopting the non-movant’s claim construction.[17] In Aatrix, factual allegations made in the proposed amended complaint that described the deficiencies in the prior art, the development of the patented invention, and the improvements represented by the patented invention were enough to defeat a 12(b)(6) motion to dismiss. Here, however, the court did not find such alleged facts—in the complaint or the patent itself—that would create a genuine dispute over the patented invention’s innovative aspects, or lack thereof.[18] Indeed, even though CardioNet argued that “determination logic” represented an improvement in cardiac monitoring activity, CardioNet did not—perhaps, could not—point to any alleged facts in either the complaint or specification to raise a genuine dispute as to whether the claims did more than recite well-understood, routine, and conventional activities.

The district court’s ruling gives rise to two takeaways. One, even after Berkheimer and Aatrix, a defendant may successfully invalidate a patent under §101 at the outset of litigation. But stay tuned. An appeal to the Federal Circuit has been filed for this case and it may be interesting to see whether the Federal Circuit will scrutinize the district court’s application of Berkheimer and Aatrix.  

Next is the unaddressed question of whether the preclusion aspect of Alice Step 2 contains factual inquiries that invoke Berkheimer. In analyzing the “inventive step,” Judge Talwani focused on whether the claims “impose[d] a meaningful limit on the abstract idea of identifying [heart arrhythmia].”[19] The court found that the claim element “determination logic” was “undefined and unspecified” in the patent and agreed with the defendant that the dependent claims “provide no meaningful details on how to implement [determination logic], and thus add nothing inventive.”[20] As with many other aspects of analyzing subject matter eligibility, Judge Talwani’s analysis appears to overlap in some respect with an analysis of validity. As the court scrutinized the claims, the analysis begins to resemble an enablement or indefiniteness analysis under §112. Whether a claim is adequately supported by the disclosure under §112 is a fact-intensive inquiry.[21] It could be interesting going forward to see whether courts expand Berkheimer to isolate the factual questions surrounding the preclusion aspect of Step 2. 

Editor: Mauricio Uribe

 

 



[1] See, e.g., OIP Technologies, Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362 (Fed. Cir. 2015).

[2] Berkheimer v. HP Inc., 881 F.3d 1360, 1370 (Fed. Cir. 2018).

[3] Aatrix Software, Inc. v. Green Shades Software, Inc., 882 F.3d 1121, 1125 (Fed. Cir. 2018).

[4] Berkheimer at 1368 (emphasis added).

[5] U.S. Patent 7,941,207, available at https://patents.google.com/patent/US7941207B2.

[6] CardioNet at *1.

[7] Alice Corp. Pty. Ltd. v. CLS Bank Intern., 134 S. Ct. 2347, 2354 (2014).

[8] CardioNet at *4.

[9] Id. (citing Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1336 (Fed. Cir. 2016)).

[10] Id.

[11] While Berkheimer explicitly addressed the role of factual inquiries at Step 2 of Alice, a subsequent Federal Circuit case suggests that factual questions may play a role at Step 1. See Data Engine Technologies LLC v. Google LLC, No. 2017-1135, 2018 WL 4868029, *6 (Fed. Cir. 2018) (considering reports included in prosecution history that showed that the invention was “applauded in the industry” in finding that the claims provided a technical improvement over prior art).

[12] CardioNet at *8.

[13] Id. at *5.

[14] Id. at *8.

[15] Id.

[16] Berkheimer at 1369.

[17] See, e.g., Aatrix at 1125.

[18] See CardioNet at *8 (“Here, there are no disputes of fact as the court accepts the Plaintiffs' non-conclusory factual assertions in the complaint and the patent as true.”).

[19] Id. at *6.

[20] Id. at *7-*8.

[21] Compliance with the written description requirement is a question of fact which must be resolved on a case-by-case basis. Vas-Cath, Inc. v. Mahurkar, 935 F.2d at 1563 (Fed. Cir. 1991).

 

Meet the Knobbe Martens Attorneys

Invalidating Patents Under §101 in the Early Stages of Litigation Still Possible Post-Berkheimer and Aatrix
Suyoung Jang is an associate in the firm’s New York office. His practice focuses on patent prosecution in medical device technologies and software. Suyoung completed his...
Invalidating Patents Under §101 in the Early Stages of Litigation Still Possible Post-Berkheimer and Aatrix
Recognized by Los Angeles Magazine as one of the “Top Women Attorneys in Southern California” and by Super Lawyers magazine as a Southern California “Rising Star,”...
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