The Court of Appeals for the Federal Circuit just highlighted another approach plaintiffs can use to overcome early challenges to the validity of patent claims under 35 U.S.C. §101. What is that approach? It is a classic one: show there is a genuine issue of fact. That approach saved a subset of claims from summary judgment in Berkheimer v. HP.
Berkheimer sued HP for infringement of its patent “relat[ing] to digitally processing and archiving files in a digital asset management system.” The system parses files into objects and “tags objects to create relationships between them.” “The objects are analyzed and compared … to archived objects” to find variations. “The system then eliminates redundant storage of common text and graphical elements” improving efficiency and reducing storage costs.
In an Alice challenge, HP moved for summary judgment that certain claims are not patentable under 35 U.S.C. §101. In Alice v. CLS Bank, the Supreme Court recognized that “laws of nature, natural phenomena, and abstract ideas” are not patent-eligible subject matter under §101. To determine whether claims are patent eligible the Supreme Court set forth a two-part test in Mayo v. Prometheus as further explained in Alice. This test consists of the following steps:
Step 1: The court determines whether the claims are directed to an abstract idea.
Step 2: If the claims are directed to an abstract idea, then the court determines whether the claims include elements showing an inventive concept that transforms the idea into a patent-eligible invention. Step 2 is satisfied when the claim limitations “involve more than performance of ‘well-understood, routine, [and] conventional activities previously known to the industry.’”
“[W[hether a claim recites patent eligible subject matter is a question of law which may contain underlying facts.” Any fact, however, “that is pertinent to the invalidity conclusion must be proven by clear and convincing evidence.”
The district court granted summary judgment that a number of claims of Berkheimer’s patent were invalid under §101. On appeal, the Federal Court found the patent is directed to an abstract idea (Step 1) and then focused on Step 2 of the two-part test. While the patent-at-issue relates to a technique for archiving files, Berkheimer argued that “portions of the specification referring to reducing redundancy and enabling one-to-many editing contradict the district court’s finding that the claims describe well-understood, routine, and conventional activities.” Berkheimer thus argued there was a fact question to which HP had offered no evidence. The Federal Circuit agreed the validity of some of the claims turned on whether they cover “well-understood, routine and conventional” technology. “Whether something is well-understood, routine, and conventional to a skilled artisan at the time of the patent is a factual determination.” Therefore, the Court found there was a genuine issue of fact as to whether the disclosed system archives files in an inventive manner that transforms the abstract idea into a patent-eligible invention.
Given the genuine issue of material fact, the Federal Circuit found that it was inappropriate to invalidate the claims at the summary judgment stage. Note the Federal Circuit did not find the claims are directed to patent-eligible subject matter, but rather the district court judge should not have granted summary judgment given to the factual issue.
Therefore, a plaintiff’s patent can survive an Alice challenge in a motion to dismiss or motion for summary judgment if the plaintiff can show a genuine issue of fact as to whether the invention is well-understood, routine, and conventional to a skilled artisan at the time of the patent. Importantly, the Federal Circuit indicated not all cases involving Alice implicate questions of fact stating “not every §101 determination contains genuine disputes over the underlying facts…” Thus “[p]atent eligibility has in many cases been resolved on motions to dismiss or summary judgment.”
In light of Berkheimer, it will be interesting to see whether district courts are now more hesitant to invalidate claims as patent-ineligible in early stages of litigation.