Facts Matter for Patent Eligibility Analysis

February 12, 2018

Facts no longer matter in American politics, but they still do in patent law. And that is good news for patent owners and applicants facing §101 challenges under the infamous Alice decision. Within the Alice framework, one must first determine whether the claims at issue are directed to a patent-ineligible concept, i.e., one of three judicial exceptions. If they are, then one considers the elements of each claim both individually and as a combination to determine whether the additional elements transform the claims into “significantly more” than the judicial exception. This transformation into eligible subject matter happens when the claim limitations recite more than “well understood, routine, and conventional activities previously known to the industry.” In its recent Berkheimer v. HP decision (Fed. Cir., Feb. 2018), the Court of Appeals stated:

“The question of whether a claim element or combination of elements is well-understood, routine and conventional to a skilled artisan in the relevant field is a question of fact. Any fact, such as this one, that is pertinent to the invalidity conclusion must be proven by clear and convincing evidence.”

This statement is significant because it clarifies that the question of whether a claim recites patent eligible subject matter is a “validity” question based on underlying facts, and not merely a “threshold” legal question. As such, in patent infringement cases, an accused infringer must prove patent ineligibility by clear and convincing evidence.

This decision should help patent owners defend the validity of their patents on the pleadings, as well as at the summary judgment stage, by raising genuine factual issues and preventing judges from declaring their patents invalid as a matter of law. Indeed, in Berkheimer v. HP, the Court of Appeals vacated the district’s grant of summary judgment that dependent claims 4-7 are ineligible under 101 because of fact questions created by the specification. The factual question raised was whether the improvement of reducing redundancy when digitally archiving files, as discussed in the specification, creates a factual dispute regarding whether the claims describe well-understood, routine and conventional activities for archiving files.

This aspect of the decision highlights other interesting strategies for patent applicants: describe in the specification how the claimed invention improves a specific technology; add dependent claims that capture these improvements; and argue the dependent claims separately from the broader independent claims. This decision should also help applicants facing conclusory §101 rejections at the USPTO. While the standard of proof is lower at the USPTO (preponderance of the evidence) than in litigation, applicants (and patent owners in post-grant reviews) should counter such challenges by submitting rebutting evidence (e.g., an expert declaration that a limitation is not routine and well-known) in support of the facts underlying the analysis.