Federal Circuit Patent Ruling Clarifies Section 101 Procedures

Fed. Circ. Patent Ruling Clarifies Section 101 Procedures By Thomas Sprankling and Vikram Iyer (August 27, 2024) Courts have long interpreted Title 35 of the U.S. Code, Section 101 to bar patenting abstract ideas, laws of nature or natural phenomena.[1] But until six years ago, the U.S. Court of Appeals for the Federal Circuit's Section 101 case law could have at least reasonably been understood to treat the issue as a pure question of law to be most often resolved at the motion-to-dismiss stage. A patent either claimed an unpatentable idea, law or phenomenon on its face, or it did not.[2] Thomas Sprankling The Federal Circuit's 2018 decisions in Aatrix Software Inc. v. Green Shades Software Inc.[3] and Berkheimer v. HP Inc.[4] complicated this type of binary analysis by holding that Section 101's applicability can turn on questions of fact — such as whether the patent directed to an abstract idea nevertheless included an inventive concept that was not conventional, routine or well understood.[5] At the time, a dissenting judge observed that the rulings would "creat[e] a period of uncertainty" regarding the procedure on how to raise or respond to Section 101 challenges, and predicted that Section 101 "will rarely be resolved early in the case, and will instead be carried through to trial."[6] Vikram Iyer Commentators made similar predictions, noting that Aatrix and Berkheimer may have profound implications, such as making "district courts … more reluctant to address the [Section] 101 analysis" before trial.[7] Today, while many other questions remain about the scope of Section 101, the path to successfully filing or contesting a Section 101 motion to dismiss is relatively well trodden. The Federal Circuit's Aug. 6 decision affirming a dismissal at the pleading stage — Mobile Acuity Ltd. v. Blippar Ltd.[8] — encapsulates the principles developed over the last halfdecade. The complaint's allegations may not automatically fend off a Section 101 motion to dismiss, but can make the motion harder. Mobile Acuity reiterates a basic principle reaffirmed numerous times since Aatrix: As a general matter, a defendant may raise a Section 101 challenge at the motion-to-dismiss stage.[9] More notably, Mobile Acuity confirms that — at least under Ninth Circuit procedure — a plaintiff cannot evade a motion to dismiss simply by failing to make allegations related to Section 101 in the complaint.[10] Although Section 101 is an affirmative defense, it can be raised in a motion to dismiss where the fact that the patents claim an unpatentable idea, law or phenomenon is apparent on the face of those patents.[11] Because the Mobile Acuity Court held that the ability to raise an affirmative defense at the pleading stage was a question controlled by regional circuit law, parties filing outside the Ninth Circuit should consult their jurisdiction's case law to confirm that it permits similar facial challenges at the pleading stage. If plaintiffs cannot avoid a pleading-stage Section 101 challenge by omitting Section 101related allegations from their complaint, Mobile Acuity teaches that plaintiffs may consider embracing Section 101. For example, it has been well established since the Federal Circuit's decision in cases like Electric Power that a patent claim that can be reduced to the basic concepts of "collecting, analyzing, and presenting information using ... conventional operations of generic computer components" cannot survive Section 101.[12] A plaintiff may wish to provide robust factual allegations in the complaint explaining why the claimed invention recites an improvement in computer functionality that goes beyond speed and efficiency, or an inventive concept to place itself in a stronger position in opposing a motion to dismiss.[13] However, those allegations must be specific, as conclusory allegations will be disregarded, as will allegations that are unsupported by or that contradict the patent's written description.[14] Both plaintiffs and defendants should consider staking out a clear position on whether the patent has a representative claim for purposes of Section 101. Mobile Acuity is perhaps most notable for clarifying the standards regarding when a claim is considered representative for purposes of Section 101. Whether a patent with dozens of claims can be declared invalid based on an exemplar claim or two can be crucial at the motion-to-dismiss stage, where page space is often limited and any increase in the complexity of the technology at issue might push a district court toward delaying resolution of the Section 101 analysis until a later stage. Mobile Acuity teaches that, if a defendant chooses to identify a representative claim, it should be clear and steadfast in explaining the claim's representativeness. It is the defendant's burden to show that the challenged claims "are 'substantially similar and linked to the same' ineligible concept."[15] In other words, absent some agreement with — or a concession by — the plaintiff on representativeness, a defendant always has the initial duty to provide a persuasive theory for why a particular claim or claims are representative of the rest. As the Mobile Acuity court explained, this burden is required by the presumption of validity and the background statutory principle that "each claim of a patent … shall be presumed valid independently of the validity of the other claims."[16] A plaintiff, however, cannot contest representativeness without providing some explanation to refute a...