Will a SCOTUS Grant in Berkheimer v. HP Finally Get Alice Out of Wonderland?

Kaminski_Jeffri_LRFeatured Expert Contributor, Intellectual Property—Patents

Jeffri A. Kaminski, Venable LLP

The future of patent-infringement challenges under 35 U.S.C. § 101 may be in the hands of the Solicitor General of the United States. The defendant in Berkheimer v. Hewlett Packard petitioned the U.S. Supreme Court to grant certiorari and overturn a U.S. Court of Appeals for the Federal Circuit decision that applied the high court’s Alice Corporation v. CLS Bank International decision. Hewlett Packard petitioned after the Federal Circuit denied rehearing en banc, a denial that included an exasperated concurrence by two judges seeking further guidance on how the court should interpret Alice. On January 7, the Supreme Court requested the views of the Solicitor General.

The case began in 2016, when inventor Steven Berkheimer asserted U.S. Patent No. 7,447,713 against Hewlett Packard (“HP”). The ’713 patent relates to digitally processing and archiving data. HP moved for summary judgement under § 101.

The district court applied the two-part test articulated in Alice and Mayo: “First, [] determine whether the claims at issue are directed to” a patent ineligible concept and, if so, “consider the elements of each claim both individually and as an ordered combination to determine whether the additional elements transform the nature of the claim into a patent eligible application.” (Quoting Mayo Collaborative Services v. Prometheus Laboratories, Inc.).

The district court found eight of the claims to be directed to the abstract idea of using a generic computer to collect, organize, and compare data. It further concluded that the claims do not contain an inventive concept under Alice’s second step because the claims describe “steps that employ only ‘well understood, routine, and conventional’ computer functions” and are claimed “at a relatively high level of generality.” Thus, the claims were deemed statutorily ineligible of patent protection.

Berkheimer appealed to the Federal Circuit. The panel affirmed the district court’s finding that the claims were directed to an abstract idea. However, when evaluating the second step of the Alice test, the court noted: “While patent eligibility is ultimately a question of law, the district court erred in concluding there are no underlying factual questions to the § 101 inquiry. [] Whether something is well-understood, routine, and conventional to a skilled artisan at the time of the patent is a factual determination.” Berkheimer argued that the claims had an unconventional element that eliminated redundancies in a way not disclosed in the prior art.

The court determined that there was an inventive concept described in the specification; therefore, whether the inventive concept is sufficient to satisfy the Alice test for eligibility is a factual dispute. The Federal Circuit also said that inventive concept must be “more than a well-understood, routine, and conventional activity.”

HP moved for a rehearing en banc, but the Federal Circuit declined, stating that while not all patent eligibility considerations have underlying questions of fact, these claims did. The court pointed out that “[e]very other type of validity challenge is either entirely factual (e.g., anticipation, written description, utility), a question of law with underlying facts (e.g., obviousness, enablement), or a question of law that may contain underlying facts (e.g., indefiniteness).” Thus, the court said, it is not surprising that patent eligibility is a question of law that may contain underlying issues of fact.

Two members of the Federal Circuit did, however, point out that this case highlighted the problems with the two-part test developed in Alice. In a concurring opinion, Judges Lourie and Newman lamented:

“[b]ut why should there be a step two in an abstract idea analysis at all? If a method is entirely abstract, is it no less abstract because it contains an inventive step? And, if a claim recites ‘something more,’ an ‘inventive’ physical or technological step, it is not an abstract idea, and can be examined under established patentability provisions such as §§ 102 and 103.”

In its petition for certiorari, HP asserted that instead of inquiring about the existence of an inventive concept, the Federal Circuit improperly determined that an inventive concept exists if there is anything more than “well-understood, routine, [and] conventional activities.” HP also argued that, by turning the inventive-concept inquiry into something that turns on the state of the art, the question of patent eligibility changes over time. Based on the letter of § 101 law as written, subject-matter eligibility is not intended to be based on the time of invention but on the nature of the invention.

Berkheimer waived his right to respond, but this past December, the Court ordered him to file a response. In his brief opposing cert, Berkheier claimed that the Federal Circuit’s ruling was not so broad as to require a factual ruling on every claim of ineligibility. The brief argued that the Federal Circuit’s opinion would not, as HP claimed, upend § 101 challenges because the court only held that there may be a question of fact in rare circumstances.

It is unclear whether the Supreme Court will use this case as a vessel to clarify § 101. The Court’s request for the views of the Solicitor General hints that some justices may be interested in granting review. One should note that in its brief in Mayo, the Solicitor General took a fairly expansive view of patent-eligible subject matter.  The Solicitor General presented an analysis in Mayo that “virtually any step beyond a statement of a law of nature itself should transform an unpatentable law of nature into a potentially patentable application sufficient to satisfy § 101’s demands.”

This analysis largely tracked § 101 jurisprudence at the time.  The Supreme Court considered and rejected the Solicitor General’s view.  And the Court subsequently expanded the realm of abstract ideas to software in Alice.  Given the Solicitor General’s prior analysis on § 101, the office may recommend denying certiorari and waiting for a better vehicle to decide the issue.  Nonetheless, the Supreme Court may take up the case, and it may be the case that finally gets Alice out of Wonderland.

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