On May 31, the Federal Circuit yet again demonstrated that a cohesive approach to determining patent eligibility under Section 101 continues to evade the patent bar and the bench.

By way of recap, the panel in Berkheimer v. HP stated that a determination of patent eligibility under Section 101 is a question of law based on underlying facts, and therefore the district court’s grant of summary judgment was improper as to some of the challenged claims.

In Aatrix Software v. Green Shades, the panel likewise held that factual issues underlying Section 101 precluded a dismissal under Rule 12(b)(6). Petitions for en banc review were filed in both cases. The Federal Circuit then denied both en banc petitions.

The en banc hearing decision, although per curium, is notable based on the issuance of concurring opinions by Judge Moore (joined by Dyk, O’Malley, Taranto and Stoll) and Judge Lourie (joined by Judge Newman), as well as a dissenting opinion by Judge Reyna. It is clear from the opinions that the proper approach under Section 101 is very much unsettled even among the Judges.

Although the vote tally was not released, the opinions suggest that Judges Lourie, Newman and Reyna believe that further guidance on Section 101 is warranted. Judges Moore, Dyk, O’Malley, Taranto and Stoll seem to be okay with the status quo and do not believe that Berkheimer or Aatrix dramatically change the Mayo/Alice analysis (note: Moore, Taranto and Stoll decided Berkheimer, Judges Moore, Reyna and Taranto decided Aatrix, with Reyna dissenting in part).

There are no tea leaves to read as far as Judges Wallach, Hughes, Prost and Chen as they did not sign onto an opinion.

Judge Moore: Federal Circuit is a Special Court but does not have Special Rules

Judge Moore wrote to underscore that the panel decisions “stand for the unremarkable proposition that whether a claim element or combination of elements would have been well-understood, routine, and conventional to a skilled artisan in the relevant field at a particular point in time is a question of fact.” Judge Moore helpfully provided a guide to validity challenges, noting “[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).”

For Federal Circuit watchers, Judge Moore noted that patent challenges under Section 101 are an invalidity challenge, and it “would be odd to suggest” otherwise. Specifically, the second step under Mayo and Alice is a factual inquiry. Because this is a factual inquiry, Judge Moore noted that procedural and evidentiary issues are decided based on the normal rules set forth in the Federal Rules of Civil Procedure and Federal Rules of Evidence.

In making this point, Judge Moore noted (perhaps humorously) that “[t]hough we are a court of special jurisdiction, we are not free to create specialized rules for patent law that contradict well-established, general legal principles.” Thus, as applied to Berkheimer, the absence/presence of issues of genuine material facts properly governed the partial grant and denial of summary judgment.

As applied to Aatrix, because Rule 12 requires the court to accept Plaintiff’s factual allegations as true, the presence of factual issues precluded dismissal under Rule 12(b)(6). Judge Moore noted, however, that neither Berkheimer nor Aatrix categorically stand for the proposition that Section 101 cannot be determined on a motion to dismiss or summary judgment (and noted recent affirmances of summary dispositions).

Judge Lourie: Somebody, save the baby!

Judge Lourie, in what will likely be cited in a cert petition, wrote to indicate that Section 101 issues “require attention beyond the power of this court” and “need[] clarification by higher authority, perhaps by Congress.” Judge Lourie does not take issue with the general proposition that patent protection should not be extended to laws of nature, natural phenomena, natural products, abstract ideas and principles. However, as Judge Lourie notes, the devil is in the details, and the two-step Mayo/Alice test has transformed “what used to be a fairly simple analysis” into a “complicated multiple-step consideration.”

Specifically, Judge Lourie questioned the need for step two, pointing out that if an idea has “something more” then by definition it is not an abstract idea, and the inquiry ends at step one. In closing, Judge Lourie implored “higher intervention” to address the Section 101 analysis “hopefully with ideas reflective of the best thinking that can be brought to bear on the subject.”

Judge Reyna: The Sink is broken. We need to fix it.

Judge Reyna dismissed the majority’s “move along, there’s nothing to see here” approach to the “exceptional importance” of the Section 101 issues.  According to Judge Reyna, the panel decision reduced the Mayo/Alice step two inquiry “into what is routine and conventional, rather than determining if an inventive concept expressed in the claims transforms the nature of the claims into a patent eligible application.” Judge Reyna noted that the bar has struggled to comprehend the panel decisions. He believed an en banc hearing was required in order to provide the patent bar with meaningful guidance.

Notably, Judge Reyna faulted the Aatrix decision that step two cannot be resolved on a motion to dismiss record as being “wholly unmoored” from established precedent holding that Section 101 eligibility is a matter of law. Judge Reyna believed that a Section 101 analysis is “analogous to contract interpretation” and thus should be decided based on the specification and the claims without resort to extrinsic evidence (unlike the Section 102/103 analysis).

Judge Reyna further warned that “the consequences of this decision are staggering” and that juries should not be deciding “whether a patent includes an inventive concept sufficient to survive Alice step two.”