To track #AliceStorm, we're maintaining a current count of the federal district court and Federal Circuit opinions invalidating patent under Section 101.  

*Updated April 4, 2015

March 20- March 31, 2015:  The past couple of weeks have been busy, with a number of district court and PTAB decisions.  In the district court,  there have been four decisions, My Health, Inc. v. LifeScan, Inc., Ameritox Ltd. v. Millennium Health LLC, Tuxis Techs., LLC v. Amazon.com, Inc., and Advanced Auctions LLC v. eBay Inc.. The MyHealth and Ameritox decisions went favorably for the patentee.

In Ameritox, the court rejected the defendant's motion to reconsider it's earlier ruling that the patents were not ineligible. (The earlier decision cited my Law360 article, noting that only 26% of patents have survived post-Alice motions).  On reconsideration, Millenium argued that the court should not have considered that "the prior art steered a skilled artisan away" from the claimed invention, and that one of the claimed steps was not conventional, since this allegedly conflated eligibility with novelty and non-0bviousness.  The court ripped Millenium on this point, saying "this argument ignores that Millenium itself squarely argues the relevant relevance of this factor in assessing the eligibility of the ’680 patent under § 101, by citing the Federal Circuit's decisions in In re BRCA1- and BRCA2- Based Hereditary Cancer Test Patent Litigation, where the court specifically held that "what practitioners already knew" and what were "well-understood, routine, and conventional techniques that a scientist would have thought of" where relevant to eligibility.

This is, in my view, the right approach.   Several recent district court decisions have said that evidence of novelty is not relevant to eligibility, and cited Diehr's statement that "the "novelty" of any element or steps in a process, or even of the  process itself, is of no relevance in determining whether the subject matter of a claim falls within the § 101 categories of possibly patentable subject matter."  This approach utterly misreads Diehr: the Court was discussing claim dissection, emphasizing that "it is inappropriate to dissect the claims into old and new elements and then to ignore the presence of the old elements in the analysis."  The Court was criticizing the approach of disregarding "old elements" that lack novelty from the the claim for the purposes of eligibility--not saying that actual novelty was irrelevant.  

One could argue that this approach cuts both ways, and so actual novelty does not matter.  True: except that Alice/Mayo brought "conventional, well-understood, routine" into play.  If evidence (or more frequently mere assertions) of the "conventional" aspect of the claim is now relevant, then likewise is evidence of actual novelty or non-obviousness.  For a court to accept the former and reject the  latter is not legally sound.  

The MyHealth decision is also a good sign. The court denied a motion to dismiss, noting that  "while the issue of patentable subject matter presents a question of law, the legal analysis can – and often does – “contain underlying factual issues," and that in the present case "the need for claim construction is especially apparent, where Lifescan’s invalidity argument is implicitly premised on its conclusions about the meanings of certain claim terms."  The court signaled its overall view that motions to dismiss under § 101  are disfavored:  "The difficulty of making a substantive ruling on the validity of an issued patent in what is – in essence – a complete vacuum cannot be understated. While the claim language of some patents may be so clear that the court need only undertake a facial analysis to render it invalid at the pleading stage, that will not be the norm and is certainly not the case here."  What makes this striking is that the asserted claim is not an especially technical one:

1. A method for tracking compliance with treatment guidelines, the method comprising:

determining a current assessment of one or more diagnosed conditions in a patient based

on data about each of the diagnosed conditions from the patient who is at a remote location and on one or more assessment guidelines for each of the diagnosed conditions;

updating an existing treatment plan for each of the diagnosed conditions based on the

existing treatment plan, the current assessment, and on one or more treatment guidelines for each of the diagnosed conditions to generate an updated treatment plan for each of the diagnosed conditions;

reviewing the updated treatment plan for each of the diagnosed conditions;

determining if one or more changes are needed to the reviewed treatment plan for each

of the diagnosed conditions;

changing the reviewed treatment plan if the one or more changes are determined to be

needed;

providing the patient with the reviewed treatment plan for each of the diagnosed conditions; and

generating and providing compliance data based on the updated treatment plan and the

reviewed treatment plan for each of the diagnosed conditions.

On the other side of the ledger, the Tuxis decision followed a prior decision in the same case in which the court invalidated just claim 1 of Tuxis' patent; here the court invalidated the remaining 99 asserted claims as being directed to the abstract idea of "upselling" and having no inventive step.   In Advanced Auctions, the court invalidated a patent to a two-mode auction method, in which the first mode the current auction status, such as current price, is only updated on demand from the user, and then at a predetermined time, the auction transitions to a second mode in which the auction status is automatically updated.  

There was also significant activity at PTAB, which continued its almost unbroken streak of invalidating patents under a CBM.  In just the period of 3/20 to 3/31 PTAB granted four final decisions and instituted five proceedings on patent eligibility grounds, deny only one institution decision on a technical ground.

Week of March 17, 2015:  This week saw two decisions, Priceplay.com v. AOL Advertising and Modern Telecom Systems v. Juno Online.  In Priceplay, the J. Andrews in the Delaware district court invalidated two patents of Priceplay that covered pricing a good in an auction based on both the buyer's bid and the buyer's participation in a "competitive activity" such as a video game, board game, card game, etc.   The better the buyer did in the competitive activity the more the auction price would be reduced.  An odd idea, but at least one that doesn't seem to be a fundamental economic practice.  The court found this combination to be abstract and lacking inventive concept. The court finessed the unusual combination of auctions and competitive activity by considering each as ineligible by itself: "Priceplay's claimed invention merely combines the abstract ideas found to patent ineligible in Schrader [auctions], Planet Bingo [competitive activity] and OIP [price setting]."   The  word "merely" is awesome in its ability to leap over gaps in logic and law. 

At least the court in Modern Telecom was not so willing to play this fast and loose.  The court denied a motion on the pleadings to invalidate six patents. The court found that defendants "have failed to meet their burden of establishing that the patents in suite lack an inventive concept".  The court rejected the notion that software is ineligible per se, stating "Defendants emphasize the “software focus” of the patents as if recent Federal Circuit cases support a rule that software is categorically patent-ineligible. The Court does not interpret the cases that way and, instead, agrees with the conclusion in Hughes Commc’ns that “software must be eligible under § 101."