Recent Federal Circuit Decisions Emphasize Effect of Factual Questions on Patent Eligibility
In two recent cases, the Federal Circuit addressed the role of factual questions in resolving patent eligibility under 35 U.S.C. § 101. The first case was Berkh eimer v. HP Inc. and the second was Aatrix Software v. Gree n Shades Software. These cases possibly undercut the holdings of previous cases in which the Federal Circuit routinely affirmed judgments invalidating patent claims under § 101 in the early stages of litigation, when factual questions are typically unresolved.
In Berkhei mer, the Federal Circuit reviewed a decision invalidating eight patent claims under § 101 on a motion for summary judgment. The court reiterated the familiar principle that “patent eligibility is ultimately a question of law,” but added that the underlying question of “[w]hether something is well-understood, routine, and conventional to a skilled artisan at the time of the patent is a factual determination.” Turning to the challenged patent, the court identified certain “purported improvements” to computer technology that were described in the specification. The court held that these purported improvements, “to the extent they are captured in the claims, create a factual dispute regarding whether the invention describes well-understood, routine, conventional activities.”
Because four of the eight claims at issue in Berkhei mer contained “limitations directed to the arguably unconventional inventive concept described in the specification,” the Federal Circuit found that those claims raised a “genuine issue of material fact making summary judgment inappropriate.” Accordingly, the court vacated the grant of summary judgment on those four claims, but affirmed on the other four claims that did not recite the limitations that were arguably unconventional.
In Aat rix, the Federal Circuit reviewed a decision invalidating six patent claims under § 101 on a motion to dismiss. In the proceedings below, when the district court granted the motion to dismiss, it found that a claim limitation relied on by the patentee failed to satisfy § 101 because it merely described “a ‘well understood’ and ‘routine’ component and function of a computer.” After that dismissal, the patentee moved for reconsideration and moved to amend its complaint. The patentee’s proposed amendments to the complaint explained how the claims allegedly reflected an improvement in computer technology that was neither well-understood nor routine. The district court denied the motion to amend and declined to reconsider its holding on § 101 in view of the amended complaint.
On appeal, the Federal Circuit panel issued a split decision. The majority (Judges Moore and Taranto) emphasized the presence of factual questions, echoing the court’s approach in Berk heimer. Specifically, the majority explained that “the ultimate determination of eligibility under § 101 is a question of law” but “like many legal questions, there can be subsidiary fact questions,” which include the question of “[w]hether the claim elements or the claimed combination are well-understood, routine, conventional.” The majority then found that there were “concrete allegations in the second amended complaint that individual elements and the claimed combination are not well-understood, routine, or conventional activity.”  On a motion to dismiss, the district court was required to accept those allegations as true, but it failed to do so. Thus, the majority vacated the dismissal and remanded the case to the district court.
Judge Reyna dissented in part. He argued that the majority opinion attempted to “shoehorn a significant factual component into the Alice § 101 analysis” and “shift the character of the § 101 inquiry from a legal question to a predominantly factual inquiry.” Judge Reyna also argued that, after Aatrix, “a plaintiff facing a § 101 motion may simply amend its complaint to allege extrinsic facts that, once alleged, must be taken as true regardless of its consistency with the intrinsic record.” The majority opinion in Aatrix did not directly address Judge Reyna’s criticism.
The majority stated that patent eligibility can be decided on a motion to dismiss “only when there are no factual allegations that, taken as true, prevent resolving the eligibility question as a matter of law.” But the majority did not state that factual allegations must be taken as true “regardless” of intrinsic evidence (e.g., the patent specification and the claims themselves) as Judge Reyna argued. To the contrary, the majority’s reference to “concrete” allegations may suggest it believed the allegations in Aa trix amounted to more than the type of gamesmanship Judge Reyna feared.
To clarify the potential impact of A atrix, it is helpful to compare that decision with Be rkheimer because both judges who joined the majority in Aatrix also joined the unanimous decision in Berkhei mer. As explained above, Ber keimer vacated summary judgment on four out of eight claims, but affirmed summary judgment on the other four claims. The court invalidated the latter claims despite several factual assertions that the patentee raised in an effort to show eligibility.
First, the patentee asserted that the claims were rooted in technology because they recited a “parsing” limitation. However, the court rejected this assertion by relying on the patentee’s admission that “parsers had existed for years prior to his patent.” Second, the patentee asserted that the claims improved computer functionality by eliminating redundancy in an unconventional manner. Addressing this assertion, the court noted that the four claims it held invalid did not recite any limitations that required eliminating redundancy. Because that allegedly unconventional feature was not recited in the claims themselves, it could not provide the inventive concept necessary to satisfy § 101.
Berk heimer shows that despite the Federal Circuit’s recent emphasis on factual questions, it continues to view some of those questions as insufficient to prevent claims from being held invalid as a matter of law. Indeed, Berkheimer warns that “not every § 101 determination contains genuine disputes over the underlying facts material to the § 101 inquiry.” This warning is consistent with the Supreme Court’s decision in Alice. In that case, the Court affirmed summary judgment of invalidity on four patents and concluded that various computer-related claim limitations were “purely conventional” and therefore non-inventive. The Court reached this conclusion without explicitly referring to any evidence or factual findings.
Although fact finding may not be necessary to every § 101 decision, patentees litigating § 101 should identify any concrete or genuine questions of fact that might affect the § 101 inquiry in their cases specifically, and consider raising those questions in their pleadings and evidentiary submissions. Conversely, accused infringers should be prepared to explain why any questions of fact raised by the patentee cannot affect the outcome of the § 101 analysis in their cases because they are not “concrete” or “genuine.” For further discussion of factual questions that may be material under § 101, see the section on “Pitfalls for Eligibility Evidence” in our prior article: Will Courts Consider Evidence of Patent Eligibility? .
 Berkheimer v. HP Inc., No. 2017-1437 (Fed. Cir. Feb. 8, 2018); Aatrix Software, Inc. v. Green Shades Software, Inc., No 2017-1452 (Fed. Cir. Feb. 14, 2018).
 See, e.g., Cleveland Clinic Found. v. True Health Diagnostics LLC, 859 f . 3d. 1352, 1360 (Fed. Cir. 2017) (The Federal Circuit has “repeatedly affirmed § 101 rejections at the motion to dismiss stage, before claim construction or significant discovery has commenced.”).
 Berkheimer, Slip op. at 14.
 Id. at 14-15.
 Id. at 15.
 Id. at 16.
 Aatrix, Slip op. at 14.
 Id. at 3-4.
 Id. at 9-10.
 Id. at 7.
 Id., Slip op. at 11-12.
 Id. at 12.
 Id. at 14-15.
 Aatrix, Reyna op. at 2.
 Aatrix, Slip op. at 5.
 Berkheimer, Slip op. at 11.
 Id., Slip op. at 14-15.
 Id. at 15.
 Id. at 13 (emphasis added).
 Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S.Ct. 2347, 2359-60