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Less Is More: IPR Claim Amendments May Not Enlarge Claim Scope

by Amol Parikh | Sep 14, 2023 | Patents

The US Court of Appeals for the Federal Circuit affirmed a decision from the Patent Trial & Appeal Board denying a motion to amend claims during an inter partes review (IPR) proceeding, explaining that a claim amendment is improper if a proposed claim is broader in any respect relative to the original claims, even if it is overall narrower. Sisvel International S.A. v. Sierra Wireless, Inc., et al., Case Nos. 22-1387; -1492 (Fed. Cir. Sept. 1, 2023) (Prost, Reyna, Stark, JJ.)

Sisvel owns two patents directed to methods and apparatuses that rely on the exchange of frequency information in connection with cell reselection between a mobile station (or user cell phone) and a central mobile switching center. Sierra Wireless filed petitions for IPR alleging that claims of Sisvel’s patents were unpatentable as anticipated and/or obvious in view of certain prior art. During the IPR proceeding, the Board determined that the claim term “connection rejection message” should be given its plain and ordinary meaning of “a message that rejects a connection.”

The Board also denied Sisvel’s motion to amend the claims of one of the patents, finding that the amendments would have impermissibly enlarged the claim scope. the Board focused on a limitation relating to “setting a value,” comparing the original claims’ requirement with that of the proposed substitute claims. The original claims required that the value be set “based at least in part on information in at least one frequency parameter” of the connection rejection message while the substitute claims recited that the value may be set merely by “using the frequency parameter” contained within the connection rejection message. The Boeasoneasoned that in the proposed substitute claim, the value that is set need not be based on information in the connection rejection message, and thus the claim was broader in this respect than the original claims. After denying the motion to amend, the Board concluded that the original claims were unpatentable. Sisvel appealed.

Sisvel challenged the Board’s construction of “connection rejection message,” arguing that the term should be limited to a message from the specific cellular networks disclosed in the specification. The Federal Circuit rejected Sisvel’s argument, finding that the intrinsic evidence provided no persuasive basis to limit the claims to any particular cellular network disclosure. Having agreed with the Board’s construction, the Court affirmed the unpatentability determination.

Sisvel also challenged the Board’s refusal to permit Sisvel to amend the claims. Sisvel argued that the Board had incorrectly found that the proposed substitute claims were broader than the original claims because when all the limitations were considered as a whole, the scope of the substitute claims was narrower than the original claims.

Citing 35 U.S.C. § 316(d)(3), the Federal Circuit noted that when a patent owner seeks to amend its claims during an IPR, the amended claims “may not enlarge the scope of the claims of the patent.” The Court explained that removal of a claim requirement can broaden the resulting amended claim and concluded that such was the case [...]

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Sins of the Fathers? Grandparent IPR Factors into Current Institution Decision

by Kyle Sorenson, PhD | Sep 7, 2023 | America Invents Act, Patents

US Patent & Trademark Office (PTO) Director Kathi Vidal vacated and remanded a Patent Trial & Appeal Board decision denying institution of an inter partes review (IPR) because the Board improperly applied the precedential Advanced Bionics framework in rendering its decision. Keysight Tech., Inc. v. Centripetal Networks, Inc., IPR2022-01421 (PTAB Decision Review Aug. 24, 2023) (Vidal, Dir.)

Keysight Tech. petitioned for an IPR proceeding against a patent owned by Centripetal Networks, challenging the validity of all claims. After the Board denied institution, Director Vidal issued a sua sponte director review decision, vacating and remanding the Board’s decision.

The Centripetal patent is the great-grandchild of, and shares the same disclosure as, an earlier Centripetal patent that was subject to an IPR proceeding during the pendency of the presently challenged patent. The Final Written Decision (FWD) in the earlier IPR found all claims of the patent unpatentable. The patent owner included that FWD in an Information Disclosure Statement (IDS) submitted during the prosecution of the presently challenged patent, and the examiner initialed it as having been considered.

In its decision denying institution, the Board cited the guidance of Advanced Bionics, which articulates a framework that requires that the Board determine the following:

Whether the same or substantially the same prior art or arguments made in the petition were previously presented to the PTO during prosecution of the challenged patent
Whether the PTO erred in a manner material to the patentability of the challenged claims when it allowed the claims of the patent.

If both factors are met in the affirmative, the Board should not exercise its discretion to deny institution.

Here, the Board found that the first factor of the Advanced Bionics framework was met because the petitioner’s arguments in its petition were the same or substantially the same as those in the FWD in the IPR of the grandparent patent. However, the Board found that the second part of the framework was not satisfied and therefore denied institution.

Although Director Vidal agreed with the Board’s findings under the first factor, she vacated the Board’s findings pursuant to the second factor after determining that this factor was also met. Director Vidal found that the PTO erred in a manner material to the patentability of the challenged claims for the following reasons:

The challenged patent and the grandparent were directed to the same subject matter.
The prior art references submitted to the PTO during the prosecution of the challenged patent were the same as those asserted in earlier IPR and were considered by the examiner through the patent owner’s IDS.
In the grandparent IPR, the Board held all of the claims of the patent unpatentable due to these same prior art references.
The examiner’s statement of reasons for allowing the challenged patent was that the claims were directed to limitations that appeared in both the currently challenged claims and the claims found unpatentable in the grandparent patent.

As the director noted, the overlap between the claim limitations in the [...]

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The End Is Not So Near: Patent Term Adjustments Count in Obviousness-Type Double Patenting Determinations

by Jake B. Vallen | Sep 7, 2023 | Patents

Addressing for the first time how patent term adjustments (PTAs) interact with obviousness-type double patenting (ODP), the US Court of Appeals for the Federal Circuit concluded that when members of a patent family have different expiration dates due to PTAs, the earlier expiring family members can be used as a basis for an ODP invalidity challenge against the later expiring family members. In re Cellect, LLC, Case Nos. 2022-1293; -1294; -1295; -1296 (Fed. Cir. Aug. 28, 2023) (Lourie, Dyk, Reyna, JJ.)

Cellect owns several patents directed to devices with image sensors, such as personal digital assistant devices and phones. Each patent claims priority from a single application. None of the patents were subject to a terminal disclaimer, and each was granted PTA under 35 U.S.C. § 154(b) because of PTO delay during prosecution. Had the patents not been granted PTA, each one would have expired on the same date as the original application.

After Cellect sued for infringement, the defendant requested ex parte reexaminations and asserted that the patents were unpatentable based on ODP. During the reexaminations, the Examiner “determin[ed] that the challenged claims were obvious variants of Cellect’s prior-expiring reference patent claims” because “although the ODP invalidating reference patents form a network across the four ex parte reexamination proceedings, all invalidated claims can be traced back to the single family member [now expired] patent that did not receive a grant of PTA.” The Patent Trial & Appeal Board affirmed the Examiner’s finding. Cellect appealed.

The Federal Circuit began with the inquiry for determining unpatentability based on ODP and whether, in that context, a patent’s expiration date includes a duly granted PTA under 35 U.S.C. § 154. While the Court recognized that the relevant expiration date for an ODP analysis where a patent received a patent term extension (PTE) is the pre-PTE expiration date, the Court concluded that, in the context of patents that have received PTAs, the relevant expiration date for analyzing ODP is the expiration date accounting for the PTA regardless of whether a terminal disclaimer has been filed. The Court reasoned that when determining whether claims are unpatentable for ODP, PTA and PTE, they “should be treated differently” because each is governed by different statutes that were designed to address different circumstances. While both PTAs and PTEs were intended to recover lost patent terms, PTAs were designed to extend patent terms because of administrative delays in patent processing and preclude the extension of a patent term past a terminal disclaimer. PTEs were designed to extend a patent term because of regulatory delays in product approval and are not foreclosed by a terminal disclaimer. As such, the Court reasoned that not contemplating a PTA when analyzing ODP would “frustrate the clear intent of Congress” because “when a terminal disclaimer has been entered in a patent subject to PTA, no patent (or claim) may be extended beyond the disclaimed expiration date.”

The Federal Circuit next considered whether examiners are required to consider “equitable concerns” such as good faith when [...]

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Don’t Be So Stern: Copying Carries Significant Weight in Assessing Objective Evidence

by Amol Parikh | Aug 31, 2023 | Patents

The US Court of Appeals for the Federal Circuit vacated and remanded a Patent Trial & Appeal Board decision invalidating a patent, finding that the Board erred in assessing nexus and weight to be accorded to objective evidence of nonobviousness. Volvo Penta of the Americas, LLC v. Brunswick Corp., Case No. 22-1765 (Fed. Cir. Aug. 24, 2023) (Moore, Lourie, Cunningham, JJ.)

Volvo Penta owns a patent directed to a tractor-type stern drive for a boat. A stern drive is a type of engine that is mounted in the hull of a boat and connected to a drive unit mounted outside of the hull, typically on the stern. In the industry, this arrangement is often referred to as an inboard/outboard drive. In 2015, Volvo Penta launched its commercial embodiment of the patent called the Forward Drive and was popular particularly for wake surfing and other water sports. The Forward Drive included forward-facing propellers that increased the distance between the propeller and swimmers or surfers compared to prior pulling-type stern drive boats.

In August 2020, Brunswick launched its own drive, the Bravo Four S, which embodies Volvo Penta’s patent. On that same day, Brunswick filed a petition for inter partes review asserting that the challenged claims were anticipated or obvious based on several references, two of which were Kiekhaefer and Brandt. In response, Volvo Penta argued that a person of ordinary skill in the art would not have been motivated to combine Kiekhaefer and Brandt with a reasonable expectation of success and that the objective indicia of nonobviousness overcame any prima facie case of obviousness. In support, Volvo Penta offered evidence of copying, industry praise, commercial success, skepticism, failure of others and long-felt but unsolved need. Volvo Penta also argued that it was entitled to a presumption of nexus between the objective indicia and the claimed invention, and, even if there was no presumption, there was still nexus.

The Board found that Kiekhaefer did not anticipate the challenged claims, but it would have been obvious to redesign the stern drive of Brandt in light of Kiekhaefer’s outboard motor to arrive at the challenged claims. After finding a motivation to combine (and prima facie obviousness), the Board turned to Volvo Penta’s objective evidence of nonobviousness. The Board first determined that Volvo Penta was not entitled to a presumption of nexus because, even though the Forward Drive and Bravo Four S indisputably embody the challenged claims, Volvo Penta did not make sufficient arguments on coextensiveness. The Board also found that regardless of the presumption, Volvo Penta did not otherwise show nexus because it failed to identify the “unique characteristics” or “merits” of the claimed invention.

Despite finding no nexus, the Board still analyzed the objective evidence and concluded that Volvo Penta’s objective evidence weighed somewhat in favor of nonobviousness but that Brunswick’s strong evidence of obviousness outweighed the objective evidence. The Board therefore concluded that the challenged claims were unpatentable. Volvo Penta appealed.

Volvo Penta raised three primary arguments on appeal:

The Board’s [...]

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No Two Ways About It: No Disparagement ≠ Teaching Away, Free Samples ≠ Commercial Success

by Mike Baldwin | Aug 31, 2023 | Patents

The US Court of Appeals for the Federal Circuit affirmed the Patent Trial & Appeal Board invalidating two patents: one as anticipated because disclosure of a genus anticipated the claimed species, and the other as obvious because the prior art did not disparage the claimed invention and therefore was not a “teaching away.” The Court also found that free samples cannot be used to show commercial success. Incept LLC v. Palette Life Sciences, Inc., Case Nos. 21-2063; -2065 (Fed. Cir. Aug. 16, 2023) (Schall, Taranto, JJ.) (Newman, J., concurring in part, dissenting in part).

Incept owns two patents related to improved methods for treating cancer, particularly prostate cancer, using radiation. The patents describe methods of introducing a filler between a radiation-targeted tissue and other tissue to increase the distance between the two and thereby decrease the amount of radiation received by the non-targeted tissue. Palette filed inter partes review petitions against each patent, asserting that the claims of one patent were anticipated and the claims of the other were obvious. Both theories of invalidity relied on the same prior art reference, Wallace. The Board instituted review and ultimately found both patents unpatentable. Incept appealed.

As to the patent that the Board found anticipated, Incept argued that the Board erred legally by “picking and choosing” from the teachings of Wallace to piece together elements. Incept argued that Wallace teaches a genus of millions to billions of possible compositions while its patent claims a species. Thus, according to Incept, the genus had to be defined well enough that a person of ordinary skill could have envisioned each member of the genus.

The Federal Circuit found no legal error in the Board’s anticipation analysis. The Court rejected Incept’s assertion that its patent claimed a species, finding that the patent described a method to inject a composition that had the same general properties as the composition described in Wallace. The Court also found that the Board’s conclusion that Wallace taught biodegradable compositions (where Wallace stated that “a portion of the polymer may be biodegradable”) was supported by substantial evidence and noted that it was not the Court’s duty to reweigh factual determinations.

As to the Board’s obviousness finding of the other patent, Incept alleged that the Board improperly reiterated its anticipation analysis, disregarded statements in Wallace that teach away, did not separately analyze the dependent claims and disregarded evidence of commercial success. The Court was unpersuaded by any of these arguments.

First, the Federal Circuit noted that since the anticipation analysis had no error, it was not improper for the Board to rely upon that analysis for its obviousness determination. The Court noted that the Board relied on the teachings of another piece of prior art concerning the challenged patent’s displacement limitation. The Court also dismissed Incept’s allegation that the motivation to combine analysis was conclusory.

The Federal Circuit rejected Incept’s assertion that Wallace taught away from biodegradable compositions, noting that Wallace provided a preference for an alternative but did not criticize, discredit or [...]

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Petitioner Reply May Include New Evidence if Responsive to Patent Owner and Based on Original Legal Contentions

by Tessa Kroll | Aug 24, 2023 | Patents

Addressing the issue of new invalidity theories offered during inter partes review (IPR) proceedings, the US Court of Appeals for the Federal Circuit held that a petitioner does not improperly offer new theories when it merely expands on previously raised arguments and responds to a patent owner’s assertions without advancing a “meaningfully distinct [invalidity] contention.” Rembrandt Diagnostics, LP v. Alere, Inc., Case No. 21-1796 (Fed. Cir. Aug. 11, 2023) (Moore, C.J.; Reyna, Dyk, JJ.) The Court further concluded that the patent owner waived its new theories argument by raising a general objection that did not identify which theories were allegedly new.

Alere filed an IPR petition challenging a Rembrandt patent directed to test assay devices and methods for testing biological fluids. Alere argued that the claims were obvious over two combinations of prior art references (among other grounds not at issue on appeal): MacKay in view of Charm or May, and Tydings in view of MacKay or Lee-Own. On remand from a previous appeal, the Patent Trial & Appeal Board ordered briefings on all non-instituted grounds set forth in Alere’s petition. Rembrandt filed a patent owner response without an expert declaration. Alere filed a reply attaching a declaration from its expert and responding to arguments raised by Rembrandt in its response and by the Board in its institution decision.

In a sur-reply, Rembrandt generally argued that Alere “resort[ed] to new theories in reply” but did not specifically contest the two combinations at issue while specifically objecting to other allegedly new theories. Relying on Alere’s expert testimony, the Board issued a final written decision finding the claims at issue unpatentable over the MacKay and Tydings combinations. Rembrandt unsuccessfully petitioned for Director rehearing and then appealed the decision, arguing that the Board abused its discretion by relying on Alere’s new theories and evidence and that there was a dearth of substantial evidence to support the Board’s determinations.

The Federal Circuit first considered whether Rembrandt had forfeited its new theories argument by raising a general objection without expressly objecting to the obviousness grounds at issue. Underscoring the fact that Rembrandt had specifically identified and objected to other allegedly new theories, the Court concluded that Rembrandt’s general objection was insufficient and that Rembrandt’s “objection” argument had been forfeited. The Court noted that holding otherwise would be unfair to the parties and the Board because such a general objection could not provide adequate notice.

Even though Rembrandt’s new theories argument had been waived, the Federal Circuit concluded that Alere’s reply arguments did not constitute new theories and evidence. As the Court noted, in its reply a petitioner must identify “with particularity . . . the evidence that supports the grounds for each challenge to each claim” and may “only respond to arguments raised in the corresponding opposition, . . . patent owner response, or decision on institution.” The Court further explained that a petitioner who asserts previously unidentified prior art disclosures or embodiments in its reply to make a “meaningfully distinct contention” impermissibly raises a [...]

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Tune to the Right Channel: Disclosure Lacking Fraud Information Isn’t an FCA Qui Tam Bar

by Cecilia Choy, Ph.D. | Aug 17, 2023 | Patents

The US Court of Appeals for the Ninth Circuit reversed a district court’s decision to dismiss a qui tam action brought under the False Claims Act (FCA) after analyzing the public disclosure bar channels. The case required the Ninth Circuit to examine Congress’s 2010 amendments to the FCA public disclosure bar to determine whether the claims were substantially the same as information publicly disclosed in any one of three enumerated channels. Silbersher v. Valeant Pharm. Int’l, Inc., No. 20-16176 (9th Cir. Aug. 3, 2023) (Schroeder, Sanchez, Antoon, JJ.)

The FCA imposes civil liability on anyone who knowingly presents a fraudulent claim for payment to the federal government. The FCA includes a qui tam provision that allows private citizens (or “relators”) to bring fraud claims on behalf of the government. In 2010, Congress’s public disclosure bar precluded qui tam actions if substantially the same allegations or transactions were publicly disclosed in one of three channels:

In a federal criminal, civil or administrative hearing in which the government or its agent is a party
In a congressional, Government Accountability Office (GAO) or other Federal Report hearing, audit or investigation
From the news media, unless the action is brought by the Attorney General or the person bringing the action is an original source of the information.

Valeant owns the “Otterbeck patents” for its drug Apriso’s delayed-release formula. Valeant initiated an infringement action against Lupin, a generic drug manufacturer that attested in an abbreviated new drug application (ANDA) that the Otterbeck patents were invalid because of prior art that described a similar delayed-release formula. Thereafter, Valeant extended its monopoly by applying for and being granted a new patent that claimed a recent discovery that Apriso was effective when taken without food. GeneriCo then challenged the new patent in an inter partes review (IPR) proceeding, arguing that it was obvious that Apriso would be effective without food. GeneriCo presented two medical studies as support. The Patent Trial & Appeal Board agreed and invalidated the claims in the new patent.

Zachary Silbersher, GeneriCo’s IPR lawyer and a relator in another FCA suit in the same court, discovered that Valeant failed to disclose certain information to the US Patent &Trademark Office (PTO) during the IPR proceeding. Specifically, he discovered that three years before applying for the new patent, Valeant applied for another patent where it claimed it made an unexpected finding that taking Apriso’s active ingredient with food made the drug more effective. This claim was the opposite of the claim made in the new application that had been invalidated in the IPR proceeding.

Silbersher brought an FCA case seeking damages from Valeant, alleging that Valeant fraudulently obtained the Otterbeck and new patent to prolong its monopoly and charge an artificially high price for Apriso. The district court dismissed Silbersher’s qui tam action as precluded by the public disclosure bar because the IPR qualified as an “other Federal hearing” under channel two of the bar, as described above. Silbersher appealed.

The Ninth Circuit analyzed whether [...]

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Noncompulsory Counterclaims Don’t Confer Appellate Jurisdiction

by Kathleen Lynch | Aug 17, 2023 | Antitrust, Patents, Trade Secrets

The US Court of Appeals for the Federal Circuit determined that it does not have appellate jurisdiction to review noncompulsory patent counterclaims in a case otherwise unrelated to the originally asserted patents. Teradata Corp. v. SAP SE, Case No. 22-1286 (Fed. Cir. Aug. 1, 2023) (nonprecedential) (Lourie, Taranto, Hughes, JJ.)

Teradata makes and sells data warehouse systems and services. SAP develops and sells software. The two companies began collaborating while SAP was simultaneously developing its own database (HANA) and component software. SAP eventually informed Teradata that it would stop selling certain Teradata products. Teradata sued SAP, alleging misappropriation of trade secrets on the theory that SAP used Teradata’s proprietary information to create HANA. Teradata also alleged various antitrust violations, arguing that SAP “illegally tied” HANA and HANA’s supporting software. In response, SAP filed counterclaims against Teradata for allegedly infringing SAP patents related to database organization and optimization. On Teradata’s motion, the district court agreed to sever one of the four patent infringement claims but allowed the others to proceed. The district court reasoned that Teradata’s claims and SAP’s counterclaims all arose from “the same transaction or occurrence,” namely SAP’s development of HANA.

The district court granted summary judgment to SAP on Teradata’s antitrust and technical trade secret claims and stayed proceedings on Teradata’s business trade secret claim and to Teradata on SAP’s patent counterclaims. Teradata appealed to the Federal Circuit.

SAP moved to transfer the appeal to the Ninth Circuit. The Federal Circuit denied the motion but instructed the parties to address the jurisdictional issue in the merits brief. 28 U.S.C. § 1295(a)(1) grants the Federal Circuit exclusive appellate jurisdiction over final decisions in which a party claims or asserts a compulsory counterclaim related to patents. As it relates to this case, the issue was whether SAP’s patent infringement counterclaims were “compulsory,” meaning SAP would be unable to later sue on these patent infringement allegations “if it did not press them in this action.”

The Federal Circuit began by looking at Federal Rules of Civil Procedure 13(a), which states that a counterclaim is “compulsory” if it arises from the same transaction or occurrence as a plaintiff’s claim. The Court explained that it uses three tests to determine whether the transaction or occurrence is sufficiently related between the claim and counterclaim:

Whether the legal and factual issues are substantially the same
Whether the evidence will be substantially the same
Whether there is “a logical relationship between the claim and the counterclaim.”

Taken together, these tests essentially ask if there is substantial overlap between what the plaintiff and the defendant must establish to succeed on the claim and counterclaim, respectively.

The Federal Circuit found that the first two tests clearly weighed against SAP’s counterclaim being compulsory. While an understanding of the accused products and alleged trade secrets would be necessary for both the claim and the counterclaim, “same-field overlap” is not enough to make the issues or necessary evidence “substantially the same.”

As to the third test, the Federal Circuit found [...]

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New Claim Construction in Patent Owner’s Post-Initiation IPR Response? Sure, Charge Away

by Tessa Kroll | Aug 17, 2023 | Patents

Addressing the issue of new claim constructions presented by a patent owner after the institution of inter partes review (IPR) proceedings, the US Court of Appeals for the Federal Circuit found that a petitioner is entitled to argue and present evidence under the new construction so long as it relies on the same prior art embodiments used in the petition. Axonics, Inc. v. Medtronic, Inc., Case No. 22-1532 (Fed. Cir. Aug. 7, 2023) (Dyk, Lourie, and Taranto, JJ.)

Medtronic owns two patents directed to the transcutaneous charging of implanted medical devices via inductive coupling between a primary coil in an external charger and a secondary coil in the implanted device. The relevant claims of each patent require the external charger’s power to be automatically varied based on “a value associated with the current passing through the internal power source” (the value limitation) and “a measured current associated with the current passing through the internal power source” (the measured current limitation).

Axonics filed two IPR petitions challenging Medtronic’s patents, arguing that the claims were anticipated by three prior art references. Axonics’s petitions did not propose any express claim constructions, but its claim charts stated that the measured current limitation simply narrows the “value” in the value limitation to “measured current” and does not require a separate measurement. Under this “one-input” construction, both limitations would be satisfied if the external power source automatically varied its power output based on the implanted device’s current. In its preliminary response, Medtronic agreed that while claim construction was not necessary, the prior art failed to anticipate the claimed device under the one-input construction. In its institutional decision, the Patent Trial & Appeal Board agreed that “no term requires express construction.”

In its patent owner response, Medtronic (for the first time) advanced a new claim construction, arguing that the value limitation and the measured current limitation required separate inputs (the two-input construction). In Axonics’ reply, it defended the one-input construction and further argued that the three prior art references also disclosed the claimed device under the two-input construction. In support of its reply, Axonics submitted a supplemental expert declaration citing additional disclosures in the prior art references pertaining to the same embodiments relied upon in the petition. Medtronic argued that it would be prejudicial for the Board to consider Axonics’ new reply arguments without providing Medtronic an opportunity to submit a supplemental expert declaration. Medtronic, however, did not seek leave to submit a new declaration.

In its final written decision, the Board adopted the two-input construction and declined to consider Axonics’ arguments and evidence under the new construction, considering them to be improper reply arguments. Axonics appealed.

The Federal Circuit acknowledged that a petition is required to identify “in writing and with particularity…the grounds on which the challenge to each claim is based, and the evidence that supports the grounds.” To that end, a petitioner may not submit new evidence or arguments in a reply that could have been raised earlier but may respond to new arguments [...]

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Should This Be an Alice Two-Step or a Section 112 Enablement Waltz?

by Katherine Pappas | Aug 10, 2023 | Patents

The US Court of Appeals for the Federal Circuit affirmed the dismissal of a lawsuit for lack of subject matter eligibility under 35 U.S.C. § 101 based on an Alice two-step analysis, with Judge Newman filing a sharp dissent focused on “the current law of § 101.” Realtime Data LLC v. Array Networks Inc., Case No. 2021-2251 (Fed. Cir. Aug. 2, 2023) (non-precedential) (Reyna, Taranto, JJ.) (Newman, J., dissenting).

From November 2017 through December 2018, Realtime brought suits against multiple defendant corporations asserting infringement of multiple Realtime patents related to methods and systems for digital data compression. In 2019, some defendants moved to dismiss for failure to state a claim, arguing that the asserted patent claims were patent ineligible under § 101. In an oral ruling from the bench, the district court granted the motion to dismiss. On appeal, the Federal Circuit found that the district court had provided too cursory a ruling to allow for meaningful appellate review, and therefore vacated and remanded for the district court to provide a more detailed § 101 analysis.

On remand in 2021, the district court issued a written opinion working through the two-step analysis laid down by the Supreme Court in Alice. Step 1 evaluates whether the asserted claims are directed to a patent-ineligible concept, such as an abstract idea, and Step 2 searches for an “inventive concept” by considering the claims to determine whether any elements “transform the nature of the claim” from ineligible subject matter into a patent-eligible application, which must amount to more than “well-understood, routine, or conventional activities.” The district court found the patents invalid under § 101 and granted the motions to dismiss Realtime’s complaints but gave Realtime the opportunity to file amended complaints. After Realtime did so, the defendants renewed their motions to dismiss. The district court again dismissed Realtime’s complaints based on § 101. In ruling so, the district court first found that there were no material differences between Realtime’s prior and amended complaints with respect to the § 101 analysis. Next, the court incorporated by reference its prior ruling’s legal analysis, reaffirmed its finding that the claims were invalid under § 101 and granted dismissal, this time without granting Realtime leave to file amended complaints. Realtime appealed.

This time the Federal Circuit affirmed the district court’s dismissal. In affirming, the Federal Circuit worked through the Alice two-step inquiry and agreed with the district court on each step. At Step 1, the Court agreed that “none of the claims at issue specifies any particular technique to carry out the compression of data” but instead were all “data manipulation claims that are recited at a high level of result-oriented generality and that lack sufficient recitation of how the purported inventions accomplish the results” (quoting Koninklijke). At Step 2, the Court agreed that the asserted patents “simply apply an abstract idea on generic computers with generic techniques,” thus failing to cross over into eligible subject matter. Accordingly, the Court held that the claims were directed to patent-ineligible subject matter and affirmed dismissal under § 101.

Judge [...]

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