Eppenauer Analyzes Section 101 Post-Berkheimer for Managing Intellectual Property

In “Analysis: Section 101’s Power Wanes Post-Berkheimer,” Seattle Managing Partner Bart Eppenauer tells Managing Intellectual Property that although the Federal Circuit’s decision in Berkheimer v. HP limits the use of motions to dismiss and summary judgment at the pleading stage, that’s a good thing for the U.S. patent system. The ruling, he said, will result in “more balanced and correct outcomes now that the hurdles and the burdens are higher in terms of what people have to prove to knock out patents.”

In Berkheimer, the court held that the second part of the Alice test can be a factual determination, not just a legal question. If the facts are disputed, a finding of subject matter ineligibility at the pleading or summary judgment stage is precluded. In Alice, the U.S. Supreme Court said its ruling should not be applied too broadly; but that is exactly what happened, Eppenauer said. “But now because of Berkheimer, you see in data on early motions to dismiss and summary judgments, it’s starting to even out quite nicely. Before Alice, there just weren’t many early motions to dismiss under Section 101. Then they exploded. And now, it’ll restore to what it was.”

Shortly after the Federal Circuit handed down the Berkheimer decision in February 2018, the court reinforced its holding in Aatrix Software v. Green Shades Software. The U.S. Patent and Trademark Office (USPTO) then released new Section 101 guidance for patent examiners, both in response to those cases and to a later ruling in Vanda Pharmaceuticals v. West-Ward Pharmaceuticals. 

The U.S. Supreme Court has tried to clarify Section 101 four times, and Eppenauer says he hopes that the Court will not take it up again. “It would be nice if they could fix it, but they created a lot of confusion with the Alice and Mayo decisions,” he said. “So the question is, can the Federal Circuit, the PTO, and the district courts reach clarity with the current law?”

For now, the Berkheimer and following decisions and the USPTO guidance signal that in order to ensure a “reasonable dispute” under Alice, it may be increasingly important to include detailed facts in patent specifications to avoid adverse rulings under Section 101. “Really, it’s just trying to find the balance of how to address and deal with litigation abuse, and promote a vibrant patent system in the United States,” Eppenauer said.

The cases are: Berkheimer v. HP Inc., No. 17-1437 (Fed. Cir., February 8, 2018); Aatrix Software, Inc. v. Green Shades Software, Inc., No. 17-1452 (Fed. Cir., February 14, 2018); Vanda Pharmaceuticals, Inc., v. West-Ward Pharmaceuticals, 16-2707 (Fed. Cir., April 13, 2018); Alice Corp. Pty. Ltd. v. CLS Bank Int’l, No. 13-298 (U.S., June 19, 2014); Mayo Collaborative Servs. v. Prometheus Labs., No. 10-1150 (U.S., March 20, 2012.