Last week, the Federal Circuit denied petitions for rehearing en banc in two separate cases: Berkheimer v. HP, Inc. and Aatrix Software, Inc. v. Green Shades Software, Inc. Both cases involved the question of whether an invention was patent-eligible under 35 U.S.C. § 101. That is, in Berkheimer a digital file archiving idea and, in Aatrix, a data manipulation idea. In the prior panel decisions, the Federal Circuit had determined that there were factual questions regarding patent eligibility in both cases, reversing the district court’s grant of judgment on the pleadings in each instance. Although the denials for rehearing en banc were made in per curiam orders, what is unusual and noteworthy is that they were accompanied by concurring and dissenting opinions that dealt squarely with the question of how properly to analyze patentability under 35 U.S.C. § 101.
Section 101 sets forth statutory categories of patent-eligible subject matter: “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” 35 U.S.C. § 101. Section 101 is viewed as disqualifying laws of nature, abstract ideas, and natural phenomena from being patentable. The appropriate analysis, the Supreme Court has determined, is in two steps: (1) determining whether the claims are directed to a patent-ineligible concept; and, next, (2) determining whether the claim’s elements, considered both individually and as an ordered combination, otherwise transform the nature of the claims into a patent-eligible application. Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 543 U.S. __ (2014).
Judge Lourie, in a concurring opinion joined by Judge Newman, called into question the Supreme Court’s treatment of the Section 101 inquiry for determining patent eligibility, suggesting that Congress should get involved to undo the damage that he believed had been done by Alice to Section 101. In particular, Judge Lourie wondered “why should there be a step two in an abstract idea analysis at all?” Berkheimer (Lourie, J., concurring) at 4. According to Judge Lourie, the problem is that the two-step Section 101 inquiry under Alice—which asks whether the subject matter is well-understood, routine, or conventional—essentially delves into questions already handled by inquiries under Sections 102 and 103, which address these issues in the context of novelty and non-obviousness. Id.
Judge Reyna, on the other hand, dissented from the court’s denial of rehearing en banc in both Berkheimer and Aatrix, arguing that Federal Circuit wrongly treated the Section 101 inquiry as one of fact and not of law. A Section 101 analysis, Judge Reyna argued, can be conducted “without the need to look beyond the four corners of the patent.” Aatrix (Reyna, J., dissenting) at 13. Focusing on Aatrix, Judge Reyna found that the Federal Circuit improperly moved the inquiry outside the four corners of the patent when it held that a Section 101 inquiry cannot be resolved against the patentee without consulting extrinsic evidence.
Judge Lourie’s concurrence importantly signals the frustration of some with the current two-step Alice inquiry. It remains to be seen, however, whether Congress accepts Judge Lourie’s invitation to revisit Section 101. Judge Reyna’s dissent may invite clarity from the Federal Circuit in future opinions as to whether a Section 101 inquiry properly considers extrinsic evidence.