Section 101 On Trial: Understanding How Eligibility Issues Have Fared Before Juries

• Published date: 01 March 2022
• Subject Matter: Intellectual Property, Patent
• Law Firm: Global IP Law Group
• Author: Mr C. Graham Gerst and Lily Parker

"Our review found just four cases where a jury addressed some aspect of Section 101, all from the Eastern District of Texas.... In every one, the jury found the claims routine and conventional. This fact should concern lawyers representing patentees and prompt a rethinking of strategy."

Few lawyers have tried patent eligibility, 35 U.S.C. Section 101, to a jury. Our research found just four such cases since the Supreme Court created its muddled two-step test in Alice v. CLS Bank. In every one of those, the jury issued a pro-ineligibility verdict, while none resulted in a final Section 101 determination either way. Understanding how that issue has been handled at and after trial is important for practitioners with cases where Section 101 is at issue, which has become increasingly common.

Why Have So Few Juries Considered Section 101 at Trial?

Alice v. CLS Bank issued in June 2014. Prior to that decision, patent-ineligibility was a rarely-asserted defense. And, when defendants asserted it, the judge typically resolved it at the motion-to-dismiss or summary-judgment stages using tests issued by the Federal Circuit, such as the machine-or-transformation test.

The Supreme Court's two-step Alice test created uncertainty around Section 101 eligibility for many patents and encouraged defendants to assert ineligibility as a defense. The first step, asking whether the claim is directed to a law of nature, a natural phenomenon, or an abstract idea, is amorphous and expansive. Everything ultimately involves laws of nature, and any claim can be considered to involve an abstract idea if one steps back far enough from the specific claim elements, as the Judge Prost's decision in Yu v. Apple Inc. showed. And the second step, whether any element or combination of elements contains an "inventive concept," effectively asks whether the court missed something patent eligible in its step-one analysis. That aspect of the inquiry may be why step two analysis so rarely rescues patent claims.

The Alice decision led to an immediate explosion in patent-ineligibility assertions, which the district courts often decided themselves. In the year following Alice, district courts issued over 90 decisions on eligibility. Typically, they did so at the pleadings stage. In the second half of 2014 alone, more Rule 12 pleadings motions were filed and ruled on than during 2008-2012 combined. And whether at the pleading or summary-judgment stages, the district courts held the challenged claims ineligible 69% of the time in the four years after that decision.

The Federal Circuit's 2018 Berkheimer...