Alice Remains a Narrower Off-Ramp for Defendants as Berkheimer Is Here to Stay
May 27, 2020
Alice was once a key defensive tool for companies faced with patent litigation, but it has grown markedly harder to wield in the past two years. RPX data show that the overall Alice invalidation rate has dipped as a result of the Federal Circuit’s decisions in Berkheimer and Aatrix, which limited the circumstances in which courts will grant early patent eligibility challenges.
Since the Alice decision’s issuance in June 2014 and through the end of Q1 2020, 60% of patents have seen claims invalidated under its rationale, down from 66% around two years ago. Outcomes diverge based on plaintiff type; while operating company patents have an Alice invalidation rate of 50% as of the end of the first quarter, around 66% of NPE patents saw claims invalidated.
That decrease reflects a sharper decline in the time since Berkheimer’s issuance in February 2018. Although 67% of patents that saw Alice rulings before Berkheimer had claims invalidated, the success rate has dropped to 44% for Alice challenges decided since then—with challenges decided at both Rule 12 and summary judgment each seeing a sizable decline. With the US Supreme Court’s January decision not to rehear Berkheimer, this downturn may be here to stay.
More information on this and other trends affecting litigation and the patent marketplace can also be found in RPX’s recent first-quarter review.