Alice in 2020: Most Operating Company Patents Withstood Eligibility Challenges Decided Last Year

RPX data reveal that the vast majority of patents litigated by operating companies survived patent eligibility challenges in 2020, with courts declining to invalidate 74% of such patents in Alice motions decided this past year. In contrast, just 38% of NPE-asserted patents withstood Alice motions adjudicated during that period. The overall invalidation rate for 2020 was 47%.

Moreover, courts have invalidated 46% of the patents in Alice challenges decided since the Federal Circuit’s Berkheimer and Aatrix decisions—before which the invalidation rate was about two thirds. In those cases, the court ruled that dismissal under Alice may be premature when the patent owner can establish a factual dispute over the challenged patent’s inventiveness. The decisions give some patent owners what amounts to an early Alice defense and have led many plaintiffs to supplement their complaints with copious factual allegations regarding their patents’ alleged inventiveness.

Of course, the Berkheimer defense does not always succeed, with courts sometimes rejecting factual contentions raised by patent owners. In Q4 2020, the Supreme Court declined to review allegations that the Federal Circuit was allowing this to happen too often—rejecting a petition filed by plaintiff WhitServe LLC. That denial of certiorari followed the Supreme Court’s decision not to accept an even more closely watched petition, one challenging the Federal Circuit’s controversial ruling in Chamberlain Group v. Techtronic Industries. Some stakeholders characterize that decision, commonly referred to as the “garage door” case, as underscoring the need for Section 101 reform.

For more on patent eligibility and other trends in 2020, see RPX’s fourth-quarter review.