Alice Remains in Its Post-Berkheimer Narrowed State, as Stakeholders Push for Supreme Court to Revisit Section 101

RPX data show that the US Supreme Court’s Alice decision, once a key defensive tool for patent litigants, remains in a significantly narrowed state due to the Federal Circuit’s Berkheimer and Aatrix opinions. In those cases, the Federal Circuit held that the early resolution of Section 101 challenges may be premature if a patent’s inventiveness is factually in dispute.

While two thirds of the patents challenged and adjudicated under Alice before Berkheimer’s February 2018 issuance were invalidated, the invalidation rate drops to 46% for patents decided since then and through the end of 2020. Meanwhile, the overall invalidation rate for eligibility challenges decided since Alice was decided in June 2014 stands at 58% through the end of last year.

Despite the narrowing that has resulted from Berkheimer, a remaining and persistent criticism from various stakeholders has been the difficulty that courts face in applying the decision consistently. One example frequently cited by critics is the Federal Circuit’s controversial ruling in Chamberlain Group v. Techtronic Industries, commonly referred to as the “garage door” case, for which the US Supreme Court denied certiorari in October 2020. In that decision, the Federal Circuit invalidated a patent claiming a smart garage door opener as unpatentably directed to the abstract idea of “wirelessly communicating status information about a system”, but the patent owner had argued in its petition that the court erred by distilling the patent to “a single supposed point of novelty” rather than considering the claims as a whole—allegedly leading courts taking this approach to nullify “concrete and specific” inventions. Senator Thom Tillis (R-NC), the former chair and current ranking member of the Senate IP Subcommittee, has argued that the decision highlights the need for Section 101 reform, stating that “nothing better demonstrates the madness” of how courts have applied Alice.

However, as Senator Tillis himself has lamented, the lack of consensus between stakeholders in the life sciences and tech industries on how to address Section 101 has dimmed the prospects of such reform in the near future. Indeed, Professor Colleen Chien recently remarked that the prospect of “Congressional action on Section 101”—as well as that of “near-term Supreme Court” intervention—“remains murky”.

Senator Tillis again brought up the Chamberlain case in late February 2021, when he asked DC Circuit Judge Merrick Garland, President Joe Biden’s nominee for US Attorney General, about his views on patent eligibility. In his question to Judge Garland, provided to the nominee in writing, Senator Tillis remarked that “[t]he current state of patent eligibility law is in shambles”, stating that the current standards are “so unworkable that you have judges ruling that things like a garage door opener is an abstract idea”. Additionally, Senator Tillis asked Judge Garland if he would “direct the Solicitor General to find appropriate cases on patent eligibility and to urge the Supreme Court to take them up and finally provide clarity in this area of the law”.

Notably, Senator Tillis has also cofiled an amicus brief with former Federal Circuit Judge Paul Michel and former USPTO Director David Kappos in American Axle & Manufacturing v. Neapco, another patent eligibility case presently before the Supreme Court that has ignited a heated debate over the bounds of the Alice test. In American Axle, a divided Federal Circuit found that a patent related to a quieter automotive driveshaft was unpatentably directed to a natural law, Hooke’s Law, in contrast to decisions like Diamond v. Diehr that found a mechanical process implementing a natural law to be eligible. The full Federal Circuit was split 6-6 on whether to rehear the panel decision—falling short of the threshold for en banc review. Several other amicus briefs have also been filed in that case, while the Supreme Court requested a response on January 29—subsequently extending the time to respond until March 31.

See RPX’s fourth-quarter review for more on patent eligibility, as well as other trends impacting patent litigation and the patent marketplace.