Berkheimer Is a Less Effective Alice Defense in the Hands of an NPE

RPX’s latest quarterly report takes a deep dive into the ongoing impact of the Federal Circuit’s decisions in Berkheimer and Aatrix, which held that courts cannot grant early dismissal under Alice when a patent owner establishes a material factual dispute over a challenged patent’s inventiveness. The result of those rulings has been a significant drop in the Alice invalidation rate, which stood at around 67% before Berkheimer but has now dropped to 43% for decisions issued since Berkheimer and through Q3.

Moreover, an analysis limited to decisions that turned on Berkheimer or Aatrix, meaning a plaintiff asserted that a factual issue precluded early resolution and the court’s order actually addressed that issue, shows that NPEs are significantly less successful than operating companies at blocking Rule 12 challenges under Berkheimer/Aatrix. Courts found sufficient facts to issue a ruling 56% of the time for motions against NPEs but only 38% of the time for those against operating companies. NPEs fare even worse at the summary judgment stage, as courts found sufficient facts to rule in 75% of Alice summary judgment motions against NPEs—whereas for summary judgment motions against operating companies, courts found sufficient facts just 11% of the time.

See RPX’s full third-quarter review for more analysis on Section 101.