Kirby Drake - Advanced Patent Litigation - Section 101

© 2016 Klemchuk LLP

PATENT CHALLENGES UNDER SECTION 101

Kirby B. DrakeJuly 21, 2017

1© 2017 Klemchuk LLP


• Invention must involve something “significantly more” than mere natural phenomenon, abstract idea, or law of nature to merit patent protection

• Initially, spelled trouble for “business method” patents as well as many software patents

Alice Corp. v. CLS Bank Int’l (2014)



Guiding Federal Circuit Decisions Post-Alice

• Enfish - database patent directed to improvements in computer operations so patent-eligible

• Bascom - combined abstract idea of filtering content and claim elements known in the art in inventive way that transformed abstract idea into patent-eligible practical application

• McRo - claimed process for animating characters using a computer is patent-eligible because it uses different techniques from prior animators



TecSec Inc. v. Adobe Systems Inc., 1:10-cv-115, (E.D. Va. May 23, 2017)

1. A method for providing multi-level multimedia security in a data network, comprising the steps of:

A) accessing an object-oriented key manager;B) selecting an object to encrypt;C) selecting a label for the object;D) selecting an encryption algorithm;E) encrypting the object according to the encryption

algorithm;F) labelling the encrypted object;G) reading the object label;H) determining access authorization based on the

object label; andI) decrypting the object if access authorization is

granted.



TecSec Inc. v. Adobe Systems Inc., 1:10-cv-115, (E.D. Va. May 23, 2017)• Claims not directed to abstract idea, law of nature,

or natural phenomenon

• Emphasis on how problem solved by claims is conventional and not one that exists only because of the Internet or the computer technology

• Patent challengers should point out why the claims impermissibly preempt an entire field of ideas



Smart Meter Techs. v. Duke Energy, 16-208-SLR, (D. Del. July 11, 2017)

17. A method of measuring power consumption information on a power line comprising:

measuring current fluctuations in the power line;calculating power consumption information from

the current fluctuations in a processor;converting the power consumption information

into IP-based power consumption information in the processor; and

transmitting the IP-based power consumption information from the processor to a destination autonomously in IP format over an external power line network.



Smart Meter Techs. v. Duke Energy, 16-208-SLR, (D. Del. July 11, 2017)

• Invention not directed to abstract idea

• Specification supports broader reading of claim than characterizations that include a number of embodiments and possible benefits of invention, only one of which is replacing human meter readers

• “A claim is not ‘directed to’ a specific embodiment when multiple embodiments are potentially covered by the claim limitations.”



T-Rex Property v. Cedar Fair, L.P., 16-2018 (D. Minn. June 2, 2017)

• Emphasis on presumption of validity to deny motion to dismiss

• Dismissal under Section 101 on a motion to dismiss “unwarranted unless the only plausible reading of the patent must be that there is clear and convincing evidence of ineligibility.”

• Emphasis on procedural context in which the issue was presented



Preferential Networks IP v. AT&T Mobility, 2-16-cv-01374 (E.D. Tex. July 15, 2017)

• Denied motion to dismiss

• “Character as a whole” of claims is directed to manner by which data is transmitted between two computer systems -- which is not a law of nature, a natural phenomena, or an abstract idea

• Defendants did not produce evidence about claimed advance compared to prior art



Credit Acceptance Corp. v. Westlake Servs. (Fed. Cir. June 9, 2017)

• Claims on storing dealer’s inventory information in a database, receiving financial information about a customer in relation to certain products sold by the dealer via a user terminal, combining these two sources of information to create a financial package for each of the inventoried items, and presenting the financial packages to the user

• Mere automation of a manual process using generic computer components cannot constitute a patentable improvement in computer technology



Best Practices – Patent Challengers

• Consider timing of when to raise 101 challenge and venue to make challenge

• Utilize intrinsic evidence in challenge to support allegations about the basic nature of the patent and why the subject matter should not be deemed patent-eligible

• Minimize claim construction issues and factually distinguish claims discussed in Federal Circuit decisions finding subject-matter eligibility



Subject Matter Eligibility Materials

https://www.uspto.gov/patent/laws-and-regulations/examination-policy/subject-matter-eligibility• Business method examples• Quick reference sheet on decisions holding

claims eligible and identifying abstract ideas (updated June 28, 2017)

• Index of examples (updated December 15, 2016)

• Chart of subject matter eligibility court decisions (updated June 28, 2017)



Best Practices – Patent Owners

• Perform Section 101 due diligence before filing, including venue

• Evaluate if claim construction and/or expert testimony necessary to evaluate motion

• Consider whether to agree to use of representative claims related to a Section 101 challenge

• Consider arguing factual record not fully developed or there are factual disputes that need to be resolved through Markman proceedings



Thanks!

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Kirby Drake - Advanced Patent Litigation - Section 101