United States: Sections 101 And 112: Eligibility, Patentability, Or Somewhere In Between?

  1. Introduction

We wrote earlier about the Supreme Court's renewed interest in patent eligibility and seemingly unintended confusion between the patent eligibility requirements of 35 U.S.C. § 101 and the remaining patentability requirements under Title 35.  To paraphrase Judge Rich, whether we lawyers would take advantage of terminology available to us and stop talking nonsense is up to us.  Principles of Patentability, Geo. Wash. L. Rev., 28(2), 393-407, 407 (1960).  We tried to heed his guidance and aimed to be careful to differentiate between eligibility under § 101 and the remaining requirements of patentability.  Since our article, there has been significant commentary and angst regarding the failure of the courts to so differentiate, at least with respect to patent eligibility and the requirements of §§ 102 and 103.  But there has been less attention paid to possible changes in the relationship between § 101 and § 112, so we address the relationship of those two sections here.

  1. The Way Things Used to Be

            As described in our previous article (J.W. Cox, et al., A BRIEF HISTORY OF SUPREME COURT INTEREST IN PATENT-ELIGIBLE SUBJECT MATTER UNDER 35 U.S.C. § 101, J. Tech. Law & Policy, 19(2), 181–226, (2014)) the law of § 101 was relatively stable from 1952 to 2010, with the Supreme Court opining on eligibility under § 101 only five times during that period.  In short, the law of § 101 was simple and well understood, and was only rarely invoked to prevent a patent right covering an actual abstract idea or mathematical formula.

As a result, claim scope was traditionally determined as a question of patentability under § 112.  These standards have not evolved dramatically over the last 50 years, with perhaps the greatest change being that of the new Nautilus standard for definiteness announced in 2014.  Nevertheless, as a matter of policy, patent applicants have needed to conform with the written description, enablement, and definiteness requirements in § 112 in substantially the same form over the last five decades.

  1. The Way Things Are
  2. Current Status of the Law - The Relationship Between Patent Eligibility and 35 U.S.C. § 112

Sections 101 and 112 provide their own separate limitations to the scope of patent protection in ways that are sometimes complimentary and sometimes contradictory.  The contours of these sections of the Patent Act are discussed below.

  1. § 101

Patent eligibility under § 101 is traditionally understood as a "threshold" test: the first of multiple challenges to the sufficiency of a patented invention.  See Bilski v. Kappos, 561 U.S. 593, 602, 130 S. Ct. 3218, 3225 (2010).  Section 101 defines patent eligible subject matter as "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof."  35 U.S.C. § 101.  Courts have limited the scope of patentable material by exempting laws of nature, natural phenomena, and abstract ideas.  See Alice Corp. Pty. v. CLS Bank Int'l, 134 S. Ct. 2347, 2354 (2014). 

These subject matter qualifications have been observed for over 150 years.  Id.  Despite their venerable nature, however, courts have struggled in recent years to clearly define the proper scope of § 101.  In particular, it remains a vexing problem to describe exactly when an invention is entitled to patent protection, and when an invention is merely the recitation of an abstract idea.  The Supreme Court has developed a two-part analytical framework to identify claims that are directed to a patent-ineligible concept.  See Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 132 S. Ct. 1289 (2012), and Alice, 134 S. Ct. 2347.  This Mayo/Alice framework has courts first examine whether the patent claims "are directed to a patent-ineligible concept." Alice, 134 S. Ct. at 2355.  If so, courts must then "consider the elements of each claim both individually and 'as an ordered combination' to determine whether the additional elements 'transform the nature of the claim' into a patent-eligible application."  Id. (quoting Mayo, 132 S. Ct. at 1298, 1297).  This approach seeks to limit the protection of unpatentable subject matter, despite the fact that "[a]t some level, 'all inventions . . . embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.' " In re TLI Commc'ns LLC Patent Litig., 823 F.3d 607, 611 (Fed. Cir. 2016) (quoting Alice, 134 S. Ct. at 2354).  Above all, § 101 is concerned with weeding out claims that merely claim the "building blocks of human ingenuity" and thus threaten to preempt the use of those ideas for other innovations.  Alice, 134 S. Ct. at 2354-55 (quotations omitted).

  1. § 112

Should a claim satisfy the threshold test of § 101, it can properly be subjected to the requirements of other sections of the patent statute, including 35 U.S.C. § 112.  Section 112 contains multiple requirements that relate to the adequacy of the inventor's disclosure within a patent application.  The first requirement, the written description, "serves a quid pro quo function in which the public is given meaningful disclosure in exchange for being excluded from practicing the invention for a limited period of time."  Carnegie Mellon Univ. v. Hoffmann-La Roche Inc., 541 F.3d 1115, 1122 (Fed. Cir. 2008) (quotation omitted).  This requirement requires an applicant to "convey with reasonable clarity to those skilled in the art that [. . . ] he or she was in possession of the invention," by including sufficient disclosures in the specification.  Id.  (quotation omitted).

Under § 112, broader claims require broader disclosures.  Claims to the genus of an invention are patentable, just as claims to a species.  See Diamond v. Chakrabarty, 447 U.S. 303, 100 S. Ct. 2204 (1980).  But broader claims must be accompanied by an equally broad disclosure.  "[A] broad claim is invalid when the entirety of the specification clearly indicates that the invention is of a much narrower scope."  Carnegie Mellon, 541 F.3d at 1127 (quotation omitted).  "[C]laims may be no broader than the supporting disclosure."  Gentry Gallery, Inc. v. Berkline Corp., 134 F.3d 1473, 1480 (Fed. Cir. 1998).

The enablement requirement of § 112 is directed to disclosing how to make and use "the full scope of the claimed invention."  Genentech, Inc. v. Novo Nordisk, A/S, 108 F.3d 1361, 1365 (Fed. Cir. 1997) (quotations omitted).  As with written description, "[e]nablement serves the dual function in the patent system of ensuring adequate disclosure of the claimed invention and of preventing claims broader than the disclosed invention."  MagSil Corp. v. Hitachi Glob. Storage Techs., Inc., 687 F.3d 1377, 1380–81 (Fed. Cir. 2012).  Therefore, a patentee risks the invalidation of claims that are not fully enabled by the specification.  Id.

Finally, § 112 contains a definiteness requirement that serves as a check against claims broadened by vague and imprecise language.  While formerly understood as a requirement that claim language avoid being "insolubly ambiguous," see, e.g., Datamize, LLC v. Plumtree Software, Inc., 417 F.3d 1342, 1347 (Fed.Cir.2005), the Supreme Court recently clarified this standard: "a patent is invalid for indefiniteness if its claims, read in light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention."  Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120, 2124 (2014).  This standard mandates clarity, and requires a level of detail that discourages different reasonable interpretations of claim language.

Ultimately, the requirements of § 112 operate to incentivize substantial inventor disclosures to the public.  Furthermore, § 112 calibrates claim language to the bounds of the disclosed specification.  Compliance with § 112 results in claims that "avert[] the generality or vagueness or imprecision or over-breadth that characterize abstract ideas."  Bascom Glob. Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1353–54 (Fed. Cir. 2016).

  1. The Relationship

Inventors are motivated to maximize the breadth of their claims.  But they may seek to do so by employing imprecise claim language.  Both §§ 101 and 112 corral this behavior, although in slightly different ways.  Section 101 safeguards against claims that are too abstract or overbroad to be patentable, being concerned with claims that would "wholly pre-empt" any other use of an inventive concept, thereby foreclosing independent innovations or application.  Bilski, 561 U.S. at 610 (quotation omitted).  Section 112 protects against claims that are not completely and functionally disclosed within the patent specification ensuring that patentees cannot claim more than what they have invented – and shared with the public.

  1. Cases from the Federal Circuit
  2. Affinity Labs of Texas, LLC v. Amazon.com, Inc.

In Affinity Labs of Texas, LLC v. Amazon.com, Inc., the Federal Circuit analyzed a § 101 challenge in terms that were remarkably similar to those used in a typical § 112 analysis.  838 F.3d 1266 (Fed. Cir. 2016).  Considering a representative claim that the court described as "directed to a network-based media system with a customized user interface, in which the system delivers streaming content from a network-based resource upon demand to a handheld wireless electronic device having a graphical user interface[,]" the court undertook a Mayo/Alice inquiry.  Id. at 1268-69.  The court held that "the concept of delivering user-selected media content to portable devices is an abstract idea," and moved to the second step of the analysis.  Id. at 1269.

The court found that neither the claims nor specification supplied the "inventive concept" necessary to survive a § 101 challenge.  Id. at 1271 (quoting Alice, 134 S. Ct. at 2355; Mayo, 132 S. Ct. at 1294.)  According to the court, the patent lacked the required "concrete implementation of the abstract idea" under Mayo/Alice.  Id.  The court found instead that these claims were directed to "the general concept of streaming user-selected content to a portable device[,]" and that the patent neither solved a technological problem nor improved computer or network functionality.  Id. at 1272.  The court rejected aspects of express functionality written into the claims, such as network streaming and a customized user interface, as insufficient to take the claim outside of the realm of the abstract.  Id. at 1271-72.

Notably, the patent at issue had a priority date of 2000, despite issuing in 2014.  Id. at 1269.  The wireless streaming of media to a handheld device was not widespread at the time of invention.  Indeed, few would argue that such an invention would have been considered "abstract" in 2000.  Regardless, the court's analysis makes more sense when viewed through the lens of § 112.  Indeed, the court's criticism of the vague and generic nature of the claims is entirely consistent with the disclosure requirements of § 112.  In one instance, the court considered the claim limitation of "a customized user interface page for the given user[,]" but found that "neither the claim nor the specification reveals any concrete way of employing a customized user interface."  Id. at 1271.  This analysis appears more at home under § 112 than § 101.

  1. McRO, Inc. v. Bandai Namco Games Am. Inc.

The Federal Circuit has openly acknowledged the overlap between §§ 101 and 112 as means for policing claim scope.  In McRO, Inc. v. Bandai Namco Games Am. Inc., the court examined a § 101 challenge to two related patents directed to methods of animating lip synchronization and facial expressions of 3-D characters.  837 F.3d 1299 (Fed. Cir. 2016).  The district court in that case found that these claims were broadly preemptive of the "field of such lip synchronization using a rules-based morph target approach," and that the novel aspects of the invention were claimed too broadly to satisfy § 101.  Id. at 1309.

The Federal Circuit reversed.  In conducting the first step of the Mayo/Alice inquiry, the court framed the issue as one of preemption – namely whether the claims would improperly result in the complete "preemption of all processes for achieving automated lip-synchronization of 3–D characters."  Id. at 1315.  The court characterized such preemption as "the primary concern driving § 101 jurisprudence," and that such risk "arises when the claims are not directed to a specific invention and instead improperly monopolize the basic tools of scientific and technological work."  Id. at 1314 (quotation omitted).  Ultimately, the court found the asserted claims contained specific rules-based limitations to the method of automated lip-synchronization.  Id. at 1315.  The court then held that the claimed genus of rules represented a specific implementation that was not directed to an abstract idea.  Id. at 1316.  Because the court determined that the claims were not directed to ineligible subject matter, it did not reach the second Mayo/Alice step.  Id.

Interestingly, the court recognized the traditional role of § 112 in policing claim scope: 

Patent law has evolved to place additional requirements on patentees seeking to claim a genus; however, these limits have not been in relation to the abstract idea exception to § 101. Rather they have principally been in terms of whether the patentee has satisfied the tradeoff of broad disclosure for broad claim scope implicit in 35 U.S.C. § 112.

Id. at 1313-1314 (citing Carnegie Mellon, 541 F.3d at 1122).  Thus, the court appears to acknowledge that, even though § 101 is increasingly used to challenge overbroad claims, it has not subsumed the role of § 112.  Therefore, while § 112 limits claims to the breadth of possession held by the applicant, § 101 serves as a check against claims that are so broad as to preempt an entire field of research.

  1. Additional Guidance or Confusion Through Concurrences

Despite what appears to be useable guidance in McRO, individual judges on the Federal Circuit have written separate concurrences outlining very different visions of § 101 in the post-Mayo/Alice landscape.  For example, Judge Mayer, concurring with the court's invalidation of a patent on § 101 grounds, describes § 101 as a "sentinel, charged with the duty of ensuring that our nation's patent laws encourage, rather than impede, scientific progress and technological innovation."  Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 718 (Fed. Cir. 2014) (Mayer, J., concurring) cert. denied sub nom. Ultramercial, LLC v. WildTangent, Inc., 135 S. Ct. 2907 (2015).  In Judge Mayer's view, § 101 remains a "gateway" or "threshold test" that should be satisfied before courts consider traditional validity issues such as those embodied within §§ 102, 103, or 112.  Id.  Judge Mayer compares § 101 to a court's "jurisdictional inquiry," placing the burden on courts to ensure that "claimed subject matter is even eligible for patent protection before addressing questions of invalidity or infringement."  Id.  While this perspective ensures the divide between §§ 101 and 112, it is a maximalist interpretation of the role of § 101 in patent jurisprudence.

Compare Judge Mayer's position with that of Judge Newman, who outlined a more holistic view of § 101 in a concurrence rejecting a motion to dismiss on § 101 grounds.  Bascom Glob. Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1352 (Fed. Cir. 2016) (Newman, J., concurring).  She "urge[s] a more flexible approach to the determination of patent eligibility, for the two-step protocol for ascertaining whether a patent is for an 'abstract idea' is not always necessary to resolve patent disputes."  Id. at 1352-1353.  Judge Newman suggests that the abstract idea analysis may be better handled as a patentability analysis under §§ 102, 103, or 112.  Id. at 1353.  Considering § 112 specifically, Judge Newman points out:

The process, machine, manufacture, or composition of Section 101 must comply with Section 112. Subject matter that complies with Section 112 averts the generality or vagueness or imprecision or over-breadth that characterize abstract ideas. These are conditions of patentability, not of eligibility. The "conditions and requirements of this title" weed out the abstract idea.

Id. at 1354 (emphasis added).  Judge Newman also argues that §§ 102 and 103 could be similarly pressed into service to dispatch "abstract idea" challenges associated with § 101.  Id.  Naturally, this approach would erode the distinction between § 101 and the requirements of patentability (i.e., §§ 102, 103, and 112). 

Judge Newman's opinion on § 101 contrasts with the panel in Bascom, which stated "[t]he Supreme Court has also consistently held that § 101 provides a basis for a patentability/validity determination that is independent of—and on an equal footing with—any other statutory patentability provision."  Id. at 1347.

  1. Cases From District Courts

District courts have grappled with § 101 and § 112 analyses in different ways.   

  1. Intellectual Ventures I, LLC v. Canon Inc.

One district court openly expressed frustration with the recent shifts in § 101 jurisprudence, and questioned how they could be squared with traditional patentability standards such as § 112.  See Intellectual Ventures I, LLC v. Canon Inc., 143 F. Supp. 3d 143 (D. Del. 2015).  In Intellectual Ventures, the court was presented with multiple motions for summary judgment, including one for patent ineligibility under § 101.  The patent at issue related to an image scanning method for a scanner that resulted in an improved scanning rate.  Id. at 168. 

Considering the § 101 challenge, the court observed that, because of the moving standards under § 101, a computer-implemented invention "would have survived such challenges if mounted at the time of issuance, [but] these claims are now in jeopardy under the heightened specificity required by the Federal Circuit post-Alice."  Id. at 172.  The court continued:

Moreover, it is less than clear how a § 101 inquiry that is focused through the lens of specificity can be harmonized with the roles given to other aspects of the patent law (such as enablement under § 112 and non-obviousness under § 103), especially in light of the Federal Circuit's past characterization of § 101 eligibility as a "coarse" gauge of the suitability of broad subject matter categories for patent protection.

Id. (footnote and quotation omitted).  The court settled on an implementation of the Mayo/Alice test articulated in DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1258-59 (Fed. Cir. 2014):

[T]he claims (informed by the specification) must describe a problem and solution rooted in computer technology, and the solution must be (1) specific enough to preclude the risk of pre-emption, and (2) innovative enough to "override the routine and conventional" use of the computer.

Id. Applying this framework, the court found that the claims neither claimed an underlying mathematical formula nor the implementation of a formula and, therefore, the claims were not directed to an abstract idea.  Id. at 173.  The court also evaluated whether the asserted claims posed a risk of preempting the use of the claimed mathematical relationship in any scanning device, but concluded that the "claimed solution is described with enough specificity to place meaningful boundaries on the inventive concept."  Id. at 174.

            The district court's focus on the specificity of the claims, necessarily requiring consideration of their scope in view of the disclosure as understood by one of ordinary skill at the time of invention, overlaps significantly with the patentability considerations of § 112.  Therefore, while the court appears to describe the §§ 101 and 112 inquiries as separate and distinct analyses, the court's § 101 analysis is in essence a § 112 determination.

  1. Perdiemco, LLC v. Industrack LLC

Another court has taken a much more discrete approach to §§ 101 and 112 analyses.  In Perdiemco, LLC v. Industrack LLC, the district court was faced with motions for judgment on the pleadings on both §§ 101 and 112 grounds for claims directed to conveying user location information to a third party.  No. 2:15-CV-1216-JRG-RSP, 2016 WL 5719697, at *4-5 (E.D. Tex. Sept. 21, 2016), report and recommendation adopted, No. 2:15-CV-727-JRG, 2016 WL 5475707 (E.D. Tex. Sept. 29, 2016).  The court proceeded to analyze the questions of eligibility and patentability posed by these two sections entirely separately.

Considering § 101, the court relied heavily on Alice and McRO in finding that the asserted claims were not patent ineligible.  The court narrowly focused on "whether the claims in these patents focus on a specific means or method that improves the relevant technology or are instead directed to a result or effect that itself is the abstract idea and merely invoke generic processes and machinery."  Id. at *6 (quoting McRO, 837 F.3d at 1314).  This approach avoided the concerns of § 112, even when considering whether the asserted claims threatened preemption.  Id.  Despite how McRO itself acknowledged the overlap between §§ 101 and 112 when searching for preemption, the court in Perdiemco was most concerned with whether the claims "inhibit further discovery by improperly tying up the future use of laws of nature . . . [or] the basic tools of scientific and technological work[,]" in other words, strictly the concerns of § 101.  Id. (quoting Mayo, 132 S. Ct. at 1301).  The court then proceeded to conduct a separate analysis of § 112 (one that was minimal given the procedural posture) before finding no issue of unpatentability for "this fact-intensive defense."  Id. at *8.

  1. THE UNCERTAIN FUTURE

A recent opinion by the Federal Circuit suggests that there will be considerable uncertainty about the respective boundaries of §§ 101 and 112 in the years ahead.  In Trading Technologies Intl. Inc. v. CQG, Inc., Judge Newman wrote on behalf of a unanimous panel, following up on her concurrence in BascomTrading Technologies Intl., Inc., v. CQG, Inc., et al., No. 2016-1616, 2017 WL 192716, --- Fed.Appx. ---- (Fed. Cir. Jan. 18, 2017).  The case involved § 101 challenges to patents that:

[D]escribe and claim a method and system for the electronic trading of stocks, bonds, futures, options and similar products. The patents explain problems that arise when a trader attempts to enter an order at a particular price, but misses the price because the market moved before the order was entered and executed. It also sometimes occurred that trades were executed at different prices than intended, due to rapid market movement. This is the problem to which these patents are directed.

Id. at *1.

Judge Newman wrote that the asserted claims were "directed to a specific improvement to the way computers operate," and was thus patent eligible.  Id. at 4 (quotation omitted).  Of particular interest is her continued endorsement of a flexible approach to § 101 and the traditional measures of patentability, such as § 112.  Judge Newman wrote that the "threshold level of eligibility is often usefully explored by way of the substantive statutory criteria of patentability," and that this approach is in harmony with the Supreme Court's reasoning in in AliceId. at 4.

            Judge Newman went on to say that the public interest favors considering close questions of eligibility:

[A]long with the understanding flowing from review of the patentability criteria of novelty, unobviousness, and enablement, for when these classical criteria are evaluated, the issue of subject matter eligibility is placed in the context of the patent-based incentive to technologic progress.

Id.  Thus to Judge Newman and the rest of the panel, the § 101 inquiry remains closely linked to traditional questions of patentability, including those within § 112.  And remember her concurrence in Bascom, where a proper analysis would render moot the § 101 determination.  District courts looking to the Federal Circuit for guidance on this issue will likely continue to see different approaches to analyzing § 101 for the foreseeable future. Practitioners also likely will be faced with defenses or rejections somewhere in between eligibility and patentability.

This article originally was published by IP Watchdog.

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Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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