On August 19, 2016, Judge Shaw issued an early Initial Determination (ID) in the 994 Investigation (Portable Electronic Devices) concluding that the sole asserted patent (U.S. Patent 6,928,433) is invalid because it fails to claim patent-eligible subject matter. The issue of patent eligibility was designated for early resolution within 100 days of institution of the investigation, pursuant to the ITC's 100-Day Pilot Program. This is the first time that a Section 101 challenge was resolved using the 100-Day Pilot Program and only the second time since the Supreme Court's decision in Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 134 S. Ct. 2347 (2014), that an ITC judge has found claims invalid for claiming ineligible subject matter.

As discussed in our previous post, the Commission had directed Judge Shaw to determine whether the '433 patent was invalid under 35 U.S.C. §101 within 100 days of institution of the investigation on May 5, 2016. Judge Shaw held a hearing on this subject on July 8 and 9, 2016. The '433 patent claims methods of organizing and accessing music tracks on portable media devices.

Applying step 1 of Alice's two-part analysis, Judge Shaw concluded that all asserted claims were "directed to the abstract idea of using hierarchical categories to access content." (337-TA-994, Initial Determination, 33 (August 19, 2016).) Citing the Federal Circuit's recent Enfish decision, Judge Shaw further determined that "there is no specific asserted improvement, such as in the structure of implementation," of a computer's capabilities in the asserted claims; the claims instead "are directed to the application of the abstract and well-known idea of a hierarchically navigated user interface itself to the portable media player computing environment." (Id. at 34-39.) Judge Shaw further found that the asserted dependent claims added merely functional limitations that "flow[ed] directly from the application of the abstract organizational idea." (Id. at 44.) Applying step 2 of Alice, Judge Shaw found that the asserted dependent claims did not add an inventive, patentable concept to the abstract idea of using hierarchical categories. (Id. at 45.)

Complainants had argued that one term of the asserted claims required construction before the Commission could determine Section 101 eligibility. Judge Shaw agreed with Respondents and the Staff that no construction was necessary but nonetheless did construe that term, agreeing with Respondents' proposed construction and finding that the Complainants had disclaimed the broad scope encompassed by their proposed construction during reexamination. (Id. at 13-23.)

Complainants are expected to seek Commission review of the ID. Unless the Commission decides to review the ID, it will become the Commission's final determination 30 days after service of the ID on August 22, 2016. The investigation is currently stayed pending any Commission review of the ID.

Disclosure: Morrison & Foerster is representing respondents BlackBerry Ltd. and BlackBerry Corporation in the 994 Investigation.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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