Berkheimer v. Hp Inc.
890 F.3d 1369 (2018)
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Rule of Law:
Whether a patent claim's elements are well-understood, routine, and conventional to a person of ordinary skill in the art at the time of the invention is a question of fact. The ultimate question of patent eligibility under 35 U.S.C. § 101 is a question of law, but it may be based on underlying factual determinations.
Facts:
- Steven E. Berkheimer obtained U.S. Patent No. 7,447,713 ('713 patent) related to a digital asset management system.
- The '713 patent's specification described its invention as increasing efficiency and computer functionality over conventional digital asset management systems.
- The specification asserted that certain elements, like a 'one-to-many' editing function, were improvements over known systems.
- The patent also stated that having redundant document images, which his invention aimed to reduce, was 'the convention' in existing digital asset management systems.
- HP Inc. created and used a system that Berkheimer alleged infringed upon his '713 patent.
- In defending against the infringement claim, HP's expert provided a conclusory declaration that the features claimed in the patent 'were known functions at the time the application was filed.'
Procedural Posture:
- Steven E. Berkheimer sued HP Inc. in a federal district court (court of first instance) for patent infringement.
- HP filed a motion for summary judgment, arguing the asserted patent claims were invalid under 35 U.S.C. § 101.
- The district court granted HP's motion, finding the claims patent-ineligible.
- Berkheimer, as appellant, appealed the district court's judgment to the U.S. Court of Appeals for the Federal Circuit.
- A three-judge panel of the Federal Circuit affirmed the district court's decision in part but reversed it as to certain claims, finding a genuine dispute of material fact precluded summary judgment on those claims.
- HP Inc., as appellee, filed a petition for rehearing en banc, asking the full Federal Circuit to review the panel's decision.
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Issue:
Is the determination of whether a patent's claim elements are 'well-understood, routine, and conventional' under step two of the Alice/Mayo framework a question of fact that may preclude dismissal or summary judgment if genuinely disputed?
Opinions:
Majority - Per Curiam
Yes. Whether a claim element or combination of elements is well-understood, routine, and conventional is a question of fact. While the ultimate question of patent eligibility under § 101 is one of law, it can depend on underlying factual disputes. Standard procedural rules, such as those governing motions to dismiss and summary judgment, apply to this factual inquiry. A genuine dispute of material fact regarding whether claim elements are conventional will preclude summary judgment of ineligibility. In this case, assertions in Berkheimer's patent specification that certain claimed features were improvements over conventional systems created a genuine factual dispute when countered only by a conclusory expert declaration from HP, thus making summary judgment on those claims improper.
Concurring - Lourie
Yes, there are potential fact issues involved in this case under the current legal framework. Although the court is bound to follow the Supreme Court's script for § 101 cases, the overall state of patent eligibility law is problematic. The Supreme Court's two-step test in Mayo and Alice has improperly imported novelty and nonobviousness inquiries (from §§ 102 and 103) into the threshold eligibility analysis of § 101. This decision, while correctly applying precedent, further complicates the analysis and 'digs the hole deeper.' The law requires clarification from a higher authority, like Congress or the Supreme Court, to resolve the confusion surrounding § 101 jurisprudence.
Dissenting - Reyna
No. The court should have reheard the case en banc because the panel's decision improperly treats a question of law as one of fact, contrary to well-established precedent. Patent eligibility under § 101 has consistently been treated as a threshold question of law that can be resolved on the pleadings. By recasting the 'inventive concept' inquiry as a factual one, this decision will prevent early resolution of patent cases, lead to costly and unnecessary discovery, and create significant legal uncertainty. This change fundamentally alters the § 101 analysis by divorcing it from the claims and reducing it to a simple novelty test, which is contrary to Supreme Court guidance.
Analysis:
This decision significantly impacts patent litigation by clarifying that the second step of the Alice/Mayo eligibility test can involve factual disputes. It makes it more difficult for defendants to invalidate patents at the motion to dismiss or summary judgment stage, as patentees can now create a triable issue of fact by asserting that the claimed elements were not 'well-understood, routine, and conventional.' This holding provides patent owners a procedural tool to survive early challenges and proceed to discovery, potentially increasing litigation costs and shifting leverage in settlement negotiations. The decision underscores the tension within patent law between the desire for early resolution of meritless cases and the need to adhere to standard procedural rules for resolving factual disputes.
