Federal Circuit Makes it More Difficult to Invalidate Patents under Alice

Takeaway: Any clarity that may have developed since 2014 for Section 101 challenges now seems to have faded away. The recent Federal Circuit ruling determining that Section 101 challenges may involve issues of fact and may not be suitable for dispositive motions complicates the way we look at these issues.

As many patent attorneys and agents know, the landscape of business methods and software patent eligibility has changed since the 2014 ruling of Alice v. CLS Bank. Alice has made it significantly more difficult to patent software and business methods, but now the Federal Circuit made a ruling that will slow down the process of invalidating patents under Section 101.

The Federal Circuit found that a finding of patent eligibility under Section 101 and the Alice ruling involve “factual issues.” This means that lower district courts will have a more difficult time resolving Section 101 cases at the summary judgment stage because these factual issues are something that require a jury to decide.

This ruling may drastically change how we look at Section 101 challenges because we have yet to see how a jury will decide such an issue. Over the past four years since the Alice ruling, judges, attorneys, and clients have all been trying to figure out the bounds of Section 101 for business methods and software inventions. With this ruling, it is as if the slate has been wiped clean and we will have to analyze the issues in a different light because the decision may come down to the jury to decide as opposed to the judge.