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IP Insights - March 2020

Judge Holte to the Rescue! – Some Relief in 35 USC 101 Cases

By: Barry Bretschneider

Judge Ryan Holte of the U.S. Court of Federal Claims, formerly professor of IP law at the University of Akron School of Law, has injected some clarity into pleading under the second part of the Supreme Court’s Alice test, the part of the test that asks, once the court determines that the claimed invention is directed to an abstract idea, law of nature or the like, whether the invention adds “something more” in the way of an “inventive concept” to that abstract idea or law of nature so as to make the invention patentable subject matter under 35 USC 101.

In Wanker v. United States, 2020 U.S. Claims LEXIS 68 (Ct. Fed. Cls., Jan 31, 2020), the invention related to consumer information systems which provided a method for comparing products and services through the use of various weighting factors to assign each merchant a relative ranking.  As explained by Judge Holte, “This allows for easier comparison and contrasting of various merchants according to weighted factors specific to the consumer, resulting in the presentation of a ranking relative to other merchants.”  The government moved to dismiss for failure to state a claim on the ground that the claims covered unpatentable subject matter.

In denying the motion to dismiss, Judge Holte first concluded that the plaintiff’s claims were directed to an abstract idea under step one of the Alice test, although it was a “close call.”  He concluded, “The Court finds the concept of ranking merchants according to a series of weighting factors is ‘directed to the abstract idea of collecting, analyzing, manipulating, and displaying data.’”  Id. at *34.  However, Judge Holte found that the complaint contained sufficient factual allegations under the second part of the Alice test to support “a legally cognizable claim for relief” under Berkheimer v. HP Inc., 881 F.3d 1360, 1372 (Fed. Cir. 2018).

After dismissing certain allegations of the complaint as “mere conclusory statements” under Berkheimer (such as the “claimed subject matter of the '429 patent marks a significant technological improvement over the prior art” and the “technological solution disclosed and claimed in the '429 Patent was not well-understood, routine, or conventional activity at the time of the invention of the '429 patent”) as not being tied to pleaded technology or to the claims, Judge Holte provided a useful catalog of allegations in the complaint that sufficed to clear the second part of the Alice test with sufficient technological specificity tied to the claims:
 

• The patented systems and methods “add a step to the functionality of the database by allowing the pre-query entering of information before the database begins generating results.”  (“Mr. Wanker invented systems and methods to define, prior to data analysis, consumer-modifiable weighting factors for different categories of merchant and product information.”) (“[W]hether generating the paradigm prior to the analysis of the data is . . . the important, inventive concept[].”).  The complaint also alleged that this “paradigm” was an entirely new introduction to systems at the time of invention.
• The system was also alleged to provide for the inclusion of “[i]nformation from multiple merchants.”  The complaint alleged that “[t]he ability to include information from multiple merchants marked a ‘significant improvement over single-vendor systems’ in the prior art.”  Judge Holte observed that claim 1 of the patent addressed this limitation in the prior art by “receiving a plurality of merchant comparison information data for a plurality of merchants related to completing the potential consumer purchase.”

The court’s opinion provides several other examples that practitioners can use as examples.  In response to the government’s argument that the complaint allegations were “mere attorney argument,” the court disagreed: “While plaintiff's specific factual allegations do not rise to the level of suggesting the ‘claimed combination improves the functioning and operation of the computer itself,’ plaintiff's allegations of increased speed and efficiency and less computing power, when accepted as true as required at the Rule 12(b)(6) stage, do create at least a factual dispute as to whether ‘the claimed combination was conventional or routine.’”