In the recent Trinity vs. Covalent decision, the Federal Circuit gave patent infringers a new defensive weapon: a 12(b)(6) motion to dismiss the patent as being “abstract” under “Alice” 35 USC 101.
Some background
Federal courts are the primary way to enforce patents. Usually, the patent owner acts as a plaintiff who wants to sue an infringer (the defendant). To be enforceable, the plaintiff’s patent(s) must survive the defendant’s initial Federal 12(b)(6) motion to dismiss.
Patent litigation is expensive. However, nearly all expenses occur after the initial motion to dismiss. So, a patent infringer has a big incentive to move to dismiss
Since the 2014 “Alice” decision, the Federal Courts have invalidated thousands of patents as abstract, often for many different (and often contradictory) reasons. However, one thing that all these decisions had in common was that they took place later in the litigation proceedings. As a result, the judges making these “abstract” court rulings were at least informed by discovery, expert witness evaluations, and claim construction.
Discovery, expert witness evaluations, and claim construction are expensive for litigants and take up much court time. Indeed, the entire “abstract subject matter” legal rabbit hole likely evolved from an initial judicial decision to avoid mental overload.
Why not go one step further? Since discovery, expert witnesses, and claim construction are burdensome for the judge, why bother making an informed decision? Instead, allow motions to dismiss as being “abstract!”
In Trinity vs. Covalent, the Federal Circuit opened the floodgates to this tactic.
What are the official Federal 12(b)(6) rules? They are short and only say: “(6) failure to state a claim upon which relief can be granted.” What does this mean?
Over the years, various courts have attempted to define this term better. As per more recent Supreme Court rulings, 12(b)(6) motions usually require that the Court assume that the plaintiff’s (Trinity, the patent holder) facts are correct but then consider if alternative scenarios might be plausible. Covalent (the defendant) moved to dismiss, making Trinity the “nonmovant.” Accordingly, the Court should have also construed the pleadings in the light most favorable to the nonmovant (the patent holder, Trinity). This is one of the reasons why, until now, 12(b)(6) motions to dismiss didn’t work for Alice-type “abstract” rejections.
“…the code is more what you’d call “guidelines” than actual rules.”
Barbossa, Pirates of the Caribbean.
Unfortunately, the Federal 12(b)(6) “code” is almost entirely judge-defined. As a result, it is a bit fuzzy. In this particular case, let’s see what happens when the somewhat vague 12(b)(6) code is combined with the very ambiguous, judge-defined 35 USC 101 “abstract” rules.
The Federal Circuit is an appeals court, here reviewing the decisions of the US Central California District Court. The Federal Circuit approved the District Court decision and made it a precedent for future decisions. Since the two courts were in total agreement, let’s consider the case as a whole.
Here Covalent argued (moved) to dismiss the patent as invalid, asserting it was abstract. Covalent also argued that the usual discovery steps, expert opinions, and claim construction were unnecessary.
Did they correctly follow rule 12(b)(6)?
Uh, but under 12(b)(6), doesn’t the court need to construe Trinity’s assertion that it held valid US patents as fact? Nope! The Court argued that due to “Alice,” “facts” are not needed for an “Abstract” inquiry. So, the heck with the usual 12(b)(6) “code.” Also, they conveniently forgot the part about “construe the pleadings in favor of the nonmovant” (Trinity).
The joys of fact-free “Alice” 35 USC 101 “abstract” reviews
Instead, the Court did its own “fact-free” “Alice” type review. They picked specific claims to analyze, argued that the specification was not that important, and then cherry-picked those various previous “Alice” legal cases they wanted to cite. One was:
“A “telltale sign of abstraction” is when the claimed functions are “mental processes that ‘can be performed in the human mind’ or ‘using a pencil and paper.'”
Personal-Web, 8 F.4th at 1316.”
The catch is that the court ignored all claim elements that could not be done by the human mind or pencil and paper! Would any patent survive this process?
Specifically, the Court argued that certain non-mental claim limitations, such as displaying results on a hand-held device, as well as interface claims, such as “likelihood of match are displayed in a list reviewable by swiping from one result to another,” won’t cure this issue. The logic appears to be that the court has determined that the claims have cooties, so there is no need to look at the facts.
They then cited a very narrow precedent.
“whether the claims focus on the specific asserted improvement in computer capabilities or, instead, on a process that qualifies as an abstract idea for which computers are invoked merely as a tool.”
In re Killian, 45 F.4th 1373, 1382 (Fed. Cir. 2022)
The Court ignored many other precedents (some reported here) where software wasn’t abstract.
After dismissing all of Trinity’s many arguments (so much for construing pleadings in favor of the nonmovant), the Court finally made a fact-free determination of obviousness, arguing that Trinity’s arguments that the patents contained inventive concepts were mere “conclusory statements.”
“These conclusory allegations that the prior art lacked elements of the asserted claims are insufficient to demonstrate an inventive concept.
See Simio, 983 F.3d at 1365 (“A statement that a feature ‘improves the functioning and operations of the computer’ is, by itself, conclusory.”);”
The court skipped many steps. Does anyone else see problems here? How can you prove an inventive concept without expert opinion and admission of facts?
In my opinion, this decision has a lot of legal problems. If “Alice” established the legal precedent of conducting witch trials, this would be like doing a witch trial without evidence. However, since this is at the Federal Circuit level (one level below the Supreme Court), this decision may not be easy to reverse quickly.