Procedural Grounds for Raising a Section 101 "Alice" Motion

The section 101 patent eligibility inquiry is "a threshold test," Bilski v. Kappos, 561 U.S. 593, 602 (2010), and despite the unique considerations any given stage of a case may present, there are commonalities to a section 101 legal analysis that apply throughout. First, courts routinely analyze one or more "representative" claims when adjudicating section 101 challenges. This is especially true when the challenged claims are the same or very similar. In Alice, for example, the Supreme Court ruled on 208 claims in four patents based on an explicit analysis of just two claims. 134 S. Ct. at 2359–60; see also Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat'l Ass'n, 776 F.3d 1343, 1345, 1347–48 (Fed. Cir. 2014) (affirming district court's ruling holding 242 claims in four patents patent-ineligible based on a review of two claims). Second, the section 101 legal analysis is the same regardless of claim type: methods, systems, or otherwise. See, e.g., Alice, 134 S. Ct. at 2360 (holding that system claims "fail for substantially the same reasons" as method claims).

As courts and practitioners continue to test the line between the merely "standard" and the truly inventive, filing and defending section 101 "Alice" motions is quickly becoming an important tool in every patent trial attorney's toolbox. While understanding the current state of section 101 jurisprudence is critical, it is equally critical to understand the pros and cons of the procedural grounds, i.e., procedural posture under the Federal Rules of Civil Procedure, under which a section 101 "Alice" motion may be brought.

The Federal Circuit recently endorsed filing section 101 "Alice" motions under Rule 12 of the Federal Rules of Civil Procedure. See, e.g., Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 712–13 (Fed. Cir. 2014) (affirming district court's ruling on pre-answer motion to dismiss). Practitioners now have a number of procedural avenues to bring section 101 "Alice" motions, including under Federal Rules of Civil Procedure 12(b)(6), 12(c), 56(a), and 50. Each procedural posture presents unique considerations to a section 101 "Alice" motion. This article discusses the various types of section 101 "Alice" motions available to practitioners, suggests how practitioners can take advantage of the unique considerations presented by each motion type, and provides results from a survey of the procedural posture of all section 101 "Alice" motions filed after the Supreme Court's Alice decision.

Motions under Rule 12

It should come as no surprise that Rule 12 motions are the most popular procedural means for bringing a section 101 challenge. Of the 54 surveyed section 101 "Alice" motions, 30 had been filed under Rule 12, with an even split between Rule 12(b)(6) and Rule 12(c), and generally appear to prevail more often than similar motions made later in a case.

Motions under Rule 12(b)(6). Rule 12(b)(6) permits a party to move to dismiss an infringement claim arguing that the count "fail[s] to state a claim upon which relief can be granted." The motion must be made before a defendant files its answer. A Rule 12(b)(6) motion is made before substantial litigation costs are incurred in discovery or even claim construction. Indeed, the Federal Circuit has confirmed that it is appropriate for trial courts to resolve section 101 challenges as a matter of law without claim construction or expert discovery. See, e.g., Ultramercial, 772 F.3d at 712–13.

Practitioners defending against a section 101 "Alice" motion brought under Rule 12(b)(6), on the other hand, may prevail by arguing that the motion is premature, for example, that resolution of the motion requires expert testimony and/or a claim construction order. See, e.g., My Health, Inc. v. LifeScan, Inc., No. 2:14-cv-00683 (E.D. Tex. Mar. 19, 2015) (recommending denial of a motion to dismiss because claim construction was deemed important to resolution of section 101 issues in the case).

The survey contained in this article indicates a mixed level of success on section 101 "Alice" motions filed under Rule 12(b)(6). Of the 15 surveyed motions, courts granted five, denied three, and seven motions remain pending. As seven motions remain pending, it is difficult to convey an accurate likelihood of success. It is quite possible, though it cannot be stated for certain, that in at least some instances courts are waiting to rule on such motions until the record is more developed.

Motions under Rule 12(c). Rule 12(c) allows a party to move for judgment on the pleadings"[a]fter the pleadings are closed—but early enough not to delay trial." Rule 12(d) clarifies that a Rule 12(c) motion cannot present matters outside the pleading; otherwise it will be treated as a motion for summary judgment under Rule 56. Trial courts may consider "the complaint, any documents attached to the complaint, and any documents attached to the motion to dismiss that are central to the claim and referenced by the complaint." Lone Star Fund V (U.S.) L.P. v. Barclays Bank PLC, 594 F.3d 383, 387 (5th Cir. 2010).

Even though a motion under Rule 12(c) can only be made after the pleadings are closed, it can still be an "early" option that avoids significant litigation costs associated with, for example, a trial. Another possible advantage of bringing a section 101 "Alice" motion under Rule 12(c) is that trial courts may be willing to deviate from the "clear and convincing" standard—a burden of proof—when ruling on such motions. See, e.g., Modern Telecom Sys. LLC v. Juno Online Servs., Inc., No. 8:14-cv-0348 (C.D. Cal. Mar. 17, 2015) (declining to require a "clear and convincing" showing in support of a Rule 12(c) motion); but see StoneEagle Servs., Inc. v. Pay-Plus Solutions, Inc., No. 8:13-cv-2240 (M.D. Fla. Feb. 9, 2015) (applying the "clear and convincing" standard to a Rule 12(c) motion).

Courts have also been willing to consider section 101 "Alice" motions under Rule 12(c) after claim construction, and have considered and applied the court's constructions to determine section 101 patent eligibility. See, e.g., Vehicle Intelligence & Safety LLC v. Mercedes-Benz USA, LLC, No. 1:13-cv-4417 (N.D. Ill. Jan. 29, 2015) (granting a second-filed Rule 12(c) motion relying on claim construction and a dictionary definition of a claim term). Practitioners should consider relying on Rule 12(c), instead of Rule 56(a), when filing section 101 "Alice" motions even after a court has issued its claim construction order. On the other side, practitioners defending such a motion after claim construction would do well to argue that the motion is implicitly based on facts outside the pleadings or disputed facts, converting the motion into a Rule 56(a) summary judgment motion, which may be premature under the relevant local rules, scheduling orders, or the progress of discovery.

The survey indicates a high likelihood of success for section 101 "Alice" motions filed under Rule 12(c). Of the 15 surveyed motions, trial courts have granted nine. Of the two surveyed motions that were denied, both were denied without prejudice (WOP). Without speculating on the motivation underlying the high approval rate, the data shows that parties who fail to prevail on a Rule 12(c) motion suffer little penalty; in every similar situation surveyed, parties were allowed to refile their section 101 challenge at a later date.

Motions under Rule 56(a)

Rule 56(a) states that summary judgment should be granted if there is "no genuine dispute as to any material fact." Unlike motions brought under Rules 12(b)(6) or 12(c), movants filing a section 101 "Alice" motion under Rule 56(a) may rely on evidence outside of the pleadings. Interestingly, before the Supreme Court's decision in Alice, the Federal Circuit pronounced that, while section 101 patent eligibility is a question of law, the ultimate conclusion relies on "underlying factual issues." Accenture Global Servs., GmBH v. Guidewire Software, Inc., 728 F.3d 1336, 1340–41 (Fed. Cir. 2013).

Practitioners defending such motions may consider arguing that the motion is premature, particularly if filed before the court issues its decision on claim construction. See, e.g., Order on Motion for Summary Judgment, Dunnhumby USA, LLC v. Emnos USA Corp., No. 1:13-cv-00399 (N.D. Ill. Jan. 30, 2015) (denying Rule 56 motion WOP to refile after claim construction). Courts also routinely apply the "clear and convincing" standard when evaluating Rule 56(a) section 101 "Alice" motions. See, e.g., Ameranth, Inc. v. Genesis Gaming Solutions, Inc., No. 8:11-cv-189 (C.D. Cal. Nov. 12, 2014) (applying the "clear and convincing" standard to a Rule 56(a) motion).

The survey data indicates a mixed result for section 101 "Alice" motions filed under Rule 56(a). Of the 22 surveyed motions, four were denied outright, one was denied WOP, three were granted in part and denied in part, and 14 were granted. Though reasonably high, the success rate is lower than Rule 12 section 101 "Alice" motions. Rule 56(a) motions may be less successful because, for example, stronger patents may survive an early Rule 12 challenge. Additionally, a more developed record may provide fodder for patent owners to better rebut section 101 challenges. Practitioners defending against section 101 "Alice" motions would do well to use claim construction and discovery to avoid invalidity.

Motions under Rule 50

Rule 50(a) states that "[i]f a party has been fully heard on an issue during a jury trial and the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue, the court may . . . resolve the issue against the party." At the close of the case, and if a court has not decided (or denied) a Rule 50(a) motion, a party may renew its Rule 50(a) motion under Rule 50(b).

Rule 50(a) and (b) section 101 "Alice" motions have so far not been very common. This could be because the Supreme Court's decision in Alice is fairly new. Only two district courts have faced (and denied) section 101 "Alice" motions filed under Rule 50(a) and (b). As more cases progress toward trial, it is likely Rule 50 section 101 "Alice" motions will become more common.

When ruling on a Rule 50 motion, the trial court may rely on evidence outside the pleadings. Because Rule 50 section 101 "Alice" motions can only be raised at the trial (or pretrial) phase, trial courts will have the benefit of a well-developed record to aid their determinations.

Data

The survey data developed for this article is reproduced in the table below. The table documents section 101 "Alice" motions filed after the Supreme Court issued its decision in Alice. The data is inclusive of motions filed and/or decided prior to and including March 23, 2015. (Login may be requested.)

Conclusion

The Federal Rules of Civil Procedure provide patent infringement defendants with numerous procedural mechanisms to raise a section 101 challenge at nearly every stage of the case. The surveyed decisions indicate that early section 101 challenges are more likely to be successful. Practitioners must be warned, however, that filing an early section 101 "Alice" motion that is ultimately denied will encourage the patent owner to develop a record favorable to establishing and/or maintaining patent eligibility. Practitioners on both sides of the "v" would do well to anticipate the unique considerations that each Federal Rule of Civil Procedure presents when drafting or defending any section 101 challenge.

Keywords: litigation, intellectual property, patent eligibility, Federal Rules of Civil Procedure, claim construction

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