On April 4, 2016, the U.S. International Trade Commission issued a notice stating that it would not review an Initial Determination by Judge Dee Lord finding the asserted claims of U.S. Patent Nos. 8,398,546 and 8,446,275 invalid for claiming ineligible subject matter under 35 U.S.C. § 101.
What makes this otherwise ordinary notice notable is the “modification” the Commission added regarding the presumption of validity in § 101 challenges. Judge Lord had held that, “For purposes of deciding whether the claims meet the demands of section 101, no presumption of eligibility applies.” Certain Activity Tracking Devices, Systems, and Components Thereof, Inv. No. 337-TA-963, Order No. 40 at 17 (U.S.I.T.C. Mar. 3, 2016). The Commission walked that statement back, stating:
The Commission recognizes that the law remains unsettled as to whether the presumption of patent validity under 35 U.S.C. § 282 applies to subject matter eligibility challenges under 35 U.S.C. § 101. See In re TLI Comm’ns. LLC Patent Litig., 87 F. Supp. 3d 773, 797 (E.D. Va. Feb. 6, 2015) (observing that neither the Supreme Court nor the Federal Circuit has addressed the issue and that “[a]s a result of this deafening silence, district courts, not surprisingly, are split over the standard of proof applicable to §101 challenges.”). Indeed, the parties did not cite, nor is the Commission aware of, any definitive case law holding that the presumption applies in § 101 eligibility challenges.
The Commission is correct that one can find cases applying the presumption of validity in § 101 challenges and declining to apply it. E.g., StoneEagle Servs., Inc. v. Pay-Plus Solutions, Inc., Case No. 8:13–cv–2240–T–33MAP, 2015 WL 518852 at *2 (M.D. Fla. Feb. 9, 2015) (applying clear and convincing evidence standard); CertusView Techs., LLC v. S & N Locating Servs., LLC, Case No. 2:13-cv-346, 2015 WL 269427 at *26 (E.D. Va. Jan. 21, 2015) (same); Wolf v. Capstone Photography, Inc., Case No. 2:13–CV–09573, 2014 WL 7639820 at *5 (C.D. Cal. Oct. 28, 2014) (same); but see Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 721 (Fed. Cir. 2014) (Mayer, J., concurring) (“while a presumption of validity attaches in many contexts, no equivalent presumption of eligibility applies in the section 101 calculus.”); In re TLI Comm’ns. LLC Patent Litig., 87 F. Supp. 3d 773, 797 (E.D. Va. Feb. 6, 2015).
Moreover, while the Commission has never before specifically addressed the appropriate burden of proof for § 101 determinations, a few pre-Alice opinions did apply the clear and convincing standard, albeit without any discussion or argument. E.g. Certain Video Game Machines and Related Three-Dimensional Pointing Devices, Inv. No. 337-TA-658, Order No. 25, 2009 WL 1070801 at *4 (Mar. 26, 2009); Certain Printing and Imaging Devices and Components Thereof, Inv. No. 337-TA-690, Initial Determination, 2011 WL 7628059 at *183 (Sept. 23, 2010); Certain Coenzyme Q10 Prods. and Methods of Making Same, Inv. No. 337-TA-790, Initial Determination, 2012 WL 5383646 at *97 (Sept. 27, 2012); Certain Audiovisual Components and Prods. Containing the Same, Inv. No. 337-TA-837, Initial Determination, 2013 WL 4406820 at *45 (Jul. 18, 2013).
The Commission ultimately concluded that it need not answer the question today because the burden of proof did not matter in this case: “Regardless of whether or not such a presumption applies, the record here warrants a finding that the asserted patent claims are directed to ineligible subject matter.” Thus, the Commission has left the door wide open for parties to contest the appropriate burden of proof for § 101 challenges, at least until the Federal Circuit decides the issue.
The case is Certain Activity Tracking Devices, Systems, and Components Thereof, Inv. No.
Andrew Kopsidas, a Principal in the Washington, D.C. office of Fish & Richardson, leads and tries intellectual property cases and offers strategic counseling to clients. He has successfully litigated cases in many federal district courts and the U.S. International Trade...