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PTO Can and Should Use Alice/Mayo Framework to Assess Eligibility

Addressing a challenge of the Alice/Mayo framework in the context of the Administrative Procedure Act (APA) and the Fifth Amendment’s due process clause, the US Court of Appeals for the Federal Circuit affirmed a Patent Trial & Appeal Board (Board) decision finding that patent claims directed to analyzing social security benefit applications were patent ineligible under 35 U.S.C. § 101. In re Killian, Case No. 21-2113 (Fed. Cir. Aug. 23, 2022) (Taranto, Clevenger, Chen, JJ.)

Jeffrey Killian filed a patent application related to a system and method for determining eligibility for social security disability insurance (SSDI) benefits through a computer network. The examiner rejected the claims under § 101, finding that they were directed to the abstract idea of “determining eligibility for social security disability insurance . . . benefits” and lacked additional elements amounting to significantly more than the abstract idea because the additional elements were simply generic recitations of generic computer functionalities. Killian appealed to the Board, which affirmed the examiner’s rejection. The Board explained that the claims were directed to the patent ineligible abstract idea of “a search algorithm for identifying people who may be eligible for SSDI benefits they are not receiving,” and that the “determining” and “selecting” limitations of the claims could be performed by the human mind and thus were an “abstract mental process.” Killian appealed.

Killian raised several arguments that generally fell into three categories:

  1. The Alice/Mayo standard is indefinite under the APA.
  2. The § 101 analysis for software violated Killian’s Fifth Amendment due process rights.
  3. Step 2 of the Alice/Mayo analysis has no basis in patent law.

Addressing the first argument, the Federal Circuit noted that the APA cannot apply to the decisions of courts because courts are not agencies. Next, the Court dismissed Killian’s argument that all § 101 decisions are void because the Alice/Mayo standard is indefinite. The Court explained that it has routinely found that mental processes are abstract ideas, including claims that were directed to data gathering, analysis and notification on generic computers. The Court found that nothing in Killian’s claims provided an inventive manner to accomplish the claimed method, and thus the § 101 rejection was entirely proper. As a final point, the Court stated that it was bound to Supreme Court precedent and only new overruling precedent would change the analysis it applied.

The Federal Circuit also rejected Killian’s due process argument. Killian argued that his due process rights were violated because he did not have an opportunity to appear in the other cases regarding patent eligibility. As an initial matter, the Court noted that no “void-for-vagueness” doctrine argument was put forward, and the doctrine requires a case-by-case analysis. The Court found that this was not a close case, as data gathering and analysis methods run afoul of established § 101 precedent. Next, the Court addressed the common law approach of not requiring “a single governing definitional context” and a comparison to previously decided cases finding it appropriate. Killian’s due process rights were found to [...]

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No Refunds: Cancellation of Patent Claims in IPR Isn’t a Taking

The US Court of Appeals for the Federal Circuit found that cancellation of a patent in an inter partes review (IPR) proceeding is not a taking and does not grant the patentee any compensable claim against the United States. Christy, Inc. v. United States, Case No. 19-1738 (Fed. Cir. Aug. 24, 2020) (Hughes, J.).

After Christy sued two competitors for infringement of a patent directed to a vacuum, one of the competitors filed petitions for IPR. The Patent Trial and Appeal Board (PTAB) instituted the IPRs and ultimately found a majority of the patent claims unpatentable. Christy appealed to the Federal Circuit, which affirmed the PTAB’s invalidity decision.

Christy then filed a class action suit in the US Court of Federal Claims to recover from the government the issuance and maintenance fees Christy had paid for the patent, investments Christy had made in the patented technologies, attorneys’ fees from defending the IPR proceedings, the value of the patent claims, royalties and other payments for use of the patents. The government moved to dismiss all six claims for lack of subject matter jurisdiction and failure to state a claim. The court partially granted the motion to dismiss, but found that it had jurisdiction to consider Christy’s Fifth Amendment takings claim. The court found that Christy did not state a claim for relief on the merits, and reasoned that the cancellation of claims in an IPR did not amount to a compensable taking of Christy’s property interest. The court held that it did not have jurisdiction to consider Christy’s alternative illegal exaction claim, since a statute granting authority to the US Patent and Trademark Office (PTO) to refund mistakenly excessive patent-related fees displaced the court’s Tucker Act jurisdiction. In any case, the court found that on the merits, Christy’s issuance and maintenance fees were properly owed at the time they were paid, and were not paid by mistake. The government did not require Christy to pay any alleged damages on the government’s behalf, or at all, and so Christy’s theory that damages were illegally exacted was found “devoid of merit.” Christy appealed.

On appeal, Christy argued that the claims court erred in finding 1) that Christy failed to state a compensable taking claim based on the cancellation of patent claims, 2) that the claims court lacked subject matter jurisdiction over the illegal exaction claim, and 3) that Christy failed to state a plausible illegal exaction claim. The Federal Circuit disagreed, affirming the claims court and reiterating its finding in Golden v. United States that the AIA did not displace Tucker Act jurisdiction over IPR-based takings claims, and that cancellation of patent claims in an IPR cannot be a taking under the Fifth Amendment. Thus, the Court found that the claims court correctly found that it had jurisdiction over Christy’s takings claim, but that such cancellation was not a taking.

The Federal Circuit next considered Christy’s illegal exaction claim. Illegal exaction occurs when money is “improperly paid, exacted, or taken from the claimant [...]

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