In the recent decision of Data Engine Technologies LLC v. Google LLC, the Federal Circuit may have expanded how factual questions underpin subject matter eligibility analysis under Section 101. Since the two-part eligibility analysis was established by Alice v. CLS Bank, courts have repeatedly emphasized that eligibility is a question of law, not fact. Courts have used this rationale to justify holding claims patent-ineligible without considering extrinsic evidence. Often, this leads to early dismissals of infringements suits, which limit patent holders’ ability to present evidence in support of their patents.
A major shift in this approach occurred earlier this year, based on the holdings in Berkheimer v. HP Inc. and Aatrix Software v. Green Shades Software, where the Federal Circuit held that the ultimate legal question of eligibility can, at least in some cases, be based on underlying questions of fact. Specifically, in Berkheimer v. HP Inc., the court held that whether a claim element is "well-understood, routine and conventional"—a question frequently posed under the second part of Alice's two-part eligibility analysis—is a question of fact, and thus must be supported by evidence. The court later reaffirmed this conclusion in Aatrix Software.
While not explicitly stated, the holding in Data Engine Technologies seems to expand the precedent of Berkheimer and Aatrix Software, showing how questions of fact can also undergird part one of the eligibility analysis, not just part two. This first part of the Alice analysis asks whether a claim is "directed to" an abstract idea. Frequently, that question hinges on whether the claim can be seen as a technological solution to a technological problem. Data Engine Technologies holds that the claims solve the technical problem of how to configure electronic spreadsheets, by disclosing a tabbed interface for navigating between spreadsheets. Subsequent to the priority date of the patent at issue, this type of tabbed interface became ubiquitous in spreadsheet programs. The court recognized this fact to support their conclusion that the claims provide a technical improvement, finding that the "invention was applauded by the industry for improving computers' functionality as a tool able to instantly access all parts of complex three-dimensional electronic spreadsheets." The court further stated that "[n]umerous contemporaneous articles attributed the improved three-dimensional spreadsheets' success to its notebook tab feature."
These statements seem to echo an obviousness analysis under Section 103. Like subject matter eligibility, the ultimate question of obviousness is one of law. However, numerous factual questions underlie that conclusion, including "objective considerations of nonobviousness," such as whether an invention enjoyed commercial success. The court's reference to how the "invention was applauded by the industry” closely resembles a finding of commercial success, a common consideration for nonobviousness. If this type of rationale is adopted in later decisions, it could show a continued trend of eligibility analysis mirroring obviousness analysis in important ways. This similarity could also eventually incentivize courts or Congress to draw clearer boundaries between the requirements of Section 101 and 103, or conversely to merge factual question relevant under both sections if those questions become redundant. Additional questions of fact also make it more likely that analysis of a claim under Sections 101 and 103 could proceed concurrently, as opposed to the current practice of considering Section 101 analysis as a threshold matter to be addressed prior to other requirements of patentability.
Notably, the court in Data Engine Technologies did not rely on extrinsic evidence to support its statements, but rather based them on what is technically intrinsic evidence—articles included in the prosecution history of the patent at issue. But at least with respect to obviousness, the question of commercial success is one of fact. If commercial success is relevant to part one of the eligibility analysis, as it was in Data Engine Technologies, it is unclear why extrinsic evidence should not be referenced to establish that success. A patent holder might therefore argue under Data Engine Technologies LLC that a court should allow for submission of such evidence prior to deciding whether a claim is patent eligible under Section 101. If successful, such arguments may preclude early dismissal of a case, which was similarly precluded in Berkheimer and Aatrix Software.
The holding and rationale in Data Engine Technologies LLC shows that eligibility analysis under Section 101 continues to evolve, more than four years after the Supreme Court decision in Alice. Many practitioners, including the current Director of the USPTO, have voiced dismay at the blurred lines between questions of eligibility and obviousness. Far from drawing clear distinctions, the holding in Data Engine Technologies may have just blurred it further.