August 19, 2019

Federal Circuit: Construe Disputed Claim Terms Before Deciding § 101 Eligibility

Holland & Knight Section 101 Blog
Anthony J. Fuga

The Federal Circuit – in a split decision – remanded a recent N.D. California decision and held that the district court should have construed a disputed claim term before ruling on patent eligibility.

MyMail asserted patents that are directed to the method of modifying without user interaction computer toolbars, which are displayed on internet-connected devices. The defendants moved for judgment on the pleadings and argued that the patents are directed to patent-ineligible subject matter under Section 101. MyMail opposed the motions, in part, by arguing that the patents were patent eligible as evidenced by the E.D. Texas's construction of the term "toolbar" in an earlier proceeding. The defendants opposed the adoption of MyMail's proposed claim construction.

The N.D. California dismissed the complaint and found that the asserted claims were directed to the abstract idea of  "updating toolbar software without user intervention." The district court declined to address the parties' claim construction dispute.

The Federal Circuit Majority Opinion

MyMail raised two issues on appeal: (1) whether the district court erred by failing to construe the patent claims before ruling on the Rule 12(c) motions; and (2) whether the district court erred by finding the patent claims patent ineligible under § 101.

MyMail again argued that the earlier construction confirms the claims are directed to a "particular technological process for improving an exclusively computer-oriented device." Appellees disagreed with the construction, arguing that it was both erroneous and improper.

The majority wrote that determining patent eligibility requires a full understanding of the basic character of the claimed subject matter. Therefore, if the parties raise a claim construction dispute at the Rule 12(c) stage, the district court must either adopt the non-moving party's constructions or resolve the dispute to whatever extent is needed to conduct the § 101 analysis.

Here, the district court did not address the parties' claim construction dispute in any way, and the majority found this failure to be error under Aatrix. The majority also declined to construe the disputed term "toolbar," noting that the Federal Circuit is generally hesitant to construe patent claims in the first instance on appeal.
Accordingly, the Federal Circuit vacated and remanded the case for further proceedings.

The Dissent

Judge Alan Lourie dissented from the majority's decision to vacate the district court's opinion, stating that the claim construction issue was "little more than a mirage." In his view, the claims "are clearly abstract, regardless of claim construction," and the Federal Circuit should have resolved the legal question of eligibility and simply affirmed the decision. 

Judge Lourie also stated that while "inventive programming" may provide an inventive concept in some circumstances, no such programming is disclosed in these patents. Here, the claims are directed "only to the familiar abstract idea of sending data over the internet between a device and a server and changing the device's display accordingly." Accordingly, Judge Lourie dissented and found that the case should have been affirmed.

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