When Section 101 Goes to Trial: Alice Step Two Decided by Jury

Many of the cases we discuss on this blog are decided at the district court level on a motion to dismiss or for judgment on the pleadings. Some are decided on summary judgment. But what happens when step two of the inquiry under Alice Corp. v. CLS Bank Int'l, 573 U.S. 208 (2014), which asks if a claim found at step one to be directed to an abstract idea is saved from ineligibility by transformative subject matter, requires answering a genuine question of fact?

The Federal Circuit has made clear that the existence of such a factual dispute precludes summary judgment, Berkheimer v. HP Inc., 881 F.3d 1360, 1368 (Fed. Cir. 2018) ("The question of whether a claim element or combination of elements is well-understood, routine and conventional to a skilled artisan in the relevant field is a question of fact."), and patentees opposing a Section 101 motion will attempt to demonstrate that such a dispute exists. The difficulty of doing so does not, however, rise to the level of impossibility, as demonstrated by Berkheimer itself, in which summary judgment of invalidity was vacated on these grounds. Id. at 1370 (concluding  that whether the asserted claims "perform well-understood, routine, and conventional activities to a skilled artisan is a genuine issue of material fact making summary judgment inappropriate").

In a recent case involving a patent claiming methods for managing vehicle fleets, Alice step two was sent to a jury by way of a special verdict. The independent asserted read as follows:

15. A method for data transfer and display comprising:

wirelessly receiving, via a short-range wireless communication module, vehicle data from a data acquisition device mounted inside a vehicle for gathering vehicle data from the vehicle during operation of the vehicle;

accepting inputs of driver information from a user via a user interface and transmitting the driver information to the data acquisition device, the driver information affecting hours of service records for drivers associated with the portable wireless data transfer and display device;

associating the inputs of driver information with the vehicle data;

generating a driver summary electronic report with the associated vehicle data and driver information;

sending the driver summary electronic report through a long range wireless communication module to a remote network device via a long-range wireless network;

processing the vehicle data, the driver information, and driver communications into an electronic driver scorecard, the electronic driver scorecard including one or more alphanumerical ratings according to a selection of drivers; and

presenting at least one of the electronic driver scorecard, the vehicle data, the association of the vehicle data, the driver information, and the driver summary electronic report to the user.

U.S. Patent No. 9,390,628

The accused infringing service, used in the trucking industry, provided for remote monitoring of location, vehicle diagnostics and driver performance.

Background

On the defendants' motion for judgment on the pleadings, the district court held the claims failed Alice step one as being directed to "the abstract idea of receiving, associating, and presenting data." Omnitracs, LLC v. Motive Techs., Inc., 23-cv-05261 (N.D. Cal. July 29, 2024), slip op. at 7. At Alice step two, however, the court was unable to conclude that the claims' required hardware setup, which specified a "data acquisition device" that was separate from the "portable wireless data transfer and display device," was generic and conventional:

Although the individual hardware components themselves may be generic (e.g., a cell phone and a dash cam), the First Amended Complaint and its attachments raise factual questions about whether the decision to split the functionality of the vehicle event recorder into an onboard receiver (e.g., the dash cam) and separate portable unit (e.g., the cell phone) was non-generic and unconventional.

Id. at 9.

The defendant sought summary judgment on a number of issues, but it appears from the docket that it did not raise its Section 101 defense regarding the '628 patent again in that motion. Accordingly, the Section 101 defense remained in the case for trial.  

Jury Verdict and Final Judgment

The verdict form asked the jury to determine the following with respect to Alice step two:

Did [defendant] prove by clear and convincing evidence that the elements in the following claims ... considered individually and as an ordered combination, involve only activities which a person of ordinary skill in the art would have considered to be well-understood, routine, and conventional at the time the patent application was filed?

The jury answered "yes" with respect to each asserted claim.

In post-trial briefing, the patentee argued in part that the jury verdict on this issue was advisory, meaning that the district court was the ultimate fact finder and thus free to disregard the jury's verdict. The court rejected this argument and held that the jury's answer controlled unless it was not supported by substantial evidence, i.e., the usual (and difficult to meet) standard applied to a post-trial motion for judgment as a matter of law challenging a jury verdict. After reviewing the evidence, the court found that the jury had "more than sufficient evidence to conclude that the two-device system was well-understood, routine, conventional." 2025 WL 2217593 at *2. Accordingly, it entered judgment for the defendant.

Key Considerations

Left unaddressed in this decision is the threshold question of whether factual disputes underlying Section 101 defenses are jury issues at all. As with certain other invalidity defenses, the Federal Circuit has held that Section 101 presents a question of law based on underlying facts. Berkheimer, 881 F.3d at 1368 ("Like indefiniteness, enablement, or obviousness, whether a claim recites patent eligible subject matter is a question of law which may contain underlying facts."). Enablement and obviousness defenses are routinely sent to the jury, as are some indefiniteness defenses (those which are not issues of claim construction). As of the date of this blog post, however, it appears that the issue of judge versus jury has not been authoritatively resolved by the Federal Circuit. Stodge, Inc. v. Attentive Mobile, Inc., 23-87-CJB (D. Del. Nov. 7, 2025), slip op. at 6 (Asking if Section 101 fact disputes are for the court or the jury, and answering its question with "Frankly, the Court is unsure of the answer. Indeed, the United States Court of Appeals for the Federal Circuit has deemed this an open and difficult question, and it has not yet taken a position on the issue.").

Until the Federal Circuit answers the judge-or-jury question, district courts will be tasked with deciding how contested issues of fact at Alice step two should be resolved in jury cases. The Omnitracs court's handling of it – submitting the factual question to the jury under the clear and convincing standard and reviewing the answer under the usual "substantial evidence" standard – seems to be the safest in terms of appellate review. Even if factual disputes at Alice step two are held to be issues for the court, the prevailing party is likely to argue that submitting it to the jury is harmless error not warranting reversal.

Here, for example, although the patentee urged the court to treat the jury's answer to the Alice step two question as advisory, the court's review of the evidence, albeit conducted under the highly deferential judgment as a matter of law (JMOL) standard, suggests that it would have reached the same conclusion if it had treated the jury's verdict as advisory and found the facts itself. A district court that sends an Alice step two question to the jury could take the next step and decide the issue expressly, i.e., hold in the alternative that if the jury verdict should have been treated as advisory, it would have reached the same (or the opposite) answer, thus avoiding the need for a remand if the Federal Circuit were to hold that the factual determination is for the bench.

The patentee in Omnitracs has appealed from the adverse judgment, so depending in part on what issues the patentee raises, the Federal Circuit may address the issue in that case. Meanwhile, litigants should consider the possibility that Alice step two disputes may proceed to trial, presenting the need to develop the evidence as with other factual disputes that more commonly survive to trial.