Updated: Nov 10, 2020
MyMail, LTD., Plaintiff-Appellant
ooVoo, LLC, IAC Search & Media, Inc., Defendants-Appellees
Decided: August 16, 2019
The Supreme Court's 2014 Alice decision held that when a patent claim is challenged for failing to meet the requirements of §101, a District Court must perform a two-step test to evaluate patent eligibility. The first step considers whether a claim is directed to an abstract idea, a law of nature, or a natural phenomenon—all of which are patent-ineligible concepts.
In its 2016 Electric Power Group decision, the Federal Circuit held that the analysis, transmission, and display of information are abstract ideas; claims directed to these areas would therefore necessarily fail Alice step one.
If a claim is directed to an abstract idea (or another patent-ineligible concept), Alice step two requires consideration of whether the claim elements “transform the nature of the claim into a patent eligible application.” Although there is considerable debate as to the meaning of this language, Electric Power Group says that if a claim is abstract (because it is directed to information analysis, transmission, and display), it also fails Alice step two if it requires nothing more than off-the-shelf components to perform the claimed functions.
Patent-eligibility challenges are commonly raised early in a litigation, and these challenges often give rise to claim construction disputes. In its 2018 Aatrix decision, the Federal Circuit held that if patent eligibility is challenged in a Rule 12(c) motion for judgment on the pleadings (and this motion sparks a claim construction dispute) a District Court may not decide the eligibility issue until it either: (a) adopts the nonmoving party's (typically, the patent owner’s) construction; or (b) rules on the claim construction dispute.
The key issue presented in this case (MyMail v. ooVoo et al.) is whether a District Court must always resolve claim construction disputes before ruling on a patent eligibility challenge raised in a Rule 12(c) motion. A split panel of the Federal Circuit held that it must.
After the case was transferred to the Northern District of California from the Eastern District of Texas, defendants ooVoo and IAC Search & Media filed a Rule 12(c) motion arguing that MyMail’s asserted patents (which are directed to methods for modifying/updating software toolbars that are displayed on Internet connected devices) are patent ineligible. In its opposition, the patent owner said that the claim term “toolbar” should be narrowly construed to cover toolbars that may be dynamically changed or updated using a specific process or script. And in reply, the defendants made the case that in this context, “toolbar” should be construed much more broadly.
The District Court judge never resolved this claim construction dispute, ruling that—regardless of the proper construction of the disputed term—(a) the asserted claims are abstract under Alice step one (and under the Electric Power Group decision) because they fall within the category of generating and processing information; and (b) the claims also fail Alice step two because they recite generic components (such as Internet connected computers), and because toolbars were widely used at the time of the patent’s filing.
The Federal Circuit reversed and remanded. A two-judge majority faulted the District Court for ignoring the 2018 Aatrix decision, which the majority said requires a District Court judge to resolve all of the parties’ claim construction disputes before ruling on a patent eligibility challenge raised in a Rule 12(c) motion.
In dissent, Judge Lourie said that regardless of how the term “toolbar” is construed, the Federal Circuit’s Electric Power Group decision compels a finding that the asserted claims are abstract under Alice step one, because they are directed to the analysis, transmission and display of information (specifically, methods for modifying toolbar software). And because the claims recite only Internet-connected computers and other generic components, Electric Power Group says that these commonly-used structures are insufficient to “transform the nature of the claim into a patent eligible application,” as is required by Alice step two. The claim construction dispute at the heart of the majority’s analysis is therefore “little more than a mirage,” and a remand would be a waste of judicial resources.