Alice Remains in Narrowed State Post-Berkheimer as Congress Revives Section 101 Reform Debate

Data on patent eligibility rulings reveal that Alice currently remains in a narrowed state as a result of the Federal Circuit’s 2018 Berkheimer and Aatrix decisions, which limited courts’ ability to grant early Section 101 challenges. The result has been a significant drop in the Alice invalidation rate, which has since become the status quo for defensive eligibility motions in district court, impacting both challenges against patents asserted by NPEs and by operating companies.

In particular, as shown below, NPE patents challenged and adjudicated under Alice had a 69% invalidation rate before Berkheimer, but that dropped to 55% for patents with Alice decisions dated since then. The invalidation rate dropped even further for patents asserted by operating companies, from 57% to 37%.

More broadly, the future of Alice has continued to spark debate, as the ever-expanding body of caselaw applying that decision has remained a point of contention for some stakeholders. While the US Supreme Court has consistently declined to revisit the topic of patent eligibility since Alice, the Court has indicated that it is seriously considering whether to revisit a prominent ruling from the Federal Circuit on Section 101: its divided opinion in American Axle. Meanwhile, Congress has shown a renewed focus on eligibility reform this year, asking the USPTO to solicit feedback on 101 jurisprudence—though the resulting study revealed a lack of consensus across certain industries.

For more on the ongoing Section 101 debate, as well as further analysis of patent eligibility data, see RPX Insight.