The Software IP Report

How Does Aatrix Software Change Patent-Eligibility Analysis?

By Charles Bieneman

Categories: Patent Eligibility, Software Patents, The Software IP Report

Here is a sign that the Federal Circuit’s recent decision in Aatrix Software, Inc. v. Green Shades Software, Inc. (Feb. 14, 2018), may affect district court procedures in deciding motions (especially at the pleadings stage under FRCP 12) alleging patent-ineligibility under the Alice patent-eligibility test, and 35 U.S.C. § 101.  In IDB Ventures, LLC v. DSW Inc., No. 2-17-cv-00523 (E.D. Tex. March 19, 2018), Chief Judge Gilstrap sua sponte ordered supplemental briefing concerning Aatrix Software and the defendant’s Motion to Dismiss for Failure to State a Claim.

If you look at the patent-in-suit, U.S. Patent No. 7,970,674, you won’t be surprised that the defendant was prompted to move for a dismissal on the pleadings based on patent-eligibility.  True, independent claim 1 is pretty long and perhaps narrowly drawn, but consider the ’674 patent’s title, which seems to sum up the claim: “Automatically determining a current value for a real estate property, such as a home, that is tailored to input from a human user, such as its owner.”

Judge Gilstrap gave no explanation as to the possible relevance of Aatrix Software to the pending motion, but surely none was needed.  In the  Aatrix case, you will recall, Judge Moore’s majority opinion included some strong statements about the role of fact-finding to support the legal determination of patent-eligibility under 35 U.S.C. 101.  A Federal Circuit panel after Aatrix, and at least one district court, have found that, even after Aatrix and Berkheimer v. HP, Inc., holdings of patent-eligibility could be made without extended fact-finding. On the other hand, Judge Gilstrap is not the first district court judge to order supplemental briefing in light of Berkheimer and Aatrix.

It will be interesting to see how this motion is resolved.