RMail v. Amazon.com and PayPal (E.D.Tx 2012)
Over the past few weeks we have been having an interesting debate over whether subject matter eligibility under 35 U.S.C. § 101 constitutes as valid defense to patent infringement that may be raised in litigation. Section 282 of the Patent Act defines defenses available to an accused infringer and that statute has been interpreted to limit defenses available only to those that fit the statutory list. Thus, because improper revival of an abandoned patent application does not fit on the list, the Federal Circuit ruled that mistake by the patentee and USPTO could not be used to later invalidate the patent during litigation. One problem with Section 282 is that it is not a simple list of references, but is instead really a pointer to other sections of the Patent Act. Thus, an accused infringer can assert an invalidity defense based upon "any ground specified in [Sections 100-188] as a condition for patentability" as well as "any requirement of section 112, except that the failure to disclose the best mode." Now, we normally think of the doctrines of invalidity deriving from Sections 102 (anticipation); 103 (obviousness); 112 (written description; enablement; indefiniteness); and 101 (utility and subject matter eligibility). Now, Section 112 is clearly identified as a defense, and the patent act particularly identifies section 102 and 103 as creating the "conditions for patentability" required under Section 282. The lone outsider then is Section 101 whose status as creating conditions for patentability has not been established. Professor Hricik introduced this argument and began the statutory analysis in a post titled Are the Courts Correct in Their Assumption that a Patent Issued on Non-patentable Subject Matter is Invalid?. I continued the argument by considering its application to the new post grant review program in a post titled Can a Third Party Challenge Section 101 Subject Matter Eligibility in the USPTO's new Post-Grant Review Procedure?. Now, in RMail, lawyers are asking Judge Gilstrap (E.D.Tx.) to decide the issue.
RMail's asserted patents are directed to a new way to authenticate service of electronic messages – i.e., to prove that an e-mail was actually sent and received without relying upon key encryption. U.S. Patent Nos. 6,182,219 and 6,571,334. Many of the claims are not limited to any particular "technology" except for various simple data structures. Instead, the claims simply focus on the sending and receiving of the various data elements in ways that could all seemingly be done offline using pencil and paper.
After being sued, PayPal filed a motion for partial summary judgment – asking the court to rule those claims invalid under 35 U.S.C. § 101 as lacking subject matter eligibility.
In response, RMail has argued that subject matter eligibility is not a proper invalidity defense permitted to be raised under Section 282 (in addition to providing arguments on the merits).
VI. CONGRESS DID NOT PERMIT SECTION 101 TO SUPPLY A LITIGATION DEFENSE
Rmail closes by asking the Court to recognize and apply all appropriate statutory barriers against entertaining Defendants' Section 101 defense. The entire jurisprudential "murky morass" of subject matter eligibility need not arise again in any litigation. Myspace, 672 F.3d at 1260 (using "murky morass" label). Rmail acknowledges that this argument is for the good faith extension or modification of existing caselaw. Courts until now have uniformly overlooked Congressional will on this question.
Namely, while Section 101 analyses are appropriate in Patent Office application proceedings, this Court lacks any statutory basis for analyzing Section 101 issues as a litigation defense. Patent defenses are statutory. Under the Patent Act of 1952, only enumerated patent defenses exist. Aristocrat Tech. v. Int'l Game Tech., 543 F.3d 657, 661-63 (Fed. Cir. 2008). If an issue is not denominated an infringement defense within the Patent Act, then the Court lacks jurisdiction to address it. Id.
. . . .
It does not matter that the statutory misinterpretation has lasted so long, or so pervades conventional thinking. Even a long-term statutory misconstruction will not bar restoring the patent system to its statutory limits. See Central Bank of Denver v. First Interstate Bank of Denver, 511 U.S. 164, 177, 191 (1994). . . . Four recent Supreme Court cases arose in the USPTO administrative context, and are thus consistent with Rmail's argument: Benson, Flook, Diehr, Bilski. A fifth, Prometheus, admittedly arose within an infringement defense context. However, no one seems to have pointed out to the Supreme Court this important threshold issue of statutory construction, and statutory limitations on the powers of the federal courts. Prometheus thus does not bar this Court from issuing a correct ruling in the present adversarial context.
PayPal's response is fairly weak – that the dicta of Aristocrat identifies Section 101 as a condition for patentability. (To be clear, the PayPal briefs are quite good – they just lightly treat this particular issue).
The landmark 1996 Supreme Court case of Graham v. John Deere is interesting and sends somewhat mixed signals in its dicta describing the patent act. In that case, the court wrote that "The [Patent] Act sets out the conditions of patentability in three sections. An analysis of the structure of these three sections indicates that patentability is dependent upon three explicit conditions: novelty and utility as articulated and defined in § 101 and § 102, and nonobviousness, the new statutory formulation, as set out in § 103." The odd element of the Supreme Court statement is that it does not identify subject matter eligibility as a defense created by § 101. In Aristocrat, the Federal Circuit explained away the gap by noting "it is beyond question that section 101's other requirement, that the invention be directed to patentable subject matter, is also a condition for patentability." I guess that question is no longer unaskable.
Docs:
- Download Rmail v Amazon.com 96 MSJ Non-Statutory Subject Matter
- Download Rmail v Amazon.com 98 Opposition to Motion for Partial Summary Judgment
- Download Rmail v Amazon.com 103 Reply in Support of Motion for Partial Summary Judgment of Invalidity
- Download Rmail v Amazon.com 104 Surreply re Motion for Partial Summary Judgment of Invalidity
