Archive for the ‘Ray Guy’ Category

Clear and Convincing Evidence Requirement for Patent Ineligibility

Thursday, January 19th, 2017

In Trading Technologies v. CQG [link], the Federal Circuit panel punted on the issue of what burden of proof is required to hold a patent claim to be ineligible subject matter.  Notably, in footnote 2, the panel said:

2.  The parties dispute whether the district court erred in requiring proof of ineligibility under § 101 by clear and convincing evidence. Because our review is de novo, and because under either standard the legal requirements for patentability are satisfied, we need not address this dispute.

The district court was not shy to say what the law is.  In her district court opinion, Judge Coleman stated:

Legal Standard

At the outset, this Court acknowledges that the section 101 jurisprudence is a recently evolving and unsettled area of law as it applies particularly to software patents. There is some dispute over the level of proof required in a section 101 patent-eligibility inquiry. CQG asserts that “[a]s a matter of law, patent-eligibility is not subject to the `clear and convincing’ burden of proof.” (Dkt. 898 at 3) (quoting Microsoft Corp. v. i4i Ltd. P’ship, 131 S. Ct. 2238, 2253 (2011) (Breyer, Scalia, Alito, JJ, concurring)). TT submits that rather than a preponderance of the evidence burden of proof the appropriate standard should be “clear and convincing.” (Dkt. 962 at 11) (quoting Card Verification Solutions, LLC v. Citigroup Inc., 2014 WL 4922524, at *5 (N.D. Ill. Sept. 29, 2014)).

This Court recognizes the persuasiveness of Justice Breyer’s reasoning that because the section 101 eligibility inquiry is purely a question of law and there is no statutory presumption of eligibility, it should not be subject to the clear and convincing burden of proof. However, 35 U.S.C. § 282 provides that patents are presumed valid and it is well established that a party seeking to overcome that presumption must do so by clear and convincing evidence. See Nystrom v. Trex Co., 424 F.3d 1136, 1149 (Fed. Cir. 2005). This Court is “duty-bound to apply the law as enacted by Congress and signed by the President, and in light of the Federal Circuit’s interpretation thereof. Defendants have not presented any authority indicating that the presumption of validity no longer applies to challenges to a patent’s validity under section 101.” CertusView Techs., LLC v. S&N Locating Servs., LLC, 2015 U.S. Dist. LEXIS 7126, *42 n.6, Slip Copy, 2015 WL 269427 (E.D. Va. Jan. 21, 2015). Accordingly, this Court concludes that, until the Federal Circuit or the United Supreme Court mandates otherwise, CQG must show by clear and convincing evidence that the patents-in-suit claim patent-ineligible subject matter.