No Waiver of Patent Eligibility Challenge Under § 101

ERICSSON INC. v. TCL COMMUNICATION TECHNOLOGY

Before Prost, Newman, and Chen. Appeal from the Eastern District of Texas.

Summary:  The issue of patent eligibility under § 101 may be preserved for appeal even if not raised for decision or mentioned in the district court’s final judgment if there is an “effective grant of summary judgment” in favor of the non-moving party. 

Ericsson sued TCL for infringement of patent claims directed to controlling access to resources in a telecommunications system. TCL moved for summary judgment that the claims were patent ineligible under § 101. The district court denied the motion, finding that the claims were not directed to an abstract idea under step one of Alice. The case proceeded to trial and the jury found the claims infringed. TCL did not raise the issue of ineligibility under § 101 in a motion for judgment as a matter of law under Federal Rule of Civil Procedure 50.  TCL appealed the district court’s decision denying summary judgment that the patent claims are ineligible under § 101.

Ericsson argued that TCL waived its right to appeal the issue of ineligibility.  The Federal Circuit found that TCL had not waived the right to appeal the issue of ineligibility under § 101 for two reasons. First, the Federal Circuit found that the district court had effectively granted summary judgment in favor of the non-moving party by deciding the issue because once the district court found that the patent was not directed to an abstract idea under step one there was no set of facts that could have been raised at trial to change the conclusion. Second, the Federal Circuit has discretion to hear issues that have been waived, and this was an appropriate case for the Federal Circuit to exercise its discretion because the issue was fully briefed and the district court addressed the issue with finality.

The Federal Circuit found that the claims are patent ineligible under  § 101. Under step one of Alice, the Federal Circuit found the claims are directed to an abstract idea of controlling access to, or limiting permission to, resources. The Federal Circuit found the claims require “a system for controlling access to a platform” and were not limited to mobile platform technology as argued by Ericsson. Under step two of Alice, the Federal Circuit found that the claims do not contain an inventive concept. The Federal Circuit rejected Ericsson’s arguments that the layered architecture of the software provides the necessary inventive step, noting that this architecture is not recited in the claims.

Judge Newman dissented, arguing that the patent eligibility issue was not preserved and was not raised for decision or mentioned in the district court’s final judgment and therefore is not available for appeal. Judge Newman also argued the majority erred in holding the claims are patent ineligible under § 101.

Editor: Paul Stewart