Factual Issues Underlying § 101 Analysis Can Preclude Dismissal Under Rule 12(b)(6)

In Aatrix Software, Inc. v. Green Shades Software, Inc., No. 2017-1452 (Fed. Cir. Feb. 14, 2018), the Federal Circuit reversed-in-part and vacated-in-part the district court’s dismissal under Rule 12(b)(6), remanding to allow the plaintiff to file an amended complaint that pleads factual disputes relating to the § 101 analysis.

Aatrix sued Green Shades for infringement of two patents directed to systems and methods for designing, creating, and importing data into a viewable form on a computer. Green Shades moved to dismiss under Federal Rule 12(b)(6), arguing that the asserted claims were not patent ineligible under § 101. The district court granted Green Shades’ motion. Aatrix then moved to modify and vacate the judgment, for reconsideration, and to file an amended complaint that included allegations and evidence relating to the § 101 challenge. The district court denied Aatrix’s motion. Aatrix appealed.

On appeal, the Federal Circuit sided with Aatrix. The majority explained that patent eligibility can be determined on a motion to dismiss “only when there are no factual allegations that, taken as true, prevent resolving the eligibility question as a matter of law.” The majority then found that Aatrix’s proposed amended complaint, if accepted as true, could establish that the asserted claims contain an inventive concept. Accordingly, the Court vacated the district court’s dismissal, reversed the denial of Aatrix’s motion to file an amended complaint, and remanded for further proceedings.

Judge Reyna concurred-in-part and dissented-in-part with decision to vacate. He concurred with the decision to vacate and remand because the district court erred in its conclusion that the asserted patents we ineligible under § 101 because they lacked a “tangible embodiment.” He disagreed, however, regarding the role of factual evidence in a § 101 determination, because the court’s precedent states that § 101 is a legal question that can be decided on a motion to dismiss.

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