Since the Supreme Court decided Alice Corporation Pty. Ltd. v. CLS Bank International et al. on June 19, 2014, the number of patent application rejections by the U.S. Patent and Trademark Office (USPTO), the number of cases in the courts, and the uncertainty about whether an issued patent will hold up in court over an inquiry into patent subject matter eligibility under 35 U.S.C. §101 have all increased. Dropbox, Inc., Orcinus Holdings, LLC, v. Synchronoss Technologies, Inc., decided June 19, 2020, is a relevant recent (albeit nonprecedential) ruling by the United States Court of Appeals for the Federal Circuit that serves as a useful case study on what worked and went well and what didn’t for both plaintiff and defendant in a Section 101 case. At issue was the eligibility of Dropbox patents U.S. 6,178,505, U.S. 6,058,399 and U.S. 7,567,541.
Inventiveness vs. Sufficiency of Factual Allegations
The CAFC affirmed the district court’s decision, agreeing “that the patents claim abstract ideas, and that the claims provide no inventive concept transforming the abstract idea into patentable subject matter.” This decision is in the context of Dropbox alleging Synchronoss infringed three patents held by Dropbox, and Synchronoss moving “to dismiss the claims, arguing the patents are invalid due to ineligibility under 35 U.S.C. §101.” Defendant’s move to dismiss the claims worked well for them and did not work well for plaintiff, but why? The CAFC decision hints that the ruling is based on “an issue common to all three patents: the sufficiency of Dropbox’s factual allegations of the patents’ inventiveness.” A subtlety here is that the decision may not have hinged on the actual inventiveness (or not) of the relevant patents, but rather on the sufficiency of plaintiff’s factual allegations regarding inventiveness.