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S.D.N.Y. Holds That There is No Presumption of § 101 Patent-Eligibility

On February 22, 2016, District Judge Shira A. Scheindlin (S.D.N.Y.) granted counterclaim-defendants WPP PLC’s and its subsidiaries’ (collectively, “the WPP Companies”) motion for summary judgment of patent invalidity under 35 U.S.C. § 101. The WPP Companies commenced this action in 2011, seeking declaratory judgment of non-infringement of U.S. Pat. No. 7,729,940, of which Tivo Research and Analytics, Inc. (d/b/a TRA, Inc.) (“TRA”) is the sole assignee. TRA asserted various counterclaims against the WPP Companies, including claims of infringement of two additional patents: U.S. Pat. Nos. 8,000,993 and 8,112,301.

Before turning to the question of whether the claims of the three patents recite patent-eligible subject-matter under 35 U.S.C. § 101, the Court considered the parties’ dispute as to the WPP Companies’ burden of proof on their summary judgment motion. TRA argued that, under 35 U.S.C. § 282(a), patents are entitled to a presumption of validity, and that the WPP Companies bear the burden of proving invalidity by clear and convincing evidence. The WPP Companies argued, in response, that the clear and convincing evidence standard does not apply to patent eligibility issues because patent eligibility is a question of law, not a question of fact.

The Court held that “[t]he presumption of validity – and its concomitant clear and convincing evidence standard – does not apply to section 101 claims.” Drawing an analogy, the Court noted, “[b]ecause no evidence outside the pleadings is considered in deciding a motion to dismiss or a motion for judgment on the pleadings, ‘it makes little sense to apply a clear and convincing standard – a burden of proof – to such motions’” (quoting Modern Telecom Sys. LLC v. Earthlink, Inc., No. SA CV 14-0347-DOC, 2015 U.S. Dist. LEXIS 31388, 2015 WL 1239992, at *7 (C.D. Cal. Mar. 12, 2015)). The Court reasoned that “[t]he same is true in the summary judgment context: like summary judgment on a claim of breach of an unambiguous contract, this Court’s determination of patent-eligibility requires no extraneous information, [and] no factual record — only the patents themselves.”

The Court noted that its holding is “in line with the Federal Circuit’s guidance on the issue”: “Although the Supreme Court has taken up several section 101 cases in recent years, it has never mentioned — much less applied — any presumption of eligibility. The reasonable inference, therefore, is that while a presumption of validity attaches in many contexts, no equivalent presumption of eligibility applies in the section 101 calculus” (quoting Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 720-721 (Fed. Cir. 2014) (Mayer, J., concurring) (emphasis added)). Though the Court concluded that, in providing this “guidance,” “[t]he Federal Circuit appears to have resolved this question,” the quoted language from the Ultramercial decision had appeared not in the majority opinion, but in the concurring opinion written by Judge Mayer.

Having decided the burden of proof issue against the patentee, the Court went on to hold that the claims of each of TRA’s three patents are patent-ineligible. Under the first prong of the Alice-test, the Court determined that the patents are directed to the abstract concept of “matching consumer data to households using a double-blind matching strategy.” Under the second prong, the Court determined that patent claims lack an “inventive concept,” since they recite only well-understood, routine, and conventional activities, such as data collection, data storage, and routine post-solution activities.

Case: TNS Media Research, LLC v. Tivo Research & Analytics, Inc., No. 11 Civ. 4039 (SAS), 2016 U.S. Dist. LEXIS 21218, 2016 BL 49844 (S.D.N.Y. Feb. 22, 2016).