Berkheimer v. HP: Patent Eligibility Can Turn on a Question of Fact

Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018), changed the procedural landscape of patent-eligibility litigation. For years after Alice, courts routinely resolved § 101 challenges on the pleadings or at summary judgment, treating eligibility as a pure question of law. In an opinion by Judge Moore, the Federal Circuit held that the second step of the Alice/Mayo test contains an embedded question of fact: whether the claimed elements are “well-understood, routine, and conventional” to a person of ordinary skill. Where the record genuinely disputes that question, a court cannot decide eligibility as a matter of law. Decided the same week as its companion case Aatrix Software v. Green Shades, Berkheimer handed patent owners a powerful tool for surviving early dispositive motions.

At a glance

• Case: Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018), Docket No. 17-1437
• Court: U.S. Court of Appeals for the Federal Circuit, on appeal from the Northern District of Illinois
• Decided: February 8, 2018
• Opinion: Judge Moore, for a panel of Judges Moore, Taranto, and Stoll
• Subject matter: A digital asset management system that parsed, archived, and eliminated redundancy in stored documents (U.S. Patent No. 7,447,713)
• Holding: Whether a claim element or combination is well-understood, routine, and conventional is a question of fact that can preclude summary judgment of ineligibility under § 101

The archival system and the summary-judgment ruling

Steven Berkheimer’s patent claimed a system for digitally processing and archiving files. The system parsed documents into their constituent objects, compared those objects against archived material, and stored only one copy of redundant elements, updating linked references throughout the archive. The specification touted benefits flowing from this design — reduced redundancy, improved system efficiency, and lower storage costs — and described the “one-to-many” editing feature, in which a change to a single stored object propagated automatically to every document that used it.

Berkheimer sued HP for infringement. The district court held several claims indefinite and, applying Alice, granted summary judgment that claims 1-7 and 9 were patent-ineligible abstract ideas under § 101. The court reasoned that the claims were directed to the abstract idea of parsing, comparing, storing, and editing data, and that the remaining elements were conventional. Berkheimer appealed the eligibility ruling (along with the indefiniteness holding, which the Federal Circuit largely affirmed).

Step two hides a fact question

The Federal Circuit accepted that patent eligibility is ultimately a question of law, but it drew a critical distinction: that legal question can rest on “underlying facts.” The court located the factual component in step two of Alice, the search for an inventive concept. Whether the claim elements, considered individually and as an ordered combination, are “well-understood, routine, and conventional” activities previously known in the industry is, the court held, a factual determination. And like other factual questions, it must be proved — and can be genuinely disputed.

This reframing had immediate teeth. Under ordinary summary-judgment standards, a court cannot grant judgment when a reasonable factfinder could resolve a material factual dispute in the nonmovant’s favor. If the patent’s specification asserts that the claimed combination was not conventional — that it achieved improvements the prior art did not — that assertion can create a genuine issue of material fact about whether the elements were routine and conventional. The court cautioned that “the mere fact that something is disclosed in a piece of prior art” does not, by itself, establish that it was well-understood, routine, and conventional; widespread, ordinary use must be shown, not merely prior existence.

Crucially, the court emphasized that not every § 101 case presents a fact dispute. Where the claims recite only functions that the specification and record confirm to be conventional, eligibility can still be decided as a matter of law. The factual question arises only when the record — often the specification itself — plausibly supports the view that the claimed combination was unconventional.

A split outcome on the claims

Applying that standard, the court divided the claims. As to independent claim 1 and dependent claims 2, 3, and 9, the court found no genuine factual dispute: those claims captured only the abstract idea of parsing, comparing, and storing data using conventional computer functions, and nothing in the specification suggested the recited combination was unconventional. Summary judgment of ineligibility was affirmed for those claims.

But dependent claims 4-7 were different. Those claims added limitations tied to the specification’s described improvements — storing parsed data in a manner that eliminated redundancy and enabled one-to-many editing, yielding reduced storage and greater efficiency. The specification described these features as improvements over the prior art. That description, the court held, created a genuine issue of material fact as to whether those claimed elements were well-understood, routine, and conventional. Because a reasonable factfinder could find they were not, summary judgment was improper, and the court vacated and remanded as to claims 4-7. The split illustrated the new rule in operation: the same patent could lose on some claims as a matter of law and survive on others because of a factual dispute rooted in the specification.

Open questions

Berkheimer answered one procedural question but raised others. What quantum and kind of evidence establishes that an element is well-understood, routine, and conventional — must it be more than a single prior-art reference, and can the specification alone create or foreclose the dispute? How readily can courts still resolve eligibility at the pleadings stage, before any evidence, given that the inquiry now has a factual dimension? The USPTO quickly issued guidance requiring examiners to support “conventional” findings with evidence, extending Berkheimer’s influence into prosecution. And the decision left open how the fact question interacts with the ultimate legal conclusion of eligibility, a tension that continues to shape how § 101 motions are litigated and decided.

Implications

• The specification is a shield. Patent drafters should describe, with specificity, how the claimed combination improves on conventional technology; those statements can create the factual dispute that defeats an early § 101 motion.
• Early dismissal got harder. Accused infringers can no longer assume eligibility will be resolved on a motion to dismiss or summary judgment; where the record disputes conventionality, the question may reach trial.
• Conventionality must be proved with evidence. A bare assertion, or the mere existence of a prior-art reference, does not establish that an element was routine and conventional; ordinary, widespread use must be shown.
• The rule cuts both ways. Berkheimer does not immunize weak claims — where the record confirms only conventional activity, courts still decide ineligibility as a matter of law.

Frequently asked questions

What is the Berkheimer rule? Whether a claim element or combination of elements is well-understood, routine, and conventional to a person of ordinary skill in the art is a question of fact. When there is a genuine factual dispute on that point, a court cannot resolve step two of the Alice test as a matter of law on summary judgment.

Did Berkheimer make patents harder to invalidate under Section 101? In practice, yes. By classifying the routine-and-conventional inquiry as factual, Berkheimer made it harder for accused infringers to win eligibility on the pleadings or at summary judgment when the patent’s specification asserts that the claimed combination was unconventional. It gave patent owners a factual foothold to survive early challenges.

Did Berkheimer save all of the patent’s claims? No. The Federal Circuit affirmed summary judgment of ineligibility for the independent claim and several dependent claims, finding no factual dispute that they recited only conventional activity. It vacated and remanded as to the dependent claims whose specification described improvements that could be unconventional, because those raised a genuine issue of material fact.

Authorities and sources

• Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018), Docket No. 17-1437 (decided February 8, 2018). BitLaw full-text opinion; Leagle.
• Judge Moore’s authorship and the factual-question holding corroborated by IPWatchdog analysis and Patent Docs case report.
• Governing framework from Alice Corp. Pty. Ltd. v. CLS Bank International, 573 U.S. 208 (2014), via Justia.