IBM saves patents under Alice test
IBM has secured a victory against pet supplier Chewy in a patent dispute after a US federal judge affirmed two of its patents according to the eligibility test set by Alice v CLS Bank (2014).
In an opinion delivered on Monday, August 23, at the US District Court for the Southern District of New York, Judge Jed Rakoff also said that it was too early to remove another pair of patents found to “be directed to abstract ideas” from the suit.
The conflict between the two companies arose in July 2020, when IBM alleged that Chewy infringed four of its patents, US numbers 9,569,414; 7,076,433; 6,704,034; 7,496, 831.
The patents at issue each claim improvements to web based technologies used in internet advertising, and IBM agreed to settle if Chewy paid $36m in alleged outstanding licensing fees.
In February 2021, Chewy filed an action against IBM in New York accusing the tech company of “seeking exorbitant licensing fees” for “early internet patents” which no longer have any value.
Big Blue’s ‘aggressive approach’
According to Chewy, while IBM has obtained thousands of patents over the past 20 years, it is does not itself make or sell any products or services covered by the vast majority of those patents. Instead, it accused the tech company of recruiting “an army of lawyers who try to patent just about anything, and then aggressively seeks to license those patents”.
The pet supplier sought a declaratory judgment of non-infringement of the patents on the grounds that they were all “abstract” according to the two-step eligibility test formed under the landmark Alice decision seven years ago.
Following that controversial ruling, the US Supreme Court set down a two-step process for determining subject matter eligibility under 35 USC §101: to determine whether the claims recite a patent-ineligible concept and, if they do, to determine whether the claims contain an inventive concept that transforms the claims into “significantly more” than the patent-ineligible subject matter.
Chewy also challenged the validity of the patents at the US Patent Trial and Appeal Board, a decision which is still pending.
IBM responded by filing a counterclaim for infringement in April 2021, including details of expert declarations about the inventiveness of each of the patents and patent infringement allegations.
Application of Alice eligibility steps
Earlier this month, on August 4, the district court dismissed Chewy’s motion to dismiss IBM’s counterclaim.
In his opinion handed down this week, Judge Rakoff found that both the ‘414 and the ‘034 patents were eligible under step one of the Alice test, but agreed with Chewy that the ‘831 patent was directed towards an abstract idea, and that the ‘431 patent lacked specificity.
But he contended that it was still too early to dismiss the latter two patents from the suit as both contained inventive concepts that could render them valid after further investigation.
Judge Rakoff ordered a claim construction briefing for the patents to be completed by September 2 2021, which will then be followed by a hearing on September 17.
Did you enjoy reading this story? Sign up to our free daily newsletters and get stories sent like this straight to your inbox
Today’s top stories
