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IP Alert: Section 101 Is Indeed a Defense to Infringement

February 28, 2019

On February 26, in University of Florida Research Foundation, Inc. v. General Electric Co., the Federal Circuit held that section 101 of the Patent Act constitutes a formal defense to a claim of infringement under 35 U.S.C. § 282(b). This case puts to rest any doubts engendered by earlier cases that some have raised to suggest otherwise.

The University of Florida Research Foundation (UFRF) owns a patent that claims a “method of integrating physiologic treatment data.” When it sued a number of General Electric entities alleging patent infringement, the defendants moved to dismiss, arguing that the claims of the patent were patent-ineligible under section 101 of the Patent Act. The district court agreed and dismissed the case.

On appeal, the UFRF argued that as an arm of the State of Florida, it enjoys sovereign immunity under the Eleventh Amendment. As such, it argued, the district court did not have jurisdiction to hear the section 101 challenge.

The Federal Circuit disagreed. It is well settled that a state waives its Eleventh Amendment immunity when it voluntarily appears in Federal Court, such as it did in bringing a patent infringement action. This waiver extends not only to the cause of action but to any relevant defenses and counterclaims. Section 282(b) allows a party who brings an infringement claim to raise any available defenses, including the “condition[s] for patentability.” The UFRF contended that these “condition[s]” included defenses of anticipation and obviousness, but not patent eligibility.

Notably, not every alleged defect in a patent can be raised as a ground of invalidity. For example, in Aristocrat Techs. Austl. Pty Ltd. v. Int’l Game Tech., the Federal Circuit concluded that improper revival of a patent could not be raised as a defense to infringement. But based on the plain language of the patent statutes, the court rejected the UFRF’s arguments and concluded that patent-ineligibility under section 101 could indeed be raised as defense to a claim of infringement. Because section 101 is a cognizable defense, it fell within the ambit of the UFRF’s waiver of Eleventh Amendment immunity. The court went on to analyze the patent at issue and agree with the district court that it was patent-ineligible.

Today’s case appears to settle the question whether section 101 is or is not a defense to patent infringement. The decision is relevant in a number of contexts, particularly litigation involving states or state entities.

For more information, please contact Fitch Even partner Allen E. Hoover, author of this alert.

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