Aatrix Software, Inc. v. Green Shades Software, Inc.

United States Court of Appeals
for the Federal Circuit
______________________
AATRIX SOFTWARE, INC.,
Plaintiff-Appellant
v.
GREEN SHADES SOFTWARE, INC.,
Defendant-Appellee
______________________
2017-1452
______________________
Appeal from the United States District Court for the
Middle District of Florida in No. 3:15-cv-00164-HES-
MCR, Senior Judge Harvey E. Schlesinger.
______________________
Decided: February 14, 2018
______________________
JOHN BENTLEY LUNSETH, II, Briggs & Morgan, PA,
Minneapolis, MN, argued for plaintiff-appellant.
JOSEPH W. BAIN, Shutts & Bowen LLP, West Palm
Beach, FL, argued for defendant-appellee. Also represent-
ed by HAROLD TIMOTHY GILLIS, Jacksonville, FL.
______________________
Before MOORE, REYNA, and TARANTO, Circuit Judges.
2 AATRIX SOFTWARE, INC. v. GREEN SHADES SOFTWARE, INC.
Opinion for the court filed by Circuit Judge MOORE.
Opinion concurring-in-part, dissenting-in-part filed by
Circuit Judge REYNA.
MOORE, Circuit Judge.
Aatrix Software, Inc. (“Aatrix”) appeals the United
States District Court for the Middle District of Florida’s
dismissal under Rule 12(b)(6), in which the district court
held claims 1, 2, and 22 of U.S. Patent No. 7,171,615
(“’615 patent”) and claims 1, 13, and 17 of U.S. Patent No.
8,984,393 (“’393 patent”) invalid as directed to ineligible
subject matter under 35 U.S.C. § 101. Aatrix also appeals
the district court’s denial of its motion for leave to file a
second amended complaint. We vacate the district court’s
grant of the motion to dismiss, reverse its denial of
Aatrix’s motion for leave to file a second amended com-
plaint, and remand for further proceedings.
BACKGROUND
The ’615 and the ’393 patents have essentially the
same specification and are directed to systems and meth-
ods for designing, creating, and importing data into a
viewable form on a computer so that a user can manipu-
late the form data and create viewable forms and reports.
’615 patent at Abstract. The preferred embodiment in the
specification describes a data processing system, which
has three main components: a form file, a data file, and a
viewer. Id. at 3:4–31, Fig. 1. The form file is created
using in-house form development tools and is designed to
model the physical characteristics of an existing form,
including the calculations and rule conditions required to
fill in the form. Id. at 3:5–14. The data file, referred to as
the Aatrix Universal File (“AUF”), allows data from third-
party applications to be “seamlessly imported” into the
form file program to populate the form fields. Id. at 3:14–
22. The viewer generates a report by merging the data in
the AUF file with the fields in the form file, performing
AATRIX SOFTWARE, INC. v. GREEN SHADES SOFTWARE, INC. 3
calculations on the data, and allowing the user to review
and change the field values. Id. at 3:24–31. Claim 1 of
the ’615 patent is representative (emphases added):
1. A data processing system for designing, creat-
ing, and importing data into, a viewable form
viewable by the user of the data processing sys-
tem, comprising:
(a) a form file that models the physical
representation of an original paper form
and establishes the calculations and rule
conditions required to fill in the viewable
form;
(b) a form file creation program that im-
ports a background image from an original
form, allows a user to adjust and test-
print the background image and compare
the alignment of the original form to the
background test-print, and creates the
form file;
(c) a data file containing data from a user
application for populating the viewable
form; and
(d) a form viewer program operating on
the form file and the data file, to perform
calculations, allow the user of the data
processing system to review and change
the data, and create viewable forms and
reports.
Aatrix sued Green Shades Software, Inc. (“Green
Shades”) for infringement of the ’615 and ’393 patents.
Green Shades moved to dismiss the complaint under Rule
12(b)(6). It argued all claims in the asserted patents were
ineligible under § 101. Aatrix argued the motion should
be denied “to permit claim construction to go forward and
for the [district court] to acquaint itself with the actual
4 AATRIX SOFTWARE, INC. v. GREEN SHADES SOFTWARE, INC.
inventions.” J.A. 198; see also J.A. 5, 204. Aatrix also
filed declarations discussing the claimed invention, which
the district court did not consider in its analysis.
The district court granted Green Shades’ motion and
held every claim ineligible under § 101. J.A. 33 (holding
“the ’615 and ’393 Patents to be drawn to ineligible sub-
ject matter”). Though not argued by the parties, the
district court concluded claim 1 is not directed to any
tangible embodiment and therefore not directed to eligible
subject matter under § 101. The district court applied the
Alice/Mayo two-step analysis to the remaining claims at
issue. The court held that ’615 patent claim 2 is directed
to the abstract idea of “collecting, organizing, and per-
forming calculations on data to fill out forms: a funda-
mental human activity that can be performed using a pen
and paper.” J.A. 23. It found that the claim elements do
not supply an inventive concept. It concluded ’615 patent
claim 22 and ’393 patent claims 1, 13, and 17 are substan-
tively the same as ’615 patent claim 2 and similarly
directed to abstract ideas without inventive concepts.
Aatrix moved to modify and vacate the judgment, for
reconsideration, and for leave to amend the complaint. It
sought reconsideration of the district court’s tangible
embodiment analysis and leave to file a second amended
complaint that it argued supplied additional allegations
and evidence that would have precluded a dismissal
under § 101 at the Rule 12(b)(6) stage. The district court
denied these motions, stating that “[u]pon consideration
of the filings and the relevant case law, the [district court]
sees no reason to reconsider its prior determination.
Accordingly, [Aatrix’s] motions will be denied.” J.A. 34.
Aatrix timely appealed. We have jurisdiction under
28 U.S.C. § 1295(a).
AATRIX SOFTWARE, INC. v. GREEN SHADES SOFTWARE, INC. 5
DISCUSSION
I.
“We review a district court’s dismissal for failure to
state a claim under the law of the regional circuit.”
Content Extraction & Transmission LLC v. Wells Fargo
Bank, Nat’l Ass’n, 776 F.3d 1343, 1346 (Fed. Cir. 2014).
The Eleventh Circuit reviews the grant of Rule 12(b)(6)
motions de novo, accepting as true the complaint’s factual
allegations and construing them in the light most favora-
ble to the plaintiff. Speaker v. U.S. Dep’t of Health &
Human Servs. Ctrs. for Disease Control & Prevention, 623
F.3d 1371, 1379 (11th Cir. 2010).
We have held that patent eligibility can be deter-
mined at the Rule 12(b)(6) stage. See, e.g., Genetic Techs.
Ltd. v. Merial L.L.C., 818 F.3d 1369, 1373 (Fed. Cir.
2016); Content Extraction, 776 F.3d at 1346, 1351. This is
true only when there are no factual allegations that,
taken as true, prevent resolving the eligibility question as
a matter of law. Indeed, we have explained that “plausi-
ble factual allegations may preclude dismissing a case
under § 101 where, for example, ‘nothing on th[e] rec-
ord . . . refutes those allegations as a matter of law or
justifies dismissal under Rule 12(b)(6).’” FairWarning IP,
LLC v. Iatric Sys., Inc., 839 F.3d 1089, 1097 (Fed. Cir.
2016) (quoting BASCOM Glob. Internet Servs., Inc. v.
AT&T Mobility LLC, 827 F.3d 1341, 1352 (Fed. Cir.
2016)). If there are claim construction disputes at the
Rule 12(b)(6) stage, we have held that either the court
must proceed by adopting the non-moving party’s con-
structions, BASCOM, 827 F.3d at 1352; Content Extrac-
tion, 776 F.3d at 1349, or the court must resolve the
disputes to whatever extent is needed to conduct the § 101
analysis, which may well be less than a full, formal claim
construction. Genetic Techs., 818 F.3d at 1373.
This is not a case where patent ineligibility was
properly adjudicated with finality at the Rule 12(b)(6)
6 AATRIX SOFTWARE, INC. v. GREEN SHADES SOFTWARE, INC.
stage. The district court erred to the extent it determined
that claim 1 of the ’615 patent is ineligible because it is
not directed to a tangible embodiment. The district court
granted this Rule 12(b)(6) motion without claim construc-
tion. We have some doubt about the propriety of doing so
in this case, but need not reach that issue because it did
err when it denied leave to amend without claim construc-
tion and in the face of factual allegations, spelled out in
the proposed second amended complaint, that, if accepted
as true, establish that the claimed combination contains
inventive components and improves the workings of the
computer.
As a preliminary matter, the district court erred to
the extent it held that claim 1 of the ’615 patent is ineligi-
ble solely because it is directed to an intangible embodi-
ment. We have held that claims to pure data and claims
to transitory signals embedded with data are directed to
ineligible subject matter under § 101. Digitech Image
Techs., LLC v. Elecs. for Imaging, Inc., 758 F.3d 1344,
1348–50 (Fed. Cir. 2014); In re Nuijten, 500 F.3d 1346,
1353–57 (Fed. Cir. 2007). But the rationale of those
decisions—failure of the claimed matter to come within
any of the four statutory categories: process, machine,
manufacture, composition of matter—does not apply here.
It remains true after Alice Corp. Pty. v. CLS Bank Inter-
national, 134 S. Ct. 2347 (2014), that “[a] § 101 analysis
begins by identifying whether an invention fits within one
of the four statutorily provided categories of patent-
eligible subject matter.” Ultramercial, Inc. v. Hulu, LLC,
772 F.3d 709, 713–14 (Fed. Cir. 2014) (post-Alice); Dig-
itech, 758 F.3d at 1348–50 (post-Alice). Claim 1 of the
’615 patent meets that requirement. Like many claims
that focus on software innovations, it is a system claim. It
claims a data processing system which clearly requires a
AATRIX SOFTWARE, INC. v. GREEN SHADES SOFTWARE, INC. 7
computer operating software, a means for viewing and
changing data, and a means for viewing forms and re-
ports. This is very much a tangible system. 1 The district
court erred in holding claim 1 ineligible because it was
directed to intangible matter and should have instead
performed an Alice/Mayo analysis of claim 1.
The district court did perform an Alice/Mayo analysis
on the remaining claims and dismissed pursuant to Rule
12(b)(6), concluding that the claims are ineligible. The
subsequent refusal to permit an amended complaint was
erroneous because at that stage there certainly were
allegations of fact that, if Aatrix’s position were accepted,
would preclude the dismissal.
The district court denied, without explanation,
Aatrix’s motion to amend its complaint. The Eleventh
Circuit reviews a district court’s denial of leave to amend
for abuse of discretion. Mann v. Palmer, 713 F.3d 1306,
1316 (11th Cir. 2013). A district court should freely give
leave to amend a complaint “when justice so requires.”
Fed. R. Civ. P. 15(a)(2); see Perez v. Wells Fargo N.A., 774
F.3d 1329, 1340 (11th Cir. 2014). A district court may
1 The district court recognized that claims drawn to
a computer system are not intangible elsewhere in its
analysis. In assessing dependent claim 2 of the ’615
patent, the district court noted that it is directed to a
tangible embodiment because it adds a client computer
and server computer limitation to the data processing
system of claim 1. It then explained that claim 2 “de-
scribes the structural components and functional limita-
tions of said components of a data processing system (i.e.,
software program) on generic computers.” J.A. 22 (em-
phasis added); see also J.A. 24. It failed, however, to
appreciate that claim 1 is similarly directed to a data
processing system.
8 AATRIX SOFTWARE, INC. v. GREEN SHADES SOFTWARE, INC.
deny a motion to amend on numerous grounds such as
“undue delay, undue prejudice to the defendants, and
futility of the amendment.” Mann, 713 F.3d at 1316; see
also Perez, 774 F.3d at 1340–41 (listing other factors).
The Eleventh Circuit reviews de novo a district court’s
denial of leave to amend for futility. Mann, 713 F.3d at
1316. A justification for denying leave to amend may be
declared or apparent from the record. See Garfield v.
NDC Health Corp., 466 F.3d 1255, 1270 (11th Cir. 2006)
(citing Foman v. Davis, 371 U.S. 178, 182 (1962)).
In this case, the district court denied Aatrix’s motions
stating in full that “[u]pon consideration of the filings and
the relevant case law, the Court sees no reason to recon-
sider its prior determination.” J.A. 34. The district court
gave no reason for its denial of Aatrix’s motion to amend,
and this is not a case where the record contains “ample
and obvious grounds for denying leave to amend.” Rhodes
v. Amarillo Hosp. Dist., 654 F.2d 1148, 1154 (5th Cir.
1981). 2 Indeed, the only argument Green Shades makes
on appeal is that the amendment would be futile because
the claims “at issue are invalid on their face and a more
carefully drafted complaint would do nothing to alter”
their validity. Appellee’s Br. 4, 12. We do not agree.
The proposed second amended complaint contains al-
legations that, taken as true, would directly affect the
district court’s patent eligibility analysis. These allega-
tions at a minimum raise factual disputes underlying the
§ 101 analysis, such as whether the claim term “data file”
constitutes an inventive concept, alone or in combination
with other elements, sufficient to survive an Alice/Mayo
2 The Eleventh Circuit adopted as binding prece-
dent all decisions of the former Fifth Circuit handed down
before October 1, 1981. Bonner v. City of Prichard, Ala.,
661 F.2d 1206, 1209 (11th Cir. 1981) (en banc).
AATRIX SOFTWARE, INC. v. GREEN SHADES SOFTWARE, INC. 9
analysis at the Rule 12(b)(6) stage. Alice/Mayo step two
requires that we consider whether the claims contain “an
‘inventive concept’ sufficient to ‘transform’ the claimed
abstract idea into a patent-eligible application.” Alice,
134 S. Ct. at 2357 (quoting Mayo Collaborative Servs. v.
Prometheus Labs., Inc., 566 U.S. 66, 72, 79 (2012)). We
have held that patentees who adequately allege their
claims contain inventive concepts survive a § 101 eligibil-
ity analysis under Rule 12(b)(6). See, e.g., BASCOM, 827
F.3d at 1352 (so holding after analysis of allegations).
Here, allowing Aatrix to file the proposed amended com-
plaint, which alleges facts directed to the inventive con-
cepts in its claimed invention, would not be futile. See
FairWarning IP, 839 F.3d at 1097.
Aatrix’s proposed second amended complaint supplies
numerous allegations related to the inventive concepts
present in the claimed form file technology. It describes
the development of the patented invention, including the
problems present in prior art computerized form file
creation. J.A. 418–33. It then presents specific allega-
tions directed to “improvements and problems solved by
the Aatrix patented inventions.” J.A. 454–57 (emphasis
removed). As directed to the claimed data file, for exam-
ple, the proposed second amended complaint alleges:
The inventions claimed in the Aatrix Patents al-
low data to be imported into the viewable elec-
tronic form from outside applications. Prior art
forms solutions allowed data to be extracted only
from widely available databases with published
database schemas, not the proprietary data struc-
tures of application software. The inventions of
the Aatrix Patents allowed data to be imported
from an end user application without needing to
know proprietary database schemas and without
having to custom program the form files to work
with each outside application. The inventions of
the Aatrix Patents permit data to be retrieved
10 AATRIX SOFTWARE, INC. v. GREEN SHADES SOFTWARE, INC.
from a user application and inserted into a form,
eliminating the need for hand typing in the values
and eliminating the risk of transcription error.
J.A. 455 ¶ 109; see also J.A. 431–32 ¶¶ 43–46 (describing
the development and success of the claimed data file
despite the difficulty in obtaining data from other soft-
ware vendors given proprietary data structures). These
allegations about the claimed data file claim that the data
file is directed to an improvement in importing data from
third-party software applications.
The complaint also alleges that “[t]his invention in-
creased the efficiencies of computers processing tax
forms.” J.A. 429 ¶ 39. The complaint alleges that the
claimed invention “saved storage space both in the users’
computers’ RAM (Random Access Memory, which is fast,
short-term storage used by running programs) and hard
disk (permanent slower storage used for files and pro-
grams when not running).” J.A. 429 ¶ 38. The claimed
invention, according to the complaint, reduces the risk of
“thrashing,” a condition which slowed down prior art
systems. J.A. 429–30 ¶ 39. The complaint alleges that
the claimed software uses less memory, results in faster
processing speed, and reduces the risk of thrashing which
makes the computer process forms more efficiently. J.A.
429 ¶ 39. These allegations suggest that the claimed
invention is directed to an improvement in the computer
technology itself and not directed to generic components
performing conventional activities. We have repeatedly
held that inventions which are directed to improvements
in the functioning and operation of the computer are
patent eligible. See, e.g., Visual Memory LLC v. NVIDIA
Corp., 867 F.3d 1253, 1258–59 (Fed. Cir. 2017); Amdocs
(Israel) Ltd. v. Openet Telecom, Inc., 841 F.3d 1288, 1300–
02 (Fed. Cir. 2016); Enfish, LLC v. Microsoft Corp., 822
F.3d 1327, 1336 (Fed. Cir. 2016); see also DDR Holdings,
LLC v. Hotels.com, L.P., 773 F.3d 1245, 1257 (Fed. Cir.
2014). Viewed in favor of Aatrix, as the district court
AATRIX SOFTWARE, INC. v. GREEN SHADES SOFTWARE, INC. 11
must at the Rule 12(b)(6) stage, the complaint alleges that
the claimed combination improves the functioning and
operation of the computer itself. These allegations, if
accepted as true, contradict the district court’s conclusion
that the claimed combination was conventional or routine.
J.A. 26. Therefore, it was an abuse of discretion for the
district court to deny leave to amend.
While the ultimate determination of eligibility under
§ 101 is a question of law, like many legal questions, there
can be subsidiary fact questions which must be resolved
en route to the ultimate legal determination. Relevant to
this case, the second step of the Alice/Mayo test requires
examining “the elements of the claim to determine
whether it contains an ‘inventive concept’ sufficient to
‘transform’ the claimed abstract idea into a patent-eligible
application.” Alice, 134 S. Ct. at 2357 (quoting Mayo, 566
U.S. at 72, 79). If the elements involve “well-understood,
routine, [and] conventional activity previously engaged in
by researchers in the field,” Mayo, 566 U.S. at 73, they do
not constitute an “inventive concept.” We have explained
that the second step of the Alice/Mayo test is satisfied
when the claim limitations “involve more than perfor-
mance of ‘well-understood, routine, [and] conventional
activities previously known to the industry.’” Content
Extraction, 776 F.3d at 1347–48 (quoting Alice, 134 S. Ct.
at 2359); see also Affinity Labs of Tex., LLC v. DIRECTV,
LLC, 838 F.3d 1253, 1262 (Fed. Cir. 2016) (holding that
the features constituting the inventive concept in step two
of Alice/Mayo “must be more than ‘well-understood,
routine, conventional activity’” (quoting Mayo, 566 U.S. at
79–80)); Intellectual Ventures I LLC v. Erie Indem. Co.,
850 F.3d 1315, 1328 (Fed. Cir. 2017) (same); BASCOM,
827 F.3d at 1350 (“[I]t is of course now standard for a
§ 101 inquiry to consider whether various claim elements
simply recite ‘well-understood, routine, conventional
activit[ies].’” (quoting Alice, 134 S. Ct. at 2359)). Whether
the claim elements or the claimed combination are well-
12 AATRIX SOFTWARE, INC. v. GREEN SHADES SOFTWARE, INC.
understood, routine, conventional is a question of fact.
And in this case, that question cannot be answered ad-
versely to the patentee based on the sources properly
considered on a motion to dismiss, such as the complaint,
the patent, and materials subject to judicial notice.
There are concrete allegations in the second amended
complaint that individual elements and the claimed
combination are not well-understood, routine, or conven-
tional activity. There are also concrete allegations re-
garding the claimed combination’s improvement to the
functioning of the computer. We have been shown no
proper basis for rejecting those allegations as a factual
matter.
Below, even on the motion to dismiss, Aatrix argued
the district court should have held claim construction
proceedings to obtain a full understanding of the claims
prior to granting Green Shades’ motion to dismiss. It
argued the claims are directed to specific structures
defined in the claim language. On the other hand, Aatrix
did not clearly explain which claim terms required con-
struction or propose a construction of any particular term.
We need not decide whether it was proper on that record
for the court to grant the motion to dismiss without claim
construction: the need for claim construction might be
apparent just from the claim terms themselves, to arrive
at “a full understanding of the basic character of the
claimed subject matter.” Bancorp Servs., L.L.C. v. Sun
Life Assur. Co. of Canada (U.S.), 687 F.3d 1266, 1273–74
(Fed. Cir. 2012). We conclude that Aatrix is entitled to
file its proposed second amended complaint, and that
ruling makes it unnecessary to decide whether the district
court erred by ruling on the § 101 motion prior to claim
construction. The briefing and argument on appeal
demonstrate a need for claim construction, to be conduct-
ed on remand after the amended complaint is filed.
AATRIX SOFTWARE, INC. v. GREEN SHADES SOFTWARE, INC. 13
On appeal, Aatrix argues, for example, that the
claimed “data file” imports data from third-party applica-
tions into a viewable electronic form without program-
ming each form file to work with each third-party
application, which improves interoperability with third-
party software. Aatrix cites the specification as support
for its argument that the claimed data file contains an
inventive concept directed to improved importation of
data and interoperability with third-party software. It
explains that through the data file, “data from the vendor
application is seamlessly imported into the program” and
the data file imports “only the data for a selected report-
ing period based on the guidelines programmed into the
forms.” ’615 patent at 3:14–19; 10:59–67; see also id. at
12:21–24 (“By examining the data requirements for a
form, the vendor application can determine what data it
should supply in the AUF to correctly fill in as much of
the form as possible.”). The specification describes the
structure of the data file, including the “forms index file”
that “provides the vendor application with information on
the forms available to the program.” Id. at 9:46–60; see
id. at 9:45–12:24. It explains that “allow[ing] data to be
imported into the viewable electronic form from outside
applications” is a “principal object and advantage of the
present invention.” Id. at 2:46–48; see also id. at 5:1–6
(“In its preferred embodiment, the main program 800
pulls information from the user’s payroll or accounting
application’s export file, thus filling in 900 certain infor-
mation on the form without the user having to type it in.
With the export file, a lot of information that would
normally have to be manually filled in is tagged for popu-
lating fields.”). Green Shades argues that this purported
improvement in importation of data is in fact a routine
and conventional use of a computer, however, at oral
argument, Green Shades conceded that nothing in the
specification describes this importation of data as conven-
tional. Oral Arg. at 34:34–35:53.
14 AATRIX SOFTWARE, INC. v. GREEN SHADES SOFTWARE, INC.
In assessing the claims under Alice/Mayo step two,
the district court found that the claimed “data file con-
taining data from a user application for populating the
viewable form” describes “a ‘well understood’ and ‘routine’
component and function of a computer.” J.A. 26. The
district court supplied no reasoning or evidence for its
finding that the claimed data file “describes a ‘well under-
stood’ and ‘routine’ component and function of a comput-
er,” J.A. 26, nor is there any in the record at this stage of
the proceedings.
At least since the proposal of the second amended
complaint, and perhaps even before, allegations as to facts
and the proper construction of the claims have precluded
the court’s conclusion that the claimed “data file” is “a
‘well understood’ and ‘routine’ component and function of
a computer.” J.A. 26. The “data file” limitation may
reflect, as Aatrix argues, an improvement in the importa-
tion of data from third-party software applications. Cf.
Enfish, 822 F.3d at 1337 (“Here, the claims are not simply
directed to any form of storing tabular data, but instead
are specifically directed to a self-referential table for a
computer database.”). In light of the allegations made by
Aatrix, the district court could not conclude at the Rule
12(b)(6) stage that the claimed elements were well-
understood, routine, or conventional. Cf. Affinity Labs of
Tex., LLC v. Amazon.com Inc., 838 F.3d 1266, 1270 (Fed.
Cir. 2016) (rejecting criticism of conclusion that the claims
recited “routine and generic processing and storing capa-
bilities of computers generally” where it was not suggest-
ed those elements were new or inventive); Content
Extraction, 776 F.3d at 1347 (noting the concept of “data
collection, recognition, and storage is undisputedly well-
known” (emphasis added)). Thus, allowing Aatrix to file
the proposed amended complaint would not have been
futile.
We vacate the district court’s dismissal pursuant to
Rule 12(b)(6). There are factual allegations in the second
AATRIX SOFTWARE, INC. v. GREEN SHADES SOFTWARE, INC. 15
amended complaint, which when accepted as true, pre-
vent dismissal pursuant to Rule 12(b)(6). Nothing in this
opinion should be viewed as going beyond the Rule
12(b)(6) stage. Summary judgment, for example, involves
different standards than Rule 12(b)(6). On remand, the
district court should resolve, as necessary, claim construc-
tion issues.
CONCLUSION
For the foregoing reasons we vacate the district
court’s dismissal under Rule 12(b)(6) and reverse its
denial of Aatrix’s motion for leave to file a second amend-
ed complaint.
REVERSED-IN-PART, VACATED-IN-PART, AND
REMANDED
United States Court of Appeals
for the Federal Circuit
______________________
AATRIX SOFTWARE, INC,
Plaintiff-Appellant
v.
GREEN SHADES SOFTWARE, INC,
Defendant-Appellee
______________________
2017-1452
______________________
Appeal from the United States District Court for the
Middle District of Florida in No. 3:15-cv-00164-HES-
MCR, Senior Judge Harvey E. Schlesinger.
______________________
REYNA, Circuit Judge, concurring-in-part, dissenting-in-
part.
I concur with the majority’s decision to vacate and
remand to the district court on the motion to dismiss.
Like the majority, I find that the district court erred in its
conclusion that Claim 1 of the ’615 patent was directed to
an abstract idea because the patent lacked a “tangible
embodiment.” I believe that the “tangible embodiment”
requirement imposed by the district court also underlined
its decision to deny Aatrix’s motion for leave to file a
2 AATRIX SOFTWARE, INC v. GREEN SHADES SOFTWARE, INC
Second Amended Complaint. 1 Therefore, I would vacate
and remand on the motion for leave to file a Second
Amended Complaint as well. As a court, we should have
decided on this issue alone.
I respectfully disagree with the majority’s broad
statements on the role of factual evidence in a § 101
inquiry. Our precedent is clear that the § 101 inquiry is a
legal question. See Intellectual Ventures I LLC v. Capital
One Fin. Corp., 850 F.3d 1332, 1338 (Fed. Cir. 2017). In a
manner contrary to that standard, the majority opinion
attempts to shoehorn a significant factual component into
the Alice § 101 analysis. The problem here is twofold.
First, the majority opinion attempts to shift the char-
acter of the § 101 inquiry from a legal question to a pre-
dominately factual inquiry. The risk of this approach is
that it opens the door in both steps of the Alice inquiry for
the introduction of an inexhaustible array of extrinsic
evidence, such as prior art, publications, other patents,
and expert opinion. 2 Similarly, the majority opinion
strongly suggests that the district court must require
claim construction where the meaning of a claim term is
placed in controversy, even where, as here, proposed
claim constructions are not presented to the court. Maj.
Op. at 12–13. One effect of this approach is that a plain-
tiff facing a 12(b)(6) motion may simply amend its com-
plaint to allege extrinsic facts that, once alleged, must be
taken as true, regardless of its consistency with the
intrinsic record. The majority asserts that its opinion is
not intended to extend beyond the 12(b)(6) stage, but that
is not the problem. The problem is that the 12(b)(6)
procedure is converted into a full blown factual inquiry on
1 For purposes of this dissent, “Second Amended
Complaint” refers to the proposed Second Amended
Complaint that was filed on April 26, 2016.
2 See infra note 3.
AATRIX SOFTWARE, INC v. GREEN SHADES SOFTWARE, INC 3
the level of § 102, § 103, and § 112 inquiries. Clearly, this
approach would turn the utility of the 12(b)(6) procedure
on its head, in particular in the context of § 101, which is
primarily focused on the “allegations” in the patent—the
claims and written description. That said, despite the
majority’s attempt to cabin its opinion to 12(b)(6), I see
little to prevent argument that these notions extend also
to summary judgment proceedings.
Second, the posture of the case on appeal does not
support the majority opinion. The motion to dismiss on
appeal only challenges the First Amended Complaint.
There was no motion to dismiss filed challenging the
Second Amended Complaint. Therefore, the “new” allega-
tions and evidence 3 discussed by the majority were not
3 Aatrix’s new allegations in the Second Amended
Complaint included: the background and development of
the inventions of the Aatrix Patents; specific allegations
and diagrams spelling out the technology of the Aatrix
Patents; the prosecution history of the patents with the
relevant USPTO file wrappers attached as exhibits; a
large number of prior art and patentably distinct means
and methods of creating, displaying and filling out forms
on computers, such as Aatrix’s own “monolithic software;”
hundreds of search results by the USPTO disclosing prior
art in the field; eleven patents or publications disclosing
prior art and/or patentably distinct means and methods
cited by the USPTO in the prosecution of the applications
for the Aatrix’s patents; several products for creating,
designing and filling out forms, allegedly distinct from
Aatrix’s patents, on sale before the date of invention;
alternate methods for creating, displaying and filling out
forms such as Superforms and the use of SDK’s to launch
monolithic software; and the allegedly many improve-
ments, objectives and advantages over the prior art that
the inventions of Aatrix’s patents provide, including
4 AATRIX SOFTWARE, INC v. GREEN SHADES SOFTWARE, INC
raised before the district court. Thus, the part of the
majority opinion devoted to the Second Amended Com-
plaint is dicta. As an appellate court, we should not pass
judgment on matters not addressed by the district court.
Here, we must first give the district court the opportunity
to perform a § 101 analysis in light of this new complaint,
which we can later review, if at all. See Singleton v.
Wulff, 428 U.S. 106, 120 (1976) (“It is the general rule, of
course, that a federal appellate court does not consider an
issue not passed upon below.”). Nor should we prejudge
whether the Second Amended Complaint survives a Rule
12(b)(6) motion to dismiss in the first instance, particular-
ly when the defendant, Greenshades, has had no oppor-
tunity to present arguments with respect to the new
pleading.
The majority attempts to expand this court’s law re-
garding patent eligibility under § 101 at the Rule 12(b)(6)
stage. This contradicts our case law that patent ineligibil-
ity under § 101 is a question of law, and that it can be
appropriately decided on a motion to dismiss. See, e.g.,
Secured Mail Sols. LLC v. Universal Wilde, Inc., 873 F.3d
905, 912 (Fed. Cir. 2017) (“[T]his court has determined
claims to be patent-ineligible at the motion to dismiss
stage based on intrinsic evidence from the specification
without need for ‘extraneous fact finding outside the
record.’”).
For these reasons, I respectfully concur-in-part and
dissent-in-part from the majority opinion.
improvements in the functioning of the computer compo-
nents of the inventions. J.A. 407–09.