MySpace v. Graphon: Federal Circuit Avoids §101 Analysis in Determining Patent Validity

MySpace, Inc. v. Graphon Corp., No. 2011-1149 (Fed. Cir. 2012) Slip opinion

The Federal Circuit affirmed Northern District of California’s ruling on summary judgment that four of Graphon’s patents were invalid due to either lack of novelty or obviousness under 35 U.S.C. §102 and 35 U.S.C. §103, respectively. The district court found that these patents, which disclose a method for creating and searching a database over the Internet, were anticipated by the Mother of All Bulletin boards, created by Dr. Oliver McBryan. MySpace v. Graphon, No. 2011-1149.

The Federal Circuit held that the district court correctly ruled that Graphon’s patents were either anticipated or obvious and that the district court’s reasoning was adequately clear despite a failure to go through the full Graham factor analysis. Id. at 23 (citing Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 17 (1966)). The court also held that it was not necessary to examine the subject matter of the patents under 35 U.S.C. §101 because the case could be dealt with using §§102 and 103. Id. at 17-18. In so holding, the court compared the patentable subject matter requirements of §101 to the Constitution and suggested that the courts should apply something similar to the constitutional avoidance doctrine by endeavoring to resolve cases under §102 and 103 rather than §101 whenever possible. Id.

PatentlyO provides an overview and analysis of the case. The Patent Prospector criticizes the decision, arguing that the district court’s incomplete claim construction should have been reversible error.

Neither plaintiff nor defendant briefed the issue of patentable subject matter under §101. Both addressed only claims under §§102 and 103, focusing the majority of their arguments on claim construction. In holding as it did, the court reasoned that the more specific requirements of §§102 and 103 would lead to better outcomes and result in more detailed and accurate arguments by the parties. Id. at 18. It noted that §§102 and 103 focus on the facts of each patent and do not require the “swamp of verbiage” that §101 requires. Id. at 17. The court also worried that if every case required a §101 consideration, it would lead to “toss-in” arguments from patent attorneys, even in cases that would not merit a §101 argument. Id. at 19.

Judge Mayer dissented. Judge Mayer would still have held the patents invalid, but would have done so under §101 as an unpatentable abstract idea. The patents at issue in MySpace broadly covered any method that would allow the user to create and classify the user’s own database entry over a computer network. This description covers “vast swaths of the Internet,” id. at 3, and had already brought Graphon ten million dollars in licensing fees, id at 4. The dissent suggested that the ubiquity of the technology at issue here was an indication that it was actually an abstract idea, rather than a patentable invention. Id at 8. More broadly, the dissent suggests a new test that would render something unpatentable as an abstract idea if it were directed at a “fundamental and widely understood concept.” See id. at 4. The dissent also emphasized that §101 should be a preliminary matter applied to every patent, reasoning that over the past decade the number of poor quality or damaging software and business method patents has continued to increase despite the limitations of §§102, 103, and 112. Id. at 9-10. Judge Mayer therefore suggests using §101 as a bar to broad areas of subject-matter such as software and business methods in order to resolve the harms caused to the software industry by the large volume of poor quality patents. Id. at 13.

MySpace v. Graphon is significant because the majority and the dissent each offer a new test for handling patentable subject matter under §101. The majority argues that §101 is too broad and difficult to use and therefore should be avoided if a case could be resolved under another section. The dissent argues that §101 should be expanded and applied to all patents in order to provide an additional bar that will keep the large number of harmful patents out of the system. The MySpace majority references Mayo Collaborative Servs. v. Prometheus, a case on § 101’s construction currently being considered by the Supreme Court, and suggests that the MySpace majority’s reasoning undercuts the government’s argument in its Mayo Collaborative Services amicus curae brief. Given that the Prometheus decision is still pending, the majority and the dissent seem to be suggest two alternative paths for §101 doctrine for adoption by the Supreme Court.

Jacob Rogers is a 2L at Harvard Law School.