XY, LLC v. TRANS OVA GENETICS, LC

Before Wallach, Plager, and Stoll. Appeal from the United States District Court for the District of Colorado.

Summary: Claims directed to improving a method of operating an apparatus may be patent eligible subject matter.

In 2016, XY brought suit against Trans Ova alleging infringement of seven patents. At the time the suit was filed, an appeal was still pending on a 2012 lawsuit against Trans Ova asserting infringement of different patents directed to a similar technology. Trans Ova moved for judgment on the pleadings that the asserted claims are ineligible under § 101, and moved to dismiss three of the asserted patents, arguing that the 2016 infringement allegations for those patents were barred by claim preclusion based on XY’s 2012 lawsuit. The district court granted judgment on the pleadings, holding that the claims were directed to an abstract idea and lacked an inventive concept. The district court also granted the motion to dismiss, finding the claims to be precluded. XY appealed.

The Federal Circuit found that the district court erred by holding the claims abstract and directed to a “mathematical equation that permits rotating multi-dimensional data.” Instead, the Federal Circuit held that the claims improve the method of operating an apparatus to classify and sort particles in two populations in real time, and include a detailed recitation of the means for doing so. The Federal Circuit further explained that, although the claims employ formulas to improve classification and separation of particles, the formulas operate to achieve the improved result of the claimed method only when combined with the specific improvements to the operation of the apparatus (i.e., use of specific detectors and other method limitations). Having determined that the asserted claims are not directed to an abstract idea, the Federal Circuit did not reach Alice step two. Accordingly, the Federal Circuit reversed the district court’s judgment of patent ineligibility.

The Federal Circuit also held that the district court erred in finding claim preclusion. The district court concluded claim preclusion applied because the patents issued before the filing of the 2012 lawsuit, address the same or substantially the same subject matter as the previously filed claims, and are directed at a previously accused product or process. The Federal Circuit rejected the district court’s findings, explaining that to determine whether the scope of the 2012 and 2016 lawsuits were “materially the same,” the district court was required to compare the scope of the patent claims asserted in 2012 with the scope of the patent claims asserted in 2012. The Federal Circuit then declined Trans Ova’s invitation to perform this comparison in the first instance. The Federal Circuit vacated the district court’s dismissal and remanded for further proceedings.

Editor: Paul Stewart

Written by: Atiya M. Myers & Karen Cassidy