The Alice Penny Drops In East Texas

As we wrote last month, the early stats suggest that Alice v. CLS Bank has changed the landscape of patent litigation, with a 69% win rate for accused infringers on motions seeking a judgment that an asserted patent is not directed to patentable subject matter. One of the bigger open questions is what reception Alice will receive in the Eastern District of Texas, which runs neck and neck with the District of Delaware for the most popular forum for patent plaintiffs in the country. Judge Rodney Gilstrap of that court has given some indication that east Texas will not be isolated in its approach to Alice.

On March 3, 2015, in Clear With Computers v. Volvo Construction Equipment (and several related cases), Judge Gilstrap granted a defense motion to dismiss for lack of patentable subject matter.  While “not hold[ing] that all claims in software–based patents are directed to an abstract idea,” Judge Gilstrap had no problem concluding that the claims at issue in the case “essentially propose that instead of a human salesman asking customers about their preferences and then creating a brochure from a binder of product pictures and text and using a rolodex to store customer information, a generic computer can perform those functions.” Such an abstract idea was not, the judge concluded, patent–eligible.

If Alice applies with equal force in east Texas, as this decision suggests, that would be a seismic event in patent litigation with aftershocks reverberating throughout the country.