The U.S. Court of Appeals for the Federal Circuit issued a nonprecedential decision Feb. 5 affirming a lower court's invalidation of three Q Technologies patents in a dispute with Walmart Inc., marking another victory for defendants challenging patent eligibility under Section 101.
In *Q Technologies, Inc. v. Walmart, Inc.*, the Federal Circuit upheld a March 2024 ruling by Judge Alan D. Albright of the U.S. District Court for the Western District of Texas that found all asserted claims of three related patents ineligible for patent protection as a matter of law.
The patents at issue - U.S. Patents 9,635,108, 10,567,473, and 10,594,774 - form a family of related intellectual property, with the '108 patent serving as the parent to the '473 patent, which in turn spawned the '774 patent. All three patents share a common specification, according to the Federal Circuit opinion.
Q Technologies originally filed suit against Walmart in 2021, alleging the retail giant infringed its patented technology. The case was assigned to Judge Albright, whose Western District of Texas courtroom has become a popular venue for patent litigation in recent years due to his expertise in intellectual property matters and streamlined case management.
The district court's March 6, 2024 decision found that Q Technologies' patent claims failed to meet the requirements of 35 U.S.C. § 101, which defines patentable subject matter. Section 101 excludes abstract ideas, natural phenomena, and laws of nature from patent protection unless they contain an "inventive concept" that transforms them into patent-eligible applications.
The Federal Circuit panel, consisting of Circuit Judges Alan Lourie, William Bryson, and Raymond Reyna, heard oral arguments in the case. Judge Lourie authored the affirming opinion for the three-judge panel.
Q Technologies was represented by a team from MoloLamken LLP, including Rayiner Hashem, who argued the appeal, along with Jennifer Elizabeth Fischell, Walter H. Hawes IV, and Jeffrey A. Lamken. The company also retained Benoit Quarmby from Hexagon Advocates in New York.
Walmart's legal team included Gabriel K. Bell from Latham & Watkins LLP, who presented oral arguments, supported by Kathryn Riley Grasso from DLA Piper LLP and Stanley Joseph Panikowski III from the firm's San Diego office.
The Federal Circuit's affirmance represents the latest in a series of patent invalidations under Section 101 following the Supreme Court's decisions in *Alice Corp. v. CLS Bank International* and *Mayo Collaborative Services v. Prometheus Laboratories*. These precedents established a two-step framework for evaluating patent eligibility that has proven challenging for many software and business method patents.
Under the *Alice*/*Mayo* framework, courts first determine whether patent claims are directed to an abstract idea, natural phenomenon, or law of nature. If so, the analysis proceeds to step two, where courts examine whether the claims contain an "inventive concept" sufficient to transform the abstract idea into a patent-eligible application.
The Federal Circuit designated its decision as nonprecedential, meaning it cannot be cited as binding authority in future cases. However, nonprecedential decisions still provide insight into how the court applies patent eligibility standards to specific fact patterns.
Judge Albright's district court has handled numerous high-profile patent cases since becoming a preferred venue for intellectual property litigation. The Western District of Texas has seen a surge in patent filings as plaintiffs seek favorable scheduling and expertise in patent law.
The outcome in *Q Technologies* adds to the body of case law surrounding Section 101 challenges, which have become increasingly common as defendants seek early case resolution by arguing patents cover ineligible subject matter rather than engaging in lengthy claim construction and infringement analysis.
For Q Technologies, the Federal Circuit's affirmance closes this avenue of patent enforcement against Walmart. The company may seek further review by petitioning the Supreme Court for certiorari, though the high court grants review in only a small percentage of cases.
The decision also reflects the ongoing tension between patent holders seeking to protect their intellectual property rights and technology companies arguing that overly broad patents stifle innovation. Section 101 challenges have become a primary tool for defendants to eliminate weak patents early in litigation.
Walmart's victory continues the company's track record of successfully defending against patent infringement claims. As one of the world's largest retailers with extensive e-commerce operations, Walmart frequently faces intellectual property litigation from companies seeking to enforce patents against its technology systems and business methods.
The case originated as No. 6:21-cv-00779-ADA in the Western District of Texas and was appealed to the Federal Circuit as Case No. 2024-1667. The Federal Circuit maintains exclusive jurisdiction over patent appeals from U.S. district courts, ensuring uniform application of patent law across the country.