Source: https://www.crowell.com/NewsEvents/AlertsNewsletters/all/Patent-Law-Alert-A-Deeply-Divided-Federal-Circuit-Fails-to-Bring-Clarity-to-Patent-Eligibility-of-Software-Related-Inventions-in-Closely-Watched-Case
Timestamp: 2019-04-20 14:54:40+00:00

Document:
In CLS Bank International v. Alice Corp. Pty. Ltd., Appeal No. 2011-1301 (Fed. Cir. May 10, 2013) (en banc), a closely watched appeal with over twenty amicus filings, a divided court reversed its previous panel decision and held that the claims at issue were not directed to eligible subject matter under 35 U.S.C. § 101. The court's one-paragraph per curiam opinion was followed by five separate non-precedential opinions and an "Additional Reflections" section by Chief Judge Randall Rader presenting diverging views on the proper analytical framework for assessing patent eligibility under 35 U.S.C. § 101. The failure of a majority of the court to agree on a particular analytical framework means that absent a decision by the Supreme Court, there will be much uncertainty as to whether any particular software patent claim is patent-eligible under 35 U.S.C. § 101.
CLS Bank International (CLS) brought an action against Alice Corporation (Alice) seeking declaratory judgment of noninfringement, invalidity, and unenforceability of three of Alice's patents. The claims at issue were directed to systems, computer-readable mediums, and methods related to mitigating risk in financial transactions through the use of third-party validation of the parties' obligations. The district court granted summary judgment of invalidity under 35 U.S.C. § 101, and entered final judgment in favor of CLS.
Four opinions dissented from Judge Lourie's conclusion that all of the claims were patent ineligible. The fiercest division within the court involved the patent eligibility of the system claim, with five of the ten judges concluding that the system claim should be found patent eligible.
Dissenting from the court's holding, Judge Linn pens an opinion joined by Judge O'Malley finding that, based on the trial record, all of the claims should be found to be patent-eligible. Judge Linn criticizes the other opinions for ignoring that trial record, and particularly the parties' stipulation and the trial court's finding that the claims were computer-implemented and the detailed description of that implementation in the patent specification.
1CLS, No. 2011-1301, slip op. at 8 (Lourie, J., concurring).
2 Id. at 8 (quoting Diamond v. Diehr, 450 U.S. 175, 185 (1981)).
9 Id. at 21, 35 (quoting Bilski v. Kappos, 130 S. Ct. 3218, 3230 (2010)).
10 CLS, No. 2011-1301, slip op. at 16 (Rader, C.J., concurring in part and dissenting in part).
12 CLS, No. 2011-1301, slip op. at 2-3 (Moore, J., dissenting).
13 CLS, No. 2011-1301, slip op. at 4 (Newman, J., concurring in part and dissenting in part).
14 CLS, No. 2011-1301, slip op. at 5 (Rader, C.J., "Additional Reflections of Chief Judge Rader").
15 CLS, No. 2011-1301, slip op. at 3 (Moore, J., dissenting).

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