Source: http://www.akerman.com/documents/res.asp?id=1417
Timestamp: 2013-05-26 07:44:28
Document Index: 603464368

Matched Legal Cases: ['§101', '§101', '§101', '§101', '§102', '§112', '§101', '§102', '§101']

Akerman - News & Publications - Patentable Computer System or Unpatentable Abstract Idea: The Federal Circuit 'Clarifies' the Supreme Court
Patentable Computer System or Unpatentable Abstract Idea: The Federal Circuit "Clarifies" the Supreme Court
by Richard P. Gilly
In a recent decision, the Federal Circuit held that a computer-based financial transaction platform was eligible for patenting under 35 U.S.C. §101 of the patent laws, reversing the District Court's holding that the patent was invalid as claiming merely an abstract idea. The majority opinion in the case, CLS Bank v. Alice Corp, Fed. Cir. 11-1201, stated that the exclusion of so-called "abstract ideas" from being eligible for patenting would only apply to patent claims where it was "manifestly evident" that the claim language was directed to an abstract idea. It is significant that this ruling, finding the computer trading platform eligible for patenting, follows on the heels of a contrary holding of the U.S. Supreme Court in Mayo Collaborative Services v. Prometheus Laboratories, 132 S.Ct. 1289 (2012). In the Prometheus case, the Supreme Court reversed the Federal Circuit and held instead that a medical diagnostic procedure was an unpatentable law of nature. (It is longstanding jurisprudence that laws of nature, like algorithms and abstract ideas, are not eligible for patenting under 35 U.S.C. §101, whereas applications of laws of nature may be patent-eligible.) The Alice ruling by the Federal Circuit likewise comes in the face of a remand by the Supreme Court to the Federal Circuit of another computer software case, Ultramercial v. Hulu, to reconsider its decision in light of the Supreme Court's decision in Prometheus.
In the Alice case, the Federal Circuit clarified that the patent eligibility determination of 35 U.S.C. §101 is only a gatekeeper to the patent system, a threshold test. More specifically, even if a claim is patent-eligible under 35 U.S.C. §101, it may still not be patentable by virtue of either lacking novelty or being obvious based on prior art, as provided by 35 U.S.C. §§102, 103, respectively, or the claims may not be sufficiently described or enabled, under 35 U.S.C. §112. What is significant about the Federal Circuit's "clarification" is that the Supreme Court, in the Prometheus decision, had rejected a similar view taken by the U.S. Solicitor General, who appeared as an amicus in that case, and who had urged the Supreme Court to adopt a low threshold for 35 U.S.C. §101, patent-eligibility, and let 35 U.S.C. §§102, 103, and 112, perform the screening functions for the patent system. Implications of Alice for Computer-Implemented Systems and Methods
The finding of patent eligibility by the Federal Circuit in the Alice case will no doubt ease concerns for patent holders of computer-implemented systems and methods. Such patents have come under increased scrutiny since the Supreme Court's decision in In re Bilski, 130 S.Ct. 3218 (2010) invalidating a claim as merely an "abstract idea."
One of the claims of the patents at issue in Alice called for (1) a data processing system with a data storage unit having certain particular records stored thereon, and (2) a computer "configured" (a) to receive and perform certain specific transactions related to the records stored on the database and (b) to generate appropriate instructions to permit two unrelated third parties to satisfy financial obligations without one being able to renege on the other.
The Federal Circuit in Alice noted that merely implementing an abstract idea on a computer will not render an invention patentable. Instead, adding a computer to a patent claim must "impose a meaningful limit on the scope of the claim and play a significant part in permitting the claimed method to be performed, rather than functioning solely as an obvious mechanism for permitting a solution to be achieved more quickly, i.e. , through the utilization of a computer for performing calculations . . . ." The court also ruled that it must consider the asserted claim as a whole and not paraphrase the claim in overly simplistic generalities when deciding whether that claim is patentable.
Applying this standard, the court decided that the lower court oversimplified Alice Corp.'s patent claims and failed to analyze them as a whole. The court ruled that the computer-imposed limitations on the underlying abstract idea in Alice Corp.'s patents played a significant part in the performance of Alice Corp.'s invention. The court held that Alice Corp.'s claim limitations could be characterized "as being integral to the method as playing a significant part in permitting the method to be performed, and as not being token post-solution activity." Additionally, because a party must use a very specific type of financial account to perform Alice Corp.'s patent, the court held that Alice Corp.'s patent claims do not preempt innovation related to the concept of using intermediaries in financial transactions to minimize risk. Judge Prost's Dissent and the Federal Circuit's Interpretation of Prometheus
The three-judge panel in Alice included a vociferous dissent by Judge Prost, arguing that the majority opinion "failed to follow the Supreme Court's instructions" in Prometheus v. Mayo, which held that the "prohibition against patenting abstract ideas cannot be circumvented by attempting to limit the use of the formula to a particular technological environment."
The dissent argued that Alice Corp.'s patent claims, when "stripped of jargon," simply presented the abstract idea of a financial intermediary "and then says apply it." Judge Prost then argued the that computer implementation described in Alice Corp.'s claim does not make its invention patentable, because the Federal Circuit had previously decided that inventions with similar computer implementations did not limit or modify an abstract idea enough to make those inventions patentable.
Despite the signals from the U.S. Supreme Court to carefully scrutinize computer-related inventions under 35 U.S.C. §101, the Federal Circuit nonetheless found in the Alice case that the computer system and method claims did more than simply implement an abstract idea. The dissent in Alice felt the claim language of the Alice claims was simply window dressing and thus improperly claimed an abstract idea. So, in view of the split on the three-judge panel in Alice, it will be interesting to see if the Supreme Court further clarifies the "abstract idea" exception to patent eligibility in the computer or software context. This Akerman Practice Update is intended to inform firm clients and friends about legal developments, including recent decisions of various courts and administrative bodies. Nothing in this Practice Update should be construed as legal advice or a legal opinion, and readers should not act upon the information contained in this Practice Update without seeking the advice of legal counsel. Prior results do not guarantee a similar outcome.
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