Source: http://askcreditcard.com/2014/09/13/alice-corp-v-cls-bank-intl-general-purpose-computers-cannot-save-claims-directed-to-abstract-ideas/
Timestamp: 2019-02-20 00:45:52
Document Index: 75642938

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

Alice Corp. v. CLS Bank Int’l: General Purpose Computers Cannot Save Claims Directed to Abstract Ideas – Askcreditcard.com
In the U.S. Supreme Court’s decision today in Alice Corp. v. CLS Bank International, the Court affirmed the invalidity of Alice’s patents for computer implemented methods of reducing settlement risk. This case reached the high court after a severely split Federal Circuit could not agree whether language of the claims met the patent-eligibility requirements of 35 U.S.C. § 101. At the heart of this case was the Federal Circuit’s confusion over the impact of the Court’s 2012 decision, Mayo Collaborative Services v. Prometheus Laboratories, Inc. In Mayo, Justice Breyer set forth a two-part test for determining whether a claim is directed to a patent-ineligible “abstract idea” and, if so, whether the claim also contains enough substance to amount to “significantly more than [the ineligible concept] itself.”
This test, however, resulted in muddle in the lower courts – it appeared to combine the patenteligibility analysis of § 101 with the novelty and non-obviousness analyses of §§ 102 and 103 in a way that contradicted the Court’s prohibition against doing so in Diamond v. Diehr. Further, Mayo was unclear on the extent to which physical components could be tied to an otherwise abstract claim in order to render the claim patent-eligible.
Please see full alert below fore more information.
MBHB snippets Alert June 19, 2014
Alice Corp. v. CLS Bank Int’l: General Purpose Computers Cannot Save Claims Directed
to Abstract Ideas
By: Rory P. Shea and Michael S. Borella, Ph.D.
In the U.S. Supreme Court’s decision today in Alice Corp. v. CLS Bank International, the Court
affirmed the invalidity of Alice’s patents for computer-implemented methods of reducing
settlement risk. This case reached the high court after a severely split Federal Circuit could not
agree whether language of the claims met the patent-eligibility requirements of 35 U.S.C. § 101.
At the heart of this case was the Federal Circuit’s confusion over the impact of the Court’s 2012
decision, Mayo Collaborative Services v. Prometheus Laboratories, Inc. In Mayo, Justice Breyer
set forth a two-part test for determining whether a claim is directed to a patent-ineligible
“abstract idea” and, if so, whether the claim also contains enough substance to amount to
“significantly more than [the ineligible concept] itself.”
This test, however, resulted in muddle in the lower courts – it appeared to combine the patent-
eligibility analysis of § 101 with the novelty and non-obviousness analyses of §§ 102 and 103 in
a way that contradicted the Court’s prohibition against doing so in Diamond v. Diehr. Further,
Mayo was unclear on the extent to which physical components could be tied to an otherwise
abstract claim in order to render the claim patent-eligible.
Writing for a unanimous Court, Justice Thomas found that Alice’s invention was drawn to the
abstract idea of “intermediated settlement, i.e., the use of a third party to mitigate settlement
risk.” Not unlike “risk hedging” – which was the subject of the claims that the Court struck down
in 2010’s Bilski v. Kappos – Justice Thomas found that “intermediated settlement” is a
“fundamental economic practice long prevalent in our system of commerce,” and is therefore an
“abstract idea” beyond the scope of § 101. In so finding, the Court rejected Alice’s argument that
abstract ideas are limited to “preexisting, fundamental truth[s]” that “exis[t] in principle apart from
any human action.”
Moving on to step two of the test, Justice Thomas stated that “the mere recitation of a generic
computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention.” In
his view, adding a computer limitation to otherwise abstract claim language would be
tantamount to a draftsman’s trick, despite the computer being physical and not abstract. Justice
Thomas went on to find that using a “generic computer” to carry out each of Alice’s claimed
steps was “purely conventional” performance of “generic computer functions.” In other words,
Justice Thomas believed that “the claims at issue amount to ‘nothing significantly more’ than an
instruction to apply the abstract idea of intermediated settlement using some unspecified,
generic computer,” which “is not ‘enough’ to transform an abstract idea into a patent-eligible
invention.” Thus, because the computer structure “add[ed] nothing of substance to the
underlying abstract idea,” the Court invalidated all of Alice’s claims, including its method,
computer-readable media, and system claims.
This case does serve to address some of the post-Mayo § 101 confusion. Justice Thomas used
several references (though not all were strictly “prior art”) to establish that Alice’s claimed
mitigation of settlement risk was known in the art. He also considered generic computer
hardware and functionality to be routine and conventional, and applied both of these
observations to strike down Alice’s claims. Thus, the separation of the §§ 101, 102, and 103
analyses mandated by Diehr appears to be a thing of the past.
On the other hand, it is still unclear to what extent a method claim needs to be tied to a physical
device in order to be patent eligible. Justice Thomas did hint that some abstract ideas intended
to “improve the functioning of [a] computer itself” or other technologies may pass the § 101 bar,
but he did not provide any further guidance regarding this notion.
This case continues the trend of two other patent cases decided this term, Limelight Networks,
Inc. v. Akamai Technologies, Inc. and Nautilus, Inc. v. Biosig Instruments, Inc., in which the
Court has placed further limits on the scope of patent protection. Consequently, we are likely to
see new attacks on the validity of patents during litigation, and more emphasis on focused claim
drafting during prosecution.
The opinion can be found at http://www.supremecourt.gov/opinions/13pdf/13-298_7lh8.pdf.
Rory P. Shea is a partner with McDonnell Boehnen Hulbert & Berghoff LLP. Mr. Shea practices
in all areas of intellectual property law, with a particular emphasis on patent litigation and patent
preparation and prosecution in the areas of electrical engineering, computer software and
hardware, and telecommunications. shea@mbhb.com
Michael S. Borella, Ph.D., is an associate with McDonnell Boehnen Hulbert & Berghoff LLP.
Dr. Borella conducts legal research and provides technological advice in support of validity,
infringement and patentability analyses, and litigation matters, with a focus on software
engineering, networking, telecommunications, and mobile applications. borella@mbhb.com
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September 15, 2014 james_parrott Reply
But Greg, why use CPI as a benchmark when needs are rising (like homelessness), important new initiatives are undertaken (UPK), or long overdue problems are addressed (NYCHA repai1, Rike1 problems)? Over the 2014-18 period, NYC pe1onal income is projected to grow by 17.1% (greater than growth in City spending.) I guess the a1wer to your question is “no.”