Opinion ID: 867144
Heading Depth: 2
Heading Rank: 1

Heading: Alice’s Patents

Text: Alice, an Australian company, owns the ’479, ’510, ’720, and ’375 patents by assignment. The patents, which 1 While Chief Judge Rader is correct to note that no single opinion issued today commands a majority, seven of the ten members, a majority, of this en banc court have agreed that the method and computer-readable medium claims before us fail to recite patent-eligible subject matter. In addition, eight judges, a majority, have con- cluded that the particular method, medium, and system claims at issue in this case should rise or fall together in the § 101 analysis. CLS BANK INTERNATIONAL v. ALICE CORPORATION 3 all derive from the same family and share substantially the same specification, concern “the management of risk relating to specified, yet unknown, future events.” ’479 patent col. 1, ll. 8–10. In particular, the patents relate to a computerized trading platform used for conducting financial transactions in which a third party settles obligations between a first and a second party so as to eliminate “counterparty” or “settlement” risk. CLS Bank, 768 F. Supp. 2d at 224. Settlement risk refers to the risk to each party in an exchange that only one of the two parties will actually pay its obligation, leaving the paying party without its principal or the benefit of the counterparty’s performance. Alice’s patents address that risk by relying on a trusted third party to ensure the exchange of either both parties’ obligations or neither obligation. Id. For example, when two parties agree to perform a trade, in certain contexts there may be a delay between the time that the parties enter a contractual agreement obligating themselves to the trade and the time of settlement when the agreed trade is actually executed. Ordinarily, the parties would consummate the trade by paying or exchanging their mutual obligations after the intervening period, but in some cases one party might become unable to pay during that time and fail to notify the other before settlement. Id. As disclosed in Alice’s patents, a trusted third party can be used to verify each party’s ability to perform before actually exchanging either of the parties’ agreed-upon obligations. Id.; see also ’479 patent col. 5 ll. 61–63 (“The invention also encompasses apparatus and method dealing with the handling of contracts at maturity, and specifically the transfer of entitlement.”). The claims currently before the court include claims 33 and 34 of the ’479 patent and all claims of the ’510, ’720, and ’375 patents. The relevant claims of the ’479 and ’510 patents recite methods of exchanging obligations between parties, the claims of the ’720 patent are drawn 4 CLS BANK INTERNATIONAL v. ALICE CORPORATION to data processing systems, and the claims of the ’375 patents claim data processing systems as well as computer-readable media containing a program code for directing an exchange of obligations.