Alice Corp. Pty. LTD v. CLS Bank Int’l

Summarized by:

  • Court: Intellectual Property Archives
  • Area(s) of Law: Patents
  • Date Filed: 06-19-2014
  • Case #: 13-298
  • Judge(s)/Court Below: United States Supreme Court
  • LexisNexis Citation: 2014 U.S. Lexis 4303
  • Westlaw Citation: 2014 WL 2765283
  • Full Text Opinion

The mere use of a computer is not sufficient to transfer ma claim from a patent-ineligible abstract idea to a patent-eligible invention.

Opinion (Thomas):
CLS Bank facilitates money transactions and Alice Corporation is an assignee of patents for financial exchanges. CLS argued that the patent claims were invalid and the District
Court held for CLS because the patents were "directed to an abstract idea".

The Federal Circuit court affirmed the ruling.
The United States Supreme Court granted certiorari and AFFIRMS the ruling of the Federal Circuit court.

According to the Patent Act, inventions and processes eligible for patent protection must be "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof."

The Supreme Court, in Association for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. ___, ___, 133 S. Ct. 2107, 186 L. Ed. 2d 124, 133 (2013), previously held that "abstract ideas are not attemptable."
In order to determine which patents are eligible for protection, the Supreme Court first determines if the issues are abstract ideas, natural phenomena, or claims of law of nature.
As a second steep, the court analyses the "inventive concept" of the claims to determine if the patent as a whole is "sufficient to ensure that the patent amounts to significantly more than a patent upon the [ineligible concept] itself."

As held in the case of Bilski v. Kappos, 561 U.S. 593, 130 S. Ct. 3218, 177 L. Ed. 2d 792 (2010), hedging was determined to be a "fundamental economic practice" so it follows that Alice's patent claim for risk mitigation is fairly abstract is beyond the protection of the Patent Act.

However, the Court proceeded to step two of the analysis to determine if Alice's patents had any "inventive concepts" that transformed it from an abstract idea to a claim worth protection under the Patent Act.

The use of a computer does not alter the analysis at this step unless the claim is specific about the formula or equation used. The Court stated that the "mere recitation of a generic computer" is not sufficient to "transform a claim from a patent-ineligible abstract idea into a patent-eligible invention."

For these reasons, the Court AFFIRMED the judgment of the Federal Circuit Court of Appeals.

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