On June 19, 2014, the U.S. Supreme Court issued a unanimous decision in Alice Corp. v. CLS Bank Int’l (Alice)[i].  In Alice, the Court held that several patents that pertained to a computerized platform for eliminating risk in conducting financial transactions between two parties were ineligible for patenting under 35 U.S.C. §101[ii].  The Court reasoned that the patents were merely drawn to an abstract idea of intermediated settlement that utilized a “generic computer implementation.”

In response to the decision, the United States Patent and Trademark Office (USPTO) issued preliminary examination instructions to patent examiners for determining the patent eligibility of computer-implemented inventions involving abstract ideas (Guidelines)[iii].  The Guidelines indicated that patent examiners can utilize a two-part analysis for evaluating the patent eligibility of abstract ideas.  First, examiners must “determine whether the claimed invention is directed to an abstract idea.”  Second, if an abstract idea is present, the examiners must determine whether the claimed invention is sufficient to ensure that it amounts to “significantly more than the abstract idea itself.”[iv]

Since the issuance of Alice and the Guidelines, the USPTO and the lower courts have challenged numerous computer-implemented inventions.  For instance, the USPTO has withdrawn the notice of allowances for several patent applications that were deemed to be patent ineligible in view of Alice.  Likewise, several lower court decisions have relied on Alice to invalidate computer-implemented patents.  Some examples of these court decisions are summarized below:

• Digitech Image Technologies v. Electronics for Imaging, Inc., et al., C.A. No. 2013-1600-1618 (U.S. Fed. Cir., July 11, 2014). A patent that utilized a computerized system to ensure that images displayed consistently on different kinds of devices (e.g., computer screens and printers) was held to be invalid because the computer-implemented processes were allegedly abstract ideas that could have been performed by human beings.
• Planet Bingo, LLC v. VKGS, LLC, C.A. No. 2013-1663 (U.S. Fed. Cir., August 26, 2014).   Patents relating to the implementation of a bingo game on a computer were held to be invalid because the processes were allegedly directed to abstract ideas (i.e., mental steps) that could have been performed by human beings through the use of “pen and paper.”
• Buysafe, Inc. v. Google, Inc., C.A. No. 2013-1575 (U.S. Fed. Cir., September 3, 2014).  A patent directed to methods and machine-readable media encoded to perform steps for guaranteeing a party’s performance of its online transaction was held to be invalid because the methods and media were allegedly directed to an abstract idea.
• Dietgoal Innovations, LLC v. Bravo Media LLC, C.A. No. 13 Civ-08391-PAE (U.S. Dist. Ct., S.D.N.Y, July 8, 2014).  A patent relating to the use of a computer to plan meals and achieve diet goals was held to be invalid because the process was directed to an abstract idea that could have been performed by human beings.
• Comcast IP Holdings, LLC v. Sprint Communications Company L.P., et al., C.A. No. 12-205-RGA (U.S. Dist. Ct., Del., July 16, 2014).  A patent relating to a computerized telecommunications system that checked with a user before deciding whether or not to establish a new connection was held to be invalid because the process was allegedly directed to an abstract idea that could have been performed by human beings.
• CMG Financial Services, Inc. v. Pacific Trust Bank, F.S.B., C.A. No. CV-11-10344 PSGA (U.S. Dist. Ct., C.D.CA., August 29, 2014).   A patent on a method of paying down a mortgage early when funds are available and then borrowing funds as needed to reduce the overall interest charged by the mortgage was held to be invalid  because the process was allegedly directed to an abstract idea.
• Loyalty Conversion Systems v. American Airlines, Inc. et al., C.A. No. 2:13-CV-655 (U.S. Dist. Ct., E.D.TX., September 3, 2014). Patents on computer-implemented systems for converting reward points from one store to another store was held to be invalid because the process was allegedly directed to an abstract idea without any significant additions.
• Walker Digital, LLC v. Google, Inc., C.A. No. 11-318-LPS (U.S. Dist. Ct., Del., September 3, 2014).  Patents directed to systems and methods for controlling the release of confidential or sensitive information in anonymous communications was held to be invalid because the systems and processes were allegedly directed to abstract ideas.
• Tuxis Tech v. Amazon, C.A. No. 13-1771-RGA (U.S. Dist. Ct., Del., September 3, 2014).  A patent directed to a computerized process for individualizing up-selling based on the identities of the purchaser and the product to be purchased was held to be invalid because the process was allegedly directed to an abstract idea.
• Eclipse IP, LLC v. McKinley Equipment Corporation, C.A. No. CV-14-154-GW(AJWx) (U.S. Dist. Ct., C.D.CA., September 4, 2014).  Patents directed to computer-implemented systems for asking people to perform tasks and monitoring the performance of those tasks were held to be invalid because the systems were allegedly directed to abstract ideas.
• Every Penny Counts, Inc. v. Wells Fargo Bank, N.A., C.A. No. 8:11-CV-2826-T-23TBM (U.S. Dist. Ct., M.D.FL., September 11, 2014).  Patents directed to methods and systems for automated saving or automated charitable giving were held to be invalid because they were allegedly directed to abstract ideas.
• McRO (Planet Blue) v. Activision Blizzard, et al., C.A. No. CV-14-336-GW(FFMx), (U.S. Dist. Ct., C.D. CA., September 22, 2014).  Patents directed to computer-implemented methods of automatically animating lip synchronization and facial expression of animated characters were held to be invalid because they were allegedly directed to abstract ideas.
•  Open Text v. Alfresco Software, C.A. No. 13-CV-04843-JD (U.S. Dist. Ct., N.D. CA, Sept. 19, 2014).  A patent directed to a computer readable storage medium for facilitating a network based dialogue with customers was held to be invalid because it was allegedly directed to an abstract idea.

The aforementioned developments could make it easier to challenge inventions directed to software, computer implementations, and business methods.  However, it is doubtful that all software, computer-implemented and business method inventions will be affected by Alice.  For instance, software inventions that improve the functioning of a computer may still be eligible for patent protection.  Likewise, software inventions that improve other technical fields may also be eligible for patent protection.  Nonetheless, the full effect of Alice remains to be determined.