Increase in Cases Finding Patent Ineligible Subject Matter


Since the United States Supreme Court's 2010 decision in Bilski v. Kappos, holding that a computer-assisted method of hedging risk in the field of commodities trading was unpatentable under §101 of the Patent Act, courts have increasingly used §101 to invalidate patent claims that use computers or the internet to perform the steps of an abstract idea. The United States Supreme Court long has held that claims covering nothing more than abstract ideas are not eligible for patent protection under §101. However, if a claim includes meaningful limitations that make it clear that the claim is not limited to an abstract idea alone, but rather to a non-routine and specific application of the idea, then the claim may be allowed.  
Examples of patent claims that have been held invalid under §101 after a finding of ineligible subject matter include:

  • a method and system for detecting fraud in a credit card transaction between a consumer and a merchant over the internet, using a computer system
  • a computer-assisted system and method for managing a stable value protected investment plan
  • a computer-aided method and system for processing credit applications over an electronic network
  • a computer program for handling insurance-related tasks
  • a computerized trading platform used for conducting financial transactions in which a third party settles obligations between a first and second party to eliminate settlement risk
  • a system using a central database to practice a method of hiring temporary workers

In many of these cases, the courts concluded that claiming a computer implementation of a purely mental process that could otherwise be performed without a computer (or the internet) does not render a claim patentable. The key is whether the claim contains limitations that meaningfully tie the abstract idea to an actual application of that idea.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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