Patent Watch: CLS Bank Int'l v. Alice Corp.

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[T]hough much is published today discussing the proper approach to the patent eligibility inquiry, nothing said today beyond our judgment has the weight of precedent.

On May 10, 2013, in CLS Bank Int'l v. Alice Corp., the U.S. Court of Appeals for the Federal Circuit (Rader, Newman, Lourie, Linn, Dyk, Prost, Moore, O'Malley, Reyna, Wallach) en banc issued a per curiam opinion affirming the district court's holding that the asserted method and computer-readable media claims of U.S. Patents No. 5,970,479, No. 6,912,510, No. 7,149,720 and No. 7,725,375, which related to a computerized trading platform for exchanging obligations in which a trusted third party settles obligations between a first and second party so as to eliminate settlement risk, were not directed to patent eligible subject matter under 35 U.S.C. § 101.

Chief Judge Rader stated:

No portion of any opinion issued today other than our Per Curiam Judgment garners a majority. The court is evenly split on the patent eligibility of the system claims. Although a majority of the judges on the court agree that the method claims do not recite patent eligible subject matter, no majority of those judges agrees as to the legal rationale for that conclusion. Accordingly, though much is published today discussing the proper approach to the patent eligibility inquiry, nothing said today beyond our judgment has the weight of precedent.

Judge Lourie (joined by Judges Dyk, Prost, Reyna and Wallach) stated:

[T]he proper focus is not preemption per se, for some measure of preemption is intrinsic in the statutory right granted with every patent to exclude competitors, for a limited time, from practicing the claimed invention. Rather, the animating concern is that claims should not be coextensive with a natural law, natural phenomenon, or abstract idea; a patent-eligible claim must include one or more substantive limitations that, in the words of the Supreme Court, add "significantly more" to the basic principle, with the result that the claim covers significantly less. Thus, broad claims do not necessarily raise § 101 preemption concerns, and seemingly narrower claims are not necessarily exempt. What matters is whether a claim threatens to subsume the full scope of a fundamental concept, and when those concerns arise, we must look for meaningful limitations that prevent the claim as a whole from covering the concept's every practical application. . . . The requirement for substantive claim limitations beyond the mere recitation of a disembodied fundamental concept has "sometimes" been referred to as an "inventive concept." . . . An "inventive concept" in the § 101 context refers to a genuine human contribution to the claimed subject matter. "The underlying notion is that a scientific principle . . . reveals a relationship that has always existed." From that perspective, a person cannot truly "invent" an abstract idea or scientific truth. He or she can discover it, but not invent it. Accordingly, an "inventive concept" under § 101-in contrast to whatever fundamental concept is also represented in the claim-must be "a product of human ingenuity." In addition, that human contribution must represent more than a trivial appendix to the underlying abstract idea. The § 101 preemption analysis centers on the practical, real-world effects of the claim. [Analyzing patent eligibility] considers whether steps combined with a natural law or abstract idea are so insignificant, conventional, or routine as to yield a claim that effectively covers the natural law or abstract idea itself.

Chief Judge Rader (joined in part by Judges Linn, Moore and O'Malley) stated:

Any claim can be stripped down, simplified, generalized, or paraphrased to remove all of its concrete limita¬tions, until at its core, something that could be characterized as an abstract idea is revealed. Such an approach would "if carried to its extreme, make all inventions unpatentable because all inventions can be reduced to underlying principles of nature which, once known, make their implementation obvious." A court cannot go hunting for abstractions by ignoring the concrete, palpable, tangible limitations of the invention the patentee actually claims. . . . The relevant inquiry must be whether a claim in¬cludes meaningful limitations restricting it to an application, rather than merely an abstract idea. An abstract idea is one that has no reference to material objects or specific examples -- i.e., it is not concrete. A claim may be premised on an abstract idea -- the question for patent eligibility is whether the claim contains limitations that meaningfully tie that idea to a concrete reality or actual application of that idea. [A] claim does not become ineligible simply because it applies a basic tool. [E]ven if a claim does not wholly pre-empt an abstract idea, it still will not be limited meaningfully if it contains only insignificant or token pre-or post-solution activity -- such as identifying a relevant audience, a category of use, field of use, or technological environment. [A] claim is not meaningfully limited if its purported limitations provide no real direction, cover all possible ways to achieve the provided result, or are overly-generalized. . . . When assessing computer implemented claims, while the mere reference to a general purpose computer will not save a method claim from being deemed too abstract to be patent eligible, the fact that a claim is limited by a tie to a computer is an important indication of patent eligibility. This is true both because its tie to a machine moves it farther away from a claim to no more than an idea and because that same tie makes it less likely that the claims will preempt all practical applications of the idea. The key to this inquiry is whether the claims tie the otherwise abstract idea to a specific way of doing something with a computer, or a specific computer for doing something; if so, they likely will be patent eligible, unlike claims directed to nothing more than the idea of doing that thing on a computer. While no particular type of limitation is necessary, meaningful limitations may include the computer being part of the solution, being integral to the performance of the method, or containing an improvement in computer technology. . . . At bottom, where the claim is tied to a computer in such a way that the computer plays a meaningful role in the performance of the claimed invention, and the claim does not preempt virtually all uses of an underlying abstract idea, the claim is patent eligible. [L]ike Judge Lourie, we would hold the method claims in this case are not eligible under Section 101, but would do so for different reasons than he articulates.

 

Topics:  CLS Bank, CLS Bank v Alice Corp, Patent-Eligible Subject Matter, Patents

Published In: Civil Procedure Updates, Intellectual Property Updates, Science, Computers & Technology Updates

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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