Supreme Court Unanimously Affirms Federal Circuit’s Decision in CLS Bank: Alice Corp. Pty. Ltd. v. CLS Bank Int’l, No. 13-298


On June 19, 2014, the U.S. Supreme Court affirmed the Federal Circuit’s decision holding that the method, computer-readable medium, and system claims at issue in CLS Bank are not directed to eligible subject matter under 35 U.S.C. § 101. Alice Corp. Pty. Ltd. v. CLS Bank Int’l, No. 13-298 (June 19, 2014). Unlike the Federal Circuit’s fractured en banc decision, the Supreme Court’s opinion is unanimous and unambiguously defines the standard for applying the “abstract ideas” exception for patent eligibility determinations under 35 U.S.C. § 101. In particular, the Supreme Court made clear that (1) the “abstract idea” exception is not limited to preexisting, fundamental truths (the Supreme Court declined to consider the outer limits of the “abstract idea” exception) and (2) the implementation of an abstract idea in a particular technological environment—in CLS Bank, implementation via a computer—is not alone sufficient to transform an abstract idea into something that is patent-eligible.

Although the Supreme Court’s opinion is not the death knell for business method patents, the CLS Bank standard will likely make it easier to challenge the validity of business method patents under § 101. Further, in a separate concurring opinion, Justices Sotomayor, Ginsburg, and Breyer made clear their belief that business methods are patent-ineligible because they do not qualify as a “process” under § 101. Finally, by issuing yet another unanimous opinion in a patent case, the Supreme Court again confirmed that it will continue to resolve core, and frequently divisive, patent-law issues, notwithstanding the specialized expertise offered by the Federal Circuit.

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