E-TIPS® previously reported on the case Alice
Corporation v CLS Bank International (Alice) as it
wound its way through the US court system (see
here). This case was closely watched as the courts struggled
with the issue of what is patentable subject matter under section
101 of the US Patent Act as it relates to business methods
implemented by software.
On June 19, 2014, the US Supreme Court (USSC or Court) issued a
decision, affirming the 5-5 en banc decision of the Court of
Appeals for the Federal Circuit, holding that the patent claims at
issue in Alice were not patentable, as they were drawn to
a patent-ineligible abstract idea.
In Alice, the patents at issue related to the
mitigation of "settlement risk" by using a computer
system as a third-party intermediary. The claims of the patents
claimed methods for exchanging financial obligations and for the
computer systems and computer-readable media containing program
code to carry out the methods of exchanging obligations.
Interestingly, before determining the issue, the USSC noted that
laws of nature, natural phenomena, and abstract ideas are implicit
exceptions from the subject matter eligible for patent protection
under section 101 of the US Patent Act. The Court stated
that the concern driving the exclusion of this subject matter was
to avoid monopolization of these "building blocks of human
ingenuity". However, the USSC noted it should "tread
carefully in construing this exclusionary principle lest it swallow
all of patent law."
The Court then reviewed the two-step test that it had set out in
Mayo v Prometheus (reported by E-TIPS®
here). The first step of the test requires that the claims at
issue be directed to one of the categories of patent-ineligible
subject matter. If yes, the second step of the analysis requires
considering whether the additional elements of the claim are
sufficient to transform that abstract idea into a patent-eligible
Applying the test to the facts at issue, the USSC found that the
claims were directed to an abstract idea because they were drawn to
intermediated settlement, which is a "fundamental economic
The Court further found that the additional elements of the
claims were not sufficient to "transform" the abstract
idea into a patent-eligible application, holding that the method
claims (which merely required generic computer implementation of
the abstract idea) did not cover patent-eligible matter. The Court
similarly rejected the patent eligibility of the media and system
claims at issue.
The use of a computer to improve an existing technological
process could be patentable subject matter, said the Court, as was
the case in Diamond v Diehr, which involved a
computer-implemented process for curing rubber. However, given the
ubiquity of computers, merely reciting generic computer
implementation to turn an abstract idea
into patent-eligible subject matter would permit monopolization
of the abstract idea by a drafting exercise.
In a concurring opinion, in addition to finding that the method
claims at issue were drawn to an abstract idea, Justice Sotomayor,
joined by Justices Ginsburg and Breyer, would have found that
business methods do not qualify as "processes" under
The Federal Court dismissed a motion by Apotex seeking particulars from Allergan's pleading relating to the prior art, inventive concept, promised utility and sound prediction of utility of the patents at issue.
Last year we saw the Canadian Courts release trademark decisions that granted a rare interlocutory injunction, issued jailed sentences for failure to comply with injunctive relief, grappled with trademark and internet issues...
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