In a unanimous decision authored by Justice Thomas, the Supreme
Court today affirmed the Federal Circuit's en banc
decision invalidating the patents asserted by Alice Corporation
against CLS Bank International as ineligible for patent protection
under 35 U.S.C. §101 because they are directed to an abstract
idea. See Alice Corporation Pty. Ltd. v. CLS Bank International
et al. (U.S. June 19, 2014). The decision helps define the
boundary between patent-eligible and patent-ineligible subject
matter, in an area of law that has become increasingly fractured,
as evidenced by the Federal Circuit's en banc
decision, which consisted of seven separate opinions advancing a
medley of different positions regarding patent eligibility.
Justice Thomas followed the analytic framework the Court previously
set forth in Mayo Collaborative Services v. Prometheus
Laboratories, Inc., 132 S. Ct. 1289 (2012), in which the Court
set forth a two part test to distinguish patents claiming
patent-ineligible laws of nature, natural phenomena, or abstract
ideas, from those that claim patent-eligible applications of such
concepts. At Mayo step one, one must determine whether the
claims are directed to patent-ineligible concepts. Then, at
Mayo step two, one must consider the elements of each
claim individually and as a combination to determine whether the
claims contain any additional elements that "transform the
nature of the claim" into a patent-eligible application.
In applying Mayo step one, the Court determined that
Alice's claims were drawn to the abstract concept of
intermediated settlement (i.e., the use of a third party
to mitigate settlement risk). Rejecting Alice's arguments that
the abstract-ideas category is confined to preexisting fundamental
truths that exist apart from any human action, the Court ruled that
intermediated settlement has long been a fundamental practice in
our system of commerce, and recognized that Alice's claims to
intermediated settlement were not meaningfully distinguishable from
the risk hedging claims it previously held to be abstract in
Bilski v. Kappos, 561 U.S. 593 (2010).
The Court next considered the second step of the Mayo
test, and held that one cannot impart patent eligibility to an
abstract idea merely by claiming the implementation of the abstract
idea on a computer. The Court further pointed out that if the mere
recitation of a computer were the end of the inquiry, there would
be no barrier to monopolization of the abstract idea itself.
Turning to the specific steps recited by the Alice method claims,
the court found that each step simply required the use of a generic
computer to perform generic computer functions, and thus added
nothing to transform the claimed abstract idea of intermediated
settlement into a patent-eligible invention. The Court also
provided some guidance as to what might render an otherwise
abstract claim patent-eligible, suggesting that, for example, it
may be "enough" if a claim purports to improve the
functioning of the computer itself or effects an improvement in
another technology or technical field.
The computer system and computer media claims fared no better
– Alice had already conceded that the computer media claims
would rise or fall with its method claims, and the Court determined
that the "specific hardware" elements recited in the
claims were purely functional and generic computer
components.
In a brief concurring opinion, Justice Sotomayor, joined by
Justices Ginsburg and Breyer, opined that claims to business
methods are ineligible per se for patent protection,
because they do not qualify as a process under 35 U.S.C.
§101.
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