To you patent law students out there who are stuck with CLS Bank for an upcoming turn in the Socratic hot seat … “You’re welcome.”
CLS Bank Intl. v. Alice Corp.
598 F.3d 1336 (2013)
PROCEDURAL HISTORY:
– In 2007, CLS filed suit against Alice regarding patents nos. 5970479, 6912510, and 7149720
– Parties renewed cross-motions regarding validity question under §101 after Bilski decision (2010)
– United States District Court for the District of Columbia granted summary judgment
– Upon appeal in 2012, Federal Circuit panel reversed as to method, system, and media claims
– CLS Bank petition for rehearing en banc granted
ISSUES:
– What test should the court adopt to determine whether a computer-implemented invention is a patent-ineligible abstract idea?
– When, if ever, does the presence of a computer in a claim lend patent eligibility to an otherwise patent-ineligible idea?
– In assessing patent eligibility under §101 of a computer-implemented invention, should it matter whether the invention is claimed as a method, system, or storage medium?
– Should related method, system, and/or media claims at times be considered equivalent for §101 purposes?
FACTS:
– Alice assigned patents regarding computerized escrow (automated trusted third party)
– Parties stipulated that method claims require computer implementation
– CLS Bank argued that method of escrow is “fundamental and ancient”
RULES:
– No single opinion commands a majority
– Proposed patent-eligibility analysis steps:
1) Claim to eligible subject matter?
2) Claim barred by judicially-created exception?
2.a) What is the fundamental concept at risk of preemption?
2.b) What is the practical likelihood of preemption?
2.b.i. Is the fundamental concept disembodied? (no inventive concept)
– 2.b.i.a. Genuine human contribution? (invented, not discovered)
– 2.b.i.b. Non-trivial human contribution? (practical effect, not routine)
2.b.ii. Is the fundamental concept preempted? (subsume all applications)
– Preemption test IS NOT to be confused with novelty § 102 and nonobviousness § 103 analyses
– All issued patent claims receive a statutory presumption of validity (§ 282)
REASONING:
– §101 only addresses patent eligibility, not overall patentability
– Preemption is the primary focus in applying the common law exceptions to §101
NOT seeking to eliminate preemption per se
Rather, ineligibility is based on wholesale preemption
– patent-eligible claim must include limitations that
— 1) add “significantly more” (Prometheus) to the basic principle (no disembodiment)
— 2) with the result that the claim covers significantly less (no preemption)
– (past case “guideposts” caution against overly formalistic approach / bright line rules)
– As to Alice’s method claims
1) Eligible subject matter? Yes, method recites a process
2.a) Fundamental concept? Abstract idea of reducing settlement risk (a form of escrow)
2.b.i) Disembodied?
FAIL: As in Bilski, upholding Alice’s claims to methods of financial intermediation “would pre-empt use of this approach in all fields, and would effectively grant a monopoly over an abstract idea.”
– As to Alice’s computer-readable medium claims
Claims in Beauregard format
1) Eligible subject matter? Yes, subject matter is a physical (storage) device
2.a) Fundamental concept? Every substantive limitation drawn to escrow method steps
FAIL: Therefore, fails preemption test for same reasons as method claims
– As to Alice’s system claims
Claims recite “data processing systems” configured to enable escrow functionality
1) Eligible subject matter? Yes, subject matter is tangible devices as system components
2.a) Fundamental concept? “None of the recited hardware offers a meaningful limitation beyond generally linking ‘the use of the [method] to a particular technological environment,’ that is, implementation via computers. Bilski, 130 S. Ct. at 3230 (quoting Diehr, 450 U.S. at 191)”
FAIL: Therefore, fails preemption test for same reasons as method claims
HOLDING: Asserted method, system, and computer-readable media claims are ineligible subject matter
JUDGMENT: Affirmed district court finding of invalidity
Next time, more case briefs on the responses to Judge Lourie’s opinion.
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