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Alice Corp. Pty. Ltd. v. CLS Bank Int'l

Supreme Court of the United States

March 31, 2014, Argued; June 19, 2014, Decided

No. 13-298

Case Summary

Procedural Posture

A currency transaction facilitator sued a patent assignee, alleging that the claims disclosing schemes to manage certain forms of financial risk were invalid, unenforceable, or not infringed. A district court held that all of the claims were patent ineligible. The United States Court of Appeals for the Federal Circuit affirmed the judgment. Certiorari was granted.

Overview

The patents at issue disclosed a computer-implemented scheme for mitigating settlement risk, i.e., the risk that only one party to a financial transaction would pay what it owed, by using a third-party intermediary. The issue was whether the claims were patent eligible under 35 U.S.C.S. § 101, or were instead drawn to a patent-ineligible abstract idea. The claims at issue were drawn to the abstract idea of intermediated settlement, and as such, the claims were directed to a patent-ineligible concept. Specifically, the concept of intermediated settlement was a fundamental economic practice, and the use of a third-party intermediary was a building block of the modern economy. The method claims, which merely required generic computer implementation, failed to transform the abstract idea into a patent-eligible invention. The computer components of the patent's method added nothing that was not already present when the steps were considered separately. The assignee's claims to a computer system and a computer-readable medium failed for substantially the same reasons.

Outcome

The judgment was affirmed. Unanimous decision; 1 concurrence.

LexisNexis® Headnotes

 

 

Patent Law > Subject Matter > General Overview

HN1 See 35 U.S.C.S. § 101.

 

Patent Law > Subject Matter > General Overview

HN2 Judicial precedent has long held that 35 U.S.C.S. § 101 contains an important implicit exception: Laws of nature, natural phenomena, and abstract ideas are not patentable.

 

Patent Law > Subject Matter > General Overview

HN3 Judicial precedent treads carefully in construing the exclusionary principle that the laws of nature, natural phenomena, and abstract ideas are not patentable lest it swallow all of patent law. At some level, all inventions embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas. Thus, an invention is not rendered ineligible for patent simply because it involves an abstract concept. Applications of such concepts to a new and useful end remain eligible for patent protection.

 

Patent Law > Subject Matter > General Overview

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573 U.S. 208 ; 134 S. Ct. 2347 ; 189 L. Ed. 2d 296 ; 2014 U.S. LEXIS 4303 ; 110 U.S.P.Q.2D (BNA) 1976; 82 U.S.L.W. 4508; 24 Fla. L. Weekly Fed. S 870; 2014 WL 2765283

ALICE CORPORATION PTY. LTD., Petitioner v. CLS BANK INTERNATIONAL et al.

Notice: The LEXIS pagination of this document is subject to change pending release of the final published version.

Prior History:  [1] ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

CLS Bank Int'l v. Alice Corp. Pty, 717 F.3d 1269, 2013 U.S. App. LEXIS 9493 (Fed. Cir., 2013)

Disposition: Affirmed.