Intellectual Property, Pages 685–692

Alice Corp. v. CLS Bank International

Supreme Court of the United States, 2014

Facts:

Petitioner Alice Corporation was assigned several patents about how to manage forms of financial risk. Its system basically made and maintained copies of people's financial records and used them to ensure that transactions were not made without another person's permission. (I.e., an escrow account) The patents claimed this system, a computer system to carry it out, and a hard drive with a program that performed the actions of the system on the computer. (I.e., do it with a computer)

Respondents filed suit against petitioner, seeking a declaratory judgment to declare the claim invalid.

Procedural History:

  • The district court held all of the claims ineligible because they were directed to an abstract idea.

  • The United States court of appeals for the Federal Circuit reversed, holding that it was not "manifestly evident" that petitioner's claims were directed to an abstract idea.

  • The Federal Circuit granted a rehearing en banc, vacated its prior opinion, and affirmed the judgment of the district court.

Issue:

Is an doing an abstract idea with a computer patentable?

Reasoning:

  • It is important that patents neither improperly tie up the future use of building block of human ingenuity nor be excluded just for involving an abstract concept in some way.

  • First, we must find if the claims are in an excluded class, and then if there is an "inventive concept" that ensures that it is more than just a patent upon the ineligible concept.

    1. Based on on the principles in Bilski, it can be seen that the claims here are of abstract ideas. Abstract ideas do not have to be "preexisting, fundamental truth[s]". The methods of hedging risk in Bilski certainly are not. There is no meaningful distinction from that here.
    2. Nothing here transforms this abstract idea into a patent-eligible invention. It merely requires a generic computer implementation. To be patent-eligible, it would have had to have supplied a "new and useful" application of the idea. Just saying "apply it" or using a computer with it does not make it protectable.

Holding:

No, doing something with a computer does not make it patentable. Affirmed.

Concurring Opinion:

Sotomayor: A business method is not a "process" under § 101. Also, this is an abstract idea.


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