IP Update, Vol. 12, No. 5 (1 July 2014)

Editor: Marc S. Weiner, Esq.

Supreme Court finds computer-implemented scheme invalid for not claiming patent-eligible subject matter under 35 U.S.C. § 101

The U.S. Supreme Court issued its opinion in Alice Corporation Pty. Ltd. v. CLS Bank International, No. 13-298, concluding that a computer-implemented scheme for mitigating "settlement risk" was invalid for not claiming patent-eligible subject matter under 35 U.S.C. § 101. (Slip. Op. at 1.) The Court applied its framework established in Mayo Collaborative Services v. Prometheus Laboratories, Inc., to determine when patent claims are drafted to patent-ineligible concepts of laws of nature, natural phenomena, and abstract ideas. (Slip. Op. at 7.)  After finding the patent claims are drawn to the abstract idea of intermediated settlement, the Court asked, "[w]hat else is there in the claims before us?" and found that the claims only recited a generic computer, when the claims were viewed as individual elements and an "ordered combination." (Slip. Op. at 7.)  The Court held that, "the mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention," rejecting the patentee's argument that the existence of the tangible computer would satisfy patent-eligibility.   (Slip. Op. at 13-14.) All of the claims before the Supreme Court failed its test, rejecting method, system, and computer-readable media claims directed to the same abstract idea.

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Supreme Court Decision can be found here

Summary provided by Michael B. Marion