Supreme Court Unanimously Finds Alice Corp.'s Business Method Patent is Directed to a Patent-Ineligible "Abstract Idea"?

June 19, 2014

By: Brian T. Moriarty

Hamilton Brook Smith Reynolds Alert

  • The Supreme Court 9-0 reaffirms that patents directed to “abstract ideas” are not patent eligible
  • This decision does not address the larger question of patentability of software
  • Particular claims at issue directed to method of reducing risk through use of intermediary are not patent eligible as “abstract idea”

Today, in Alice Corporation Pty. Ltd. v. CLS Bank International (docket 13-298), the Supreme Court unanimously affirmed the Federal Circuit’s decision that a business method claim directed to reducing risk through the use of an intermediary was not patent eligible because it was directed to an abstract idea.  The Court generally applied its prior teachings on patent eligibility in Mayo Collaborative Services v. Prometheus Laboratories, Inc. and Bilski v. Kappos to the claims at hand, finding “that there is no meaningful distinction between the concept of risk hedging in Bilski and the concept of intermediated settlement at issue here.  Both are squarely within the realm of ‘abstract ideas’ as we have used that term.”

The Court also rejected the argument that adding general computer implementation language to a claim that is otherwise directed to an abstract idea will impart patent eligibility: “Thus, if a patent’s recitation of a computer amounts to a mere instruction to ‘implemen[t]’ an abstract idea ‘on . . . a computer,’ that addition cannot impart patent eligibility.”  The Court concluded that, because system and media claims added nothing of substance to the underlying abstract idea, they too were not patent eligible under §101.

Significantly, a majority of the Court did not accept the view expressed in the concurring opinion by Justice Sotomayor (joined by Ginsburg and Breyer) that any “claim that merely describes a method of doing business does not qualify as a ‘process’ under §101.”
 

Overview

June 19, 2014

By: Brian T. Moriarty

Hamilton Brook Smith Reynolds Alert

  • The Supreme Court 9-0 reaffirms that patents directed to “abstract ideas” are not patent eligible
  • This decision does not address the larger question of patentability of software
  • Particular claims at issue directed to method of reducing risk through use of intermediary are not patent eligible as “abstract idea”

Today, in Alice Corporation Pty. Ltd. v. CLS Bank International (docket 13-298), the Supreme Court unanimously affirmed the Federal Circuit’s decision that a business method claim directed to reducing risk through the use of an intermediary was not patent eligible because it was directed to an abstract idea.  The Court generally applied its prior teachings on patent eligibility in Mayo Collaborative Services v. Prometheus Laboratories, Inc. and Bilski v. Kappos to the claims at hand, finding “that there is no meaningful distinction between the concept of risk hedging in Bilski and the concept of intermediated settlement at issue here.  Both are squarely within the realm of ‘abstract ideas’ as we have used that term.”

The Court also rejected the argument that adding general computer implementation language to a claim that is otherwise directed to an abstract idea will impart patent eligibility: “Thus, if a patent’s recitation of a computer amounts to a mere instruction to ‘implemen[t]’ an abstract idea ‘on . . . a computer,’ that addition cannot impart patent eligibility.”  The Court concluded that, because system and media claims added nothing of substance to the underlying abstract idea, they too were not patent eligible under §101.

Significantly, a majority of the Court did not accept the view expressed in the concurring opinion by Justice Sotomayor (joined by Ginsburg and Breyer) that any “claim that merely describes a method of doing business does not qualify as a ‘process’ under §101.”
 

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