Alice Corporation v. CLS Bank International
In Alice Corp. v. CLS Bank International, 573 U.S. 134 S. Ct. 2347 (2014), the Court affirmed our judgment that method and system claims directed to a computer-implemented scheme for mitigating settlement risk by using a third party intermediary were not patent-eligible under 101 because the claims add nothing of substance to the underlying abstract idea. See Alice, 134 S. Ct. at 2359- 60.
The Court in Alice made clear that a claim that is directed to an abstract idea does not move into 35 U.S.C 101 eligibility territory by merely requiring generic computer implementation. Id. at 2357. In Alice, the Supreme Court identified a framework for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts. Id. at 2355 (citing Mayo, 132 S. Ct. at 1296-97).
First, we determine whether the claims at issue are directed to one of those patent-ineligible concepts. Id. If not, the claims pass muster under 35 U.S.C 101.
Then, in the second step, if we determine that the claims at issue are directed to one of those patent-ineligible concepts, we must determine whether the claims contain an element or combination of elements that is sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the ineligible concept itself. Id.
In Alice, the claimed intermediated settlement technique was purportedly new and useful, but the Supreme Court nonetheless unanimously concluded that it fell outside section 101. 1 134 S. Ct. at 2358-59.
The problem was not that the asserted claims disclosed no innovation, but that it was an entrepreneurial rather than a technological one. In effect, Alice articulated a technological arts test for patent eligibility, concluding that the asserted method and system claims were patent ineligible because they did not improve the functioning of the computer itself or effect an improvement in any other technology or technical field. Id. at 2359.
In Alice Corporation v. CLS Bank International, 573 U.S. 134 S. Ct. 2347 , 2359 (2014), the Supreme Court concluded that the concept of intermediated settlement was a patentineligible abstract idea. 134 S. Ct. at 2355-57.
But whether the concept of intermediated settlement is an abstract idea is a wholly different question from whether the claimed invention provided a useful and innovative application of that concept.
Significantly, in determining whether the asserted claims disclosed an inventive concept sufficient to make the claimed abstract idea patent eligible, the Court looked solely at the technology-asking only whether the recited computer elements were wellunderstood, routine, and conventional. Id. at 2359. The issue of whether the claimed intermediated settlement technique represented an innovative method for improving commercial transactions was not addressed because disclose any significant advance in science or technology, they fell outside 35 U.S.C. section 101. See 134 S. Ct. at 2359 (noting that the claimed method simply required a generic computer to perform generic computer functions).
Section 101 mandates not only that claims disclose an advance in science or technology-as opposed to an innovation in a non-technological discipline such as business, law, sports, sociology, or psychology-but also that this advance be both significant and well-defined. Id. at 2360.
In Alice, the claims recited only the method for ex- changing financial obligations and a generic computer system. 134 S. Ct. at 2353.
There was no dispute in that case that the use of a generic computer in implementing the method was well-understood and conventional; the only argument advanced by the patent-holder at step two was that the claims are patent eligible because these steps require a substantial and meaningful role for the computer. Id. at 2359.