Clarified or Confused? SCOTUS Decision in Alice v. CLS Bank and Continued Mystification of Abstract Ideas

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By Chris Ferrell

On June 19th, the Supreme Court ruled on its sixth and final patent law case of this term, Alice Corp. v. CLS Bank. The case concerned the patentability of claims covering a computerized trading platform for exchanging financial obligations. The business method patents at issue in Alice were directed to a computer-implemented scheme for mitigating settlement risk in certain financial transactions. The claims included a method, a computer-readable medium, and a system. The key issue for the Court was to identify an appropriate test for determining whether a computer-related invention is an application of an abstract idea. In a unanimous decision authored by Justice Thomas, the Court held that Alice’s claims were not patent eligible under 35 U.S.C. § 101 because they were directed at an abstract idea of intermediated settlement. While the decision was not a surprise to some in the industry, others waited on baited breath to see just how far the Court would go in analyzing these software claims, and to what extent patent analysis would be moving forward. In previous cases, including Mayo Collaborative Services v. Prometheus Labs, Bowman v. Monsanto and Association for Molecular Pathology v. Myriad Genetics, the Court took the opportunity to reign in overbroad positions in patent law and define the outer-boundaries of patentability; Alice was no different. However, in trying to contain patent law, the Court may have muddied the waters even more for those trying to decipher what may be patentable, especially in the realm of computer software. Continue reading