CLS Bank v. Alice Corp: Patentability of Software Rehearing En Banc

The Court of Appeals for the Federal Circuit will focus on the legal test for determining when a computer-implemented invention is an abstract idea in the forthcoming en banc rehearing of CLS Bank v. Alice Corp., (Fed. Cir. 2012).  The en banc panel will focus on two questions, as ordained by the en banc order:

1. What test should the court adopt to determine whether a computer-implemented invention is a patent ineligible “abstract idea”; and when, if ever, does the presence of a computer in a claim lend patent eligibility to an otherwise patent-ineligible idea?
2. In assessing patent eligibility under 35 U.S.C. § 101 of a computer-implemented invention, should it matter whether the invention is claimed as a method, system, or storage medium; and should such claims at times be considered equivalent for § 101 purposes?

 

At issue in CLS Bank are a number of patents that cover a computerized platform for eliminating settlement risk.  The majority held that the asserted claims were patent eligible when considered as a whole.  The majority opinion also applied a rule of recent origin in the Federal Circuit: Section 101 issues should only be addressed when subject matter ineligibility is “manifestly evident.”  Judge Prost wrote a strong dissent and asserted that the majority opinion ignored Prometheus and failed to use a valid test to make its determination.  The Supreme Court emphasized that abstract ideas are not patentable in Prometheus. Since software claims have been ruled to be abstract ideas in the past, the CLS Bank opinion will hopefully clarify the patentability of software inventions going forward.  It is doubtful, however, if that will be the case.

(Thanks to Kyle Helgemoe for his assistance in preparing this post.)

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