CLS v Alice decision may be the “death” of US business method patents
Managing IP is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX
Copyright © Legal Benchmarking Limited and its affiliated companies 2024

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

CLS v Alice decision may be the “death” of US business method patents

The validity of hundreds of thousands of business method patents is uncertain after the Federal Circuit narrowly upheld the district court’s decision in CLS v Alice that four patents are invalid under Section 101

In a 135-page decision published on Friday by a strongly divided court, the 10 judges on the en banc panel issued seven conflicting opinions on whether Alice’s claims relating to a computerised trading system are patent-eligible.

Seven of the judges affirmed the district court’s ruling that the method and computer-readable media claims are not patent eligible. The judges were equally divided on whether the system claims were patent eligible, meaning that the district court’s decision was upheld.

In a dissenting-in-part opinion joined by three other judges, Judge Moore said the decision would lead to the "death" of hundreds of thousands of software and business method patents. She said the decision gave "staggering breadth to what is meant to be a narrow judicial exception".

She added: “There has never been a case which could do more damage to the patent system than this one.” In an opinion titled “Additional reflections”, Chief JudgeRader lamented that there was “little, if any, agreement amongst” the judges.

The disagreement between the judges may lead to the case being taken up by the Supreme Court.

The Court was rehearing the case after overturning its controversial 2-1 panel decision in July last year to affirmAlice’s patent claims for a computerised trading system that minimises risk.

In the previous split decision, the judges concluded that merely using a computer did not prevent Alice’s claims from being regarded as patent-ineligible abstract ideas. However, the 2-1 majority said that computer implementation was crucial to the system’s function as an intermediary between traders.

The case dates back to CLS's 2007 lawsuit which sought to invalidate Alice's patents. Alice counterclaimed that CLS was infringing claims 33 and 34 of its US patent number 5,970,479 and all claims of its US patents numbers 6,912,510; 7,149,720; and 7,725,375.

more from across site and ros bottom lb

More from across our site

View the Social Impact EMEA Awards 2024 shortlist and join us on September 12 at The Waldorf Hotel in London
James Tumbridge talks about advising the government on AI and why his day could start with the police and end with legal networking
Data from Managing IP+’s Talent Tracker shows that the IP ambitions of Asian full-service firms and a life sciences focus in the US have prompted lateral moves
Michelle Lue-Reid has joined the IP business as its chief transformation officer and will look to implement major change initiatives across member firms
Chad Landmon, who joins in Washington DC, hopes to expand the firm’s Hatch-Waxman practice
The FRAND rate is only 5 cents higher than the per-device rate determined at first instance in 2023
We provide a rundown of Managing IP’s news and analysis from the week, and review what’s been happening elsewhere in IP
Nearly four months after joining Crowell & Moring, Edward Taelman reflects on starting afresh, new clients, and firm culture
Firms discuss the ebb and flow of life sciences IP work and explain how they help professionals pivot between specialities
Mercedes-Benz, Dolby Laboratories, and Panasonic discuss the merits and drawbacks of the USPTO's terminal disclaimer proposal
Gift this article