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

Managing IP is part of Legal Benchmarking Limited, 1-2 Paris Gardens, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

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 affirm Alice’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 SHARED ros bottom lb

More from across our site

Two partners have departed DLA Piper to join Squire Patton Boggs and Blank Rome in San Francisco and Chicago, respectively
Practitioners say a 32% rise in court fees is somewhat expected to maintain the UPC’s strong start, but some warn that SME clients could be squeezed out
Swati Sharma and Revanta Mathur at Cyril Amarchand Mangaldas explain how they overcame IP office objections to secure victory for a tyre manufacturer
Claudiu Feraru, founder of Feraru IP, discusses the benefits of a varied IP practice and why junior practitioners should learn from every case
In the ninth episode of a podcast series celebrating the tenth anniversary of IP Inclusive, we discuss IP & ME, a community focused on ethnic minority IP professionals
Firms that made strategic PTAB hires say that insider expertise is becoming more valuable in the wake of USPTO changes
Aled Richards-Jones, a litigator and qualified barrister, is the fourth partner to join the firm’s growing patent litigation team this year
An IP lawyer tasked with helping to develop Brownstein’s newly unveiled New York office is eyeing a measured approach to talent hunting
Amanda Griffiths, who will be tasked with expanding the firm’s trademark offering in New Zealand, says she hopes to offer greater flexibility to clients at her new home
News of EasyGroup failing in its trademark infringement claim against ‘Easihire’ and Amgen winning a key appeal at the UPC were also among the top talking points
Gift this article