CLS v Alice decision may be the “death” of US business method patents
Managing IP is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian 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

A 36-member team from Zhong Lun Law Firm, including six partners, will join the newly formed East IP Group
The Delhi High Court sided with Ericsson against Indian smartphone maker Lava, bringing the companies' nine-year dispute to a close
We provide a rundown of Managing IP’s news and analysis from the week, and review what’s been happening elsewhere in IP
Tennessee has passed the ELVIS Act, a law that fights against AI models that mimic the voice and likeness of music artists
Rob Stien, chief communications and public policy officer at InterDigital, says the EU has forgotten innovators while trying to solve an issue that doesn’t exist
As Australia’s Qantm IP leans towards being acquired by a private equity company, sources discuss what it could mean for IP firms
Law firms that are conscious of their role in society are more likely to win work, according to a survey of over 23,000 in-house professionals
Nghiem Xuan Bac Pham, managing partner of Vision & Associates, discusses opportunities created by the US-China rift as well as profitability issues facing IP practices
Douglas Leite and two of his colleagues were intrigued by Bhering Advogados’s mission to grow its patent litigation practice
Each week Managing IP speaks to a different IP practitioner about their life and career
Gift this article