CLS Bank International v. Alice Corporation Pty. Ltd.
685 F.3d 1341
| Fed. Cir. | 2012Background
- Alice owns four computer-implemented financial patents ('479, '510, '720, '375) claiming a trusted intermediary settles obligations to reduce settlement risk.
- Claims include method (shadow records, start-of-day balances, ordered adjustments), system, and computer program product (media) forms.
- District court held all asserted claims invalid under §101 as directed to abstract ideas; district court treated computer implementation as insufficient.
- This court now reverses and holds the method, system, and product claims are patent eligible, finding meaningful computer limitations and practical application.
- The court analyzes §101 as a framework with distinct roles for §§101, 102, 103, 112, emphasizing not simply abstract ideas but claim scope as a whole.
- Dissent argues the claims are abstract ideas repackaged as computer-implemented inventions and urges stricter §101 scrutiny in light of Prometheus and related cases.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the claims are patent eligible under §101. | Alice argues computer implementation and claim limitations tie to a specific practical application. | CLS Bank argues claims are abstract ideas executed on a computer, lacking meaningful limits. | Yes; claims are patent eligible under §101. |
| Whether the district court erred by focusing on abstract ideas rather than claim scope. | Alice asserts court must assess the claims as a whole with their limitations. | CLS Bank contends abstract idea analysis applies to the claimed concept. | No; the court must consider the claimed limitations and overall claim scope. |
| Whether computer implementation saves the abstract idea claims. | Alice maintains computer implementation provides meaningful limits. | CLS Bank argues mere computer implementation is insufficient. | Yes; computer limitations contribute to patent eligibility when integral to the invention. |
| Whether system and product claims differ in eligibility from method claims. | Alice contends system/product claims are not merely abstract ideas. | CLS Bank maintains systems recite abstract ideas via generic hardware. | Yes; all claim types are patent eligible under §101. |
Key Cases Cited
- Bilski v. Kappos, 561 U.S. 593 (U.S. 2010) (abstract ideas and preemption concerns guide eligibility (machine-or-transformation as clue))
- Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (U.S. 2012) (implicit exceptions to §101; inventive concept required)
- Gottschalk v. Benson, 409 U.S. 63 (U.S. 1972) (mathematical algorithm preemption concerns; abstract idea)
- Diehr, 450 U.S. 175 (U.S. 1981) (integration of math with known process is patent eligible)
- Alappat v. FCC, 33 F.3d 1526 (Fed. Cir. 1994) (specialized computer to produce a tangible result can be patent eligible)
- CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir. 2011) (mere computer implementation of abstract idea is insufficient)
- Research Corp. v. Microsoft Corp., 627 F.3d 859 (Fed. Cir. 2010) (patentable when there is a functional, palpable application in computer tech)
- SiRF Tech., Inc. v. Int’l Trade Comm’n, 601 F.3d 1319 (Fed. Cir. 2010) (when a machine adds a meaningful limit, claim may be eligible)
- Dealertrack, Inc. v. Huber, 674 F.3d 1315 (Fed. Cir. 2012) (computer-based claims evaluating an abstract idea may be abstract)
- Fort Props., Inc. v. Am. Master Lease, LLC, 671 F.3d 1317 (Fed. Cir. 2012) (example of abstract idea tied to computer-based steps)