December 6, 2013
Today, the Supreme Court granted certiorari in one case of interest to the business community:
Patent Act—Patent Eligibility of Computer-Implemented Inventions
Section 101 of the Patent Act provides that “[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.” 35 U.S.C. § 101. Laws of nature, physical phenomena, and abstract ideas, however, are exempt from this provision; the Supreme Court has long held that granting such a patent monopoly would improperly preempt the use of these fundamental principles. Today, the Supreme Court granted certiorari in Alice Corp. Pty. Ltd. v. CLS Bank International, No. 13-298, to consider whether certain patent claims that are implemented through the use of a computer are eligible for patent protection.
The patent claims at issue in this case concern a computer-implemented method for conducting third-party credit intermediation. The claims are directed to establishing an electronic process for mitigating or eliminating the risk that one party to a financial transaction will fail to perform.
In May 2007, CLS Bank International sued Alice Corp. in federal district court for a declaratory judgment, asserting that the patent was invalid or unenforceable, or had not been infringed. Alice Corp. brought a counterclaim for patent infringement. The district court granted summary judgment in favor of CLS Bank, finding that none of Alice Corp.’s asserted claims were patent-eligible. It concluded that the implementation of the abstract idea of third-party credit intermediation by use of a computer is not a sufficient basis to transform that concept into a patent-eligible claim. On appeal, a panel of the Federal Circuit reversed.
Subsequently, however, the Federal Circuit granted rehearing en banc. Although every member of the court agreed that computer-implemented innovations are eligible for patent protection, members of the court crafted differing tests as to how Section 101 applies to claims that turn on computer implementation of a law of nature, physical phenomenon, or abstract idea. The court ultimately affirmed the judgment of the district court that the asserted patent claims were not drawn to patent-eligible subject matter. A majority of the Federal Circuit also concluded that, in the context of computer-implemented innovations, whether a claim is drafted as a method, a system, or a storage medium has no bearing on its eligibility for patent protection.
Because the Court’s resolution of this case will likely provide additional clarity as to which computer-implemented innovations are eligible for patent protection, it should be of significant interest to a wide array of businesses.
Absent extensions, amicus briefs in support of the petitioner will be due on January 28, 2014, and amicus briefs in support of the respondent will be due on February 27, 2014. Any questions about this case should be directed to Andrew J. Pincus (+1 202 263 3220) in our Washington office.
The Supreme Court also recently invited the Solicitor General to file a brief expressing the views of the United States in one case of interest to the business community:
Oneok, Inc. v. Learjet, Inc., No. 13-271: The question presented in this case is whether the field preemptive effects of the Natural Gas Act extend to state-law claims asserted by plaintiffs who purchase gas in retail transactions.
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