Clothing abstract ideas in computer language does not make them eligible for a US patent
CLS Bank v Alice Corp.
On 10 May 2013, the Federal Circuit released an en banc decision [i] about the eligibility of Alice Corp’s computer-implemented inventions under 35 U.S.C. 101. At issue was whether the claims are excluded from eligibility for being drawn to an “abstract idea”.
There was little consensus between the ten en banc members, however seven agreed that the claims lack subject matter eligibility, and eight concluded that the claims should rise and fall together regardless of their claim type. Several opinions were issued: the following discusses the leading opinion.
Although the claims fall into the categories of computer implemented method claims, computer-readable media claims and system claims, they are not typical software inventions. The claims are directed to a computerized trading platform used for conducting financial transactions in which a third party settles obligations between a first and a second party so as to eliminate “settlement risk”.
As an overview, the method claims require a supervisor to create a shadow record for each party that reflects their real accounts. Over the course of a day, transactions are referred to the supervisor for settlement, which updates the shadow records accordingly. The supervisor only allows those transactions for which the parties’ updated shadow records indicate that sufficient resources remain to satisfy their mutual obligations. This underlying subject matter was considered to be abstract because it is a disembodied concept.
The computer readable media claims were considered to, in substance, be equivalent to the method claims. The court warned that the computer readable media claims, which refer to “a computer readable storage medium having computer readable program code embodied in the medium...” are “merely method claims in the guise of a device and thus do not overcome the Supreme Court’s warning to avoid permitting a “competent draftsman” to endow abstract claims with patent-eligible status”.
The system claims were given the same treatment. They were considered to merely be “abstract methods coupled with computers adapted to perform those methods”. The court was keen to point out that claims to computers are eligible for a patent. What are not eligible are claims that are directed to computers that have been routinely adapted by software consisting of abstract ideas that do tasks formerly performed by humans.
The concluding remark in the leading opinion bluntly summarised the take-home message here, that “abstract methods do not become patent-eligible machines by being clothed in computer language”.
[i] http://www.cafc.uscourts.gov/images/stories/opinions-orders/11-1301.Opinion.5-8-2013.1.PDF
