Alice Corp. v. CLS Bank: The Mother of Computer-Implemented Invention Patents?

Alice Corp. v. CLS Bank: The Mother of Computer-Implemented Invention Patents?

The Internet has been buzzing with excitement lately. On March 31, the Supreme Court of the United States began hearing oral arguments for what’s being called the not-to-be-missed case of Alice Corp. v. CLS Bank, which concerns the application of patent protection on software, specifically computer-implemented inventions, and whether it is appropriate under Section 101 of the Patent Act.

In 2007, CLS Bank International sued Alice Corporation, claiming that the patent protection its financial program held was neither invalid nor enforceable. What followed was a countersuit by Alice Corporation, claiming infringement on its patent rights, a federal judge nullifying the patent, then a panel from the United States Federal Court of Appeals for the Federal Circuit reversing the judge’s decision, ruling that the granting of the patent was justifiable. At the request of CLS Bank, the full Federal Circuit reviewed the decision, simultaneously attempting to clarify the criteria under the Patent Act, specifically Section 101, for computer-implemented inventions. While the en banc decision found that Alice Corporation’s patent was not valid, the judges could not reach a majority for an approach — not one.

As technology has advanced, so has the number of patent cases. Tim Holbrook, a professor at the Emory University School of Law, noted that the Supreme Court has heard many patent cases — 30 since 2000 and six in the October 2013 term — and considers the activity “extremely odd.”  He points out that there is already a “patent court” in this country in the form of the United States Federal Court of Appeals, and that it creates nationally uniform legal standards for patent law. He contends this activity may be due to the Supreme Court’s fear that the Federal Circuit has developed a pro-patent bias.

While the Justices may have an interest in patent cases, Ronald Mann, a professor at Columbia Law School, asserted in his recent SCOTUS blog that they have “danced around” this patent question for years. Mann continues that this very case is before the Court because the Court’s 2010 decision in Bilski v. Kappos “left the topic in such disarray.” (Holbrook of Emory Law called it a “disaster.”) In this case, the Court considered the subject matter too abstract, thus it invalidated its patent. The reasoning, however, did little to help guide Federal Circuit, as seen in its own attempt at Alice Corp. v. CLS Bank.

If the Court determines that software is not eligible for such protection — a protection which many believe impedes innovation — then countless patents will become void, for example the single-touch versus multi-touch differentiation on your iPhone. A lot is at stake. Whatever the result, the Court will, once and for all, have to deal with this patent matter and provide the legal guidance necessary for future cases. So we wait and watch with great anticipation.

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