In a unanimous opinion on June 19, 2014, the U.S. Supreme Court held that patent claims drawn to an abstract idea are not saved by merely requiring a generic computer to implement the idea. Alice Corp. v. CLS Bank Int'l (2014). Alice is the assignee of a patent claiming a method and system for mitigating settlement risk in financial exchanges using a computer. CLS Bank sued Alice seeking a declaratory judgment that Alice's patent claims are invalid, unenforceable or not infringed. The district court granted summary judgment that the patent claims were unenforceable under 35 U.S.C. § 101 for claiming patent ineligible subject matter. An en banc panel at the Federal Circuit affirmed, but had competing opinions as to why the patent claims were unenforceable.
The Supreme Court uses a two-part test to determine patent ineligibility. First, they consider whether the claims are directed to a patent ineligible concept, i.e., laws of nature, natural phenomena, and abstract ideas. If the claims are directed to an abstract idea, the court should then consider whether the other elements of the claim transform the abstract idea into a patent-eligible matter. Using this test, the Supreme Court found that the patent claims in this case were directed to an abstract idea because they recited a method and system for mitigating settlement risk that had been a fundamental economic practice long prevalent in our system of commerce. Then, the Supreme Court concluded that the other claim element, which was a generic computer implementation of the well-known method, failed to transform the abstract idea into a patent-eligible invention.
The Supreme Court's decision affirms that a person cannot obtain a patent on a well-known idea simply by using a computer to execute that idea. While the Supreme Court opinion was unanimous, it is interesting to note that three justices wrote a concurring opinion to state their belief that any "claim that merely describes a method of doing business does not qualify as a ‘process' under § 101." In future cases, parties may try to use this concurring opinion to attack the enforceability of any business method patent.