CLS Bank International v. Alice Corporation PTY, LTD (Fed Cir 2012);

Bancorp Services, LLC v. Sun Life Assurance Company of CA (Fed Cir. 2012).

Two recent business-method cases from the CAFC give conflicting guidance on how computer-aided process inventions should be viewed under §101. The inventions in both cases are business methods aimed at minimizing risk in financial transactions; a computer plays a similar role in both methods; and the court applied the same ‘machine” prong and the “abstract idea” tests in both analyses. Despite these similarities, the court found the business method in CLS Bank to be patent eligible, but disqualified the invention in Bancorp Services under §101.

Can the conflicting decisions be reconciled, or should the court have arrived at the same result in both cases? A possible answer is suggested by CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1375 (Fed. Cir. 2011), where the court relied on the “mental processes” exclusion to disqualify the business-method invention at issue. The “mental processes” exclusion finds ample support in Supreme Court decisions on §101 issues, but has receded in importance in the post-Bilski era. It’s an easy exercise to show that the claimed business methods in both CLS Bank and Bancorp Services can be carried out by mental processes alone, disqualifying both business methods under §101.