Alice Corporation Pty. Ltd. v. CLS Bank International

Whether claims to computer-implemented inventions are considered patent eligible subject matter under 35 U.S.C. § 101.

Petitioner thought up and built a computerized system for creating and exchanging financial instruments. Petitioner then applied for and later received patents for this computerized system. Respondent sued Petitioner for a declaratory judgment that asserted Petitioner’s claims were invalid and unenforceable; Petitioner countersued claiming that Respondent had infringed on various claims of Petitioner. Petitioner’s claims include system, computer-readable media, and method claims.

The district court denied Petitioner’s motions and granted Respondent summary judgment. Petitioner appealed to a Federal Circuit panel which reversed the district court’s decision holding that “the asserted claims ‘cover the practical application of a business concept in a specific way, which requires computer implemented steps.’” The Federal Circuit then granted Respondent’s petition for an en banc rehearing. The court held seven to ten to affirm the district court’s holding that system, computer-readable media, and method claims are not directed to eligible subject matter.

The Supreme Court granted certiorari to resolve the divided Federal Circuit and decide on a clear standard for applying 35 U.S.C. § 101 in the context of computer-based systems and software. Petitioner asks the Court to revisit the issue as previous cases dealing with this issues have become outdated with the advances in technology leaving the implementation of the laws uncertain.