CLS Bank v Alice – Federal Circuit Orders en banc Rehearing

Those who have been following comments on the split decision in CLS Bank v. Alice Corp. case will be unsurprised to learn that yesterday the Federal Circuit ordered a rehearing en banc in the matter, vacating the panel decision originally decided on July 9, 2012.

The questions to be addressed on appeal are:

1. What test should the court adopt to determine whether a computer-implemented invention is a patent ineligible “abstract idea”; and when, if ever, does the presence of a computer in a claim lend patent eligibility to an otherwise patent-ineligible idea?

2. In assessing patent eligibility under 35 U.S.C. § 101 of a computer-implemented invention, should it matter whether the invention is claimed as a method, system, or storage medium; and should such claims at times be considered equivalent for § 101 purposes?

The parties have been invited to file new briefs on these questions, and the case will be heard based on the original briefs and any new briefs filed.

The conflicting majority and minority views are set out in an earlier “house divided” post

https://ipwatchdog.com/2012/07/15/cls-bank-v-alice-corporation-reveals-a-house-divided/id=26433/

It is arguable that neither view is beyond criticism and that any emergent legal test as to patent-eligibility demands further development. There is much to commend the majority view that each of §§101, 102, 103 and 112 serves a different purpose and presents different questions and that under §101 only when it is apparent that the claimed subject-matter is a manifestly ineligible abstract idea should that subject-matter be excluded. Significant involvement of a computer in the working of the invention points towards invention.

But a clear answer to Judge Prost’s view on the facts that this particular invention is not patent-eligible is not discernible from the majority opinion.  More questionable is her criticism that the majority should have followed “the Supreme Court’s unanimous directive to apply the patentable subject matter test with more vigor”. Authority binding on the lower courts is not an approach involving vigor or its lack, but rather the rule of law which can be derived from the earlier case and can be applied and developed to meet the new factual situation of subsequent cases.

Against this background, as commentators have pointed out, the decision in Prometheus v Mayo arguably fails to set out a rule that is fit for further development and which excludes mere patent-ineligible discoveries of rules of nature whilst allowing pharmaceutical inventions that have been considered patent-eligible for decades. Whatever the outcome, the decision in CLS will have effects beyond the software field and will deserve close scrutiny.

The views of the USPTO as amicus curiae is invited and other amicus briefs will be entertained and may be filed without prior consent. Widespread comment from interested parties can be expected in this interesting and significant case. Stay tuned.

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9 comments so far.

  • [Avatar for Paul Cole]
    Paul Cole
    October 11, 2012 04:42 pm

    I think it is worth going back to my posting on signal and computer program product claims.

    In the report of the BBC Television Signal case in the EPO there is a graph showing the form of the signal. The control pulses are on the left hand side of the graph and the the picture information is on the right hand side. I just tell my students to make sure that you describe and claim the stuff on the left hand side of the graph. If you do that, you are likely to disclose and claim the technical features that make the system that you are trying to patent really work. And nine times out of ten it is a small “must have” feature that is the most valuable. I have not read the specification in Alice line by line, but my general impression is that most of the disclosure is to the right hand side of the graph and there is not so much on the left hand side, unfortunately. It may be that if you go into the facts in great detail that first impression is wrong, but there is not much that shines through.

  • [Avatar for dmc]
    dmc
    October 11, 2012 02:38 pm

    Correction on my last sentence: “…can you give an example of insignificant versus significant use of a computer in a proposed software invention?”

  • [Avatar for dmc]
    dmc
    October 11, 2012 02:30 pm

    What seems unclear to me is how can a patent which covers software ever be found not to significantly involve a computer? If we assume all software requires engagement of the CPU (to whatever degree) and we assume that engagement of the CPU (at whatever degree) constitutes “significant involvement of a computer”, then how is this test useful at all? Put another way, can you give an example of insignificant versus significant use of a computer in a proposed invention?

  • [Avatar for Gene Quinn]
    Gene Quinn
    October 11, 2012 01:03 pm

    @dmc-

    “Significant involvement of a computer in the working of the invention points towards invention.”

    What specifically needs elaboration? This is a statement of law. This is what is legally required and one of the factors that the USPTO considers to determine patent eligibility.

    -Gene

  • [Avatar for Paul Cole]
    Paul Cole
    October 11, 2012 10:42 am

    @dmc
    You will find that nugget in the decision.

  • [Avatar for dmc]
    dmc
    October 11, 2012 09:18 am

    I’m curious where this nugget of wisdom came from:
    “Significant involvement of a computer in the working of the invention points towards invention.”

    Was this meant as a stand-alone assertion? If so, please elaborate.

  • [Avatar for EG]
    EG
    October 11, 2012 08:42 am

    “Can a law dictate to the judiciary how said law is to be interpreted?”

    Mark,

    Most certainly. In fact, judges are supposed to interprete the law according to the legislative intent. When judges don’t, it’s called “judiicial activism” and “making up law.”

  • [Avatar for Mark Nowotarski]
    Mark Nowotarski
    October 11, 2012 07:44 am

    I’m wondering if the AIA will play any role in the en banc hearing. On the one hand, it defines “covered business method” as, inter alia, a patent on a method used in the practice of a financial product that is not a technological invention. (Section 18 (d)(1)). One the other hand, it provides a rule of construction that says that nothing in that section shall be construed as amending or interpreting patent-eligible subject matter. (Section 18 (e))

    Can a law do that? Can a law dictate to the judiciary how said law is to be interpreted? Could the CAFC instead interpret 101 based on the AIA?

  • [Avatar for step back]
    step back
    October 10, 2012 03:34 pm

    Just as it was asked when the first atomic bomb exploded, we must ask in view of Prometheus and Alice, “What hath the Supreme Court wrought?”
    God help us.