Google Review

Case Brief: CLS Bank v. Alice … Round 2

FCSIn my last post, I offered a case brief of the concurring opinion filed by Federal Circuit Judge Lourie in CLS Bank v. Alice Corp.  Below, I try my hand at briefing the concurring-in-part and dissenting-in-part opinion filed by Chief Judge Rader, which recommends a particular practical application inquiry centered on a meaningful limitations test.  The opinion also takes exception to Judge Lourie’s proposed (re)introduction of an “ingenuity” test as the gateway to patent eligibility.

Hang on!  This could get bumpy …


CLS Bank Intl. v. Alice Corp.

598 F.3d 1336 (2013)


Concurrence-in-part and Dissent-in-part

Rader, Linn, Moore, and O’Malley as to all but part VI (method claims analysis)

Rader and Moore as to part VI, with Linn and O’Malley dissenting separately

RULE (Recommended):

–          Proposed patent-eligibility analysis steps:

1)      Claim to eligible subject matter?

  • Categories:  processes, machines, manufactures, and compositions of matter

2)      Claim barred by judicially-created exception?

  • laws of nature, natural phenomena, and abstract ideas

2.a.) What is the particular practical application of the excepted area?

  • Meaningful limitation test
    • Examine claim as a whole
    • Any “inherency” problems present in recited steps?
    • Clear and convincing evidence of preemption risk?
      • Means all practical applications subsumed


    • Judge Lourie’s “identification” step improperly strips down claim to a core abstract idea
      • A  court cannot go hunting for abstractions by ignoring the concrete,  palpable, tangible limitations of the invention the patentee actually claims
      •  “under § 101, … claims must be considered as a whole” (Diehr)
      • “[T]here is no legally recognizable or protected ‘essential’ element, ‘gist’ or ‘heart’ of the invention.” (Aro Mfg. Co., 1961)
    • Judge Lourie’s “inventive concept” test is inconsistent with the law
      •  central purpose of 1952 Act was replacing “inventiveness” measure
        • by definition a subjective, hindsight analysis
        • replaced with objective test for “obviousness” in § 103 (Dann)
      • opinion bastardizes “inventive concept” as used in Prometheus
        •  “inconceivable” that SCOTUS would undo what Congress tried to accomplish in the 1952 Patent Act with one phrase in one opinion
        • And by the way, … both inventions and discoveries are eligible for patenting
          • “anything that is under the sun that is made by man” (Diehr)
          • an invention “shall not be negated by the manner in which [it] . . . was made.” 35 U.S.C. § 103
    • Relevant inquiry is whether the claim covers a particular application of excepted area
      •  “[T]o transform an unpatentable law of  nature into a patent eligible application of such a law, one must do more than simply state the law of nature while adding the words ‘apply it.’” (Prometheus)
      •  “[A]n application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection.” (Bilski, Diehr)
      •  “He who discovers a hitherto unknown phenomenon of nature has no claim to a monopoly of it which the law recognizes. If there is to be invention from such a discovery, it must come from the application of the law of nature to a new and useful end.” (Benson)
    • Recommended analysis step:  Meaningful Limitation test
      • “[W]hether a claim includes meaningful limitations restricting it to an application, rather than merely an abstract idea.” (Prometheus)
      • Addresses preemption risk
        • “It is not the breadth or narrowness of the abstract idea that is relevant,  but whether the claim covers every practical application of that abstract idea.” (Prometheus)
      • As applied to computer-specific limitations
        • a  computer need not do something other than what a computer does to be  patent-eligible
          • If a computer can do what a human can in a better, specifically limited way, it could be patent eligible
          • An increase in speed alone may be … a meaningful limitation; if a computer can perform a process that would take a human an entire lifetime
        • likely patent-eligible claims tie the otherwise abstract idea to
          • a specific way of doing something with a computer
          • a specific computer for doing something (special purpose)
          • Examples (SiRF Tech):
            • computer being part of the solution
            • computer being integral to the performance of the method
            • containing an improvement in computer technology
        • likely ineligible if claims directed to
          • nothing more than the idea of doing that thing on a computer
  • About software patentability, generally
    • were it not for software, programmable computers would be useles … computer without software collects dust, not data.
    • “… a computer programmed to perform a specific function is a new machine with individualized circuitry created and used by the operation of the software. See Alappat, 33 F.3d at 1545.“
    • “a general purpose computer in effect becomes a special purpose computer once it is programmed to perform particular functions pursuant to instructions from program software.” Bilski
    • Bilski, 130 S. Ct. at 3227 (an important clue that a claim embracing an abstract idea is patent eligible is if its use is tied to a machine).”
    • Under Section 101, even a process made up of old processes is patent eligible; so too must be a new machine made to perform even old processes. (see also § 100(b))

As to Alice’s system claims (part IV)

–          Labeling [Alice’s] system claim an “abstract concept” wrenches all meaning from those words, and turns a narrow exception into one which may swallow the expansive rule (and with it much of the investment and innovation in software)

  • Claims recite machines (“Computers are ‘machines'”)
  • 1) Eligible subject matter?  Yes, machines are expressly eligible subject matter under § 101
  • 2) Judicial exception? (“clear and convincing” standard) Automates concept of escrow
  • 2.a.) Practical application of abstract idea?  Meaningful limitation test
      • Examining each claim as a whole, machine embodiments are not abstract
        • Claims recite special purpose computer system
        • even have a means-plus-function element limited to specific algorithms!!
          • specification includes numerous, detailed flowcharts
      • no “inherency” problems present in recited steps
        • can conduct an escrow without a data processing system
        • no reason to conclude that use of machines in the specific claimed system would “involve well-understood, routine, conventional activity previously engaged in by researchers in the field.” Prometheus
      • no clear and convincing evidence of preemption
        • public may use an escrow arrangement in many other applications, without computer systems, and even with computers but in other ways without infringing the claims
        • patentee offers example!!! (See Appellant’s En Banc Resp. Br. 40)

PASS:  System claims are directed to practical applications of the underlying concept of escrow

As to Alice’s method claims (part VI)

  • 1) Eligible subject matter? Yes, claims recite a process (statutory under § 101)
  • 2) Judicial exception? (“clear and convincing” standard) Abstract idea of escrow
    • Viewed as a whole (not “fundamental concept” parsing), the claim is indistinguishable from the claim in Bilski.
    • 2.a.)  Practical application of abstract idea?  Meaningful limitation test
      • Viewed individually, elements only recite steps inherent in concept of escrow
        • elements deemed basic bookkeeping fail as “inherent”
          • “shadow credit and debit records for the parties”
          • “obtaining the values for the previously created accounts”
          • “adjusting the account balances”
          • “an instruction to pay or deduct funds”
  • Implicit (stipulated by parties) reference to computer “implementation” is not, by itself, enough (Bilski, Flook)
  • Limiting the escrow concept to a particular field is not sufficient. (Bilski)

FAIL:  Claim as a whole embraces using escrow to avoid risk of one party’s inability to pay—an abstract concept.

HOLDING (Recommended):

  • Rader, Linn, Moore, O’Malley
    • Asserted method and media claims are ineligible
    • Asserted system claims are patent eligible
    • Linn, O’Malley
      • Caveat:  if method claims interpreted per part VI, then ineligible

JUDGMENT (Recommended):

  • Reverse as to system claims; Affirm as to method and media claims (see Dissent)


And the hits keep coming!  Stay tuned for more case briefs next week, to include some concurring, more dissenting, and even a little reflecting …