Case Brief: CLS Bank v. Alice … Round 3

My case briefs of the various opinions filed in CLS Bank v. Alice Corp continue today with the dissent-in-part authored by Federal Circuit Judge Moore.

The opinion includes a forceful defense of the patent eligibility of software, and reads like the judicial equivalent of taking to a microphone in response to the anti-software-patent zealots and saying, “Hello, is this thing on?” …

CLS Bank Intl. v. Alice Corp.

598 F.3d 1336 (2013)

Dissent-in-part

Moore, Rader, Linn, and O’Malley

 

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?

  • Examine claim as a whole (period!)

 

REASONING:

Defense of software patents

        • Both the software and the computer running the software are patentable subject matter and should pass through the § 101 gate
        • “too broad an interpretation” of the abstract idea exception to § 101 “could eviscerate patent law” because “all inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.” (Prometheus)

Judge Lourie’s opinion lumps together method, media, and system claims

      • “gives staggering breadth to a … narrow judicial exception”
      • would lead to the “death of hundredths of thousands of patents”
        • all business method, financial system, and software
        • many computer implemented and telecommunications

Judge Lourie’s opinion completely repudiates Alappat

      • “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.” (Alappat)

Judge Lourie’s opinion is inconsistent with Bilski

      •  machine tie is a “useful clue” that helps limit the claim to a practical application of any underlying idea
      • a method claim may be patent-eligible under § 101 even if it is not tied in any way to a machine

Judge Lourie’s “identification” step improperly strips claim to a core abstract idea

  • claims must be considered as a whole (Diehr)

Judge Lourie’s “inventive concept” test is inconsistent with the law

    • 1952 Patent Act abolished “heart of the invention” analysis
    • limitations requiring certain physical components (concrete elements) *are* the “inventive concept”
    • combination of known components may result in a brand new machine

Judge Lourie’s analysis imbues § 101 with a “time-dependency”

      • “§ 101 is not a moving target”
      • Under Judge Lourie’s analysis “a system claim that passes § 101 when the patent issues could later magically transform into an abstract idea simply because certain computer hardware elements no longer seem inventive.”

Key question is whether a claim recites a sufficiently concrete and practical application of an abstract idea

  • Structurally defined machine is a practical application of the underlying idea when limited to
            • specific hardware recited and
            • algorithms disclosed to perform the recited functions
  • More proper means than § 101 exist to challenge a system claim
      • § 102 (novelty) and § 103 (nonobviousness) for a claim that does no more than put a familiar, well known concept on a computer
      • § 112 (written description) for a claim to a machine whose precise structure or method of operation is not sufficiently detailed

 

As to Alice’s system claims

– hardware and software components make it impossible to conclude the claim, evaluated as a whole, is to an abstract idea

  • Claim recites specific machines configured to perform certain functions
    • Claimed computer is “tangible item you could … put on your desk.”
      • Asserted data processing systems recite structural limitations
      • “a computer, a first party device, and a data storage device.”
    • means-plus-function element limited to specific algorithms
      • “means for allowing said first party to acquire an item from said second party, wherein the exchange obligation relates to said item.”
      • “If these claims do not clear the § 101 hurdle, then the abstract idea exception will be an insurmountable bar for innovators of software, financial systems and business methods …”
    • Claims are more than mere addition of insignificant pre- or post-solution activity to an abstract idea (Diehr)

PASS: System claims are directed to a machine that covers the practical application of the underlying concept.

JUDGMENT (Recommended):

  • Reverse as to system claims

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